Domain universe grows on new gTLDs despite .com shrinkage

The number of domain names on the internet grew by about 600,000 during the fourth quarter of 2023, despite the drag caused by shrinkage in .com and .net, according to Verisign’s latest Domain Name Industry Brief.

There were 359.8 million registered domains at the end of the year across all TLDs, a 0.2% increase over September, the latest DNIB says.

The growth was hampered by declines in Verisign’s own flagship gTLDs, which were down by 1.2 million names over Q3 and a million names year-over year. Verisign blamed softness in China for the declines during its Q4 earnings call last week.

New gTLD reg volume picked up most of the slack, growing by 1.6 million or 5.3% over Q3, and 4.4 million or 15.9% over 2022. This seems to have been largely driven by six-figure increases at a handful of low-cost gTLDs coupled with smaller increases across the board.

ccTLDs grew more modestly, up about 200,000 names or 0.2% quarter over quarter and 5.3 million names, 4%, year over year. There were 138.3 million ccTLD domains at the end of the year. Growth seems to have been tempered by six-figure declines in the likes of .uk and .ru.

How to qualify for a $40,000 gTLD

Organizations from most of the countries of the world, including some very wealthy economies, could find themselves eligible for a discount of up to 85% on ICANN new gTLD application fees, according to draft rules published for public comment today.

By my count, small businesses from 177 of the world’s countries and territories could qualify for cheap applications in the next round, expected in 2026, assuming they meet the new Applicant Support Program’s other criteria.

The list of qualifying nations includes the BRIC countries (Brazil, Russia, India, China), oil-rich nations such as Saudi Arabia and the UAE, wealthy Asian territories such as Hong Kong and South Korea, and some European nations, such as Serbia and Montenegro.

The draft ASP rules propose to subsidize applications from non-profits, intergovernmental organizations, indigenous/tribal groups, and small businesses that provide a “social impact or public benefit” from anywhere in the world.

It also promises subsidies to small businesses located in and owned by people based in several UN-designated economic regions: Small Island Developing States, Least Developed Countries, Economies in Transition, and Developing Economies.

Lists of these countries can be found in this UN document. China, Singapore, South Korea and Hong Kong are among dozens on the “developing economies” list. Russia counts as an “economy in transition” along with a handful of other east European and west Asian nations.

There’s no requirement to have a public benefit or charitable mission to qualify as a “Micro or small sized business from a less-developed economy”, you just need to have fewer than 50 employees, less than $5 million in the bank, and less than $5 million of annual sales (or meet two of those three criteria).

According to my tally, there are 177 distinct territories on the applicable UN lists. The same UN document lists just 36 nations that qualify as “developed” economies.

Because the application fees for the next round are not yet fixed, the discount eligible applicants can get isn’t either. The placeholder text in the current draft says the discount will be in the range of 50% to 85%.

ICANN has previously said that the base fee could be as much as $270,000, so an 85% discount would be worth almost $230,000, reducing the fee to about $40,000. Each applicant would be limited to one gTLD.

Support applicants under any category also have to pass various background screening checks — they can’t be affiliated with another registry, for example — and have to show that paying the full base gTLD application fee would be a “financial hardship”.

This is defined as: “Cost of the subsidized base gTLD application fee ([X%] of the [$X] USD fee) is greater than 20 percent of the organization’s annual revenue”. So, if we assume a discounted fee of $40,000, only companies with revenue under $200,000 would qualify.

The 2012 round’s Applicant Support Program worked a little differently. Applicants could be from anywhere in the world, but they could earn points under the score-based rules by being from a developing nation.

There were only three applicants using the ASP in 2012, and only one — DotKids Foundation, based in Hong Kong and founded by the same businessman who founded DotAsia and currently sits on the ICANN board of directors — ended up qualifying for the cheaper application fee.

For the next round, ICANN has penciled in a Q4 2024 date to start accepting applications for the discount. The application window is expected to close a year later, at least six months before the new gTLD application window opens.

Anyone thinking about trying to game the system should note that ICANN promises that anyone “found to have abused the intent of the program” will be banned from the new gTLD program forever.

The proposed ASP rules are open for comment for 50 days here.

Registry service provider evaluation handbook published

ICANN has released the first draft of its RSP Handbook, the guidelines and questionnaire for registry service providers that want to get pre-approved by the Org ahead of the next new gTLD application round.

The Handbook is aimed at the few dozen companies that offer back-end services to gTLD registries — companies such as GoDaddy, Identity Digital and CentralNic — to guide them through the process of getting approved under the new Registry Service Provider Evaluation Program.

