Domain name sales, usage up

As a sign of the recovery of the Internet industry, both sales and usage of domain names showed solid growth during the second quarter of 2004, according to a report issued last week by VeriSign.

VeriSign’s Domain Name Industry Brief says domain name registrations reached an all-time high of 64.5 million during the second quarter of 2004. That figure is up 2.4% over the first quarter of 2004 and up 7% over year-end for 2003.

Even more significant are several statistics showing that usage of domain names is much higher today than it was at the peak of the Internet bubble:

* On average, VeriSign processes more than 14 billion dot-com and .net queries each day, up from 8 billion a year ago and 2 billion in 2000.

* Sixty-four percent of all dot-com and .net domain names link to live Web sites, up from 61% a year ago. Meanwhile, the percentage of parked Web sites – which are not actively being used but are associated with a domain name – has decreased from 12% a year ago to 8% today. 

* Renewal rates for dot-com and .net domain names have rebounded from a low of 45.7% in the first quarter of 2003 to reach a new high of 72% in the second quarter of 2004.

“The domain name base continues to grow, but far more impressive than that is the extent to which we see dramatic increases in usage,” says Ben Golub, senior vice president of marketing and corporate affairs for VeriSign.

“At the height of the so-called boom – in 2000 or 2001 – we would have seen a lot domain names being sold, but names that were not likely to be renewed and names that weren’t tied to real Web sites. They were just parked there for speculation,” Golub explains.

The most popular domain continues to be .com, which accounts for 45% of all domain names registered. Other popular domains include Germany’s .de, which accounts for 12% of all domain names, and the U.K.’s .uk, which accounts for 8% of all domain names. Rounding out the top-five are .net, with 7% of registrations, and .org, with 5% of registrations.

VeriSign says it has seen no slow down in domain name sales or usage during the third quarter of 2004.

“The key trends in this report are increased overall growth of the domain name business, increased quality of the domain name base and increased internationalization,” Golub says.