.Com registry offers $2 discount on deleting domain names.
Verisign is testing lower wholesale prices for deleting .com domain names later this month.
From December 15-31, registrars will be able to register .com domain names on the day they delete for $5.85. Regular wholesale pricing is $7.85 per year.
The domain names must be registered before midnight on the day they are deleted. They must be registered through the auto batch pool, which is a secondary registry-registrar connection. Most domain names registered are done through a “live” pool, which will not qualify for the discount.
This is an interesting test. The timing could be that Verisign is trying to push up its numbers just before the quarter ends. But it also could be that they are trying to figure out how to improve long term re-registration of domain names that expire. (Or maybe both.)
Verisign has considered offering tiered pricing on expired domain names, essentially discounting the price over time if there are no takers when the domain drops. But in this test the discount is only good on the day the domain expires, and the discount is the same if you grab the domain immediately after it drops or later in the day.
End user customers are unlikely to see any price decrease from the test.
Verisign is valued at 25 times forward looking earnings. Compare to Neustar at 20 times and others with even lower multiples. Verisign gets that valuation premium because of the growth it showed in .com registrations between 2004 and 2010; and because of the com/net franchise. Most of the growth during that period was not from end users, it came from domain tasting. Now with the ICANN mandated re-stocking charge closing the tasting window, and with new name extensions about to start nipping at its heels, .com/net growth has plateaued and will begin to fall as all those old tasting names, (which no longer cover registration prices, due to lower Google parking payouts) begin to expire. As the registration growth slows the valuation premium in .com will go down. A 25 p/e implies VRSN will grow revenues in 25 years time. They have no new GTLD story except the stuff tied to .com. That franchise will inexorably change over the next 10 years. This price change is a stab at trying to prop up what’s dying. It’s not enough.
I’m still learning this field, so please excuse the stupid question.
Verisign shows domains about to expire (will expire and be available in 1-5 days), so there’s no facility to buy it now… right?
Correct. You can place backorders for the domains as sites like NameJet and SnapNames. But it will be well after the expiration date before they are actually released.