Domain Names Market

THE DOMAIN NAME INDUSTRY BRIEF - MAY 2005
The .Com and .Net Base
+ Opportunities for Growth

Ten countries represent 78 percent of all of the domain names registered worldwide.
The United States is the largest with 37 percent of the domain name base which is nine
domain names for every 100 people. While Germany has the second largest domain
name base, it has the largest domain name penetration with 14 domain names for every
100 people. The United Kingdom and the Netherlands also have high domain name
penetration with 11 and 12 domain names per 100 people, respectively. These high
domain name penetrations in Europe may be attributable to strong usage of the local
ccTLD as well as organizations setting up Web sites in multiple languages and countries.
Not surprisingly, .de, .uk and .nl (Netherlands) are the top three ccTLDs in terms of
domain name base.
The .com and .net active base of domain name registrations was 41.4 million domain
names at the end of first quarter 2005, representing an increase of eight percent over
fourth quarter 2004.
New Registrations
New .com and .net registrations were added at an average of 1.6 million per month in
the first quarter of 2005. This is a 19 percent increase over fourth quarter 2004. One
of the drivers behind this growth in new registrations is registrants setting up websites
to derive revenue from PPC advertisements placed on the websites. While the exact
number can not be discerned, estimates place these PPC-purposed domain names at
approximately 20 percent of new .com and .net registrations.
Top Domain Name Countries
Renewals
At 74 percent, registry renewal rates for .com and .net continued to reach historically
high levels in the first quarter of 2005. This continues an upward trend in renewal rates
that began in 2003. Renewal rates are a key indicator of the continued strength of the
domain name industry. The renewal rate for a previously renewed domain name is 84
percent compared to a renewal rate of 64 percent for domain names going through
their first renewal cycle.

Sources: eMarketer, April 2005;
ClickZ Stats, May 2005; Zooknic,
April 2005.
.Com/.Net Registry Renewal Rates

Q1 04
70%
Internet
Penetration
Domain
Names
% of Total
Domain Names
United States
185,550,000
64%
25,885,405
37%
Germany
41,880,000
51%
11,198,885
16%
United Kingdom
33,110,000
55%
6,409,916
9%
Canada
20,450,000
64%
2,104,863
3%
Netherlands
9,790,000
61%
1,917,766
3%
Italy
25,530,000
44%
1,640,360
2%
China
99,800,000
8%
1,602,352
2%
Japan
78,050,000
61%
1,484,373
2%
South Korea
31,670,000
74%
1,431,043
2%
France
25,470,000
42%
1,411,734
2%
72%
Q2 04
.Com/.Net Registry
Renewal Rates
Q3 04
Source: VeriSign, May 2005
Q4 04
74%
Q1 05
74%
72%
0%
10%
20%
30%
40%
50%
60%
70%
The domain name industry seems to mirror the leading Internet indicators such as the
number of Internet users and broadband households. Eight out of the top ten domain
name countries are considered to be the largest broadband countries as well as measured
by the number of broadband households. The other two, Netherlands and Italy, are not
far behind. The United States, China, Japan and South Korea lead in broadband
households. With 107 percent growth in broadband households in 2004, China saw the
largest growth. South Korea has the largest penetration of broadband at 73 percent.4
80%
Since domain names that are in use are more likely to be renewed than unused domain
names, domain name usage is a key factor in the high renewal rates. In a recent study of
all .com and .net domain names, 76 percent of these names are currently associated with
a Web site; 62 percent are live sites and 14 percent are parked sites. Live Web sites are
those being used by an organization or an individual. Parked Web sites are defined as
Web sites that are not actively being used, but are associated with a domain name.3
As these Internet indicators continue to show favorable trends, domain name

registrations will follow as more businesses and users seek to establish their online
presence and increase their usage of ecommerce and other Internet-centric activities.
.Com/.Net Web Sites
.Com/.Net Web Sites
Zooknic Methodology
For gTLD data cited with Zooknic as a source,
the analysis uses a comparison of domain name
root zone file changes supplemented with
whois data on a statistical sample of domain
names which lists the registrar responsible for a
particular domain and the location of the
registrant. The data has a margin of error based
on the sample size and market size. The ccTLD
data is based on analysis of root zone files. For
more information, see www.zooknic.com.
Source: Cyveillance, May 2005

Parked Web sites
Live Web sites
14%
62%
0
3 Live Web sites include sites that are
classified as live, redirected, under
construction and for sale.
Internet
Users
10
20
30
40
No Web sites
24%
50
60
70
80
90
100
Total Domain Names Spidered = 41,672,942

Percent of all Domain Names Resolving to a Web site = 76%
+ Learn More
To subscribe or to access the archives for the Domain Name Industry Briefs, please
go to www.verisign.com/domainbrief. Email your comments or questions to
domainbrief@verisign.com.
+ About Verisign
VeriSign, Inc. (Nasdaq: VRSN), operates intelligent infrastructure services that enable
individuals and businesses to find, connect, secure, and transact across todays complex
global networks.
4 eMarketer, April 2005; ClickZ Stats, May 2005;

Zooknic, April 2005.
2005 VeriSign, Inc. All rights reserved.

