NEW YORK (TheStreet) -- Shares of Web.com (WWWW), which provides Internet addresses, are falling after Google (GOOG) announced that it would offer a similar service.
WHAT'S NEW: Google announced on its Google+ blog that it would enable individuals and businesses to choose Internet addresses, also known as domain names. The search giant stated that it would offer specialized domain endings such as .guru and .photography. Similarly, Web.com maintains a registry of domain names from which individuals and businesses can choose. Meanwhile, Google stated that it was partnering with companies that will offer website building tools. Web.com offers website design services.
ANALYST REACTION: In a note to investors earlier today, JPMorgan analyst Sterling Auty wrote that Google's move would likely hurt Web.com. However, Web.com is attractive to small and medium businesses, as they like the additional services, such as the construction and maintenance of websites, that the company provides, according to the analyst. He kept an Overweight rating on the stock. Meanwhile, Verisign (VRSN) and Neustar (NSR) - which provide the backend infrastructure for websites and manage the domain names that are sold through Web.com and its competitors - could benefit from Google's entrance into the market, Auty believes. He kept an Overweight rating on Web.com and a Neutral rating on Verisign. Since Google is not hosting websites or helping customers build their own websites, the search giant is not directly competing against Web.com or another company in the sector, Endurance (EIGI), Wells Fargo analyst Gray Powell wrote. Web.com and Endurance provide "higher end" services and Powell does not expect the competition faced by the two to increase in the near-term or mid-term. He kept Outperform ratings on shares of both Web.com and Endurance.
PRICE ACTION: In early trading, Web.com tumbled 21%, to $27.25, Endurance sank 10% to $14.23, Verisign rose 0.4% to $51.45 and Neustar added 0.8% to $25.70.