In an article from Trefis a stock analysis firm on Verisign out today cites ccTLD’s not new gTLD’s as the biggest threat to Verisign.
“For the six months so far into fiscal year 2014, VeriSign reported revenues of approximately $499 million vs. $476 million during a similar period in 2013, indicating a 5% growth in its top line. Comparatively, sales growth from H1’12 to H1’13 was over 10%. The rapid slowdown in sales growth was partially affected by a surge in demand for country code top-level domain names (ccTLDs) and other new generic top-level domains (gTLDs). VeriSign reports that ccTLD registrations have grown at more than thrice the growth rate of the .com and .net domain names in its latest Q1’14 Domain Name Industry Brief.
In Q2’14, VeriSign processed approximately 8.5 million registrations but could make only 0.42 million net addition into the .com domain root zone.
We believe the rapid growth in ccTLD domain registrations to be a more significant factor affecting its sales growth slowdown.
One reason why businesses and corporations are migrating towards newer gTLDs and ccTLDs is because of the saturation of the .com root zone.
Moreover, individual government policy frameworks concerning ccTLDs such as a relaxation in registration requirements, free domain names pertinent to certain usage requirements, etc., has supported business migration into ccTLDs, especially in the small and medium enterprise (SME) space.
“Going forward, we believe VeriSign’s market share in the overall domain registration market is likely to remain under pressure from the surging demand for ccTLDs globally.
“Base ccTLD registrations reached about 127 million by Q1’14 end, with Tokelau (.tk), Germany (.de) and the U.K. (.uk) ranked as the largest three ccTLDs by zone size. In the near term, we could see the Chinese ccTLD .cn rise higher up the ranks, driven by expanding Internet penetration and a burgeoning e-commerce market in the region.”
