Deletions greater than new registrations thanks to Chinese purge.
The great Chinese domain name investment surge of Q4 2015 led to the great Chinese domain name purge of Q4 2016.
The combined .com and .net namespace shrunk by 1.9 million domain names last quarter, which was within the range Verisign previously predicted.
The drop was due to a surge in registrations by Chinese domain name investors one year prior. Not only do first-year registrations have lower-than-average renewal rates, but the air was let out of the Chinese investment bubble in early 2016.
With this in mind, Verisign predicted the domain base to drop by 1.5 million to 2.8 million names in Q4 2016. In some respects, this makes the 1.9 million number look decent.
There were 8.8 million new .com/.net registrations in Q4, so 10.7 million names were deleted.
Although not fully measurable yet, Verisign expects a 67.5% overall renewal rate for Q4 2016. This compares to 73.3% in the same quarter of 2015.
The Chinese investment surge also spilled over into Q1 2016, so Verisign has tampered expectations for Q1 2017 results. It expects the base to grow by 0.7 million to 1.2 million in Q1 2017.