In an article from Trefis a stock analysis firm on Verisign out today cites ccTLD’s not new gTLD’s as the biggest threat to Verisign.
“For the six months so far into fiscal year 2014, VeriSign reported revenues of approximately $499 million vs. $476 million during a similar period in 2013, indicating a 5% growth in its top line. Comparatively, sales growth from H1’12 to H1’13 was over 10%. The rapid slowdown in sales growth was partially affected by a surge in demand for country code top-level domain names (ccTLDs) and other new generic top-level domains (gTLDs). VeriSign reports that ccTLD registrations have grown at more than thrice the growth rate of the .com and .net domain names in its latest Q1’14 Domain Name Industry Brief.
In Q2’14, VeriSign processed approximately 8.5 million registrations but could make only 0.42 million net addition into the .com domain root zone.
We believe the rapid growth in ccTLD domain registrations to be a more significant factor affecting its sales growth slowdown.
One reason why businesses and corporations are migrating towards newer gTLDs and ccTLDs is because of the saturation of the .com root zone.
Moreover, individual government policy frameworks concerning ccTLDs such as a relaxation in registration requirements, free domain names pertinent to certain usage requirements, etc., has supported business migration into ccTLDs, especially in the small and medium enterprise (SME) space.
“Going forward, we believe VeriSign’s market share in the overall domain registration market is likely to remain under pressure from the surging demand for ccTLDs globally.
“Base ccTLD registrations reached about 127 million by Q1’14 end, with Tokelau (.tk), Germany (.de) and the U.K. (.uk) ranked as the largest three ccTLDs by zone size. In the near term, we could see the Chinese ccTLD .cn rise higher up the ranks, driven by expanding Internet penetration and a burgeoning e-commerce market in the region.”
I’m sure they’ve done the research to back up their claims, but on our end over 90% of the inquiries we get in purchasing our domains come from ccTLD owners who want the dotCOM version. This was the case when we sold Whisky.com. It was purchased by Whisky.de. Our Tangerine.com was purchased by Tangerine.ca, etc.
Yes! Michael, I appreciate that you make the connection with the new gTLDs also…. “One reason why businesses and corporations are migrating towards newer gTLDs and ccTLDs is because of the saturation of the .com root zone.” — Your statement there sums up why Verisign’s Q1 report was complete obfuscation of facts to protect bottom lines.
Perhaps Verisign is seeing that the cost of selling local is not worth it, so they decided not to compete with ccTLDs in markets where they are the underdog. Of companies in Brazil with 10 or more employees, their presence is almost nil (0 to 1%) (source: http://cetic.br/tics/empresas/2013/geral/B8B/). Verisign had local offices and closed them, and they have never ran any sales campaign since 2011.
Devon
To be fair its not my statement, its the statement from Trefis
It doesn’t matter whose statement it is; it’s wrong.
Wait a minute, are new gTLD people trying to divert to ccTLDs now?
If ccTLDs are good enough, why do we need all the new extensions? The funny thing that every single person who wrote this post, every person who read it, every person who commented on it, every single person who agrees with, every single person who disagrees with, and so on, is more than likely doing so from a dot com website.
I personally am not, but the new gtlds are a paradigm shift that fills a need and more effectively fits the definition and purpose for the existence of domain name (to be memorable and concise).
It is impossible to register one word .com anymore that isn’t a branded name. It’s like when IP4 ran out of room, IP6 was the newer better more useful IP structure. Just like there use to community telephones. Just like how the NAICS classification system replaced the SIC in 1997. Just like B4B is the B2B. The user base and auxillay needs of the end users feed the requirements and framework for each succeeding version of any type of product/service/technology.
its not like any of those things. there are no technological advantages to using new gtlds. they have a dot in the middle, thats the only difference. people say, well why promote .com when you don’t have to… well why promote .guru or .whatever, you’re always going to be promoting someone else’s extensions unless you run your own string. new gtlds are an option, not an advancement.
Right this is not innovation, its more supply, and good luck hand regging a one word domain that goes with the extension in most new gtlds, there are some, but not as many as people would like to tout. Collision lists, premiums held back, names regged by the registry themselves.
I know I am not getting Cloud.Host or The.Web for a handreg, and that’s fine but people should not be knocking .com saying you can’t handreg a one word.com (like the only value lies in one word domains) and act like you can get whatever you want in any new gtld you want.
