The pandemic played a role, but the future is uncertain.
Verisign (NASDAQ: VRSN) reports earnings this Thursday, and there will be something unusual for the company to report: a drop in the base of registered .com and .net domain names.
For years, the company has reported a modest but upward trend in domain registration, quarter to quarter (see chart). It added over a million domains in the first quarter of this year.
But it appears the number went negative in Q2.
Verisign concluded Q1 with 174.7 million .com and .net domains under management. According to the zone data on its website, it finished Q2 with between 174.2 and 174.3 million domains. It’s down to 174.1 million as of today.
Both .com and .net lost registrations during the quarter. .Com dropped from 161.3 million to 161.0 million. .Net fell from 13.4 million to 13.2 million according to the Verisign data.
So, is this peak .com? Has the world’s appetite for domains ending in .com been satiated?
It’s an interesting question with a lot of nuance.
Verisign saw this coming. It saw a reversal in fortunes and lowered its annual guidance after Q1. (It no longer provides quarterly guidance for the domain base.)
I suspect the main reason for the dip is pull-forward demand. During the pandemic, many businesses that would have finally “gotten online” during 2022 or 2023 or 2024 suddenly rushed to do so. We saw increased registrations and the domain base grew at a fast clip, especially in Q2 2020 and Q2 2021:
Now, that company that registered a domain a couple of years earlier than it would have doesn’t need to register a new domain this year.
And a lot of those new registrations during the pandemic are coming up for renewal, too. 39.5 million .com/.net domains were set for renewal or expiration in Q2, compared to 36.6 million in the year before. As the chart above shows, Q2 was very strong for new registrations during the pandemic.
Remember that first-year registrations typically renew at lower rates than mature domains.
So the optimistic view is that this is just a come-down from the pandemic. Just like Zoom saw huge growth as everyone worked from home, Verisign benefited with new domain registrations.
There’s another take, of course. That it’s peak .com, people are substituting different domains, and the domain base has gotten so big that it’s going to be impossible to grow going forward.
People said that 20 years ago, and look where we are now.
.Com is not going anywhere any time soon.
End-users are paying more for quality .Com domains than ever before.
It used to be that end-users would only pay $100 for a good domain, then $500, then $1k, $2k now $5k.
The registries have not seen anything yet. The decline in parking
revenue alone by itself has the ability to wipeout Verisign and most
all of the bigger domain registries just by itself given time.
I myself have dropped almost 10,000 domains in the last year alone
and I am but just one small domain investor. Most of those domains
were parked domains, and/or being used soley for their traffic value.
the not so well known truth is that between 25-30% of all domains
registered are actually typos.
The registries are of course very aware of this, but are tight lipped
about it because the idea is controversial because of typosquatting etc
and for years it was their bread and butter thru both domain registrations
and domain auctions. Traffic domain investors account for the bulk
of registrations at almost all of the larger domain registries and now
that parking companies are dead, or have all gotten greedy and
are all owned by the same group of cronies (a quiet monopoly right
under the industrys eyes) traffic producing domains have become
close to worthless. My RPM with one well known parking company
which I will not name out of consideration, but it starts with a “B”
used just as an example of monetization decline, for instance
in just the last 9 months my RPM has gone from $16-18 per 1,000
pageviews to now around 2! That is roughly an 80-85% decline in
total revenue. and It is the same situation month after month dealing
with PC, Sedo, Afternic etc basically all of the big players are showing
huge declines across the board.
It seems no one wants to play fair anymore, companies are only interested
in making huge profits irreguardless of how it damages the industry
as a whole. This is in laymans terms reasonably called “cashing in”
and its what players do when they believe the game is about to end.
Huge commision fees, Huge registration fees, Internet taxes, Verisign
yearly raising registration fees etc. Its all just plain greed! and for the
most part the net result is thousands of domains daily are being dropped
by domain investors that would of otherwise before been renewed.
but now because these domains seem basically worthless because
they cannot be moneitized or sold they get dropped.
Dont believe what Im saying? Just look at the prices at the registries
or maybe try your hand at “domain parking” for yourself. Most all of the
registries have raised their prices recently until they are now sky high.
While at the same time domain sales are down, domain registrations are
down, and domain parking revenue is down! Down almost to a point
where it is almost non-existant. So therfore hence the Domain Industry
is down. It is in serious decline and should not come as a surprise to
anyone keeping up.
Tell me from the perspective of a domainer or domain investor, what is
the point in renewing tens of thousands of domains yearly if they seemingly
all hold no real value, and cannot be moneitized??
This is the problem the registries face right now. The hard won, heavily
“sold” illusion that domains were super valuable has now worn off
and the big domain investors are starting to see this.
as a long time investor myself in domains for over 20 years now, my advice
to new domainers is to avoid these well known price gouging registries
like a plague. Reguardless of how “popular” they are, or how long they
have been around. DONT DO BUSINESS WITH THEM! Their services
are no better than many of the discount registries. and If you own/register
any new domains consider either developing them or just drop them
because holding useless domains becomes a financial trap.
I have now even sold all of my stocks in Tech all together including both
Verisign and Godaddy. As it looks like there is nowhere to go but down
for our industry as it is so plagued by greed. It has become virtual financial
suicide to deal in buyng and selling domains, and domain parking.
Domain investing looks alot different today than it did say 20 years ago.
Unless you are one of the lucky few to be sitting on some premium
old school names maybe registered 20-25 years ago, the truth is it
seems the future of our industry does not look very profitable unless
their are major changes made and quick.
I very much hope Im wrong, but it looks like the lucrative good ole
days are gone! I wish the best to everyone, but Im out.
To me you are not a domain investor but a typo squatter. The industry is better of without you.