The Domain Name Industry Brief
The Domain Name Industry Brief
Volume 6 - Issue 1 - February 2009
The VeriSign Domain Report
As the global registry operator for .com and
.net, VeriSign reviews the state of the domain
name industry through a variety of statistical and
analytical research. As a leading provider of digital
infrastructure for the Internet, VeriSign provides
this briefi ng to highlight to industry analysts, media,
and businesses important trends in domain name
registration, including key performance indicators,
and growth opportunities.
T H E D O M A I N N A M E I N D U S T R Y B R I E F - F E B R U A R Y 2 0 0 9
+ Executive Summary
The year 2008 ended with a total base of 177 million domain name registrations across
all of the Top Level Domain Names (TLDs). This represents a 16 percent growth over
the previous year and a two percent growth over the third quarter of 2008. The base of
Country Code Top Level Domain Names (ccTLDs) totaled 71.1 million domain names,
a 22 percent increase year over year and a three percent increase quarter over quarter.
In terms of total registrations, .com has the highest base followed by .cn (China), .de
(Germany) and .net.1
Total Domain Name Registrations
Total Domain Name Registrations
Source: Zooknic, January 2009;
180,000,000
Name
VeriSign, January 2009
Other
160,000,000
TLDs
140,000,000
Biz
Eu
120,000,000
Info
100,000,000
Org
80,000,000
Cn
Uk
60,000,000
Net
40,000,000
De
20,000,000
Other
ccTLDs
0
Com
Q4 ‘07
Q1 ‘08
Q2 ‘08
Q3 ‘08
Q4 ‘08
+ Industry Growth and Composition
More than 10.1 million new domain names were registered across all of the TLDs in
the last quarter of 2008. This refl ects a slower growth in new registrations with a decline
of 12 percent from the third quarter 2008 and 17 percent from the same quarter in the
previous year. The decline was driven by slower growth in both gTLDs and ccTLDs.
Over the entire year, there was an average of 11.9 million new domain names registered
per quarter compared to an average of 12.2 million new domain names registered each
quarter in 2007.
New Registration Growth
New Registration Growth
16,000,000
Source: Zooknic, January 2009;
14,000,000
VeriSign, January 2009; ICANN
Monthly Reports
12,000,000
Org/Biz/
10,000,000
Info/Name
8,000,000
Com/Net
6,000,000
ccTLDs
4,000,000
1 The gTLD and ccTLD data cited in this report
2,000,000
are estimates as of the time of this report and
subject to change as more complete data is
0
Q1 '08
Q2 '08
Q3 '08
Q4 '08
received.
2
T H E D O M A I N N A M E I N D U S T R Y B R I E F - F E B R U A R Y 2 0 0 9
TOP CCTLD REGISTRIES
The composition of the domain name industry and rank order in terms of base size
BY DOMAIN NAME BASE,
remained consistent in the fourth quarter. The largest TLDs in terms of base size were
FOURTH QUARTER 2008
.com, .cn, .de, .net, .org, .uk, .info, .nl (The Netherlands), .eu (European Union), and .biz.
1.
.cn
(China)
ccTLD Breakdown
2.
.de
(Germany)
2008 ended with 71.1 million ccTLD registrations, a 22 percent increase over the
3.
.uk
(United Kingdom)
end of 2007. Just over 2.2 million ccTLDs were added in the fourth quarter of 2008,
4.
.nl
(Netherlands)
representing a three percent growth over the third quarter. There are more than 240
5.
.eu
(European Union)
ccTLD extensions globally, but the top 10 ccTLDs contribute 65 percent of the total
6.
.ar
(Argentina)
number of registrations. Among the top 25 largest ccTLDs, .ru (Russian Federation)
7. .it
(Italy)
grew the fastest with 11 percent growth quarter over quarter and .cn was not far behind
8.
.br
(Brazil)
with 8 percent growth quarter over quarter.2 Overall only 36 percent of the top 25
9.
.us
(United States)
largest ccTLDs experienced growth rates in the fourth quarter that were higher than the
10.
.au
(Australia)
growth rates in the third quarter driven largely by the overall weakening in the global
economy.
Source: Zooknic, January 2009.
