The Untold Story of SAIC, Network Solutions, and the Rise of the Web—Part 2

The beginning of the Internet gold rush is often dated with some precision—the date of Netscape Communications’ IPO, on Aug. 9, 1995—even though a broad array of Internet-related technologies had been under development for years before that. A case in point is Network Solutions Inc., a small Herndon, VA, computer networking company that was acquired by San Diego-based SAIC six months before the Netscape IPO.

If the Netscape browser made it possible for people to tour the World Wide Web, Network Solutions was responsible for keeping track of all the places they could go. The small, minority-owned government contractor founded in 1979 was granted a government-sanctioned monopoly in 1992 to serve as the sole registrar of Internet domain names that end in “.com,” “.edu,” “.net,” and “.org.” At the time, Network Solutions was a money-losing enterprise that had been generating about $18 million a year in revenue, mostly by installing computer networks for banks and government agencies.

SAIC, the defense contractor also known as Science Applications International Corp., purchased Network Solutions before it was obvious just how important—and lucrative—that service would be. As I explained yesterday, SAIC operated Network Solutions from 1995 until 2000—an extraordinary inflection point in terms of Internet growth—and made billions of dollars on its initial investment. But it’s not a story that’s widely known. So it’s something of a coup to provide an exclusive interview with two key insiders, SAIC founder (and Xconomist) J. Robert Beyster, who was SAIC’s chairman and CEO during the Network Solutions years, and Mike Daniels, the SAIC executive who led the acquisition and served as chairman of Network Solution’s board during the years SAIC controlled the company.

Here is an edited account of our conversation:

Xconomy: SAIC’s former chief financial officer told me SAIC began an expanded acquisition strategy in 1990. Why?

J. Robert Beyster
J. Robert Beyster

J. Robert Beyster: At the time, I was interested in expanding our network installation business. This task fell under Mike Daniels in Washington, who managed the contracts where SAIC installed networks for other companies and for the government. I felt that business was such that we needed to acquire more people, and the best way to do it was through acquisitions.

X: Why did SAIC acquire Network Solutions?

JRB: We were originally interested in acquiring

Pages: Page 1, Page 2, Page 3, Page 4

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.