A defense of .com’s staying power and bad news for IDN.com investors.

On its investor conference call yesterday afternoon, Verisign CEO James Bidzos explained why he isn’t afraid of new top level domain names. Also, in a blow to IDN.com investors, the company said it will take a longer for them to hit the market than many are hoping for.

New TLDs? We’re not afraid of those!

Despite Verisign’s never-ending tactics to delay new top level domain names, Bidzos told an analyst that he’s not really worried about how new TLDs will affect the .com base and he explained how .com will remain king. Here’s his explanation:

So for example, you may have seen that the U.K. paper, dailymail.co.uk, a very typical English configuration for a web address, using a company dot U.K. configuration. So dailymail.co.uk purchased dailymail.com. They said that they purchased it because they wanted something that was more global that would allow them to get more traffic, especially in the U.S. They paid GBP 1 million for it. They bought it from The Charleston Daily Mail of Charleston, West Virginia, a 100-year-old Pulitzer Prize winning newspaper, who after they got their roughly $1.6 million for that domain name, were free to go out and buy whatever they wanted. Then they chose to go out and buy charlestondailymail.com. If they bought it for retail, they probably paid about $10 for it. So I think .com is very much the preferred, established reliable name. I don’t know what’s going to happen in the future with the TLDs. I’m sure some of them will do well, they’ll build some community. But I guess I can give you one data point. If we look at — look back, this is not the first time this has happened. There have been some new TLDs before, and one of them that I think actually is a good idea of what success what might look like, a good example would be .co. And I’m sure a lot of you are familiar with it. .co is a short name, it’s just 2 letters. It’s a meaningful name, it’s linked to company. They went live in July of 2010. They had a very robust marketing partner, they partnered with Go Daddy, the largest registrar. They did 3 Super Bowl ads. They did, I thought, a very good job of marketing. They did partner with Go Daddy on 3 Super Bowl commercials. They have a substantial marketing budget. They had no gTLD competition when they came out. And they’re not ICANN-regulated because they’re operating under contract from the ccTLD .co for Colombia.

So their history was that when they went live in July of 2010, they registered 100,000 domains in the first 10 minutes that they were live. Less than a year later, in June of 2011, they had reached 1 million domains. During that same period, by the way, that 11-month period, .com registered about 7 million. Just under 2 years later, by April of 2013, they had gone from 1 million to 1.5 million, so they added 500,000 domains during those 2 years. During that period, .com added 13.2 million. And then from April of 2013 until December 31 of last year, they added another 90,000 names, they closed the year at 1.59 million. .com added another 3.5 million during that time. I think they’ve done a great job with .co. I think they’ve been successful there. They ended the year at 1.59 million domains. Their growth has slowed a bit, obviously. But in Q3, we added 1.55 million names, that’s the entire size of the .co zone. We added that in one quarter. We typically have 5x the size of their zone in gross adds in a quarter. So I think with somewhere in the neighborhood of, I don’t know, 400 or 500 gTLDs that are non-brand that’ll be distributed, it’s going to be a little bit more crowded. They’re obviously more specialized and different. I’m not sure where that’s going to end up, but I do know that we have at least one data point, so I think we’ve coexisted well and done well with .co, and I’m sure we will with the other gTLDs. And I’m sure there’ll be a lot of excitement as they roll out over the course of 2014. But we — what we described as impacting our zone in the first quarter is what we see, some registrar behavior and also some economic headwinds that we’re seeing in Asia.

The last sentence refers to the fact that Verisign saw slowing zone growth in January. It is blaming this on international markets as well as registrars not pushing discounted .com domains as much and instead focusing on pushing bundles.

But perhaps the fact that registrars are pushing new TLDs instead of .com is also hurting .com?

True, most registrars still serve up .com number one, but GoDaddy’s home page is pushing customers to new TLDs, not .com.

Sorry IDN investors, you’re going to have to wait.

I have bad news for those IDN investors patiently waiting for .com transliterations. You’re collateral damage.

Here’s the deal. Verisign has been invited to contracting for 12 of 14 names. Pat Kane, SVP of Naming and Directory Services, said it’s going to take a while to get through the negotiating process.

Part of this is because it’s trying to do something novel by offering domains to the existing .com owner. But it also has to do with name collisions, which is one of the FUD topics Verisign is using to try to slow new TLDs.

Given Verisign’s testy relations with ICANN right now, its efforts to delay new TLDs overall (despite apparently not being worried about them) and its additional asks for the contract, I suspect it’s going to be quite some time before the IDN transliterations see the light of day.

Intellectual Property

One final note from the conference call. James Bidzos said the company continues to work on its plan to monetize intellectual property. But his timeline and update is the same it has always has been: we’re progressing, he’s not going to say how soon it will happen (other than not right now) and the plan is still under wraps.