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.net zone back above 15 million names

Kevin Murphy, February 3, 2015, Domain Registries

Is .net bouncing back after a year of declines?

The Verisign legacy gTLD has topped 15 million names again, a bit over a month after it dipped below the notable but ultimately irrelevant threshold. Today, the .net zone has 15,000,038 names in its zone file.

It had gone below 15 million on January 1, and hit a trough of 14,980,773 on January 19, but has been gaining ground — in a wobbly fashion — ever since.

Verisign executives have previously blamed “confusion” from the sudden influx of new gTLDs into the market for .net’s 2014 decline, which saw it lose a couple hundred thousand zone file domains.

On January 22 and 26, the company’s stock outlook was downgraded by financial analysts, based on the view that new gTLDs were hurting its business.

But the company has been quite aggressively marketing .net alongside big brother .com for several months. Are those efforts paying dividends?

New gTLDs pummel .net below 15 million domains

Kevin Murphy, January 2, 2015, Domain Registries

Verisign’s .net gTLD has had a disappointing start to 2015, as its zone file dipped below 15 million domains for the first time since achieving the milestone.

As of last night, .net had 14,998,404 names in its zone, a daily dip of over 10,000 domains.

That’s down by about 200,000 names from the roughly 15.2 million it had in March 2014, the earliest count for which I have records.

The gTLD first passed 15 million in August 2013, according to a celebratory blog post at the time.

Verisign has previously blamed the “confusion” created by the launch of new gTLDs for the decline, which was inexorable in 2014.

In October, CEO James Bidzos told financial analysts that “.net may be more susceptible to that confusion that swirls around new gTLDs.”

My similar view is that the existence of new gTLDs is causing people to wake up to the fact that defensive or shopping cart up-sell .net registrations are now superfluous, and that the days of .net riding on big brother .com’s coat-tails may be numbered.

There are still about 31,000 dark .net domains — registered names not present in its zone file — according to Verisign.

At the end of August 2014, .net had 15,569,398 registered names, according to the most recent available ICANN registry report.

Is the free ride over for Verisign’s .net?

Kevin Murphy, October 27, 2014, Domain Services

Verisign’s .net is on the rocks due to new gTLDs, executives have confirmed.

Speaking to investors and analysts on the company’s third-quarter earnings call last week, CFO George Kilguss said that .net “is experiencing some headwinds from the launch of the new gTLD program”.

Further comments from Kilguss and CEO Jim Bidzos seem to confirm what DI reported a month ago: .net is in trouble.

Latest stats collated by DI show that the .net zone file shrunk by over 121,000 domains in the seven months between March 26 and October 26 this year.

Executives said on the call that .net stood at 15.1 million names at the end of September. That compares to 15.2 million at the end of the previous quarter.

“It’s been relatively flat,” Kilguss said. “I actually think .net has held up pretty well over the year with all these new names coming on… So I don’t view .net’s performance as anything negative.”

Bidzos told analysts that “confusion” around the new gTLDs was to blame.

“I think generally, .net may be more susceptible to that confusion that swirls around new gTLDs,” he said.

He characterized .net as being like new gTLDs, falling into “that category of ‘different'”.

In my view, this is an implicit acknowledgement that .net has been getting a free ride for the last 20 years.

Asked whether the .net weakness could spill over to .com, Bidzos said that .com is a “trusted brand” because it’s almost 30 years old and has a 17-year record of uninterrupted up-time.

While there’s no doubt that .com is a trusted brand, it’s not because of its up-time or longevity, in my view — .net has the same stability record and is actually fractionally older than .com.

The reason .net is suffering now is that that for the last two decades it’s been essentially a defensive play.

People buy the .net when they buy the .com because they’ve been marketed as a bundle — the only two truly generic TLDs out there. Unlike .org, .net lost its semantic differentiation a long time ago.