In terms of the total base of domain name registrations, .cn, .de and .uk were the largest
ccTLDs. Year over year, growth rates were 51 percent for .cn, seven percent for .de and
13 percent for .uk. Together, the bases of domain name registrations for these three
ccTLDs represented 47 percent of all ccTLDs.
ccTLD Breakdown
ccTLD Breakdown
Source: Source: Zooknic, January
80,000,000
2009
70,000,000
60,000,000
50,000,000
40,000,000
2006
2007
30,000,000
2008
20,000,000
10,000,000
0
Top 10
Total ccTLD
+ .Com/.Net Dynamics
VeriSign processed peak loads of nearly 50 billion Domain Name System (DNS) queries
per day in the fourth quarter of 2008, resulting in hundreds of millions of Internet
users accessing Web sites or sending email. The VeriSign DNS continued to maintain
operational accuracy and stability for 100 percent of the time during the fourth quarter
2 The .cn Registry (CNNIC) continued to offer
of 2008, as it has for the past 11 years. VeriSign’s unique capability to operate global
an aggressive price promotion with a 1 RMB
networks of this nature at this scale and reliability remains unparalleled.
(US$0.13) fee for a one-year .cn domain name
registration.
3 For .com and .net domain name registrations,
The .Com and .Net Base and New Registrations
VeriSign reports an adjusted base of active
domain name registrations, which refl ects
The overall base of .com and .net domain names grew to 90.4 million domain names at
deletions that occur within the fi ve-day Add
the end of 2008. This represents a 12 percent increase over the previous year and a one
Grace Period beyond the quarter end. This
percent increase over the third quarter of 2008.3
fi gure may differ from other non-authoritative
publicly available sources which do not adjust
the base.
3
T H E D O M A I N N A M E I N D U S T R Y B R I E F - F E B R U A R Y 2 0 0 9
New .com and .net registrations were added at an average of 2.1 million per month in
the fourth quarter of 2008 for a total of 6.3 million new registrations in the quarter.
This is a 9 percent decline over the third quarter of 2008 and a 16 percent decline
over the same quarter last year. New registrations averaged 7.2 million per quarter in
2007 and averaged 7.1 million per quarter in 2008. The number of new .com and .net
domain names registered for the purpose of participating in online advertising networks
declined in the fourth quarter as expected and refl ects a weakening in the earnings
per click (EPC) for some domain name holders. These online advertising names will
increasingly become a smaller part of the .com and .net base.
Renewals
The renewal rate for .com and .net for third quarter rounded up to 72 percent.4 While
the renewal rate decline is due to changes in the earnings per click (EPC) for names
registered for the purpose of participating in online advertising networks, the renewal
rate for traditional registrations declined slightly as well in the third quarter. Quarterly
renewal rates may deviate a few percentage points in either direction each quarter based
upon the composition of the expiring base and the contribution of specifi c registrars.
.Com/.Net Registry
Renewal Rates
.Com/.Net Registry Renewal Rates
Source: VeriSign, November 2008
80%
74% 74%
76%
76%
77%
77%
76%
76% 74% 74% 74% 73% 72%
60%
40%
20%
0%
Q3
Q4
Q1
Q2
Q3
Q4
Q1 Q2
Q3
Q4
Q1
Q2
Q3
2005
2006
2007
2008
Whether a domain name resolves to a Web site is a key factor in the renewal rates
since domain names that resolve to Web sites are more likely to be renewed. VeriSign
estimates that 88 percent of .com and .net domain names resolve to a Web site, meaning
that an end-user visiting that domain name would fi nd a Web site. These Web sites can
be further described as those having multiple pages or as one-page Web sites. One-page
Web sites include under-construction, brochure-ware and parked pages in addition to
online advertising revenue generating parked pages.
.Com/.Net Web Sites
.Com/.Net Web Sites
Source: VeriSign, February 2009
One-page Web sites
Multiple Page Web sites
No Web sites
24%
64%
12%
0
10
20
30
40
50
60
70
80
90
100
4 The registry renewal rate includes ASCII .com
Total Domain Names Analyzed = 90 Million
and .net domain names. The registry renewal
rate for the fourth quarter of 2008 will be
announced when VeriSign reports its earnings
for the fi rst quarter of 2009.
