MOUNTAIN VIEW, Calif., Aug. 17 /PRNewswire-FirstCall/ -- VeriSign, Inc. , the leading provider of intelligent infrastructure services for the Internet and telecommunications networks, today released the VeriSign(R) 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 http://www.verisign.com/domainbrief.
Increasing Growth
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.
Increasing Usage and Opportunities
-- At 75 percent during the second quarter of 2005, registry renewal
rates for .com and .net remain near historic highs. This upward
trend in renewal rates began in 2003 and continues to signal
strength in the overall domain name registration market.
-- VeriSign processed an average of 14.9 billion .com and .net queries
per day in operating the Internet infrastructure for .com and .net
during the second quarter, 2005.
Growth in Queries:
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). These increases are occurring as online advertising gains share from traditional outlets (Source: Forrester's Consumer Technolgraphics August 2004 North American Devices, Media, & Marketing Online Study).
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.
"For several years now, VeriSign has reported that the number of queries it manages in operating .com and .net infrastructure is consistently increasing," said Mark McLaughlin, senior vice president of VeriSign's Naming and Directory Services. "Today, we manage 14.9 billion queries per day, on average, in running .com and .net. That number is doubling about every 18 months, which tells us that email and Web traffic is growing steadily. It stands to reason that advertising dollars would find their way to where people are going -- and that's online. I think that's why you're seeing such consistent growth in all facets of online marketing."
Top Level Domain Composition
.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. Historically, the top ten ccTLDs account for the largest percentage of all ccTLD registrations; in the second quarter of 2005, they account for 71 percent. Other Generic Top Level Domain Names (gTLDs), such as .org, .biz, .info and .name, now account for 11 percent of the market.
Registrant Profile Information
-- 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.(1) Given the recent explosion of user-generated
content on the Internet such as blogs and the steady increase in
overall consumer usage of the Internet, the total number of current
consumer registrations of .com and .net domains is somewhat
surprising.
-- 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. The United
States and Japan have the lowest number of domain names per
registrant at 1.2 and 1.0, respectively. The higher registrations
in Europe are attributable, in part, to strong use of Country Code
Top Level Domain Names (ccTLDs) which serve not only their home
country, but also the entire European region. Germany and the
United Kingdom have the largest number of ccTLDs in terms of their
overall domain name bases.
-- 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.
VeriSign publishes the Domain Name Industry Brief to provide Internet users throughout the world with significant statistical and analytical research on the domain name industry and the Internet as a whole. Copies of this quarter's Domain Name Industry Brief, as well as previous reports in the series, may be obtained at http://www.verisign.com/domainbrief.
About VeriSign
VeriSign, Inc. delivers intelligent infrastructure services that make the Internet and telecommunications networks more reliable and secure. Every day VeriSign helps thousands of businesses and millions of consumers conduct commerce and communications with confidence. Additional news and information about the company is available at http://www.verisign.com/ .
Statements in this announcement other than historical data and information constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements involve risks and uncertainties that could cause VeriSign's actual results to differ materially from those stated or implied by such forward-looking statements. The potential risks and uncertainties include, among others, the uncertainty of future revenue and profitability and potential fluctuations in quarterly operating results due to such factors as the inability of VeriSign to successfully market domain services, including customer acceptance of these services; and the inability of VeriSign to successfully develop and market new products and services and customer acceptance of any new products or services. More information about potential factors that could affect the company's business and financial results is included in VeriSign's filings with the Securities and Exchange Commission, including in the company's Annual Report on Form 10-K for the year ended December 31, 2004 and quarterly reports on Form 10-Q. VeriSign undertakes no obligation to update any of the forward-looking statement after the date of this press release.
(1) VeriSign, July 2005.
