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.

Toys.com will be auctioned again; Faculty Lounge will be stalking horse bidder.

Domain Name Wire has learned that the sale of Toys.com has been halted by the bankruptcy court and the domain name will be auctioned again. Faculty Lounge, the company that won the domain name at auction earlier this month, will be a stalking horse bidder in the auction.

Eli Columbus, a shareholder in Winstead PC’s Business Restructuring/Bankruptcy Practice Group (which is not involved in the case), explained that a stalking horse bidder typically sets the floor in an auction, and typically receives additional rights in return.

“You have a bidder committed to buying an asset at a certain price,” said Columbus. “They’re setting the bar. The benefit to the bankruptcy estate is you know you have a buyer at a certain price, and it generates some interest.”

If Faculty Lounge doesn’t win the domain name in the new auction, it will likely receive some sort of compensation. “From the stalking horse bidder perspective, there are typically some incentives in the auction procedures,” said Columbus. “A lot of times the court will approve a break up fee if they aren’t the successful bidder. This usually covers at least the stalking horse bidder’s fees. In some cases the break up fee will be a percentage of the sale price.”

Bankruptcy courts sometimes block asset auction sales if they believe the assets weren’t marketed in a way that achieved the highest results. As I wrote in an article yesterday about DONE! Ventures’ purchase, I’m not surprised that there has been a challenge to the Toys.com sale. Few companies knew about the eToys auction, and the prices on some of the domain names were well below market prices.

Bankruptcy judge approves sale of domain names to DONE! Ventures.

Earlier today, U.S. Bankruptcy Court judge Brendan L. Shannon handed down an order affirming the sale of a number of eToys’ domain names to DONE! Ventures. The domains included in the $200,000 deal are:

birthdays.com
birthdays.net
birthdays.org
birthday.net
ebirthdays.com
e-birthdays.com
e-birthdays.net
happybirthdays.com
eparties.com
pinata.com

The domain name whois records for these domains still shows eToys, but you can expect that to change shortly.

In addition to the DONE! Ventures deal, the judge earlier approved Toys ‘R’ Us purchase of a number of brands and intellectual property for $2.15M.

After reviewing the judge’s orders on both the DONE! Ventures deal and Toys ‘R’ Us deal, it will be interesting to see if any objections are filed to the Toys.com purchase for $1.25M. I know there are some entities that would have bid on the domain name had they known about the auction, and the judge’s orders all include statements that the sale constitutes the highest offer received. Another party could conceivably make a higher offer, and this would have to be reported to the bankruptcy court.

Domain Name Wire will keep you posted as the judge issues more orders in this case.

Web site creation system open to new registrations.

DevHub, an online web site creation system, is finally open to new users.

DevHub allows users to create web sites using a simple, drag-and-drop system. Using dozens of APIs, users can add real estate listings, local search results, advertisements, and job listings into their web sites by literally dragging them onto the page.

Examples of web sites created with DevHub include BankProfiles.com, InvestmentsofWashington.com, and BestSeattleSushi.com (see video below).

The service makes sure to differentiate itself from other WYSIWYG and content management solutions, blogging tools, and domain parking. As DevHub describes, it:

In short, the DevHub platform is open to anyone who wants to be rewarded for the value they bring to users on the website they create. Developers, Internet Entrepreneurs, and Affiliate Marketers are all welcome as long as they meet our quality standards.

The service is free, and DevHub makes money from sharing revenue from affiliate actions and advertising. Customers can also add their own affiliate and pay-per-click advertising code, which of course doesn’t share revenue with DevHub.

DevHub is a product of EVO Media Group.

Below: DevHub video showing creation of BestSeattleSushi.com.

NameMedia improves stats and landers for its three domain parking programs.

NameMedia, parent company of BuyDomains and Afternic, has released several improvements to its three domain name parking platforms: GoldKey, ActiveAudience, and SmartName.

The improvements span three areas:

1. Reporting – improvements to reduce timeout issues and site downtime and improvements to data discrepancy reporting. This includes a move to a new data center as well as database improvements.

2. Dashboard – what was once a convoluted mess is now a simple dashboard including recent revenue, portfolio snapshot, and best and worst performing domains. Beyond the dashboard, I still find NameMedia’s reporting systems to be more complicated than some of its competitors. A simple click to view the entire month’s stats by domain name would be a nice addition.

3. Landers – introduced seven new templates including localized search. The new templates include a configurable number of results.

There are few differences between NameMedia’s parking services as they all use the same platform. GoldKey is intended for newer and smaller domainers, whereas SmartName is an exclusive program for only the biggest domain portfolio owners.