The program was called for by the GNSO community in order to minimize the amount of time-consuming, expensive evaluation work required for each new gTLD application. If a gTLD applicant’s selected RSP has been pre-approved by ICANN, it’s an automatic pass on the technical part of the application.

The new Handbook 1.0 envisages four types of RSP. A “Main RSP” is a full-service provider that looks after all technical aspects of a registry back-end. There are also categories for companies that provide DNS resolution only and DNSSEC services.

A fourth type, the “Proxy RSP”, is aimed primarily at companies that provide secondary registry services in countries that have very restrictive domain licensing rules. That basically means China, and proxies such as ZDNS.

Incumbent gTLD RSPs have a distinct advantage in the Handbook process. If they’re in good standing with ICANN and have complied with their service level agreements for the last six months, they can skip the second, technical part of the evaluation.

Incumbents also get a streamlined process for additional registry services — stuff like name-blocking and registry locks — they wish to offer. If they already offer them in an existing gTLD, they get to skip the full Registry Services Evaluation Process.

The Handbook is a first draft and does not currently include things like fees and dates. It’s not yet open for public comment but you can read the 108-page PDF here.

ICANN expects to launch the pre-evaluation program 18 months before it starts accepting new gTLD applications, so applicants have a list of approved RSPs to choose from. With a Q2 2026 target date for the next application window, that means the RSP program could launch later this year.

.com is shrinking but Verisign raises prices again anyway

Verisign has confirmed that it plans to exercise its fourth and final .com price-increasing power under its current registry contract, even as its domains under management continues to head south.

The company confirmed last night that it will increase the annual registration and renewal wholesale fee for a .com domain from $9.59 to $10.26 on September 1 this year. It’s the last of the four times it’s allowed to raise prices by up to 7% in its current contract with ICANN, which expires in November.

The news came as Verisign reported its fourth-quarter and full-year 2023 financial results, which were as profitable as we’ve come to expect.

But in terms of domains under management, .com and .net continued to decline, which CEO Jim Bidzos told analysts was all China’s fault. Domains managed by Chinese registrars shrank by 2.2 million in Q4, leading to an overall .com/.net shrinkage of 1.2 million names.

There were nine million new .com/.net registrations in Q4, down from 9.7 million in the same quarter in 2022.

Bidzos said the decline in China was due to factors such as stricter local regulations and a weaker economy, and said he expects those challenges to continue to hit Verisign’s numbers in 2024. He did not blamed higher prices for the drop.

Indeed, the .com zone file has been shrinking by about 1,500 domains per day on average since the start of the year. Zone numbers are usually a reliable predictor of DUM trends.

Revenue from China was down about $14.4 million, CFO George Kilguss said.

Bidzos said Verisign expects its DUM to be flat this year, with a possible 1% swing either way.

For Q4, the company reported revenue up 3% year over year at $380 million, with $265 million net income, up from $179 million a year earlier.

For the whole of 2023, revenue was up 4.8% at $1.49 billion and net income was $818 million, up from $674 million in 2022.

Another crypto firm to apply for a new gTLD

D3 Global, the new gTLD consultancy specializing in cryptocurrency and blockchain clients, has signed up its third public client.

The company plans to help Gate.io apply to ICANN for .gate when the next application round opens, currently expected in 2026, according to a press release today.

Gate.io is a cryptocurrency exchange that claims to have 13 million users worldwide (although it appears to be unavailable in several large markets) that was founded in China 10 years ago.

D3 is a startup founded by some domain industry pioneers that offers companies support with applying for regular gTLDs that can interoperate with blockchain-based naming systems.

It’s already announced deals with companies called Shib and Viction for the strings .shib and .vic.

.ai helps UDRP cases rise in 2023, WIPO says

The number of cybersquatting cases filed with the World Intellectual Property Organization increased 7% in 2023, WIPO said this week.

The total UDRP filings, 6,192, includes national ccTLD variations that WIPO handles but not UDRP filings with other providers.

WIPO said that 82% of cases resulted in the domain being transferred to the complainant, with the complaint being denied in just 3% of cases.

The organization does not publish data on Reverse Domain Name Hijacking findings, but RDNH.com, which tracks these things, shows 31 RDNH finding at WIPO in 2023.

.com accounted for 80% of complaints. WIPO said that the most complained-about ccTLDs were .co (Colombia), .cn (China), .mx (Mexico), .au (Australia) and .ai (Anguilla).

Perhaps unsurprisingly, given its rapid growth in registrations, Anguilla’s .ai saw a sharp uptick in UDRP filings last year, up from just four in 2022 to 43 in 2023, according to the WIPO web site.

