TIVP008: VeriSign (VRSN): The Internet’s Toll Road w/ Shawn O’Malley

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3M ago 1:04:07

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In today’s episode, Shawn O’Malley (@Shawn_OMalley_) breaks down VeriSign, a company that underpins the functioning of the internet. VeriSign acts like a toll road, collecting fees from anyone using website domains ending in .com or .net, in exchange for managing the global domain registry system and making these domains accessible.

VeriSign is a fascinating company with the fifth-highest profit margins in the S&P 500, and its shares have been increasingly snapped up by Berkshire Hathaway of late, which has become its largest shareholder. You’ll learn how VeriSign was granted its monopoly, how it supports internet infrastructure, and whether the stock is attractively valued, plus so much more!

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IN THIS EPISODE, YOU’LL LEARN

00:00 - Intro

02:29 - How VeriSign sits at the foundation of the world’s internet.

07:22 - Why VeriSign is legally permitted to have a monopoly over the .com & .net website domains.

08:40 - How VeriSign is like a toll road by getting paid by any website ending in .com.

12:29 - What VeriSign does with its ample cash flows.

13:34 - How domain registration works and how VeriSign relies on sites like GoDaddy to drive more domain registrations.

13:44 - Why VeriSign’s monopoly likely isn’t going anywhere.

32:26 - The biggest risks, from cyberattacks to terrorism, threatening the company’s operations.

45:39 - How to think about the company’s intrinsic value and how expected returns fluctuate based on your purchase price per share.

51:15 - Whether Shawn adds VeriSign to The Intrinsic Value Portfolio.

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter.
Check out our discussion of VeriSign in the Q1 2025 Mastermind episode on We Study Billionaires | YouTube Video.
Value Investors Club pitch for VRSN.
Read the article on Berkshire’s acquisitions of VRSN shares.
The difference between ICANN and VeriSign, explained.
Explore Myths & facts about VeriSign.
See here on how to attend the 2025 Berkshire Hathaway shareholder’s meeting and meet-ups with The Investor’s Podcast Network
Check out the books mentioned in the podcast here.
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