4
T H E D O M A I N N A M E I N D U S T R Y B R I E F - F E B R U A R Y 2 0 0 9
+ Internationalization of Top Level Domains
As an increasing portion of the Internet users worldwide are speakers of languages
that do not use the Latin alphabet, the introduction of Internationalized Domain
Names (IDNs) has provided a way for these users to navigate the Internet in their own
language since 2000. IDNs are domain names represented in local characters using
scripts beyond ASCII characters.5 There are currently more than 47 domain name
registry operators supporting IDNs. However, the current implementation of IDNs
is limited to the second and lower level(s) (e.g., 한글.com), leaving the Top Level
Domains (TLDs) still in ASCII. This has created a desire in the Internet community
to extend the internationalization to the top level in order to provide a fully localized
navigation experience. For purposes of this brief, such IDNs shall be referred to as
“Internationalized TLDs”. A few examples of human factors that can be better served
by internationalizing the TLDs (e.g., 例え.テスト) include ease of use in that users
will no longer need to switch their input mode from the local script to the basic
Latin characters (ASCII) in order to append the TLDs still in ASCII characters. In
addition, users of bi-directional scripts writing from right-to-left will be able to enter
Internationalized TLDs in one single direction from beginning to end. While the
Internet community is working on Internationalized TLDs, the level of interest in
Internationalized TLDs from the perspectives of registrants and end users is still unclear.
While the Internet community has worked toward bringing Internationalized TLDs into
the Domain Name System (DNS) for many years as a key next step from the current
IDN implementation, there has been a proliferation of proprietary keyword services.6
These keyword services provide Internet users a localized navigation experience. This
proliferation of private services exemplifi es the anticipation for a localized navigation
experience beyond the limitations of the current IDN implementation. However, unlike
IDNs based on DNS, these proprietary services by nature have critical dependence
on specifi c network environments and confi gurations making ubiquitous access to
the services with uniform user experience impossible. These services also could create
potentially signifi cant user confusion as there could be multiple service providers
mapping one seemingly identical keyword string to different identifi ers in DNS – thus,
lacking the mission critical characteristic of “uniqueness” in an identifi er. The long-term
reliability and stability of the proprietary services are also concerns among end users and
businesses.
According to recent qualitative research conducted with small and medium-sized
businesses (SMB) in multiple locations across Asia and the Middle East, IDNs are
still not seen by a majority of those surveyed as viable replacements for ASCII domain
names for businesses.7 The respondents cited the need for proven popularity and usage,
especially given the low adoption of IDN-aware browsers in some markets, particularly
in Asia. However, the research also indicated that SMBs perceive that IDNs have clear
advantages in targeting local markets and non-English speaking Internet users, as well
as, for local promotions and advertisements. Respondents felt that IDNs are still a
5 ASCII (American Standard Code for
novelty and are able to attract consumer attention. The current IDN implementation
Information Interchange) characters include
with the top level in ASCII was raised as one of the major challenges because it is
0-9, A-Z and the hyphen.
confusing to mix multiple scripts in a single domain name and, more importantly, more
6 For more information on the Internet
community efforts for internationalization
diffi cult to input than a URL that uses an Internationalized TLD.
of TLDs, please refer to Internationalized
Domain Names (http://www.icann.org/en/
As a part of community efforts to internationalize the top level, the Internet community
topics/idn/)
has been working on two parallel tracks:
7 “Internationalized Domain Name Study.”
Windward Directives, December 2008.
1. IDN Fast-Track for Country Code Top Level Domains (ccTLDs).8
8 Fast-track IDN ccTLD Activities (http://www.
2. New Generic Top Level Domain (gTLD) Program.9
icann.org/en/topics/idn/fast-track/)
9 New gTLD Program (http://icann.org/en/
topics/new-gtld-program.htm)
5
T H E D O M A I N N A M E I N D U S T R Y B R I E F - F E B R U A R Y 2 0 0 9
LEARN MORE
The Fast-Track process focuses on meeting a near-term demand with the implementation
To subscribe or to access the archives
of a limited number of non-Latin based IDN ccTLDs associated with the ISO 3166-1
for the Domain Name Industry Briefs,
two-letter codes while a full IDN ccTLD policy is developed.10 The New gTLD Program
please go to www.verisign.com/
focuses on expanding gTLD choices, including IDNs at the top level, in order to meet
domainbrief. Email your comments or
growing diversity and encourage competition for more innovation, choice and change to
questions to domainbrief@verisign.
the Internet’s addressing system.
com.