VeriSign, the VeriSign logo Where it all comes together, and other trademarks, service marks, and designs are registered or unregistered
trademarks of VeriSign and its subsidiaries in the United States and in foreign countries. 05/05.
The Domain Name Industry Brief

Volume 2 - Issue 2 - May 2005
The VeriSign Domain Report

As the global registry operator for .com and .net,
VeriSign closely monitors the state of the domain
name industry through a variety of statistical and
analytical research. As the leading provider of
intelligent infrastructure for the Internet, VeriSign
provides these key trends to educate industry
analysts, media, and businesses on important
trends in domain registrations. This brief details
current trends in the industry, highlighting key
performance indicators and growth opportunities.
+ Executive Summary
The domain name industry continued its impressive growth in the first quarter of 2005.
At the end of the first quarter 2005, there were 76.9 million domain names registered
worldwide. This represents a nearly eight percent growth over the fourth quarter of
2004 and a 22% increase over the first quarter of 2004. .Com remains the largest Top
Level Domain (TLD) in terms of its total base of registrations. The next three spots
remained unchanged with .de (Germany), .net and .uk (United Kingdom) rounding
out the top four.
global economy, increasing numbers of regular Internet users and the continued
importance of domain name registrations for use in the Pay-Per-Click (PPC) advertising
market.
TOP CCTLD REGISTRIES

BY DOMAIN NAME BASE,
FIRST QUARTER 2005
Domain name registrars and resellers continue to offer product bundles and services that
enable registrants to establish their web presence quickly and easily. In these packages, a
domain name is bundled with other Internet-related services such as Web site hosting,
email and e-commerce tools. In addition, there are a growing number of bundles that
include a domain name with a parked Web page and search engine listing.
Total Domain Name Registrations
1. .de (Germany)
2. .uk (United Kingdom)
3. .nl (Netherlands)
4. .it (Italy)
5. .us (United States)
6. .ar (Argentina)
7. .br (Brazil)
8. .ch (Switzerland)
9. .jp (Japan)
10. .dk (Denmark)
An increasing number of domain name registrars and resellers are using traditional
advertising, including television and radio, to increase their registrations. In February
2005, Go Daddy, a leading U.S.-based registrar, kicked-off their television advertising
campaign with a Super Bowl spot. A few registrars are also offering domain name
registrations at extremely low price points to spur new entrants and multiple domain
name registrations.
80,000,000
70,000,000
Name
60,000,000
Source: Zooknic, April 2005
Biz
Total Domain Name

Registrations
50,000,000
Registrars are also promoting ccTLD registrations to registrants beyond the borders
of the ccTLD country. For example, registrars used email marketing and other site
promotion to promote and cross-sell .uk registrations to registrants in the United States.
Info
Org
40,000,000
Sources: Zooknic, April 2005;

VeriSign, April 2005
ccTLD Breakdown
The vast majority of ccTLD registrations are attributable to a small number of ccTLD
registries. Out of the more than 240 ccTLDs, the top ten account for 71 percent of all
ccTLD registrations. From 75 percent in the first quarter of 2004, this percentage has
been decreasing slightly each quarter over the last year. The impressive growth of some
other ccTLDs, including .cn (China) and .ru (Russia) has contributed to this slow
diversification of the ccTLD market. All of the top ten ccTLDs saw growth in the
first quarter.
The largest ccTLD continues to be .de (Germany) in terms of the total base of domain
name registrations with .uk (United Kingdom) as the second largest. Together, .de and
.uk represent 46 percent of the ccTLD base with the growth rates of three percent and
six percent in the first quarter 2005 over the fourth quarter 2004, respectively.1
While some large ccTLD registries allow essentially unrestricted registrations, many
have requirements for registrations such as a business identification number or a local
presence. Some of the more restrictive ccTLD registries will only permit domain names
that exactly match a registrants registered trademark. Regardless of registration policies,
ccTLDs remain an attractive option for local businesses and Internet users.
ccTLD Breakdown
uk
Industry Composition
Net
30,000,000
.Com currently accounts for 47 percent of all domain name registrations active in the
zone, followed as a group by Country Code Top Level Domain Names (ccTLDs) at 35
percent, .net at 7 percent, and the alternate Generic Top Level Domain Names (gTLDs)
such as .org, .biz, .info and .name at 11 percent, collectively. The overall composition
of the domain name industry has remained relatively constant for the last few quarters.
de
20,000,000
Other
ccTLDs
10,000,000
Com
30,000,000
25,000,000
0
2001
2002
2003
2004
New Registration Growth
Q1 05
Industry Composition*
Biz 1%
+ Industry Growth
and Composition
7,000,000
Info 4%
5,000,000
4,000,000

3,000,000

VeriSign, April 2005; Cyveillance,
May 2005; ICANN Monthly Reports
2,000,000
1,000,000
0
Q1 '04
Q2 '04
Org/Biz/Info/Name
Q3 '04
Com/Net
Q4 '04
Q1 '05
ccTLDs
Name 0%
ccTLD Breakdown
15,000,000
Org 5%
Growth
6,000,000
20,000,000
Com 47%
uk 5%
Over 6.7 million new

domain names were
registered in the first
quarter of 2005. This is
nearly two million more
new registrations than the
number of new registrations
in the first quarter of 2004,
a 36 percent increase year
over year. The first quarter
new registrations were four
percent higher than the
fourth quarter of 2004. This
increase is larger than the
one percent increase seen in
fourth quarter of 2004. Key
factors for this growth
include a strengthening
Com
10,000,000
Other ccTLDs
Net 7%
de
5,000,000
Net
Source: Zooknic, April 2005;

* Due to numerical rounding, percentages
may not equal 100%
uk
Org
de 11%
Top 10
Total ccTLD
Info
2002
2003
2004
Q1 05
Biz
Name
Other ccTLD 19%
The number of .info registrations increased dramatically at the end of 2004 due to a
price promotion that offered one-year .info registrations for no cost. The resulting spike
in new registrations more than doubled the base of .info domain names by the end of
2004. The growth rate in new registrations dropped but remained strong at 18 percent
in the first quarter of 2005. This drop coincided with an increase in the wholesale price
to $0.75 for a one-year term.
1 Zooknic, April 2005.

2 VeriSign statistics on daily queries
reported for Business Week. at
http://www.businessweek.com/technology/
tech_stats/nettraffic050321.htm
+ .Com/.Net Dynamics
VeriSign processed an average of 15 billion .com and .net queries per day in first quarter
of 2005, thereby enabling millions of Internet users to access Web sites or send email.2
As it has for the past seven years, the VeriSign Domain Name System (DNS) continued
to maintain operational accuracy and stability for 100 percent of the time during the
first quarter of 2005.
+ Executive Summary
out the top four.
market.

FIRST QUARTER 2005
1. .de (Germany)
4. .it (Italy)
6. .ar (Argentina)
7. .br (Brazil)
9. .jp (Japan)
10. .dk (Denmark)
name registrations.
80,000,000
70,000,000
Name
60,000,000
Biz
Total Domain Name

Registrations
50,000,000
Info
Org
40,000,000

ccTLD Breakdown
first quarter.
ccTLD Breakdown
uk
Net
30,000,000
de
20,000,000
Other
ccTLDs
10,000,000
Com
30,000,000
25,000,000
0
2001
2002
2003
2004
Q1 05
Biz 1%
+ Industry Growth
and Composition
7,000,000
Info 4%
5,000,000
4,000,000

3,000,000

2,000,000
1,000,000
0
Q1 '04
Q2 '04
Org/Biz/Info/Name
Q3 '04
Com/Net
Q4 '04
Q1 '05
ccTLDs
Name 0%
ccTLD Breakdown
15,000,000
Org 5%
Growth
6,000,000
20,000,000
Com 47%
uk 5%

domain names were
Com
10,000,000
Other ccTLDs
Net 7%
de
5,000,000
Net

may not equal 100%
uk
Org
de 11%
Top 10
Total ccTLD
Info
2002
2003
2004
Q1 05
Biz
Name
Other ccTLD 19%

+ Executive Summary
out the top four.
market.

FIRST QUARTER 2005
1. .de (Germany)
4. .it (Italy)
6. .ar (Argentina)
7. .br (Brazil)
9. .jp (Japan)
10. .dk (Denmark)
name registrations.
80,000,000
70,000,000
Name
60,000,000
Biz
Total Domain Name

Registrations
50,000,000
Info
Org
40,000,000

ccTLD Breakdown
first quarter.
ccTLD Breakdown
uk
Net
30,000,000
de
20,000,000
Other
ccTLDs
10,000,000
Com
30,000,000
25,000,000
0
2001
2002
2003
2004
Q1 05
Biz 1%
+ Industry Growth
and Composition
7,000,000
Info 4%
5,000,000
4,000,000

