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Analyst becomes more bullish on new top level domain name potential.
B. Riley analyst Sameet Sinha has increased his forecast for new top level domain name registrations after attending last week’s ICANN conference in Los Angeles.
Previously, he was calling for about 20 million new TLD registrations from 2014-2016, now he’s pegging it at 29 million and says that might be conservative. He estimates top line potential of $900 million during this period.
ICANN recently downgraded its forecast for budget purposes for the fiscal year ending June 2015 from 33 million to 15 million; Sinha’s forecast calls for 5.7 million registrations during that period.
My guess is Sinha is closer to the truth, but even his estimates will require increased registration velocity going forward.
Sinha points to a number of factors in his bullishness:
- Awareness is very low now, and can only improve going forward.
- New business models including vertical integration, premium domain sales, and internet of things create upside.
- Recent private new TLD auctions reaching 8 figures raises the bar, and increases valuation of strings.
Sinha maintained his $15 price target on Rightside (NAME). It currently trades for $9.75.
Thank the Chinese and discount pricing for continued demand for .com domain names.
Verisign handled 8.7 million new registrations in .com and .net in the third quarter this year, the most ever in a third quarter.
That amounted to 1.15 million domain names added to the namespace. The addition was basically all in .com, as .net continued a flat/slow decline.
So why did .com do so well? And why did .net flounder? Here’s Verisign’s viewpoint, gleaned from its Verisign’s Q3 investor conference call last night.
Why .com did well
- The Chinese are registering a bunch of .com domain names. This is a big area of growth. (Verisign actually blames a Chinese holiday week in October for slowing down .com registrations during that time.)
- One of the largest U.S. registrars refocused on acquisition and offered discounts on .com
- .com is a strong brand and “strong, trusted brands always do well”. As new TLDs come out and people are confused, they will feel comfortable with .com
Why .net dropped
- New top level domains are causing confusion for non-.com domains. It’s also giving them alternatives to .net.
I’m not surprised that .net is struggling in the face of new top level domains. I suspect this applies to all non-.com and non-dominant ccTLD domain names.
Verisign still negotiating with ICANN over .com transliteration domain names.
Owners of IDN.com domain names that are patiently waiting for .com transliterations are going to have to keep waiting.
In an SEC filing today, and on its investor conference call, Verisign said it has received an extension to the deadline for negotiating its contracts for these domains with ICANN. The new deadline is December 31.
The company would not disclose the specific terms of the contract that it is trying to negotiate.
I can imagine that, whatever the terms are, ICANN doesn’t want to do any favors for Verisign right now. ICANN and Verisign have been sparring significantly over the past couple years. It’s also unclear what leverage, if any, Verisign has for negotiating new TLD contracts.
Unfortunately, IDN.com owners are the ones caught in the middle.
After slow second quarter, Verisign returns to health growth in net-adds in third quarter.
Verisign just reported third quarter earnings, and it appears to have been a pretty good quarter in terms of .com and .net registrations compared to the previous quarter.
The registration base for .com and .net increased by 1.15 million domain names to reach 130.0 million.
That’s a nice rebound from the second quarter, when Verisign added just 0.42 million registrations to its .com/.net base
In the third quarter, it sold 8.7 million new domain name registrations for .com and .net, compared to 8.3 million for the same period in 2013.
The company reported revenue of $255 million for the third quarter of 2014, up 4.7 percent from the same quarter in 2013.
A slow start, but some of these domains have long term potential.
Five new top level domain names launched yesterday, and they combined for a total registration base of just 2,500 after the end of the “zone day”. This includes sunrise and landrush, plus the initial hours of general availability.
Donuts’ .healthcare ended the day with about 1,400 registrations (all stats from nTLDstats).
I’m a bit curious about .healthcare. There’s a growing chorus of concern about the future .health domain and how people will falsely believe that information on it is authoritative. I personally thing this is silly, but if people do give authority to .health, won’t they also give it to .healthcare?
The other domains yesterday were all from Rightside. Its four military-related domain names struggled out of the gate: Click to continue reading…