Latest industry brief shows rate of domain registration growth slowing.
VeriSign (NASDAQ: VRSN) has released its latest Domain Name Industry Brief (pdf), which shows an all time high of 177 million domain names in existence. Although the total base of domains is growing, the growth rate is falling.
The total base of domain names increased only 2% in the fourth quarter of 2008 compared to the third quarter. New registrations in the fourth quarter totaled 10.1M, 12% fewer than in Q3 and 17% fewer than in Q4 2007.
VeriSign blames some of the decrease in new registrations and renewals on a faltering domain name parking industry:
The number of new .com and .net domain names registered for the purpose of participating in online advertising networks declined in the fourth quarter as expected and reflects a weakening in the earnings per click (EPC) for some domain name holders.
However, VeriSign says renewal rates are falling even for domain names not purchased for domain name parking.
The Domain Brief also discusses internationalized top level domain names (IDNs), pointing out the possible need but also unanswered questions:
While the Internet community is working on Internationalized TLDs, the level of interest in Internationalized TLDs from the perspectives of registrants and end users is still unclear…According to recent qualitative research conducted with small and medium-sized businesses (SMB) in multiple locations across Asia and the Middle East, IDNs are still not seen by a majority of those surveyed as viable replacements for ASCII domain names for businesses. The respondents cited the need for proven popularity and usage, especially given the low adoption of IDN-aware browsers in some markets, particularly in Asia. However, the research also indicated that SMBs perceive that IDNs have clear advantages in targeting local markets and non-English speaking Internet users, as well as, for local promotions and advertisements. Respondents felt that IDNs are still a novelty and are able to attract consumer attention. The current IDN implementation with the top level in ASCII was raised as one of the major challenges because it is confusing to mix multiple scripts in a single domain name and, more importantly, more difficult to input than a URL that uses an Internationalized TLD.