New TLDs (.XYZ?) boost Web.com’s bookings

“Very aggressive” new TLD promotions paying off for Web.com.

Many in the domain name community blasted Web.com and .xyz for the hundreds of thousands of free domain names Web.com gave away last year through Network Solutions. Was it, perhaps, a brilliant business move?

Web.com reported a bookings boost this past quarter, and the company says this is due to higher-than-expected renewal rates on new TLDs.

Here’s Web.com CEO David Brown on last week’s conference call:

Yes, I want to be very clear that the bookings benefits that we’re seeing right now really relate to some of the new GTLD promotions that occurred. As new TLDs came out last year we were very aggressive in promoting that to our existing customers and to some new customers. And very aggressive in how we promoted some of the new GTLDs and we had certain expectations on what the renewal rates would be and we’re seeing higher renewal rates than we had expected.

And that’s yielding higher bookings than we had expected and we’re very pleased with that. These turned out to be very good returns on investment for us and so far this year the few that have gone through maturity cycle have been better than expected. And we’re optimistic that future ones will also be better than expected.

Brown doesn’t specifically mention .xyz, and the .xyz domain giveaways haven’t started expiring yet. But Network Solutions has been sending out renewal notices for them already.

Web.com pitched many specific new TLDs to existing customers over the past year, but the only “very aggressive” promotion I’m aware of is .xyz, which were literally placed in customer’s accounts on an opt-out basis. According to nTLDStats, 375,000 of Web.com’s 425,000 new TLD registrations are .XYZ.

That said, Brown mentions multiple TLDs and that a few have gone through the maturity cycle.

It’s quite possible that .xyz is paying big dividends for Web.com.