Domain Name Registry Spots Country Trend

Officials at VeriSign , manager of the “.com” and “.net” generic top-level domains (gTLD), say the demand for Web sites remains strong, pointing to figures from its second-quarter Domain Name Industry Brief released today.

New domain name registrations topped 4.6 million in the second quarter, off slightly from last quarter’s 4.7 million, but still well above last year’s numbers, which hovered under or at the 4 million mark for each quarter in 2003.

This year’s strong second quarter helped push the total number of domain names to 64.5 million.

While .com remains the most popular domain extension on the Web with a 45 percent market share, country code TLDs (ccTLDs) are the fastest-growing classification, Mark McClaughlin, senior vice president of VeriSign’s naming and directory service division, said.

The ccTLD extensions are specific to a country and include “.de” (Germany) and “.uk” (United Kingdom), which accounted for 12 percent and 8 percent of registrations, respectively.

“The regional ccTLDs, as a percentage of growth, are growing faster than the overall market for domain names in general,” McClaughlin said. “When you’re starting from a smaller base, it’s easier to get high-percentage growth off that.”

While individually the country names make up a small percentage of the total domain names in use, as an aggregate ccTLDs comprise 39 percent of all the domain names registered, only 6 percent less than VeriSign’s .com market share.

“One of the things we’ve done in the past year . . . is to encourage non-U.S.-based registrars to come to market, because it’s beneficial for the market in general, and also for us, from a penetration geographical standpoint, there’s still a lot of under-penetrated markets for .com and .net, part of it is the inability to buy a domain name there,” McClaughlin said.

“As those guys become more successful it helps us, because a lot of the companies, when they buy their ccTLD, they also buy .com and .net, either as a protective measure or to buy all three,” he added.

An increase in the number of new customers is always good for the bottom line. In its second quarter 2004 financial results July 22, VeriSign reported a 5 percent net gain from the first quarter in .com and .net registrations, to 34 million. The company’s naming and directory services, which manages the .com and .net functions, helped deliver VeriSign’s Internet services group $139 million in revenues for the quarter.

Meanwhile, gTLDs outside the big three — .com, .net and .org — are still trying to make gains. VeriSign believes there is significant potential for “.aero,” “.biz,” “.coop,” “.info,” “.museum,” “.name” and “.pro,” though its report notes only one alternative gTLD is bought for every 90 .com names.

Roland LaPlante, chief marketing officer at Afilias, owner of the .info gTLD, said in the context of the entire domain name industry the alternative gTLD market share is rather small, but its been steadily growing in the three years since the service launched.

He said .info, which accounted for 2 percent of the total domain name industry in VeriSign’s report, is up to 1.4 million registered users and is growing steadily. Renewals, which he said are an indicator of good service, have exceeded expectations, through he wouldn’t release precise numbers.

“We’re seeing good solid regular increases in volume, we’re seeing increases in market share and are more than sharing in the overall vitality that VeriSign’s reporting from a market standpoint,” LaPlante said.

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