Horse and buggy is still an available mode of transportation. Unless your Amish or live in a rual area of the country, you prefer to use the modern alternative. There will always be those that criticise the next development of anything. The ‘Tipping Point’ by Malcolm Gladwell and ‘Crossing the Chasm’ by Geoffrey Moore are two books that go into heavy detail regarding how paradigm shifts work and the different groups and stages of acceptance and implementation. There will always be the innovators and laggers and the communicators. Every shift has the people that play those roles.
Whatever you say, Dave. Last time i checked new gtlds resolve a website just like any other .com, net or .de…. no faster, no slower, unlke you’re ridiculous comparisons.
The problem with the Trefis statement, Michael, is that while the analysts understand finance, they do not understand the gTLD and ccTLD markets. They seem to be making the classic dotCOM mistake in thinking that they are two competing markets. They are not. The ccTLDs typically have a clearly bounded market whereas .COM and the gTLDs are more global in nature. There is no move to the new gTLDs. And the saturation of the .COM zone is a myth.
The .COM zone is not monolithic in that it is continually changing. New domains are registered each day and domains drop. Some are resold. However the focus on generics tends to confuse the issue because there is a finite set of high value generics whereas brands and business names are often specific. These generics have been continually registered since they were identified.
The slowdown in .COM demand is not due to the demand for ccTLD domains. It is more complex than that and there are highly visible cycles in domain registration patterns that are not immediately apparent in the ICANN registry reports. The trends in .COM and other gTLDs are only apparent on a multi-year basis because of the duration of the registration.
I challenge anyone to pick any industry and find an available one word dictionary term that can be hand registered in the .Com zone.
There have been several companies that have already combed dictionary databases.
Domain squatters played a role in this issue. Many of the new gtlds will be registered and used by end users.
you obviously are not buying new gtld domains. i haven’t bothered lately but i was following a lot of them earlier on and my attempts to get good one word domains failed…every…single…time. its a fixed game and the same names with all the money are picking up the good names at a hefty price most of the time, which are at best second pickings after the registry skims the cream off the top.
My teams and partners own many many of the new gtlds. History is ALWAYS the best reference for how human nature will respond in the future. Naysayers and laggers will not be the ones that benefit the most from a shift.
Devan Crow,
“Domain squatters played a role in this issue. Many of the new gtlds will be registered and used by end users”.
I suppose you mischievously define “squatter” as Registrants, but especially domainers who hold on to premium virtual real estate (domain names), without developing them into sites (fyi that is not the definition of a squatter; a squatter is someone who registers the name of another company with in bad faith). Well, well known domainers who own hundreds of thousands of domain names, that are or should be known to ICANN, applied for many new gTLD strings, and qualified, as a matter of fact, they are the favorite Registries and operators of the new gTLDs; these are well know domainers. So, it must be okay to own dot com domain names in abundance, as far as ICANN is concerned. I give you one example, Frank Schilling: he owns hundreds of thousands of dot com domains, and yet he is the operator of many new gTLD strings.
On the main issue at hand:
New gTLDs cannot work because of one major reason: they are unregulated. If you look at the pecking order of success in internet strings, the more an extension is regulated, the more successful it is; starting from dot com which enjoys the oversight of the US Commerce Department, to ccTLDS, and last and the least, the Geos of newgTLDs. The City strings such as dotNYC, dotBerlin, dotLondon, dotVegas and so on have the mien or aura of City government endorsement and oversight, and that may not even be true. The strings that are unregulated command no such authority, and is looked at as subject to the whims of the operators. This is a very serious obstacle to overcome for the newgTLDs. No serious business will entrust their future, and brand to an unregulated outfit.
Uzoma,
What I personally was referring to are registrants who hold domains and simply do nothing with them and post registration completely disappear other than renewing the domain out for a decade and simply do nothing with the domain and have zill intention of ever selling the domain, those who use fake whois data to hide their identity or who hide behind multi-lawyers of legal entities so hide. I was simply using the term squatter in a more loose manner rather than in a strict legal definition.
moving on…
Last time I checked, MOST entrepreneurs are not campaigning for MORE regulation – in ANYTHING – especially by a government agency. Granted certain industries NEED regulation HOWEVER, the idea that you seem to suggest that businesses will sit around and do absolutely nothing until something is “properly regulated” before taking action. That is kin to waiting until all the stop lights on a cross country road trip all turn green before starting on your journey …. NO BUSINESS will ever sit around and wait for such nonsense – and yes MOST small business owners HATE government interference in their lives and will be rallying for big brother to “please, come tell us how to do run our business”.
I am curious as to what you have to offer to back up the your claim that the success or failure of a domain extension is dependent on how much red tape the use of that gTLDs involves.
