.com is back as Verisign discounts bear fruit

Verisign’s .com returned to growth in the first quarter after the company offered its registrars marketing programs that substantially discounted the retail price of domains.

The company ended the quarter with 169.8 million .com and .net domains under management, a 777,000-name increase on the end of 2024. It’s the first time it’s reported quarterly DUM growth in almost two years.

While the company did not break out the split between the two TLDs, my records show that .com’s zone file grew by about 800,000 names during the quarter, while .net’s shrank by about 100,000.

Verisign has now upgraded its guidance for DUM growth this year to between a 0.7% decrease and a 0.9% increase, the first time its guidance has had a top-end in positive territory in some time. In February, it guided at between negative 2.3% and negative 0.3%.

The major reason for the reversal of fortunes is the program of discounts that have seen some registrars sell .com domains to customers recently for less than half of the usual $10.26 wholesale price.

“It’s still early, but we do see signs of registrars shifting towards customer acquisition, and we also see more registrar engagement with our marketing programs,” CEO Jim Bidzos said on an earnings call with analysts tonight.

In previous quarters last year, the fact that registrars were focused on squeezing more revenue out of their customers, rather than driving new registrations, was blamed for .com losing DUM.

Bidzos said that sales were up across all three of its core geographic markets — the US, EMEA and Asia-Pacific. On previous calls, North America and China were noted for weaknesses.

If there’s any reason to believe that the guidance is cautious, it’s because of what Bidzos and analysts euphemistically referred to as “the macro”, or “macro-economic situation”.

At this particular point in history, that’s code for US President Donald Trump’s erratic behavior with regard to world trade and tariffs, that has spooked economies globally. It’s not at all clear yet how this crisis might affect the domains market.

Verisign reported net income of $199 million for the quarter, up from $194 million a year ago, on revenue up 4.7% at $402 million. Operating income was up from $259 million to $271 million

The company, which has to date mainly been rewarding investors with share buybacks, has now also started issuing quarterly cash dividends. This quarter, they’re all getting $0.77 per share.

As .com shrinks, China adds another 1.2 million domains

The Chinese are still registering huge numbers of domain names, just apparently not in .com, new numbers suggest.

The country’s .cn ccTLD grew by more than 1.2 million domains in the second half of 2024 even as .com shrank and new gTLDs grew, according to the latest stats from local registry CNNIC.

The registry said it had 20,823,037 .cn names at the end of the year, which is 1,261,030 more than it reported for the mid-year point and 721,546 more than it had at the end of 2023.

CNNIC publishes its statistical reports twice a year and the numbers often fluctuate wildly. It’s not usual for .cn to gain or lose millions in the space of six months.

It peaked at over 23 million names in June 2020 and has gone as low as 15 million a year later.

The CNNIC report also says that the number of .com domains registered in the country at the end of the year was 7,047,974, down by 877,515 on the 7,925,489 it had at the end of 2023.

Verisign has partly blamed weakness in China for .com’s decline in several recent quarters.

CNNIC also said that the number of new gTLD domains registered in China at the end of 2024 was 3,640,877, up a whopping 1,574,304 on the 2,066,573 it had at the start of the year.

So that’s roughly 2.3 million net new names across .cn and new gTLDs in 2024, as .com lost almost 900,000.

I humbly suggest price is the driving factor here.

If you want to speculatively or nefariously register junk domains you can reasonably expect to find a new gTLD selling for a buck or two on any given day, but Verisign has been increasing its .com prices every year since the pandemic passed.

Verisign has recently started offering promotional discounts to its registrars, an attempt to return to DUM growth, and it looks like it might be working.

.com could return to growth this quarter

Verisign might have some better news for investors and analysts when it delivers its first-quarter financial results — it looks like .com might have turned a corner and returned to growth.

The TLD has added over 540,000 domains to its zone file between the start of the year and February 20, a little over halfway through the quarter, according to the numbers Verisign posts on its web site.

While Q1 has historically been seasonally strong, in the same period of 2024 .com was down by over 63,000 names. Over the whole of 2024, .com’s zone lost 3.7 million domains.

The company recently introduced some registrar marketing programs that CEO Jim Bidzos earlier this month said he was encouraged by. Several registrars have been spotted selling .com first-years for as much as 50% off the regular wholesale price.

Two big registrars — GoDaddy and Squarespace — kicked off expensive ongoing campaigns advertising their web site building services at the February 9 Super Bowl broadcast in the US.

Since the broadcast, .com is up by 186,000 names.

Verisign is currently predicting its domain name base across .com and .net will shrink by between 2.3% and 0.3% for the full year.

Super Bowl a bit of a dud for .com?

Having two of its largest registrars advertising during Sunday’s Super Bowl broadcast doesn’t seem to have given Verisign’s declining .com flagship much of a boost.

According to numbers published on the company’s web site, .com has grown by about 30,000 domains in the last two days.

While that’s certainly not to be sniffed it, it’s well within the parameters of a normal day’s operation for .com. The TLD’s zone file shrinks more days than it grows nowadays, but five-figure daily upticks are not uncommon.

GoDaddy and Squarespace both took out 30-second spots during the Super Bowl. Both featured high-profile actors and had high production values, but neither mentioned domain names once.

GoDaddy’s focused on its Airo tool and Squarespace’s… goodness knows what that was all about.

Verisign CEO Jim Bidzos last week told analysts that the two commercials were a sign that its registrar partners are starting to focus more on customer acquisition, which should help .com return to growth.

More gloom predicted for .com

Verisign is predicting more shrinkage at .com and .net in 2025, despite a few notes of optimism from its CEO.

The company said last night that its two flagship gTLDs shrunk by a combined 3.7 million domains in 2024, a 2.1% decrease, as I flagged up a couple weeks ago, and that its growth this year will be between negative 2.3% and negative 0.3%.

The quarterly loss was around 500,000 domains. Verisign ended the quarter with 169 million domains under management.

CEO Jim Bidzos again told analysts that the shrinkage was partly due to weakness in China and partly due to American registrars concentrating on profit margins over customer acquisition.

Growth was positive in the EMEA region, he said, without quantifying it.

Bidzos said that marketing programs the company recently launched show early signs of adoption by registrars, and that he expects registrars to refocus on customer acquisition as part of a cyclical trend.

He pointed to the fact that two registrars — presumably GoDaddy and Squarespace — have taken out pricey Super Bowl TV ads this weekend as an encouraging sign.

He said that Verisign is “considering looking at” applying for new gTLDs next year and is “looking at the potential for applications”.

The company reported Q4 net income of $191 million, down from $265 million a year earlier, on revenue that was up 3.9% at $395 million.

For the full year, Verisign had net income of $786 million versus $818 million in 2023, on revenue that was up 4.3% at $1.56 billion.

Verisign has much to be thankful for as .com contract renewed

Verisign went into the US Thanksgiving weekend with a freshly renewed .com Registry Agreement that allows it to keep control of its cash cow for another six years with price-raising powers the US government admitted it is powerless to rescind.

The deal with ICANN does not change Verisign’s price caps — it will still be allowed to raise prices by 7% in four of the six-year term — but it does allow ICANN to raise the fees it charges by an amount linked to US inflation.

ICANN has already said it plans to increase its fees on all other gTLD registries, so it seems certain .com, which raises more transaction revenue than any other TLD, will get the same notice before long.

The deal means cost-conscious registrants have a bit of breathing space; Verisign is only allowed to raises prices in the final four years of its term, which runs from yesterday until November 30, 2030.

So, no more price hikes until September 2026. Due to the required notice period, designed to allow registrants to lock in renewal pricing, we’ll almost certainly hear Verisign talk about a fee increase in early 2026.

The US government, via the National Telecommunications and Information Administration, also confirmed that it has renewed its Cooperative Agreement, which is where the price caps come from, with the company:

NTIA recognizes concerns about current pricing and believes a reduction in .com prices would be in the best interest of the public. We also recognize that prices at both the wholesale level and downstream, including prices charged by resellers and substantial markups by warehousers, need to be addressed. That said, both parties must agree to any changes in order for the Cooperative Agreement to be amended. Over the past several months, NTIA and Verisign have engaged in serious conversations, but, despite our best efforts, we have been unable to agree how wholesale .com pricing should change.

So the status quo remains, at least regards pricing.

The ICANN contract also requires Verisign to act on reports of DNS abuse — malware, botnets, phishing, pharming, and some spam — for the first time, in line with the standard RA signed by all other gTLDs.

A side deal that sees Verisign pay ICANN a few extra million bucks a year and commit to cooperate on DNS security has also been renewed, with a strong implication that it will too become part of the contractual status quo over the coming year.

Americans are deserting .com

Forget China, Verisign is now seeing most of its domain sales weakness coming from the US.

The company revealed in its quarterly earnings call last week that .com and .net were down by a combined 1.1 million names in the third quarter, and 850,000 of those losses were from American registrars.

CEO Jim Bidzos told analysts that the weakness was a result of US registrars concentrating more on making existing customers more profitable and less on acquiring new customers.

Registrars are raising prices and pushing more secondary market sales, he said. That’s great for the registrars’ bottom lines, but it doesn’t help Verisign shift product.

There were 169.6 million .com and .net domains at the end of Q3, Bidzos said. The Q3 renewal rate is expected to be about 72.3%, compared to 73.5% a year ago.

There was also weakness in China, he said, due to economic factors and regulation. China has frequently been blamed for sales fluctuations in previous weak quarters. Europe was actually up by 200,000 names, Bidzos said.

Verisign now expects domain growth of between -2.9% and -2.3% for the full year, narrowing its forecast from the -3% to -2% it predicted in July and the +1% to -1% predicted at the start of the year.

Higher wholesale prices means the company is still growing, however. Revenue was up 3.8% to $391 million and net income was up from $188 million to $201 million compared to year-ago numbers.

Some Guy wants to take over .com and .net

Some Guy has noticed that domain name prices keep going up and has offered to take over the .com and .net registries from Verisign.

The Some Guy recently filed a formal Request for Reconsideration with ICANN, asking it to overturn its recent decision to renew Verisign’s .com contract and award it to him instead. The RfR reads:

I seek to become a registry operator committed to making .COM domains more affordable and accessible to students, startups, and developers. The decision to renew Verisign’s contract hinders competition, limiting opportunities for more innovative registry operators like Asxit LLC to contribute to the digital ecosystem.

The request is accompanied by a 25-page, ChatGPT-odored analysis of why Asxit LLC would be a better .com registry than Verisign, which concludes:

The introduction of Asxit LLC as a .COM registry operator would bring significant improvements in pricing, innovation, support, and accessibility compared to Verisign’s current management. By focusing on affordable and flexible solutions, Asxit LLC aims to create a more inclusive and competitive environment for all users. This change would enhance the value of the .COM domain and support the growth of a diverse and innovative digital community.

In August, Some Guy with the same last name, who said he is a student at Liberty University in Virginia, said Asxit LLC should take over .net as well.

They’re not the funniest or craziest submissions ICANN has received over the years, but they might be worth a chuckle if you’re clock-watching on a Friday afternoon.

The sad part is of course that ICANN is now duty-bound to commit legal and board resources preparing a response to this request before throwing it out entirely.

Verisign agrees to .com takedown rules

Verisign has agreed to take down abusive .com domains under the next version of its registry contract with ICANN.

The proposed deal, published for public comment yesterday, could have financial implications for the entire domain industry, but it also contains a range of changes covering the technical management of .com.

Key among them is the addition of new rules on “DNS Abuse” that require Verisign to respond to abuse reports, either by referring the domain to its registrar or by taking direct action

Abuse is defined with the now industry-standard “malware, botnets, phishing, pharming, and spam (when spam serves as a delivery mechanism for the other forms of DNS Abuse listed in this definition)”.

The language is virtually identical to the strengthened DNS abuse language in the base Registry Agreement that almost all other gTLD registries have been committed to since their contracts were updated this April. It reads:

Where Registry Operator reasonably determines, based on actionable evidence, that a registered domain name in the TLD is being used for DNS Abuse, Registry Operator must promptly take the appropriate mitigation action(s) that are reasonably necessary to contribute to stopping, or otherwise disrupting, the domain name from being used for DNS Abuse. Such action(s) shall, at a minimum, include: (i) the referral of the domains being used for the DNS Abuse, along with relevant evidence, to the sponsoring registrar; or (ii) the taking of direct action, by Registry Operator, where Registry Operator deems appropriate.

The current version of the .com contract only requires Verisign to publish an abuse contact on its web site. It doesn’t even oblige the company to respond to abuse reports.

In domain volume terms, .com is regularly judged one of the most-abused TLDs on the internet, though newer, cheaper gTLDs usually have worse numbers in terms of the percentage of registrations that are abusive.

Verisign will also get an obligation that other registries don’t have — to report to ICANN “any cyber incident, physical intrusion or infrastructure damages” that affects the .com registry.

ICANN won’t be able to reveal the details of such incidents publicly unless Verisign gives its permission, but in a side deal (pdf) the two parties promise to work together on a process for public disclosure.

Verisign will also have to implement two 20-year-old IETF standards on “Network Ingress Filtering” that describe methods of mitigating denial-of-service attacks by blocking traffic from forged IP addresses.

The contract is open for public comment.

New .com contract could see ALL domain prices go up

Verisign will retain its power to increase .com prices by 7% a year, and prices in other gTLDs could well go up too, under a new proposed registry contract designed to help patch up ICANN’s budget.

The proposed .com Registry Agreement was posted for public comment this evening, and the pricing terms within could have broad implications for all registrants of gTLD domains.

For starters, as usual the deal lets Verisign raise .com prices, currently $10.26 a year, by 7% in the final four years of the six years of its term. This is an option Verisign has never failed to exercise in the past.

But the deal would also give ICANN the power, in its sole discretion, to raise the per-transaction fees Verisign pays it for each added, renewed, or transferred .com domain, in line with the latest US inflation numbers.

The fee is currently $0.25 per transaction, and it hasn’t gone up ever, as far as I recall.

The proposed text on inflation is pretty much the same as found in all post-2012 gTLD Registry Agreements, but adds a clause saying that ICANN cannot raise the .com fees unless it also raises fees in “multiple other registry agreements”.

Yet another clause strongly suggests that ICANN intends to exercise its existing right to increase its fees, again according to the US Consumer Price Index, across other gTLDs — presumably all of them — rather soon:

ICANN and Registry Operator hereby agree that if ICANN delivers notice of a fee adjustment to other registry operators after November 1, 2024 and prior to the Effective Date, ICANN may concurrently deliver such fee adjustment notice to Registry Operator, in which case the provisions of Section 7.2(d) shall be deemed to have applied at the time such notice was sent.

Translated, this means that ICANN can put Verisign on notice that its fees are going up even before the contract is signed, but only if it also raises the fees on other registries at the same time.

It’s difficult to imagine why this language is there unless it’s describing something ICANN is actually planning to do.

Unlike Verisign, other gTLD operators do not have regulated pricing, so any ICANN fee increase on them could very well be passed on to registrars and ultimately registrants with increased wholesale prices.

The new contract is being proposed a few months after ICANN laid off staff because its budget was $10 million light, and CEO Sally Costerton said the Org was “evaluating ICANN’s fee structure to ensure it scales realistically with inflation”.

Verisign, and .com in particular, is ICANN’s biggest single source of funding, contributing $47.3 million of its $145.5 million in revenue in its last fiscal year.

The proposed new .com contract and public comment opportunity can be found here.