VeriSign Issues Quarterly Domain Name Industry Brief

By Derek Iwasiuk
DomainInformer.com
August 18, 2005

VeriSign, Inc. (www.verisign.com), a provider of intelligent infrastructure services for the Internet and telecommunications networks, today released the VeriSign® Domain Name Industry Brief for the second quarter of 2005. 

According to the report, which highlights key industry data for worldwide domain name activity, total domain name registrations reached an all-time high of 82.9 million, representing an eight percent growth since the first quarter of 2005 and a 28 percent increase since the second quarter of 2004. 

In supporting this growth, the VeriSign Domain Name System (DNS) continued to maintain operational accuracy and stability for 100 percent of the time during the second quarter of 2005. 

Also today, VeriSign released the Domain Name Industry Brief Registrant Profile offering insights into the people and organizations who register domain names. Both reports can be found at www.verisign.com/domainbrief.

The domain name industry continued to experience strong growth in the second quarter of 2005 as proven by the number of new domain names registered at just over 8.1 million.

This figure represents a 16 percent increase since the first quarter of 2005 and a 63 percent increase since the same period last year.  Growth was driven by price promotions, product bundling and the continued acceleration of using domain names to generate Pay-Per-Click (PPC) advertising revenue.

The total number of .com and .net domain names grew to 44.2 million by the end of the second quarter of 2005.  This represents a seven percent increase since the first quarter of 2005 and a 30 percent increase since the same period last year. 

Additionally, 4.2 million new .com and .net domain names were registered, representing a one percent increase since the first quarter of 2005 and a 39 percent increase since the same period last year.

The growth of queries and total users across the Internet has accelerated the online advertising space. Online advertising, in particular the Pay-Per-Click advertising market, represents the main driver behind new domain name growth. 
Online advertising revenue is forecasted to increase by 34 percent in 2005 and search engine marketing is forecasted to increase 33 percent in 2005 (Source: IAB Internet Advertising Revenue Report for 2004).

In fact, time spent online is now about equal to time spent watching television for most age demographics.  Because people are spending more time online, analysts expect advertising dollars to follow user behavior.

Currently, only 4 percent of advertising budgets are spent online versus approximately 25 percent spent television advertising.  However, nearly 85 percent of advertisers plan to increase online advertising budgets in 2005; and, 50 percent of those plan to decrease the amount they spend on traditional advertising channels.

.Com currently represents 47 percent of all registered domain names. Collectively, the country code Top Level Domain names (ccTLDs) , such as .de (Germany), .uk (United Kingdom), and .br (Brazil), account for 35 percent, followed by .net at seven percent.  Interestingly, the .cn (China) ccTLD joined the ranks of other top ten ccTLDs this quarter displacing .dk (Denmark) with a 23 percent growth in domain names quarter after quarter.

In a recent VeriSign study of .com and .net domain names, VeriSign found that 75 percent of domain names are registered by businesses; 22 percent are registered by individuals, and the remaining three percent are unknown.

European registrants feel the most tech savvy of all geographic regions. Fifty three percent, of European registrants consider themselves on the cutting edge of trying new technologies and 58 percent feel “very competent” when it comes to creating and managing a Web site.

European registrants also register the highest number of domain names per registrant. German registrants are at the top of the list with an average of 2.5 domain names per registrant.

Overall, most business registrants believe that the Internet has helped their business. Europeans, at 71 percent, felt the strongest that the Internet helped drive their business, followed by Asian registrants at 67 percent and North Americans at 58 percent.