Latest VeriSign report blames Google Adsense weakness for slowing domain registration growth rates.
New domain name registrations are slowing, and VeriSign (NASDAQ: VRSN) says Google (NASDAQ: GOOG) may be to blame.
About 11.5 million new domain names were registered in the third quarter of this year, VeriSign reported in this month’s Domain Name Industry Brief (pdf). That’s a 2% decline from the previous quarter as well as over Q3 of 2007. When you look only at .com and .net domains, new registrations are down even more. The 6.9 million .com and .net domains registered in the third quarter were down 9% compared to the second quarter of this year.
VeriSign predicts that the total base of .com and .net domains will increase only 1 or 2 million in the fourth quarter after accounting for expired domain registrations.
What’s to blame? VeriSign cites changes in Google’s Adsense for Domains program as well as general internet advertising weakness:
The number of new .com and .net domain names registered with the intent of generating online advertising revenue saw pronounced weakness again in third quarter due in part to changes in Google’s Ad-Sense program and lower spending trends in Internet advertising. As some US-based registrars forecast that economic conditions may contribute to lower than expected growth rates in the coming quarter, coupled with continued weakness in online advertising, the base of .com and .net domain names is estimated to increase one to two million domain names in the fourth quarter.
Renewal rates for .com/.net dropped to 72% from a historical average in the mid 70% range.
VeriSign’s report also shows that Germany’s .de domain name is no longer the top dog of ccTLDs. China’s .cn has replaced it, thanks in part to cut rate pricing.
The report includes an update on .tv. It’s essentially an advertisement; VeriSign has a financial stake in .tv domains.
Wouldn’t this all have more to do with the new fee structures addressing domain tasting?
and the recent rise in domain prices.
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Also, most new regs involve low-quality names; now is the time to take a serious look at the quality aftermarket names at bargain prices.
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Larry . absolutely dead on, but no way they are going to go on record and say the reason for the drop was that they were RAKING IN CASH from the tasting operations and now that cash cow has been slaughtered.
@Andrew: Verisign operates the .TV registry, so it’s a bit more than just a financial stake.
Frankly, any supposed reasons for reduced regs and renewals (or for any changes over previous time periods; and for that matter, up or down) given by VeriSign are nothing more than unsupported conjecture and supposition…
Short of taking a huge survey (of 25,000 domain owners would be a nice start) of those who have and/or do–and/or do not–reg and/or renew domains; and even that would be suspect; no one can state with certainty the reasons for any increases of decreases when it comes to domains…
Decreases due to lower PPC? Sure, it’s likely.
Lower domainer-to-domainer sales prices (at least anecdotally, the end/ retail market seems to remain strong)? Also likely.
Higher reg/renewal fees? Also likely.
But proof requires much more than than a set of “likelies.”
Raw figures like these rarely if ever should be used to draw conclusions.
I don’t think Google is the cause for slow domain name registrations. Its the lack of good names available that may be directly responsible.
All of these are possible reasons. I doubt it has much to do with the 7% rise in .com fees and 10% in .net since that didn’t take place until October (the last month of the quarter). I also don’t think it will have much of an affect. The only domains that wouldn’t get renewed would be ones with PPC revenue that didn’t cover the 7% gap and had virtually zero resale value.
But Larry and Adam are correct…domain tasting probably had a lot to do with this.
It is not only this year’s 7% but the believe that next year it will be a 10% more and another 10% the year after (over the increase from previous year so 21% in two years, 33% in three and so on). It is very unlikely that the revenue from the domains increases at this pace, so every year it will be more difficult that “the long tale” domains reach the break even. With that gloomy outlook it does not make sense to register thousands of domains whose costs will grow every year exponentially.
@steve m
verisign actually does a good job of tracking parking pages and what they are really saying here is that many fewer names are being registered for parking and/or renewed for parking.
certainly the price increase and tasting charges have impact as they relate to the above.
@enoss: They used to do a better job in breaking it out into “under construction” and “parked pages” in their reports until 1 1/2 years or so. I think the difference between parked pages and a small website is getting harder to tell all the time though.
Now 21% are “one-page web sites”: