Those who sounded the death knells for Internet domain name powerhouse Network Solutions Inc. (Nasdaq: NSOL) in early 1999 must be kicking themselves now, as the company's shares have been on a remarkable tear following a short dip caused by fears that government-mandated competition would mark the end of an impressive run as a monopoly.

Following a well-timed Foolish Duel over the company's prospects, we checked in on the company again in October when it seemed Network Solutions Inc. (NSI) -- the leader in domain name registrations in the dot-com, dot-net, and dot-org categories and the steward of the master database for all registered names -- had overcome the bugaboo of competition. Since then, the picture has only seemed to brighten to the degree that the record, so to speak, sounds a bit broken.

Today, NSI turned in fourth-quarter and full-year financial results that impressed investors, to say the least: The shares quickly rose more than 7% in morning trading. On the back of 5 million new registrations and $220 million in full-year revenue, the increased building out of new services like its popular "dot com directory" business listing and new wrinkles in its core business like one that allows users to register domains in yearly increments for up to 10 years, the company has created a financial monster that turns a profit, generates ample cash, and sits on an impressive balance sheet.

The question for investors is whether this record will continue spinning. The shares have been under some pressure lately following the company's announcement of a secondary offering in which it and several shareholders will sell some $1.9 billion in company stock, though optimism about the company's performance and plans for an upcoming 2-for-1 split have likely helped keep the stock up.

There are a few ways NSI can be looked at. First, the company has the OK from the government to continue operating in its current form through 2003; if it splits its registration and registry businesses into separate companies it can keep the registrar contract -- which gives NSI money even when users register their domains through other companies -- through 2007. Given the opportunity to pick up that kind of visibility and to extend its stranglehold on a sure source of cash, this seems a likely move.

Second, its strong performance in 1999 and its upcoming stock offering will give the company several hundred million dollars -- $850 million in cash and investments, according to CFO Robert Korzeneiwski -- with which to prepare itself for 2004, 2008, and thereafter. NSI has already started investing some of its gains, putting $10 million into application service provider Interliant (Nasdaq: INIT) earlier this month.

All told, NSI is running a powerful business and, as Korzeneiwski notes, is poised to have "a powerful war chest for strategic investments and acquisitions during the year... [and] a balance sheet that has never been stronger with $362 million of deferred revenue." Though the company's business environment has changed significantly over the past year, it still appears -- as it did to this Foolish Duelist -- that NSI is firmly in control of its destiny.

Related Links:
Network Solutions website
Network Solutions message board
Fool Plate Special, 10/28/99: Network Solutions Answering Questions
Dueling Fools, 4/28/99. NSI