The business of .com, .org, and .net domains is not just a story of digital infrastructure; it is a case study of how natural monopolies can become rent-seeking machines when public regulation fails or, worse, when it aligns with the monopolist's interests.
The question we should be asking isn't whether paying twelve or fifteen dollars a year for a domain is expensive. The question is: why are we paying more and more for a service whose technical cost has steadily decreased, and why does a single company control access to more than 70 percent of generic names on the internet?
The first .com domain in history, symbolics.com, was registered on March 15, 1985, in an academic context where no one imagined the commercial value of a web address. During the first half of the 1990s, registration was controlled by Network Solutions, the only provider authorized by the National Science Foundation, which charged up to one hundred dollars per domain and required a minimum two-year commitment. In 1998, under antitrust pressure, the United States government created the Internet Corporation for Assigned Names and Numbers (ICANN) to introduce competition and reduce prices. The separation between the registry (the database that operates the extension) and the registrar (the store that sells to the public) caused the wholesale price to fall to six dollars, democratizing access to the web.
However, what began as a pro-competition reform degenerated into a system where regulatory revenue replaced genuine competition. Network Solutions was acquired by Verisign in 2000 for twenty-one billion dollars, and since then, the .com and .net domain registrations have remained under its exclusive control. Far from fostering openness, ICANN signed contracts allowing for scheduled annual increases, eliminated price caps on key extensions like .org, and received direct payments from Verisign in exchange for approving fee hikes. In other words, the agency created to protect consumers became a financial partner of the monopolist.
Verisign is probably the most profitable company in the United States, yet very few consumers know its name. In 2023, its pre-tax operating margin reached 65.4 percent, a figure that surpasses tech giants and investment banks. Its secret isn't innovation or operational efficiency, but a government contract that grants it the exclusive right to charge 172 million websites an annual fee for maintaining a database that, technically, could be managed for less than a dollar per domain per year.
The business logic is simple and brutal. Verisign doesn't sell a product that the customer can replace. If you want a .com, there's no alternative. If your company's brand has already built recognition under that extension, switching to .net or .shop means losing direct traffic, user trust, and search engine ranking. This path dependency makes domains an inelastic commodity: the price can rise, but demand barely moves. It's no different from a toll road with no alternative route; the concessionaire charges whatever they want because the user has nowhere else to go.
The current contract, inherited from the Trump administration and automatically renewed unless the National Telecommunications and Information Administration (NTIA) decides otherwise, allows Verisign to increase its wholesale rates by 7 percent annually in four out of every six years. From the initial price of six dollars in 2010, the price reached $10.26 in 2026, a cumulative increase of 70 percent. During the same period, the costs of maintaining the DNS system not only didn't increase, they actually decreased thanks to automation and economies of scale. The difference between the cost of providing the service and what is charged is not profit margin; it is pure monopoly rent, transferred from millions of small businesses, nonprofits, and entrepreneurs to Verisign shareholders, including Warren Buffett.
The following table summarizes the evolution of the wholesale price of the .com domain and its relationship with Verisign's margins.
Tab
| Period | Wholesale price .com (USD) | Verisign operating margin | Key regulatory event |
|---|---|---|---|
| 2000-2006 | 6.00 | Not publicly available | Post-ICANN registry/registrar separation |
| 2007-2012 | 7.34 | Approximately 50 percent | Obama administration tariff freeze |
| 2013-2018 | 7.85 | 58.9 percent (2021) | Automatic renewal without price increases |
| 2019-2024 | 8.39 - 9.59 | 65.4 percent (2023) | 7 percent annual increase approved by Trump NTIA |
| 2025-2026 | 10.26 | 67.3 percent (est.) | Maximum price under current contract |
Source: Prepared by the author using data from Namecheap, Domain Incite and GuruFocus.
Perhaps the most objectionable aspect of the domain name business is not the monopoly itself, but the incentive structure that perpetuates it. ICANN was conceived as the guardian of the public interest in internet governance. In practice, it is financially dependent on the very companies it is supposed to regulate. Verisign pays ICANN an additional twenty million dollars in a side agreement, plus twenty-five cents per domain registered each quarter. When the latest price increase for .com was approved in 2020, the agreement explicitly included this payment, as if it were a commission for facilitating the price hike.
