Google Slowing Domain Name Registration Growth: VeriSign

Latest VeriSign note blames Google Adsense weakness for slowing domain registration growth rates.

Fresh domain name registrations are slowing, and VeriSign (NASDAQ: VRSN) states Google (NASDAQ: GOOG) may be to blame.

Regarding 11.5 million fresh domain names were registered in the third quarter of this year, VeriSign noted in this month’s Domain Name Industry Brief (pdf). That’s a 2% decline from the previous quarter as well as over Q3 of 2007. When you look only at .com and .net domains, fresh registrations are down even more. The 6.9 million .com and .net domains registered in the third quarter were down 9% compared to the second quarter of this year.

VeriSign predicts that the total base of .com and .net domains will increase only 1 or 2 million in the fourth quarter following accounting for expired domain registrations.

What’s to blame? VeriSign cites changes in Google’s Adsense for Domains program as well as general internet advertising weakness:

The number of fresh .com and .net domain names registered with the intent of generating online advertising revenue saw pronounced weakness again in third quarter due in part to changes in Google’s Ad-Sense program and lower spending trends in Internet advertising. As some US-based registrars forecast that economic conditions may contribute to lower than expected growth rates in the coming quarter, coupled with continued weakness in online advertising, the base of .com and .net domain names is estimated to increase one to two million domain names in the fourth quarter.

Renewal rates for .com/.net dropped to 72% from a historical average in the mid 70% range.

VeriSign’s note also shows that Germany’s .de domain name is no longer the top dog of ccTLDs. China’s .cn has replaced it, thanks in part to cut rate pricing.

The note includes an update on .tv. It’s essentially an advertisement; VeriSign has a financial stake in .tv domains.