As .com buyers start to see more and more options for duplicative or defensive registrations in their shopping carts, they’re going to be less likely to grab the .net to match their .com, in my opinion.

And it’s likely to get worse.

“It’s going to continue,” Bidzos said. “We’re seeing hundreds of more new gTLDs coming, and they’re coming at the rate of many every single week. So that confusion is likely to get worse.”

Is Verisign’s .net in trouble?

Kevin Murphy, September 24, 2014, Domain Registries

The zone file for Verisign’s .net gTLD has shrunk by almost 100,000 domains in the last few months.

I’ve been tracking .com and .net’s zone numbers since mid-March, shortly after the current wave of new gTLDs started going live, and while .com seems to be still growing strong, .net is definitely trending down.

The bulk of .net’s decline seems to have happened of the last three months. Its zone file count has decreased by 95,590 domains in the last 90 days, according to my numbers.

Here’s a chart, which you can click to enlarge, to illustrate what I’m talking about:

.net

I don’t have comparable figures from previous years, so I can’t be certain that the downturn is not related to summer seasonality.

But if there is seasonality, it doesn’t appear to have affected .com, which has added over a million names to its zone over the last 90 days.

.net

The last formal registry transactions report we have from Verisign for .net shows a decline of a little over 7,000 names under management in May.

Are these the early signs of trouble ahead for .net?

The TLD has always been a bit of an oddity. Originally designed for network operators, it was opened up and pitched in the 1990s by Network Solutions as a catch-all that should be acquired alongside .com.

That “Oh, I may as well buy the .net while I’m here” mentality stuck in the primary market, and I’ve often encountered the “I’ll throw in the .net for free” mentality in the secondary market.

But in a world of hundreds of new gTLDs I wonder whether .net’s brand caché will shrink.

If a registrant decides they can clearly do without defensively registering the .guru, the .pics, the .horse and the .wtf, perhaps they’ll start wondering why they bother to register the .net too.

Is .net on the verge of an unprecedented drop-off in registrations?

I’ll have to reserve judgement — that last 90 days might be a blip, and it only represents 0.63% of the .net business — but it’s going to be worth keeping an eye on, I think.

With 15 million names, the .net business is worth about $93 million a year in registry fees to Verisign.

Verisign lays out ‘buy once’ IDN gTLD plans

Verisign has finally clarified how it proposes to let existing registrants of internationalized domain names grab the matching domains in its 12 forthcoming IDN gTLDs.

The company has applied for transliterations of .com in nine non-Latin scripts and .net in three, but its applications were light on details about existing registrants’ rights.

But today Verisign senior vice president Pat Kane outlined precisely how name allocations will be handled.

At first glance it sounds like good news for existing IDN registrants, particularly domainers whose investments in IDN .com and .net domains are about to become much more valuable.

If you already own a .com domain that is an IDN at the second level, you will have exclusive rights to that IDN string in all other .com transliterations, but not .net transliterations.

That works the other way around too: if you own the IDN .net domain, you get the matching second level in all of Verisign’s .net transliterations.

Owning the Chinese word for “beer” in Latin .com would not give you rights to the Thai word for “beer” in the Thai transliteration of .com, but you could buy the Chinese equivalent.

The rules seem to apply to future registrations too.

You could register the Hebrew for “beer” in the Hebrew transliteration of .com and you would also get the exclusive right to that Hebrew string in Latin .com.

There would be no obligation, and you wouldn’t lose your right to register matching domains if you chose not to immediately exercise it, Kane said. He wrote:

Two primary objectives in our strategy to implement new IDN gTLDs are, where feasible, to avoid costs to consumers and businesses from purely defensive registrations in these new TLDs, as well as to avoid end-user confusion.

It all sounds pretty fair to me, based on Kane’s blog post.

There’s a hint that trademark rights protection mechanisms may complicate matters, which has apparently been discussed in a letter to ICANN, but if it’s been published anywhere I’ve been unable to find a copy.