3,000,000

2,000,000
1,000,000
0
Q1 '04
Q2 '04
Org/Biz/Info/Name
Q3 '04
Com/Net
Q4 '04
Q1 '05
ccTLDs
Name 0%
ccTLD Breakdown
15,000,000
Org 5%
Growth
6,000,000
20,000,000
Com 47%
uk 5%

domain names were
Com
10,000,000
Other ccTLDs
Net 7%
de
5,000,000
Net

may not equal 100%
uk
Org
de 11%
Top 10
Total ccTLD
Info
2002
2003
2004
Q1 05
Biz
Name
Other ccTLD 19%


domain name base.
New Registrations
to derive revenue from PPC advertisements placed on the websites.
Renewals

April 2005.
.Com/.Net Registry
Renewal Rates

.Com/.Net Web Sites

.Com/.Net Web Sites
Zooknic Methodology

+ Learn More
+ About Verisign
global networks.




domain name base.
New Registrations
to derive revenue from PPC advertisements placed on the websites. While the exact
number can not be discerned, estimates place these PPC-purposed domain names at
approximately 20 percent of new .com and .net registrations.
Renewals

April 2005.

Q1 04
70%
Internet
Penetration
Domain
Names
% of Total
Domain Names
United States
185,550,000
64%
25,885,405
37%
Germany
41,880,000
51%
11,198,885
16%
United Kingdom
33,110,000
55%
6,409,916
9%
Canada
20,450,000
64%
2,104,863
3%
Netherlands
9,790,000
61%
1,917,766
3%
Italy
25,530,000
44%
1,640,360
2%
China
99,800,000
8%
1,602,352
2%
Japan
78,050,000
61%
1,484,373
2%
South Korea
31,670,000
74%
1,431,043
2%
France
25,470,000
42%
1,411,734
2%
72%
Q2 04
.Com/.Net Registry
Renewal Rates
Q3 04
Q4 04
74%
Q1 05
74%
72%
0%
10%
20%
30%
40%
50%
60%
70%
80%

.Com/.Net Web Sites
.Com/.Net Web Sites
Zooknic Methodology

Parked Web sites
Live Web sites
14%
62%
0
Internet
Users
10
20
30
40
No Web sites
24%
50
60
70
80
90
100
Total Domain Names Spidered = 41,672,942

Percent of all Domain Names Resolving to a Web site = 76%
+ Learn More
+ About Verisign
global networks.





Domain Names Market

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THE DOMAIN NAME INDUSTRY BRIEF - MAY 2005

THE DOMAIN NAME INDUSTRY BRIEF - MAY 2005

The .Com and .Net Base

+ Opportunities for Growth

Top Domain Name Countries

Top Domain Name Countries

.Com/.Net Registry Renewal Rates

Source: VeriSign, May 2005

As these Internet indicators continue to show favorable trends, domain name

.Com/.Net Web Sites

.Com/.Net Web Sites

Source: Cyveillance, May 2005

Live Web sites

Total Domain Names Spidered = 41,672,942

4 eMarketer, April 2005; ClickZ Stats, May 2005;

2005 VeriSign, Inc. All rights reserved.

The Domain Name Industry Brief

The VeriSign Domain Report

THE DOMAIN NAME INDUSTRY BRIEF - MAY 2005

THE DOMAIN NAME INDUSTRY BRIEF - MAY 2005

TOP CCTLD REGISTRIES

Total Domain Name Registrations

THE DOMAIN NAME INDUSTRY BRIEF - MAY 2005

Source: Zooknic, April 2005

Total Domain Name

Sources: Zooknic, April 2005;

New Registration Growth

New Registration Growth

Sources: Zooknic, April 2005;

Over 6.7 million new

Source: Zooknic, April 2005

Source: Zooknic, April 2005;

Other ccTLD 19%

1 Zooknic, April 2005.

THE DOMAIN NAME INDUSTRY BRIEF - MAY 2005

THE DOMAIN NAME INDUSTRY BRIEF - MAY 2005

TOP CCTLD REGISTRIES

Total Domain Name Registrations

THE DOMAIN NAME INDUSTRY BRIEF - MAY 2005

Source: Zooknic, April 2005

Total Domain Name

Sources: Zooknic, April 2005;

New Registration Growth

New Registration Growth

Sources: Zooknic, April 2005;

Over 6.7 million new

Source: Zooknic, April 2005

Source: Zooknic, April 2005;

Other ccTLD 19%

1 Zooknic, April 2005.

THE DOMAIN NAME INDUSTRY BRIEF - MAY 2005

THE DOMAIN NAME INDUSTRY BRIEF - MAY 2005

TOP CCTLD REGISTRIES

Total Domain Name Registrations

THE DOMAIN NAME INDUSTRY BRIEF - MAY 2005

Source: Zooknic, April 2005

Total Domain Name

Sources: Zooknic, April 2005;

New Registration Growth

New Registration Growth

Sources: Zooknic, April 2005;

Over 6.7 million new

Source: Zooknic, April 2005