A Domain Name Game of Growth

More than a dozen years after companies and individuals first began to snap
up Internet domains, demand continues to be strong.

The latest VeriSign Domain Name Industry Brief reports that in the first
quarter of 2007 worldwide, there were a total of 10.7 million new
registrations. The lion’s share came from 7 million new registrations for
the .com and .net Top Level Domains (TLDs).

VeriSign reported that TLDs grew at a 31
percent clip in the first quarter over the year-ago period.

“Growth came from all segments, including the traditional segments of
small/medium business and international,” Raynor Dahlquist, vice president
at VeriSign, told internetnews.com.

“In addition, we have seen the
new registrations from domain-name investors and large portfolio holders who
leverage the Pay Per Click advertising model to generate advertising revenue
from their domain name registrations remain a small but consistent
percentage within our new name sales.”

Dahlquist noted that as the registry operator for .com and .net, VeriSign
closely monitors the domain-name industry, so he wasn’t surprised by the
report’s findings.

For those who may not follow the industry as closely, she did identify a few
interesting highlights. Among them is the growth and usage of .tv and its
positioning as the destination for rich media. As well Dahlquist cited the
continued healthy renewal rates for .com and .net coming in at 76 percent
for the first quarter.

Another interesting factoid revealed in the VeriSign report has to do with
the growth of internet traffic itself. VeriSign manages the core .com and
.net DNS infrastructure under a renewed contract with ICANN and, as such, has unparalleled visibility into Internet traffic patterns.

“With the continuing rise in Internet users and usage, our digital
infrastructure is now handling an average of 30 billion DNS requests per
day, up almost 70 percent from year-ago levels,” Dahlquist said.

Where does the domain-name industry go from here? VeriSign is still
optimistic that it’s got more room to grow.

“As we entered the year, we talked about seeing some of the highest weekly
new-name adds that we had ever seen, and that continued throughout most of
the quarter,” Dahlquist stated.

“There is some seasonality month over month
as you watch what happens in a typical Q1, Q2, Q3, but we would expect to
see pretty strong numbers continue on a weekly basis here throughout the
rest of the year. ”

There were some 69 million .com and .net domain-name registration in total
at the end of the first quarter of 2007. It’s a figure that will also grow
as the year progresses.

“My bet would be you’re going to see absolute growth about the same as this
in each of the quarters, and as renewal rates hold steady, it wouldn’t
surprise us to see the base number probably go up by about 4 million a
quarter, exiting the year somewhere north of 80 million,” Dahlquist said.

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