@Devan,
One of the indices used in measuring Economic growth index, is the degree to which a country’s laws protect private property rights and the degree to which its government enforces those laws (Heritage Foundation).
I believe in the markets, rather than government to regulate, with two exceptions: protecting the environment, and closed markets, including rigged ones; tho a conservative, I am no believer in Laissez-faire economic theory. Even with that, the theory allows for enough regulations to protect property rights. Domain names are property regardless of what some uninformed Judges say.
The best way to protect nature, and the internet including dot com: Let government do it, not market …
“I am curious as to what you have to offer to back up the your claim that the success or failure of a domain extension is dependent on how much red tape the use of that gTLDs involves”. – Crow
It’s self evident. No debate necessary.
@Devan,
“I was simply using the term squatter in a more loose manner rather than in a strict legal definition”.
My fact based approach to commentary is designed to flag false, and loose manner.
“What I personally was referring to are registrants who hold domains and simply do nothing with them and post registration completely disappear other than renewing the domain out for a decade and simply do nothing with the domain and have zill intention of ever selling the domain, those who use fake whois data to hide their identity or who hide behind multi-lawyers of legal entities so hide”.
Incidentally, it is important to understand some of the key differences between a dot com domain name being available for sale by a registrant in the aftermarkets, and that domain name not being available at all. Once that distinction is made, you’ll realize that there are plenty of one word, dictionary dot com domain names available; and for a guy who claims to believe in strict markets over governments, it’s absurd to want to chastise domain name entrepreneurs for having the fortitude to risk capital, even for a decade, on their intellectual properties aka domain names. Say it ain’t so…
@Domenclature The .COM grew rapidly in the early days of the web because it offered a relatively low regulation alternative to the many highly regulated ccTLDs. Some ccTLDs, the .IE for example is still highly regulated (managed TLD) and requires proof of entitlement to be proven before a domain can be registered. The growth curve of the more regulated ccTLDs is flatter than that of .COM in those markets. The other aspect of .COM is that its regulatory framework developed over decades. The regulatory framework of the new gTLDs did not and it is almost as if some of it is being transposed from that of .COM without being customised or having been developed to solve problems in those gTLDs.
It is not correct to call the new gTLDS unregulated as they are all regulated by ICANN and also by their own registries. It is more a case of the market trusting them. Trust is a far more important element and it grows from people developing websites in these new gTLDs and end-users seeing these developed websites. If all they see is a wasteland then the end-users begin to think of some of the new gTLDs as being Dead Zones. And when that happens, it is very difficult to reverse the perception.
@John McCormac,
I have a lot of respect for most of your opinions on this forum.
The topic of this post is implying that Verisign is losing market share to the ccTLDs, which are all virtually, and practically regulated by their corresponding countries. I hope you agree that, if that assertion is true, then your response is stunted somewhat; it will mean that my claim is enhanced, which is that the more government regulation an extension enjoys, the more adoption. This is localized just to domain name extensions, and the environment, not business in general.
Secondly, citing “regulation” by ICANN s mute in this case, since whatever ‘regulation’ that is employed relative to the newgTLDs is also redundant with the dot com. ICANN is a constant in all extensions that we are concerned with. The US Government’s Commerce function is the variable; they are unconcerned with the newgTLDs, probably don’t even know such extensions exist, and don’t care what they do. It’s a horrible place to be when the Commerce Department doesn’t care about how much you charge, or what you do.
@Domenclature The problem with Trefis’ interpretation is that it is treating it as a single domain market and as a zero sum equation. In its simplistic interpretation, a ccTLD registration is a lost .COM registration. This is not so. The .COM market is more complex than their analysts think and the ccTLD markets are not the equivalent of the .COM market. The .COM market has the bulk of the US market, a global market and a set of country level submarkets. The ccTLD typically has its own local market, some non-local businesses selling into that market and adjacent market (countries that share a border or language) registrations.
What do you consider strong regulation? Registration volume in heavily regulated TLDs have always been lower than those with less regulation. The .COM would be the best example of a lightly regulated TLD. The .JOBS or .MUSEUM gTLDs would be good examples of highly regulated gTLDs.
@John McCormac
“What do you consider strong regulation? Registration volume in heavily regulated TLDs have always been lower than those with less regulation”.
I have not used “strong” in regard to regulation of internet extensions; wherever that is implied in my comments, or even used, is meant to represent “robustness” rather than powerful; in essence, I use it as a vector quantity, rather than scalar.
