May 24, 2002

NeuStar Slashes Staff Again

From Newsbytes: NeuStar Inc. - the Washington-based operator of the "dot-biz" and "dot-us" Internet suffixes - laid off another 40 employees this week and revealed plans to consolidate its two corporate offices into one.

"It was a fantastic business for a few years when no one in the world had a domain name and everybody wanted one. Those days are over, never to return," Merrill Lynch Vice President Scott Phillips said.

Phillips has issued a "sell" rating for Internet addressing giant VeriSign Inc., the world's oldest and largest domain name seller. "There's no clue as to when that business is going to stop contracting," he said.

While companies like VeriSign may have a future as Internet "utilities," Phillips said there is little chance that they will return to the meteoric profitability they once enjoyed.

And while Bear Stearns analyst Chris Kwak took a somewhat sunnier view of the long-term viability of the domain name industry as a whole, he questioned whether companies like NeuStar that specialize in "alternative" domains will be able to carve out a niche in the soft market. (full story)

My spinWhat happens to the "dot-biz" and "dot-us" domain names if this company goes out of business?

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