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Verisign has withdrawn its application .com IDN transliteration in traditional Chinese while retaining its simplified Chinese application.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.