If Regulation is understood to mean a rule or directive made and maintained by an authority, my emphasis is more on the maintenance of the rules, than making of many. Just holding the Registries abide by the rules, in many cases, is sufficient; again vector rather than scalar, where magnitude and direction are both essential. Even obedience of mere precepts by the Registries, as imposed by Government Agencies, is satisfactory, than speedy or strong rules, dictates, decrees, fiats, or commands.
I do NOT consider ICANN a ‘Regulator”. As a matter of fact, ICANN is, and should be Regulated by the same Commerce Department of the United States.
Right now, I am conducting an experiment to determine who is responsible for multiplexing the website, domain names, and internet traffic of anybody they see fit.
I have moved my domain name to Yahoo, while hosting it at Godaddy, to separate the nefarious activities of the ‘Hosting’ from that of the Registrar; I have scrapped WordPress and built a Custom website to isolate that actor as well; so far, even tho the experiment is not complete, ICANN has not been ruled out as the culprit!
I plan on presenting my findings to the authorities, both in Congress and anywhere.
I believe it is an egregious violation of responsibility for either Search Engines, Hosting companies, Registries, Registrars, or anybody else to interfere with internet commerce, IP, domain names, traffic, or anything else, and ICANN must be held responsible no matter which organ is doing it, since they are ultimately responsible in the root zone. It will be even most frightening if ICANN themselves are doing it. I have noticed, via my internal tools, and analytics, that each time I criticize ICANN on Blogs, the only visitors to my websites become scanty, and come from Russia, Iran, Pakistan, and other unfriendly nations, where I suppose, the culprit doing ithis deems the reach of US Law is limited.
I will keep you updated on my scientific findings…
@Devan
You first said :I challenge anyone to pick any industry and find an available one word dictionary term that can be hand registered in the .Com zone.
There have been several companies that have already combed dictionary databases.
Domain squatters played a role in this issue.
and then :
My teams and partners own many many of the new gtlds.
From your own definition, you’ve pictured yourself as a domain squatter !!!
Congratulations !
Many of the new gtlds will be registered and used by end users.
They will not : as a squatter you own too many…, premiums are reserved by registries, premium renewal prices, no control on price increases (who would want to build a company website on a new gtld with the risk of facing a 200% increase of their renewal fee), no demand (.com and cctlds are more than enough to fill everybody’s needs) and so on…
Don’t know how many new gtlds you own but i bet you’ll be dropping them within 2 to 3 years (or longer depending on your wealth) because you won’t find buyers at a premium price (if there is a need to pay a premium price, end users all prefer getting a .com)
That’s something you don’t seem to know yet but you’ll learn VERY quickly.
Ultimately, the public (market) will vote as to wither the gTLDs program is a success as a whole.
Some gTLDs will succeed (.directory and .properties and .services) are amazing ones but other will obviously have a very low gravity (.hiv and .cancerresearch) .. some will fail, yes.
Failure is a very real possibility in ANY business sector but that is the nature of life and business.
Again, your assumptions make you wrong. You assume the tlds that my firm acquires is to resell. What exactly made you assume that? We aquire domains to use in our internal projects or projects of our investors and partners.
We operate as the end users of the properties we aquire. Very simple.
Also assuming that we will drop domains that we’ve invested hundreds of thousands for specific projects is rather ludicrous.
Your opinion that the market is satisfied with the .com and the cctlds is something that I personally disagree with. The projects that we use the gtlds for would not have been possible 5 years ago. That’s just a true fact for us.
Go to the owners of dentist.directory and ask them if they would have preferred to have built the same site on dentistdirectory.com – if I were them I would much prefer the shorter domain.
At some point the dot will go silent when people reference a domain. Just like it is rare to hear anyone says www. before the sld anymore.
As far as the renewal and registration costs go, the market will determine that. Look at .attorney and .lawyer. The prices are ridiculously high. Competition among the gtlds will eventually adjust prices. Any registry that fails will be an indication of poor management by the owners of the registry, not the ‘impending doom’ you for cast for the gtlds as a whole.
Again… what is your support material for suggesting that gtlds will fail due to lack of red tape?
If the regulation of .com was a perfect system there still wouldn’t be trademark violations in the zone. Even with the overhead you promote and suggest is a necessity, there are still plenty of problems … problems that flourish in the domain in industry.
It doesn’t matter which this we are speaking of.
And no business theory is ever ‘self evident’. Perhaps laws of science, but no opinion is ever foolproof to the point of being a guarantee.
‘Fact based commentary’
You have yet to provide any third party validation for your opinions that you claim are true facts.
