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Businessweek Archives

Don't Confuse Nsi With A Monopoly

Readers Report

Don't Confuse NSI with a Monopoly

"What's in a Plenty" (Legal Affairs, Sept. 6) correctly identified many important issues about the future of the Internet. Unfortunately, the article also contained several misperceptions about Network Solutions Inc. (NSI).

NSI does not have a government contract for domain name registrations. NSI entered into a cooperative agreement with the National Science Foundation (since transferred to the Commerce Dept.) that provided NSI the opportunity to register names in four domains. NSI invested the more than $250 million in hardware, software, and highly trained personnel to meet the explosive growth of name registrations. NSI had to take all the risk including legal liability.

NSI does not have a monopoly on domain name registrations. NSI did have the exclusive right to register names in four of the 250 domains currently available. Through hard work and investment, it turned that opportunity into a thriving business. But today, even those four domain names are open to competition. In fact, one of NSI's competitors just announced that it has signed up its 1 millionth customer in the domain--a number equal to almost 20% of NSI's entire customer base.

The intellectual property developed by NSI while registering domain names is not public property. It belongs to NSI under the terms of the cooperative agreement. As with thousands of other companies and universities that have entered into agreements with the National Science Foundation, information developed as a result of original work and private investment belongs to the originator, not the government.

Finally, after working nonstop for four years to develop and maintain key infrastructure that makes the Internet work reliably and securely, NSI certainly does oppose efforts that would allow the system to be disrupted by political wrangling. We owe it to our more than 5 million customers around the world not to let that happen, and we take that business responsibility very seriously.

Michael A. Daniels


Network Solutions Inc.

McLean, Va.Return to top

Shed No Tears for the IPO Tycoon

"Inside an Internet IPO" (Cover Story, Sept. 6) was fascinating reading, but please don't expect us to shed tears of sympathy for the "five weeks of pure boredom" and the two weeks of "excruciating" early mornings and long days for the owners to land their multi-hundred-million-dollar windfalls. They need to spend a day following a nurse in an intensive-care unit on a 10-day shift (with no stock options) to understand words like excruciating and to be more grateful for their compensation. And a few sleepless nights in the lab with an underpaid biomedical researcher struggling to get a grant application approved for a cancer study might help put their own nights of suffering in hotel suites in better perspective.

No one should begrudge the choices or financial successes of the entrepreneur. Just don't describe this roller-coaster experience of an IPO in such mythic and tragic human terms.

Ronald S. Newbower

Acton, Mass.Return to top

Is Barad in over Her Head at Mattel?

Street-smart investors bailed out of Mattel Inc. stock months ago, and the analysts, burned in 1998, won't be fooled again soon ("Searching for Turnaround Barbie," The Corporation, Sept. 6). Unfortunately for Mattel and its shareholders, the worst is probably yet to come.

Throughout her tenure at Mattel, CEO Jill E. Barad has made numerous assumptions that could continue to have disastrous implications for the toymaker. Not the least of which is the assumption that, at $3.5 billion, the acquisition of Learning Co. is somehow good for Mattel. The brands at the Learning Center are ancient in software years and feature fairly generic characters.

Moreover, because of the generic makeup of the Learning Center brands, the margins earned on the current

$1 billion in sales will begin to erode. The next wave of educational software development will incorporate new technologies with better, more interesting characters who already appeal to the target market and their parents.

Meanwhile, the market for used educational CDs will continue to grow, as their quality grows and the initial users graduate to higher forms of computer edutainment. Mattel, like makers of video games, will not share in this market. Although Barad is an excellent marketer, she is in over her head.

Stephen M. Stauning

St. Joseph, Mo.Return to top

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