.com still shrinking because of China

Verisign’s .com gTLD shrunk by over a quarter million domains in the first quarter due to softness in China and US registrars’ pesky habit of putting up prices and the pain is likely to continue for the rest of the year, according to Verisign.

There were about 159.4 million .com domains and 13.1 million .net domains at the end of March, down a combined 270,000 from the end of 2023, Verisign said during its first-quarter earnings call on Thursday. Most of the decline appears to be in .com.

Registrations from Chinese registrars, which are about 5% of the total, were down about 360,000 in the period. Not ideal, but a lot less sharp of a drop than the 2.2 million it lost in Q4.

There were 9.5 million new registrations across both zones in the quarter, compared to 10.3 million in the year-ago period.

But CEO Jim Bidzos told analysts that competition from low-priced new gTLDs, some of which sell year one for under a dollar, is likely harming .com’s growth among cost-conscious Chinese registrants.

But he said the company is also seeing “softness” from US registrars, which he said are increasingly focused on increasing average revenue per user and putting up retail prices. This leads to fewer new registrations and renewals.

Bidzos said Verisign expects to introduce new marketing programs in the second half of the year — around the same time as the company’s base .com wholesale fee goes up from $9.59 to $10.26 — to help offset these declines.

The renewal rate for Q1 is expected to be about 74% compared to 75.5% a year ago. Bidzos said the total domain base shrinkage could be worse in Q2 due to the larger number of names coming up for renewal.

The company lowered its guidance for the year to between 0.25% growth and negative 1.75%. In February, it had guided flat, with a 1% swing in either direction.

Verisign’s top and bottom lines continue to grow during the quarter, with revenue up 5.5% at $384 million and net income up from $179 million to $194 million.

The post .com still shrinking because of China first appeared on Domain Incite.

Back to top button