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Verisign announces ANOTHER price increase as regs slide

Kevin Murphy, July 28, 2022, 20:56:23 (UTC), Domain Registries

Verisign posted a rare decrease in its .com/.net registered name base in the second quarter, but said it is going to raise its .net prices next year anyway.

The company also massively slashed its growth outlook for domain sales this year.

The annual cost of a .net name will go up 10%, the maximum permissible under its contract with ICANN, to $9.92 from February 1 next year, the registry said

Registrants will as usual be able to lock-in the current renewal fee of $9.02 for up to 10 years if they renew before the hike kicks in.

It’s the first .net price increase since 2018. The TLD has been stagnating in volume terms for several years, due no doubt in part to behavioral changes following the introduction of new gTLDs starting in late 2013.

The news came as Verisign reported that its domain base shrunk during Q2.

The company ended June with 174.3 million names under management, up 2.2% over a year earlier but down 350,000 domains compared to the end of Q1.

The split was 161.1 million for .com and 13.2 million for .net — that’s a sequential decrease of 200,000 for .com and a decrease of 200,000 for .net. Both rounded, of course.

CEO Jim Bidzos told analysts tonight that renewals were affected by a great many first-time registrations from China not renewing. General post-pandemic and macro-economic factors also played a role, he said.

The preliminary renewal rate was 75.9% compared to 76.0% a year earlier, but the number of new regs was down to 10.1 million from 11.7 million over the same period.

Verisign reported Q2 revenue up 6.8% on a year ago at $352 million, with net income of $167 million compared to $148 million. Its operating margin swelled to 67.1% percent from 64.7%.

Bidzos told analysts that the company is cutting its registered name growth prediction for the year to between 0.5% and 1.5%, a huge decrease from the already-downgraded estimate of 1.75% and 3.5% it made after the first quarter.

He said that he expects Q3 and Q4 to go much the same way as Q2.

Bidzos said he thinks the current factors affecting regs are a bump in the road and he expects things to stabilize over time.

UPDATE 2148 UTC — The article was updated to correct the comparison of the decrease in .com/.net regs.

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Comments (4)

  1. Paul Anthony Webb says:
    July 29, 2022 at 4:07 am

    The cost of storage decreases every year, as well as the cost to manage services. If anything, managing services gets easier over time, especially if you’re not adding anything new.

    So my question is, with increasing costs, are SLD owners getting *anything*? More value in the form of discounts or some service offering?

    Being the old default will only go so far.

    Reply
    • Rubens Kuhl says:
      July 29, 2022 at 3:01 pm

      Personnel is a significant cost line for contracted parties, which is only rising (and not even linear). Computing costs have a significant share of energy costs, and I believe you know in your house and car how they have been increasing.

      So, simply to keep things as they were, costs will be higher. If there is a larger base to spread those costs it then becomes a market forces definition.

      Reply
    • Rob Golding says:
      August 12, 2022 at 5:18 pm

      >The cost of storage decreases every year, as well as the cost to manage services

      The cost of the storage-medium itself MAY decrease (based on $/unit), but they wear out, power/datacentre costs continually increase, licence fees go up regularly, staff cost more every year both directly in wages and indirectly in admin/office/pension/etc costs

      In terms of costs to operate a service over time the only direction is up !

      Reply

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