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.
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.”
ICANN has reopened the contention sets for .cam and .通販 after deciding that two String Confusion Objection panels may have been wrong to reject certain applications.
Two rulings — that .cam is confusingly similar to .com and that .通販 is confusingly similar to .shop (really) — will now head to an appeals panel for a “final” determination.
The decision was made by the ICANN board’s New gTLD Program Committee this week at the ICANN 51 public meeting in Los Angeles.
The first case being reopened for scrutiny is Verisign versus Rightside, where the original SCO panel found that .cam and .com were too similar to coexist on the internet.
But a different panelist found that the two strings were not confusingly similar in objections filed by Verisign against two other applicants — Dot Agency and AC Webconnecting.
The opposing rulings meant that Rightside’s application would have been kicked out of the .cam contention set, which hardly seems fair.
This and many other “perceived inconsistencies” led to the ICANN board being pressured to come up with some kind of appeals process, which it agreed to do in February.
Verisign, unfairly in my view, was not given the opportunity to appeal the two .cam decisions that went against it, even though they were made by the same panelist for the same reasons.
The second, altogether more peculiar, case was .shop applicant Commercial Connect versus .通販 applicant Amazon.
The panelist in that case seemed to have checked his brain at the door that day, concluding that the two strings are confusingly similar simply because 通販 means “online shopping” in Japanese.
Another panelist, in a different case also involving Commercial Connect, had found that .购物 (Chinese for “shopping”) was not confusingly similar to .shop because duh.
ICANN’s NGPC has now decided that the two controversial decisions are “not being in the best interest of the New gTLD Program and the Internet community”.
Both .cam and .通販 will now be referred to a three-person panel at the International Center for Dispute Resolution, the same body that processed the original objections, for a final determination.
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:
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.
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 is trying to form a new industry standards-setting association for domain name registries and registrars.
To be called the Registration Operations AssociationTM (yes, according to its web site it is apparently already trademarked), Verisign wants potential members of the group to meet in October to figure out whether such an association is needed and what its remit would be.
But the Domain Name Association apparently has other ideas, suggesting in a recent blog post that the DNA would be the best place for these kinds of technical discussions to take place.
The primary purpose of an association would be to facilitate communication and technical coordination among implementers and operators of the EPP protocol and its current extensions to address interoperability and efficiency obstacles.
EPP is the Extensible Provisioning Protocol used by registrars to transact with all gTLD and many ccTLD registries. It’s an IETF standard written by Hollenbeck over a decade ago.
One of the problems with it is that it is “extensible” by design, so every time a registry extends it to deal with a peculiarity of a particular TLD, partner registrars have to code new connectors.
In a world of hundreds of new gTLDs, that becomes burdensome, Hollenbeck explained in his posts.
An industry association such as the formative ROA could help registries with common requirements standardize on a single EPP extension, streamlining interoperability.
That would be good for new gTLDs.
It’s no secret that many registrars are struggling to keep up with new gTLD launches while providing a good customer experience, as Andrew Allemann pointed out last week.
The need for cooperation seems plain; the question now is what is the correct forum.
While Verisign is pushing for a new group, the DNA reckons the task could be best-performed under its own umbrella.
Executive director Kurt Pritz blogged:
Given its multi-functional and global diversity, the DNA will be an effective place to coordinate discussion of these issues and to involve broader domain name industry involvement.
Verisign isn’t a DNA member. In fact, it appears to be the only significant back-end registry provider in the western world not to have purchased a membership.
But Pritz said in his post that technical discussions would not be limited to DNA members only — anyone would be able to participate without coughing up the $5,000 to $50,000 a year the group charges:
Recognizing that industry-wide issues are… well … industry wide, the DNA Board determined that this work must include those inside and outside the DNA, welcoming all domain name industry members. Scott and others from Verisign and other firms are invited regardless of whether they join the DNA.
So is the industry going to have to deal with two rival standards-setting groups?
In the many years I was a general Silicon Valley tech reporter, I must have written scores of articles about new technologies spurring the creation of competing “standards” organizations.
Usually, this involved pitting an incumbent monopolist such as Microsoft against a coalition of smaller rivals.
It makes for great headlines, but I’m not sure the domain name industry is big enough to support or require multiple groups tackling the same problems.
With resource-strapped registries and registrars already struggling to make new gTLDs work in any meaningful way, I doubt their geeks would appreciate duplicating their efforts.
I don’t know whether the DNA or ROA would be the best venue for the work, but I strongly suspect the work itself, which almost certainly needs to be done, only needs to be done once.
Verisign wants interested parties to meet in Los Angeles on October 16, just as the ICANN meeting there concludes. The meeting may also be webcast for those unable to attend in person.