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Register.com: A Cash Register?

Simply enough, Network Solutions created a profitable Net franchise by selling domain names. Of course, it was convenient that the company had a virtual monopoly.

This is no longer the case. Now, there are many hungry entrants in the domain-name game. While it is competitive, there are still growth opportunities. One to keep an eye on is Register.com . Basically, it is the #2 player in the marketplace. So it is no surprise that the company was the first register to launch its competitive service against Network Solutions (June 1999).

The company is growing at a furious rate. In the last quarter, revenues were $12.4 million, which was an increase of 139% from the prior quarter. In the last quarter, 923,000 domain names were registered. This constituted 18% of the market, which was up from 13% of the market in the prior quarter.

Losses are small; they were $991,000 in the past quarter. Whats more, in the companys recent IPO, about $120 million was raised. Register.com's cash flow from operations in the first quarter of 2000 totaled $24.9 million, a 101% increase over $12.4 million in the fourth quarter of 1999.

The site is easy to use and provides great features. Some of the recent features include FastFind, which helps you find alternative names if the desired domain name is already taken. Another feature allows you to buy domain names in bulk transactions.

Expect the company's number to keep growing fast. Register.com has aggressively signed marketing deals. Partners include AskJeeves (11 million unique users per month); About.com (13.2 million unique users per month); Stamps.com; and freeinternet.com.

The big opportunity for the company will be value-added product offerings. Registering a domain name is the first step to launching a Web site. So Register.com can sell the necessary products to create an effective Web presence. For example, Register.com provides branded email with USA.NET.

With Network Solutions purchased, Register.com is the only pure-play investment opportunity. With the recent fall in the stock price, Register.com should be enticing to investors.