When the federal government put an end to Network Solutions' (Nasdaq: NSOL) mandated monopoly on the Web address registration business for the .com, .net, and .org domains, the idea was in part that competition would better serve consumers in the free-est of spaces, the Internet.

And while that's certainly occurred -- a recent Business Week article by Catherine Yang notes the rise of innovators plying everything from Network Solutions' (NSI) look-alike services to vanity options for those wanting theirname.coms and free registration in exchange for an ad barrage -- it took until today for investors looking for exposure to the business to find another pure-play avenue besides NSI.

Register.com (Nasdaq: RCOM), probably best described as a direct NSI competitor, hits the public markets today, selling 5 million shares at $24 apiece as the company wisely raised its offer price in the face of high demand. Why the demand? A look at what NSI has been able to accomplish, even after losing its monopoly, might be a good indicator: click here for a recent Fool Plate Special that takes a look at the company's story and high-flying stock.

Given a look at Register.com's pre-IPO filings, it looks as if the company could have a similarly bright future. Over the last five years, it has built itself into a credible second fiddle, and both hard and anecdotal evidence suggests that consumers don't have any problem spurning NSI to get their names in lights.

Register.com has some impressive growth numbers on the books: Full-year 1999 revenues jumped more than sevenfold from 1998 to $9.6 million, and gross margins jumped to nearly 70% from about 62%. On the other hand, net losses expanded as sales and marketing expense rose more than eight times year-ago levels -- and that will likely continue as the company expects to spend $35 million on branding and capital expenditures in 2000 alone.

As such, investors need to closely track Register.com's ability to quickly scale its business in what is clearly a high-growth industry. As it continues to provide value-added services, the company's revenue dollar could be stretched even further.

It's the potential size of the market opportunity that has Register.com excited. According to Register.com's filing, NSI customers accounted for 71% of the approximately 2.3 million total new registrations in Q4 of 1999; by comparison, Register.com picked up 13% of those. Those numbers are sure to fluctuate, but even so, when considering the company's estimates that the global market for domain name registrations could balloon by more than 1,000% to 140 million by 2003, there certainly does seem to be enough cake for several diners.

And now armed with a balance sheet ripe with cash, momentum in its nascent business, and the apparent favor of investors -- at least given the interest in its IPO, since the shares hadn't opened as of this writing -- Register.com certainly seems like a business worth watching.

Two points worth noting: First, Register.com does not compete in the registrar business, the maintenance of the master domain name database that is still managed by NSI for fun and profit. It's a key difference and a source of extremely high-margin revenue no other company can boast. Second, Wit Capital (Nasdaq: WITC) was both an underwriter of Register.com's IPO and this week's StockTalk subject. Click here for the interview.

Related Links:

• Register.com page
• Fool Plate Special, 2/10/00: Network Solutions Girds for 2000