Search results for "verisign"
Stock investors still think .com is king.
Verisign reported earnings yesterday and shares in the company are up 12% in trading so far today.
Why the jump in share price after a dismal quarter for net domain name adds?
Well, Citigroup upgraded the company from sell to neutral today saying “fundamentals have likely bottomed”. Financials apparently exceeded most expectations.
Verisign had just 0.42 million net adds in .com and .net last quarter. It expects Q3 net adds to rebound to between 0.6 million and 1.1, which is definitely a move in the right direction. With slipping renewal rates, these targets would indeed be rather strong and require strong new registrations.
The company also announced a 10% price hike on .net. No knowledgeable analyst didn’t see that coming, though.
Of course, when the first credible report comes out suggesting that new TLDs are making a dent in .com…
.Com base inches forward, .Net prices are increasing.
Verisign reported earnings after the bell today, and the results for .com/.net aren’t that promising.
It gets harder to grow something as it gets bigger, but net adds across these two domain names slowed by quite a bit.
Verisign reported just 0.42 million net new ads during the second quarter. Last year in the same quarter it added 1.2 million domain names.
The good news for Verisign is that new registrations of .com and .net remain fairly strong. 8.5 million new .com/.net domain names were registered last quarter, compared to 8.7 million for the same quarter last year.
The number is down, but not by that much. The company predicts a rebound in Q3.
Even better, Verisign is invoking its allowed price hike on .net domain names. The price will jump from $6.18 to $6.79 on February 1, 2015.
Who needs to grow the zone when you can just increase prices 10% a year?
Verisign used to be able to do that with .com, too. The U.S. government stepped in to put a halt to that.
Verisign cites a number of headwinds in its existing TLD business while it withdraws one of its IDN applications.
Verisign held its quarterly investor conference call yesterday after releasing it first quarter earnings.
The company processed 8.6 million new registrations across .com/.net, compared to 8.8 million in the same quarter a year ago. The renewal rate also dipped.
Here’s what Verisign discussed on the call.
Why the growth rate is shrinking
Verisign blamed a number of factors for slowing growth:
- Registrars focusing on bundles and average revenue per user instead of using domains for customer-acquisition. The company has noticed some registrars returning to a domain-focused pitch, especially outside of the U.S.
- Changes in pay-per-click (e.g. parking, heavily monetized sites).
- The law of large numbers, which makes it more difficult to push the needle.
Additionally, CEO James Bidzos said it was too early to tell how much impact new TLDs will have on growth:
…there are roughly 100 — over 100 new gTLDs that are delegated into the zone, and they’re accepting registrations right now, and have been pretty much for most of the first quarter, for roughly almost 3 months now. And in total, there are about 570,000 registrations in, collectively, all of the new gTLDs year-to-date. I think that information is current as of just a couple of days ago. So it’s too soon to tell if any of those registrations or what part of those registrations are at the expense of a .com or a .net registration, because until we see the first renewal cycle on these new gTLDs, it’s really going to be difficult to assess how much impact they might have on the .com/.net zone.
The company expects 0.3 million to 0.8 million net adds in Q2.
Verisign has withdrawn its application .com IDN transliteration in traditional Chinese while retaining its simplified Chinese application. This was due to ICANN’s policy on variants, which Verisign said did not consider one applicant applying for variants. It hopes it will be able to reinstate the traditional Chinese application once this policy is settled. It went with simplified Chinese because it believes it’s a bigger market.
Also, Verisign thinks one of its back-end registry customers for new TLDs will launch in the second quarter.
Monetizing intellectual property
Verisign reported that it is beginning to receive inquiries from competing registry operators about using certain elements of its patented registry technology.
New registrations and renewal rate dip.
Verisign reported first quarter earnings today after the bell. The company reported revenue of $249 million, a 5% increase from the first quarter of 2013.
The company added 1.28 million net new names during the first quarter to .com and .net, ending the quarter with 128.5 million active domain names in the zone.
Some other metrics weren’t as rosy.
Verisign processed 8.6 million new domain name registrations for .com and .net last quarter. That’s below the 8.8 million number in the same period in 2013.
The final renewal rate from Q4 2013 also dipped. The renewal rate was 72.2 percent compared with 72.9 percent Q4 2012.
I suspect the company will blame changes in monetization on its conference call this afternoon. A bigger question going forward is if new top level domain names can siphon off some of those 8.6 million quarterly registration.
Marketing programs help .com get top billing, but other registrars can play this game too.
New top level domain names represent a growth opportunity for domain name registrars, many of which have seen domain registrations plateauing over the past year.
That’s why 1&1 spent $50 million promoting new top level domain pre-registrations and other registrars have prominently featured new TLDs on their home pages.
Over the past week or two I’ve noticed something interesting, though. Verisign’s .com and .net domains have been pushed heavily on registrar websites, often usurping promotions for new TLDs.
Consider 1&1, which has gone all in on new TLDs:
99 cents .com and .net domains are front and center. There’s a promotion for .email, but there’s no longer a general promotion for new TLD pre-registrations anywhere near the top of the page (not even on the slider).
And here’s GoDaddy’s home page today:
.Com, .net, .org, and .co are all featured. .Club is also on there a little bit below.
This sort of promotion isn’t free.
Sure, .com is typically going to be featured high up on a registrar page. But Verisign also kicks in bonuses for registrars to market .com domain names.
This is nothing new — it’s been going on for years prior to the launch of new TLDs, and it’s not limited to Verisign. Yet it sure seems like Verisign’s placement is improving lately.
A common program will offer rebates to registrars if they grow their .com/.net registration numbers. They can also earn marketing dollars for marketing campaigns targeting new and existing customers, which is what a lot of the on-site promotion is about.
Registrars get additional bonuses if they include “Powered by Verisign” when they show .com and .net (notice the inclusion on the 1&1 home page). At least one of the marketing programs requires .com and .net to be within the top three in the search results or drop down box, at least for people visiting the site from the campaign Verisign is backing.
Verisign will also chip in to broader marketing initiatives. That’s why I saw this ad during a Major League Baseball broadcast last year:
Whereas before that ad would have just said GoDaddy.com, this time the .Com is separated and includes a “Powered by Verisign” logo.
Verisign’s fat wallet and the popularity of its TLDs give it a leg up on getting its domains pushed at registrars. But this sort of opportunity is open to all.
.Co has been heavily featured on GoDaddy.com for years, and famously appeared in three of GoDaddy’s Super Bowl commercials.
.Club apparently understands the value of this, too.
Registrars will promote whatever makes them the most money. These promotion
kickbacksrebates and marketing programs merely change the equation for what makes a registrar the most money.
This idea isn’t an invention of the domain industry. Registrars are retailers and retailers have long played this game. How do you think those Cheetos got selected for the end cap at the grocery store?