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Domain Name Industry Briefs
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Volume 1, Issue1, February 2004
The VeriSign Domain Report
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As the leading global domain name registry,
VeriSign closely monitors the state of the domain name industry through
a variety of statistical and analytical research. This brief details
current trends in the industry, highlighting key performance indicators
and growth opportunities.
Executive Summary
The domain name market shows a strong rate
of new registrations and a stabilizing base of domain names. Growing
16% in 2003, the total number of domain name registrations reached a
peak of over 60 million domain names. Com is the number 1 Top Level
Domain (TLD) in terms of total registrations with De and Uk holding
at the number 2 and 3 spots respectively. Records were set in 2003 for
new registrations, renewal volumes and base growth rates. The outlook
for continued expansion remains positive.
Total Domain Name
Registrations
Sources: Zooknic ccTLD reports; VeriSign internal gTLD data
Industry Growth and Composition
Growth
Growth statistics for domain name registrations are reaching
levels previously seen during the late 1990's Internet boom. 1.5M new
domain names were registered in October 2003 - the highest monthly figure
in the history of the Internet. Key factors for the growth trend include
the high number of global Internet users, new Top Level Domains (TLD)
and increased access to domain names. Individuals and businesses are
registering domain names primarily to create niche, local, regional,
national and international Web sites and email marketing. They also
register for other purposes as diverse as protecting the domain name
from competitors or hoping to sell it for a profit.
New Registration
Growth
Sources: Zooknic ccTLD reports; VeriSign internal gTLD data
Industry Composition
Com accounts for 44% of all domain names, followed as a group
by Country Code Top Level Domains (ccTLDs) (40%), Net at 8% and the
alternate Generic Top Level Domains (gTLDs) extensions, such as Org,
Biz, Name and Info (8%). While Com remains the leader in most countries,
a handful of ccTLDs show marked success within their specific countries,
i.e. De has 90% of the total domain name market in Germany.
Industry Composition
Sources: Zooknic ccTLD 2003 report; VeriSign internal gTLD data
With the advent of the newer alternate gTLDs
(.Org, .Biz, .Info and .Name, .Pro, etc.), there remains significant
potential for additional name competition on the Internet. While the
current ratio of these domains to Com/Net is low at one alternate domain
for every 98 Com/Net, the new extensions continue to add registrations
month over month at an average rate of over 50,000.
ccTLD Breakdown
The vast majority of registrations across all ccTLDs are attributable
to a handful of ccTLDs. Out of more than 240 ccTLDs, the top ten account
for 71% of all ccTLD registrations. The strengths of these specific
ccTLDs can be explained by low price,non-traditional merchandising,
the number of local Internet users and the rate of Com/Net registrations.
Factors that limit the potential for other ccTLDs include restrictive
registration processes and price. Some of the more restrictive ccTLD
operators require potential registrants to have a local presence or
will only permit domain names that exactly match a registrant's registered
trademark.
ccTLD Breakdown
Source: Zooknic ccTLD reports
ccTLDs - Niche Players or Growth Opportunity
There are over 240 ccTLDs or country code top level domains.
These extensions, such as De for Germany or Jp for Japan, represent
the national or territorial interests of a domain. Each country maintains
its own Registry or database of these names and manages them according
to local policies suited to their cultural, economic and legal circumstances.
In some nations such as Japan, the ccTLD is the preferred web address;
in others, it is more commonly used to showcase different language or
regional sites of an international business.
Com Net Dynamics
Reaching a total of 27 million domains by year
end 2003, Com has more total registrations than any other TLD in the
Domain Name Industry. To maintain healthy growth, the number of new
registrations plus renewals and transfers must be greater than the number
of deletions in any given month.
VeriSign processes over 10 billion Com/Net
queries per day, more than 3 times the number of telephone calls made
daily in the United States. The VeriSign Domain Name System (DNS) (see
the VeriSign Domain Name Primer www.verisign.com/domainbrief for more
information on DNS) has maintained 100% accuracy for the past 7 years.
The Com Net Base
When looking at the domain name Industry, Com still leads in
appeal to registrants. Net, at #4 in popularity appears to be the TLD
of choice if a first option .com address is not available. In fact,
of the 4.2 million .net domain names registered, 3.7 million (88%) have
an associated .com domain name. When tracked back to server ownership,
only about 35% of the matching .net and .com names ("abccompany.net"
and "abccompany.com") appear to be registered by the same
registrant this means that as many as 65% of unique Com/Net domains
may be registered by competing firms or organizations.
New Registrations
The market has been adding an average of 908K new Com/Net registrations
monthly through 2003. October's addition of 991K domains marks a new
milestone.
Renewals
Strong renewal rates are key to the continued success of the
industry. With rates ranging from 50% in January 2003 to 70% in November
2003, renewal rates show a strong positive trend. The domain name base
shows evidence of maturing. The renewal rate for domain names that have
previously been renewed is 64% compared to a renewal rate of 59% for
domain names going through their first renewal cycle. The industry seems
to be stabilizing as customers capitalize on maintaining successful
domain names.
Com Net Registry
Renewal Rates
Source: VeriSign internal data
gTLDs - The Newcomers
Seven original gTLDs or generic top level domains were created
in the 1980s. In addition to Com, Net and Org (where names can now be
registered with minimal restriction), these include: Edu, Gov, Int,
.and Mil which serve limited audiences, such as the U.S. military, and
hold restrictions on use and content. New TLDs, such as Biz, Info, Name,
Pro, Aero, Coop and Museum were added in 2001 and 2002.
Opportunities for Growth
North America and the Com/Net segment continue
to lead the industry with high Internet usage rates and 11 active domain
names for every 100 people. The European market shows a greater number
of domains per person, attributable in part to multiple language/country
sites for an organization. Other regions show much lower ratios, which
though due partially to economic status, still suggest significant market
potential. As new registrars enter these regions, Internet usage rates
continue to rise and the name base continues to mature, the outlook
for the market, in both the traditional Com/Net arena and in new gTLDs
and ccTLDs, remains strong.
Internet Penetration
and Domain Registration as a Percentage of Population
Sources: Cyberatlas; Zooknic ccTLD reports; VeriSign internal gTLD data
Learn More
Subscribe
or access the archives for the Domain Name Industry Briefs.
Send an email with your comments or questions to domainbrief@verisign.com.
About VeriSign
VeriSign, Inc. (Nasdaq: VRSN), delivers critical
infrastructure services that make the internet and telecommunications
networks more intelligent, reliable and secure. Every day VeriSign helps
thousands of businesses and millions of consumers connect, communicate,
and transact with confidence.
©2004 VeriSign, Inc. All rights reserved.
VeriSign, the VeriSign logo, The Value of Trust, and other trademarks,
service marks, and logos are registered or unregistered trademarks of
VeriSign, Inc. and its subsidiaries in the United States and in foreign
countries. 2/04
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