Why .com is growing again — Four reasons

Here’s why Verisign predicts its domain base will grow again this year.

Verisign (NASDAQ: VRSN) released its Q2 earnings yesterday and issued improved guidance, predicting annual growth in the .com/.net domain name base this year.

All of the growth in its combined domain base last quarter came from .com domain names. Here are four reasons why .com is growing again, as stated by the firm.

1. The renewal rate has improved. The preliminary renewal rate in Q2 was 75.5%, compared with 72.7% in the same quarter a year ago. Spread that across 170.5 million domains, and it makes quite a difference.
2. The firm has adapted its marketing programs to drive results at domain registrars. Verisign offers registrars a number of rebate programs based on hitting registration targets, and the firm states it has adjusted these programs in a way that is getting registrars to participate.
3. Registrars are focusing on client growth. Verisign has recently complained that registrars were focusing on margin rather than acquiring fresh clients. It states it’s seeing a shift in registrar practices to once again focus on getting fresh clients, even at lower margins.
4. China is back. Verisign used to split China into its own geographic segment, but now it’s lumped in with all of Asia Pacific. But on the investor conference call yesterday, the firm noted that China is once again showing growth.

Verisign predicts the combined .com/.net domain base will grow between 1.2% to 2.0% this year.