Organizations like the American Economic Liberties Project have described this relationship as a de facto cartel, an incestuous triangle between Verisign, ICANN, and the U.S. Department of Commerce that blocks antitrust scrutiny. The logic is perverse: ICANN doesn't set prices because it claims to defer to competition authorities; competition authorities don't intervene because ICANN is a private, non-profit entity; and Verisign raises prices because both entities provide it with legal cover. The end user, who foots the bill, has no say in any of the three.
The case of .org domains further illustrates this trend. Until 2019, the Public Interest Registry (PIR), a non-profit operator, managed the extension with reasonable price caps. ICANN eliminated these caps despite receiving over 3,500 public comments, 98 percent of which opposed the measure. Shortly thereafter, the PIR was sold to a private equity firm (Ethos Capital) with financial leverage, transforming a public-benefit infrastructure into a debt asset. Non-profit organizations that rely on .org for their digital presence went from being beneficiaries to captive clients of an investment fund.
The domain name business is not just economic; it's geopolitical. Control of .com and .net, managed by a US company under contract with a US government agency, means that Washington retains considerable leverage over much of the internet's identity infrastructure. Although ICANN promotes a multi-stakeholder model, the reality is that key decisions about pricing, contracts, and new extensions are made in closed circles where the voice of end users is merely symbolic.
The inevitable question is whether this model is sustainable. The emergence of hundreds of new generic extensions (.xyz, .online, .tech) was presented as the competition that would break the monopoly. The reality is different. Legacy domains (.com, .net, .org) concentrate user trust, direct traffic, and brand equity accumulated over decades. A .com site is still perceived as more professional and reliable than a .store or .io site, even though technically there is no difference. This perception, rooted in the early history of the web, makes the new extensions marginal complements, not true replacements.
Furthermore, Verisign has demonstrated an ability to neutralize competitive threats. In 2016, when ICANN auctioned the .web extension, an unknown buyer paid $135 million. Three days later, it was revealed that Verisign had financed the transaction, effectively acquiring one of the few viable alternatives to .com. The Department of Justice investigated but closed the case in 2018. Today, .web remains largely unused, which likely suited Verisign from the start.
Where are we headed? The current contract between Verisign and the NTIA is automatically renewed every six years unless the agency provides months' notice. The next window of opportunity to open the .com domain to competitive bidding or restore reasonable price caps is approaching. However, recent history is not encouraging: price increases were approved behind the community's back, public comments were dismissed as spam, and kickbacks to ICANN institutionalized the regulatory commission.
Official ICANN diagram illustrating the registration, grace, redemption, and release phases of a generic domain. Source: ICANN.org.
My position is that the legacy domain business represents one of the most glaring failures of internet governance. This isn't about demonizing Verisign, which operates within the legal framework it was given. It's about pointing out that this legal framework is the problem. A domain name system is, in essence, a distributed database with near-zero marginal costs. Turning it into a source of 65 percent monopoly rent has no economic or technical justification; it has political justification, based on regulatory capture and government inaction.
The analogy with digital real estate, so often used in marketing, is misleading. Physical land is scarce; domain names are not. The scarcity of .com domains is artificial, created by the political decision not to open the extension to competitive operators. If .com were auctioned off every five years among multiple registries, as happened with .net in 2011, prices would fall dramatically and the quality of service would improve. That was precisely the model that ICANN promoted for new extensions, but refused to apply to legacy domains for fear of disrupting established interests.
The criticism doesn't imply that domains should be free. There are real costs associated with infrastructure, security, and dispute resolution. But those costs don't justify ten dollars per year per domain when competitors have publicly stated they could operate the registry for less than one. The difference isn't efficiency; it's extraction.
For entrepreneurs and small businesses, especially in emerging markets, every price increase is a barrier to entry. For nonprofits, it's budgetary uncertainty that diverts resources from their mission. For digital innovation in general, it's an invisible tax that burdens the creation of a web presence without generating equivalent technical compensation.