Everyone is in titled to have any opinion they believe and I don’t doubt that you fully believe in your opinions, but stating them as true facts without any third party for support makes it difficult to take your statements at face value.
If I say that 2 + 2 = 4,
I don’t know how to provide a third party to verify such; it’s just true.
Dot com is regulated by the US Commerce Dept., that’s a fact, it’s not my opinion;
It also happens to be the most valuable extension;
The dot Mil is strictly not abused, it is used for what it is intended, because it is regulated by the US government;
so is dot Edu; I hope you agree that those are facts.
Now, we know that Verisign administers dot TV as well as dot Com; that is a fact.
Now, Verisign is a ‘constant’, where as the US Government oversight is only applicable to the dot com; that makes the US Government oversight a variable; we also know that Verisign raises prices, determines some names to be premium, does whatever it wants to the dot TV while leaving the dot com intact, right? We also know that dot TV, while moderately in use, has not enjoyed the overwhelming adoption that one might expect, correct?
So, therefore, with the foregoing, it is empirical to draw the earlier conclusion. Government oversight helps extensions get adopted; it removes the whims of the extension operators it confers authority, and patriotism; it reduces shenanigans by unscrupulous Registries, and Registrars, and consequently conveys protection, security, fairness, equality of opportunity, guarantees structure, reasonable prices, it reduces arbitrariness of the same; in short, it’s the only way to go. Without government oversight, an extension is doomed.
You seem to be confusing correlation and causality. The US Government oversight is not the only variable influencing on the number of registrations. Other variables are the year of launch (.tv was launched after), the price of a registration (.tv is pricier), the target market (.tv is more niche than .com)
Also .tv is doomed from whose point of view? There are nearly 600,000 thousands .tv registrations according to http://www.domaintools.com/statistics/tld-counts/ , so .tv is surely not a failure for Verisign. Every week .tv domain sales are published, so there are things going on for domainers as well. In order to call it a failure you would at least have to compare it to another niche TLD with a similar-sized target market and similar pricing.
“New gTLDs cannot work because of one major reason: they are unregulated.”
Regulation is not a necessity for a market to thrive.
Most of the new gTLDs will be successful for the registries, and some of them will be successful for domain investors.
If .com was one of the new gTLDs it would be average at best. If .website or .link or .web or some other general TLD had been the historical extension, domainers would be rooting for it instead and would drag down .com as unecessary crap. Why would a newcomer to the internet pick a .com that stands for commerce or communication (if they even have an idea of what it stands for), when he can pick something that much better represents what he wants to share on the internet?
When the only power that .com retains is its historical power you know that eventually it will fall, because it will not attract the new internet users, an ever growing bunch. People don’t know which extension is regulated by whom and they don’t care, only the big companies possibly do, and I imagine those will eventually apply for their own TLD.
It’s not a question of if it will happen, it’s a question of when. Whether that ‘when’ is 5 years from now or 15 years from now, we will see, this is much harder to predict. We won’t notice the shift overnight, it will happen progressively, but we will notice the trend in the number of .com registrations.
@leo,
“When the only power that .com retains is its historical power you know that eventually it will fall, because it will not attract the new internet users, an ever growing bunch”.
Dot com stands for much more than ‘commerce’. Dot com in a way is America. Dot com is like the American ‘flag’ of the internet; therefore it stands for: liberty and equality for all, liberty, justice, freedom, freedom of speech, religion, assembly, the press, sanctity, indomitable spirit, determination, bravery, honor, valor…
It stands for so much more. That is why it’s everybody’s extension. It’s regulated just enough to protect all. Equality of opportunity, that is a VERY unique quality found only with dot com; no other extension can make that claim. Dot com is indescribable; it’s a unique extension.
There is a world outside the USA, and I’m sure most people do not associate .com with America. Or if they do it would have to do with the fact that a majority of the most visited .com websites are operated by American companies (Google Facebook Youtube Yahoo …).
People are used to visiting almost exclusively .com websites, and until now they weren’t attractive alternatives, so it made sense to register a .com like everyone else. But when the big companies start using their own brand TLD, when popular websites get launched on some new good-looking TLDs, and when more and more people see non-com URLs being advertised in the media, there will be less and less an incentive for them to register a .com. “If that company became successful with that extension, why couldn’t I too?”.
And with modern tech startups launching on the new extensions I can see .com being more and more seen as a thing of the past, mostly used by historical companies from the pre-internet days. For many reasons I find it unlikely that .com will retain its status, but we will see. We will have a much better idea in a few years.