But the appointment of James Rutt as the company's new CEO shows that the U.S. based NSI is looking beyond its immediate business challenges toward staking out new territory online, according to industry observers. "Competition is going to be better for everybody involved in the Internet, because it will cause the overall market to grow," Rutt said. "Our market share will probably have to come down somewhat, but I believe our rate of growth will at least track that of the Internet."
Rutt is the former chief technology officer of The Thomson Corp., the Toronto-based publishing giant, and his involvement with the Internet goes back to pioneering online service The Source in the early 1980s. Since then he's founded a number of startups, including First Call Corp., a source for financial analysis, which he said turned a profit in its first month. In various posts at Thomson, Rutt said he took the company from print-based revenues to drawing 40 percent of its profits from electronic media.
Rutt says he's gained insight into forming electronic communities around business issues. "I've been probably one of the grandfathers of the electronic information business," Rutt said. "I've grown familiar with the real issues for building communities of users."
NSI formerly registered domain names -- Net addresses ending with .com, .net and .org -- under an exclusive government agreement. Under the new rules, companies such as America Online Inc. and Register.com are planning to compete. So far, NSI has moved to solidify its position and brand recognition by introducing a slew of value-added services and marketing itself as the pre-eminent domain-name expert.
NSI may be looking to continue broadening out into services that have nothing to do with domain names. For example, it already offers Web hosting and e-mail, among other services. "The message here, considering his background, is that he's going to be more active in a kind of visionary way, to look at entirely new opportunities for NSI," said Tony Rutkowski, director of the Washington, D.C.-based Center for Next Generation Internet, which follows industry trends. "It shows a clear direction for the company."
A measure of just how strong NSI's position is: It didn't seem to matter much that the company has been without a CEO since Gabriel Battista left in November to take the helm at Tel-Save Holdings Inc. since renamed Talk.com Inc. "Nobody even noticed, really," said Shari Steele, director of legal services for the Electronic Frontier Foundation. "[NSI] is just this machine that's going along, doing its own thing."