![What is Domain Registration - [Infographics]](https://kimi-web-img.moonshot.cn/img/imgfile.serversea.com/4c0e23b81dd11db9b61b6eadc8059e8a94d6fc88.png)
Infographic summarizing the essential elements of domain registration: SSL security, choosing an extension, brand significance, and purchase steps. Source: Serversea.pk.
From my experience helping companies build their digital presence, I've noticed that many entrepreneurs underestimate the strategic importance of domain names in their business plan. It's not just about choosing a nice name; it's about understanding that you're renting an address on a highway where the concessionaire can raise the toll without consulting you. My practical recommendation is to diversify: if your brand allows it, register the .com version simultaneously with at least one alternative extension (.mx, .co, .io, or a relevant new gTLD). Not because you'll use them all, but because having them gives you future negotiating power and brand protection.
Second, read the fine print of the registrars. The first-year price is marketing; the renewal price is the business. Some registrars offer domains for free the first year and triple the fee upon renewal. Always compare the cost over ten years, not just the first year.
Third, activate privacy protection. Registering a domain exposes your name, address, and phone number in public databases accessible to any scraper. Privacy isn't a luxury; it's a basic security measure against spam, phishing, and social engineering.
Finally, don't idealize the .com domain. If your market is local, a country code top-level domain (.mx, .es, .ar) can provide better local ranking and lower costs. If your audience is young or tech-savvy, extensions like .app or .dev can better communicate your value proposition. The .com domain is the default option, but not always the best.
Schedule an appointment with Presticorp and receive personalized advice on choosing the ideal domain for your business, protecting your brand across multiple extensions, and planning long-term renewals without price surprises. Our specialists will help you make an informed decision, not a panicked one.
The business of .com, .org, and .net domains is a reminder that the internet doesn't self-regulate through technical means. It requires institutions that genuinely represent the user and aren't funded by monopoly profits. The upcoming review of the Verisign-NTIA contract, scheduled for the next few years, will be a litmus test. If the US administration decides not to renew and opens .com to competitive bidding, we could see a price reduction similar to what happened with .net in 2011, when the price fell from six dollars to three dollars and fifty cents.
If, on the other hand, the status quo is maintained, we will continue to pay an unjustified digital tax to a company that doesn't compete, doesn't innovate, and doesn't need to because the state guarantees its monopoly. For millions of businesses in Latin America and the rest of the world, this decision made in Washington translates into real costs, barriers to digitalization, and a lesson in how technical governance, when disconnected from the public interest, becomes a closed business.
Your company deserves a solid digital strategy from the ground up. Schedule an appointment with Presticorp today and let's build a web presence together that grows without relying on third-party monopolies. We look forward to hearing from you.
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Doominio. (2026, January 13). The surprising history of domain registration and its prices.https://www.doominio.com/blog/que-es-un-dominio
Economic Liberties Project. (2024, July 24). A call for .com-petition: Reining in Verisign's monopoly over the internet's most popular top-level domain. https://www.economicliberties.us/our-work/a-call-for-com-petition-reining-in-verisigns-monopoly-over-the-internets-most-popular-top-level-domain/
Domain Incite. (2020, January 3). Verisign pays ICANN $20 million and gets to raise .com prices again. https://domainincite.com/25129-breaking-verisign-pays-icann-20-million-and-gets-to-raise-com-prices-again
IPTWINS. (2025, November 6). Forty years of DNS: From symbolics.com to the dawn of the 2026 round. https://iptwins.com/2025/11/06/forty-years-of-dns-from-symbolics-com-to-the-dawn-of-the-2026-round/
Mashable. (2019, August 9). How the battle over domain prices could drastically change the web. https://mashable.com/article/domain-name-price-caps-icann
Namecheap Blog. (2020, February 10). ICANN allows .com price increases, gets more money. https://www.namecheap.com/blog/icann-allows-com-price-increases-gets-more-money/
Prospect. (2024, June 27). The government created the most profitable company in America. https://prospect.org/2024/06/27/2024-06-27-government-created-most-profitable-company-verisign/
Shopify. (May 17, 2026). How much does a domain cost? Pricing guide. https://www.shopify.com/es/blog/cuanto-questa-dominio
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