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Year in Review: Verisign gets its price hikes

by — Policy & Law 3 Comments

The U.S. Government gave the green light to increase prices on .com domain names.

Picture of price tag

It’s an obscure contract issued by the U.S. government. For the domain industry, it means a lot.

On November 1, The U.S. National Telecommunications and Information Administration (NTIA) amended and extended its Cooperative Agreement with Verisign (NASDAQ: VRSN) for running .com.

Think of the Cooperative Agreement as a check on the contract between ICANN and Verisign for .com.

The NTIA’s role in this agreement was rather trivial for a while. Then in 2012, the NTIA effectively overruled a contract extension that ICANN and Verisign agreed to that would have allowed Verisign to increase .com prices 7% per year for four out of six years of the contract. That was the status quo from the previous contract, but NTIA questioned why price increases were justified.

Prices have been fixed at $7.85 ever since.

But the amended agreement restores price increases of 7% in four out of six years, although not until the last four years of each six. ICANN doesn’t have to agree to the price increases, but if it does then Verisign will be able to charge $10.29 per domain six years from now.

That might not seem like much, but it represents hundreds of millions of dollars directly to Verisign’s bottom line (and out of consumers’ pockets). Verisign’s competitors would gladly offer significantly lower prices if they could bid on the contract.

You would think Verisign would jump for joy after the contract amendment. So it was surprising when Verisign published an inflammatory article the very next day criticizing domain investors for their role in the market. Yes, the same group of people that Verisign has been marketing to for the past decade so it could sell more .com domain name registrations.

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Verisign adds nearly 2 million .com/.net domains in Q3

by — Services 0 Comments

.Com continues to chug along.

Verisign (NASDAQ: VRSN) reported third-quarter 2018 results yesterday.

On the domain name side, the company processed 9.5 million new .com/.net registrations during Q3. After accounting for deletions, 1.99 million .com/.net domains were added to the domain base. At 151.7 million, it’s up 4% year-over-year.

The results exceeded Verisign’s guidance of 1.3 million to 1.8 million for the quarter.

The company expects to add 0.9 to 1.4 million .com/.net domains to the base during Q4 of this year.

After this quarter, the company will change how it provides guidance on net adds. It will switch from quarterly guidance to annual guidance.

As I’ve noted before, it’s fairly easy to pull levers to hit this guidance mark. Switching to annual guidance will allow the company more time to decide which levers to pull for better long-term performance.

With regards to the Cooperative Agreement between Verisign and the NTIA, Verisign CEO James Bidzos said the company is confident that an amended agreement can be executed before it expires at the end of next month.

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“Stop the Price Increase of .COM” petition gains steam

by — Policy & Law 5 Comments

Internet Commerce Association, a group that represents the interests of domain name owners, is pushing a petition to tell the U.S. Government to continue to intervene to prevent Verisign (NASDAQ: VRSN) from increasing prices on .com domain names.

The petition is starting to gain stream with close to 1,000 signatures as of this morning. You can sign it here.

The Cooperative Agreement between the U.S. National Telecommunications and Information Administration (NTIA) and Verisign is what has kept .com prices from increasing another 31% during the past six years. While the actual .com registry agreement is between Verisign and ICANN, ICANN has generally allowed Verisign to increase prices of .com domains by 7% for four out of the six years of the previous contracts. Unsurprisingly, Verisign has taken all of the price increases it has been afforded.

For every $1 Verisign increases prices on .com domains, consumers pay an additional $137 million per year.Click To Tweet

It was the NTIA that stepped in back in 2012 to shut down price increases, and it is in the same position to do so now. The Cooperative Agreement expires at the end of November 2018. The NTIA can extend the agreement in its sole discretion. It is currently negotiating behind the scenes with Verisign without input from the internet community at large.

Should the NTIA let the agreement expire, Verisign will be free to negotiate price increases with ICANN.

Verisign already receives outrageous profits from the contract. It gets to charge $7.85 every time a .com domain is registered or renewed. If the contract were put out to bid, the cost would probably be a few dollars or less.

For every $1 increase in the wholesale cost of .com domain names, consumers around the world pay an additional $137 million a year in fees that go almost entirely to Verisign’s bottom line.

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Giuseppe Graziano launches three-letter domain marketplace

by — Domain Sales 4 Comments

New domain marketplace is dedicated to just 17,576 possible domains.

Giuseppe Graziano, a domain broker who runs GGRG.com, has launched a new marketplace for buying and selling three-letter .com domain names.

GGRG.com has always specialized in short domain names, so Liquid Domain Market Exchange is right up its alley. Still, can a marketplace dedicated to a maximum pool of 17,576 possible listings work?

If you want instant liquidity, it probably will. During the beta period, a domain owner sold his domain within 15 minutes of setting his price.

Graziano says the marketplace is not for selling domains to end users, so sellers need to price their domains with domain investors in mind.

Premium account holders can set up alerts to quickly know when a domain that meets their requirements is listed. A premium account is free for the remainder of 2018 if you sign up by September 25.

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The latest .Com Leaderboard

by — Domain Registrars 2 Comments

Here’s how registrars performed in the latest official Verisign report.

ICANN has published the latest official data from Verisign about the .com registry. This registrar-by-registrar report covers April 2018.

Chinese registrars continued to add .com domains at a nice clip in April.

In April, these were the top 10 registrars in terms of new .com registrations.

1. GoDaddy.com* 960,904 (975,008 in March)
2. HiChina Zhicheng Technology Ltd. 246,804 (252,159)
3. Tucows** 203,219 (217,900)
4. Endurance+ 153,352 (170,700)
5. NameCheap Inc. 127,855 (131,423)
6. Xin Net Technology Corporation 113,107 (173,893)
7. Web.com++ 103,385 (109,275)
8. Google Inc. 92,671 (96,621)
9. West.cn 74,741 (81,838)
10. NameSilo 62,017 (65,566)

Here’s the leaderboard of the top registrars in terms of total .com registrations as of the end of April 2018:

1. GoDaddy* 48,088,605 (47,815,002 in March)
2. Tucows** 12,932,547 (12,960,646)
3. Endurance+ 7,725,154 (7,793,869
4. Web.com++ 6,713,143 (6,721,816)
5. HiChina 5,298,573 (5,156,343)
6. NameCheap 4,222,952 (4,195,705)
7. 1&1 3,760,259 (3,771,035)
8. GMO 2,089,800 (2,097,311)
9. Xin Net Technology Corporation 2,010,000 (1,928,276)
10. Google 1,663,836 (1,603,663)

Many domain companies have multiple accreditations and I’ve tried to capture the largest ones. See the notes below.

* Includes GoDaddy and Wild West Domains
** Includes Tucows and Enom
+ Includes PDR, Domain.com, FastDomain and Bigrock. There are other Endurance registrars, but these are the biggest.
++ Includes Network Solutions and Register.com

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