ABOUT VERISIGN
The Internet community continues to strive to make progress in both tracks and to
VeriSign, Inc. (NASDAQ: VRSN)
address many complicated challenges such as resolving string contention, protecting
is the trusted provider of Internet
rights, handling internationally recognized issues of morality and public order, and the
infrastructure services for the
geographical names process. It is anticipated that the application process in the New
networked world. Billions of times
gTLD Program will commence sometime in late 2009. While the process and timing
each day, VeriSign helps companies
is under development, the Internet Corporation for Assigned Names and Numbers
and consumers all over the world
(ICANN) has been testing and evaluating internationalized strings of “example.test” in
engage in communications and
11 scripts in the DNS root zone since August calling for public participation to ensure
commerce with confi dence.
ongoing DNS stability and security.12 The potential for internationalized TLDs to truly
Additional news and information
internationalize the Internet is promising, but it must be done prudently or there is a
about the company is available at
high risk of failure over technical and business issues including the requirement for a
www.verisign.com.
safe, consistent and ubiquitous user experience as well as protection of trademarks and
other intellectual property.
The “example.test” Names in
Internationalized Scripts
The “example.test” Names in Internationalized Scripts
Source: ICANN
11
Script
Language
Internationalized TLD Examples
Arabic
Arabic
Simplified Chinese
Chinese
Traditional Chinese
Chinese
Greek
Greek
Devanagari
Hindi
Kanji, Hirigana, and Katakana
Japanese
Hangul
Korean
Zooknic Methodology
Perso-Arabic
Persian
For gTLD data cited with Zooknic as a source,
Cyrillic
Russian
the analysis uses a comparison of domain name
root zone fi le changes supplemented with
Tamil
Tamil
WHOIS data on a statistical sample of domain
names which lists the registrar responsible for a
particular domain name and the location of the
Hebrew
Yiddish
registrant. The data has a margin of error based
on the sample size and market size. The ccTLD
data is based on analysis of root zone fi les. For
more information, see www.zooknic.com.
©2009 VeriSign, Inc. All rights reserved. VeriSign, the VeriSign logo, and other trademarks, service marks, and designs are registered
or unregistered trademarks of VeriSign and its subsidiaries in the United States and in foreign countries. 02/09.
10 International Standard Organization (ISO)
3166-1 (http://www.iso.org/iso/english_
Statements in this announcement other than historical data and information constitute forward-looking statements within the
country_names_and_code_elements)
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements
11 IDN .test Root-Zone Evaluation (http://
involve risks and uncertainties that could cause VeriSign’s actual results to differ materially from those stated or implied by such
www.icann.org/en/announcements/
forward-looking statements. The potential risks and uncertainties include, among others, the uncertainty of future revenue and
announcement-2-19jun07.htm). Arabic,
profi tability and potential fl uctuations in quarterly operating results due to such factors as increasing competition and pricing pressure
Persian, Chinese (simplifi ed and
from competing services offered at prices below our prices and market acceptance of our existing services, the inability of VeriSign to
traditional), Russian, Hindi, Greek, Korean,
successfully develop and market new services, and the uncertainty of whether new services as provided by VeriSign will achieve market
acceptance or result in any revenues. More information about potential factors that could affect the company’s business and fi nancial
Yiddish, Japanese and Tamil. Example strings
results is included in VeriSign’s fi lings with the Securities and Exchange Commission, including in the Company’s Annual Report on
for testing at IDNwiki (http://idn.icann.org/).
Form 10-K for the year ended December 31, 2007, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. VeriSign
Note that the names in Arabic and Hebrew
undertakes no obligation to update any of the forward-looking statements after the date of this presentation.
script read fully from right to left.
6