Domain universe grows despite .com drag

The number of registered domain names in the world grew by 2.7 million in the third quarter, despite market-leading .com shrinking, according to Verisign’s latest Domain Name Industry Brief.

There were 359.3 million domains across all TLDs at the end of September, according to the DNIB. up from 356.6 million at the end of June.

Over the same period, .com shrunk by half a million names as Verisign faces challenges from exposure to erratic demand from China.

New gTLD volumes were up by 2.1 million names to end the quarter at 30.2 million. Judging by zone files, at least half of these new names seem to be cheap, low-quality regs in the likes of .top and .cfd.

Total ccTLD names were 138.1 million at the end of the quarter, up by a million. All of the top 10 ccTLDs grew or were flat, except .uk, which lost about a hundred thousand names.

China has .com’s growth by the balls

Verisign has downgraded its expectations for .com/.net growth for the year into potentially negative territory, citing — not for the first time — low demand from China.

The registry expects its domain name base to grow at a maximum of 0.4% or shrink as much as 0.4% by the end of the year. That compares to a prediction of between 0% and 2.25% growth at the start of the year.

“Low demand from China remains the primary source of drag on the overall domain name base growth,” CEO Jim Bidzos told analysts on Thursday. “Excluding registrars based in China, both our domain name base and new registrations are up year-over-year”.

The company’s regulatory filing for Q3 shows that China revenue was down from $26.8 million to $22 million over the year. It was the only one of the four geographic reporting segments to show a shrinkage.

Verisign ended Q3 173.9 million .com/.net domains under management, down 0.1% over the year and down half a million names in the quarter.

While DUM growth may be on the decline, price hikes compensate and keep Verisign’s dollar-growth going.

The company reported year-over-year revenue growth up 5.4% at $376 million for the quarter of 2023. Net income was $188 million, up from $169 million a year ago.

Nominet takes over failed .desi

Nominet has been picked as the Emergency Back-End Registry Operator for failed gTLD .desi, the company confirmed today.

The gig means the .uk registry will be responsible for keeping .desi ticking over — handling DNS, EPP, Whois etc — while ICANN looks for a successor registry.

.desi was operated by mom-n-pop outfit Desi Networks of Maryland on a Team Internet back-end until it threw in the towel this July, having failed to sell more than a handful of domains.

The term “desi” refers to the cultures of the Indian subcontinent and its diaspora, giving an addressable market well over a billion people. But there were only 1,743 registered domains at the last count but the only active sites that show up in Google are porn.

It’s the second gTLD to go into special measures after .wed, which Nominet is also handling. ICANN has three accredited EBERO providers, the others being CNNIC of China and CIRA in Canada.

While .wed has only one active registrar and barely 30 registered domains, .desi has almost 300 registrars, about 70 of which have domains.

London Domain Summit starts tomorrow

The second London Domain Summit is to kick off tomorrow, August 22, with a two-day agenda blending domain investor and local domain policy themes.

The conference, at the Hilton London Metropole, is being organized by founder Helmuts Meskonis, who also owns two popular domainer forums: DNForum and AcornDomains.

Registration is available on the door and currently costs £50 for the two days.

It’s a single-track agenda, so nobody’s going to have to choose between sessions they find interesting.

I will be attending.

On the policy side of things, the highlights are a Q&A with Nominet director Kieren McCarthy, who was elected by members last year following hustings at the inaugural Summit, and a separate session with the UK government’s representative to ICANN, Nigel Hickson.

Two of this year’s three Nominet director candidates — Steven Wright and Thomas Rickert — will debate during the final session of the conference on Wednesday. The third, rejected candidate, Jim Davies, may well be in the audience. Andrew Bennett of Netistrar moderates.

There’s also going to be a panel on “Web3” domains — presumably meaning blockchain-based alt-roots — hosted by sponsor Freename.io.

A few sessions are set to focus on opportunities in other regions — namely the Middle East, Africa and China.

The domainer-oriented sessions cover the usual topics of monetization and premium sales with speakers from the likes of Sedo, CentralNic, BrandForce and IT.com. Not exactly my wheelhouse, but there’s nothing on the agenda that looks uninteresting and I anticipate checking out most sessions.

That said, if any fellow attendees fancy a hallway chat or a coffee or want to smash my face in or whatever, feel free to collar a fatter, grayer, shagged-out version of whatever photos you’ve previously seen of me, or slide into my DMs.

UPDATE — this post was updated August 24 to correct the number of candidates in this year’s Nominet election. Apologies to David Thornton, the candidate I neglected to mention, who did not participate.