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Why .com had a good quarter (and .net didn’t )

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.

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  1. Joseph Peterson says

    The aftermarket for .NET domains at the moment is partly out of sync with the trend in registration / renewal volume.

    2014 has seen high .NET sales such as Mobile.net for $500,000. And I noticed another 5-figure .NET sale yesterday. But (at the same time) one of my own .NETs fared miserably at auction.

    There seems to be a lot of market confusion or disagreement on the valuation of .NETs right now. Many reseller / investor buyers (rightly or wrongly) foresee .NET being diluted by the nTLDs; so they hesitate.

    That means the .NET market is erratic enough that there are deals to be had for value investors (as opposed to growth investors). Yesterday, I pointed out one .NET flip from $800 to $8k in less than a month.

    Personally, I like good .NET domains enough to build a brand on some of them. Words like “networking” and “internet” aren’t going anywhere. Nor are sites like PHP.net.

  2. Domenclature.com says

    “Verisign has been increasing .net prices, so .net fall is probably a factor of both price hikes and new gTLDs”. – Rubens Kuhl

    Leaving .NET for new gTLD, is like jumping from frying pan to fire; doing so acrobatically, by levitation, breaking the laws of physics cum gravity; where the fire is on 7th floor, and the pan on the 3rd.

    • Joseph Peterson says

      I won’t go into whether .NET is slowly dying or not.

      But it’s fair to point out that drops aren’t necessarily an indication of lack of value. Every week, scads of expired domains sell at auction for hundreds, thousands, or tens of thousands of dollars. Drops of quality domains prove nothing more than registrant inattention. It’s what happens after a quality domain expires that indicates market demand.

      Right now the 2 domains you mentioned are in ongoing auctions with bids of $800 and $2,000 respectively.

      • domenclature.com says

        .NET to the Registrants are priced the same at the Registry/Registrar level, there are no Premium renewals;

        .NET is short 3 letter extension;

        .NET means something, as an acronym for Network, and is in the format of established Internet protocol and nomenclature;

        .NET has more registrations and use than all new gtlds combined;

        .NET is ran by an established, and known well funded entity, and thus predictable;

        .NET is fairly known to the public as an domain extension; perhaps as the best alternative to the dot COM;

        .NET has been there from the beginning with .COM and IANA;

        .NET is a keyword for both left and right of the dot, so even if the new gtlds succeed, it will qualify as a new gtld, as whatever benefit there from, inure to it; it will get a new life;

        Therefore, .NET is actually a canary in the mine for the new gtlds; the demise of the .NET will spell doom for the former, .NET is everything now that the new gtlds could ever hope to be, even in the most optimistic dream.

  3. Kassey says

    Techcrunch’s startup page is my guide. Startups reported this page tell me most Internet-related ventures around the world use .com. Internet is global, and there’s no better way to tell your customers that you are global than using a .com.

    • Joseph Peterson says

      That’s just it. There is no “general consensus on .NET”.

      If there were, then we wouldn’t simultaneously find some domainers saying that .NET is “for … losers” while other wholesale domain buyers — 140 bidders to be exact — are bidding up to or past $7,807 for Pink.net as we speak.

      You can call them foolish or savvy, but you can’t point to them as exemplars of this supposed consensus.

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