Statement on Chinese market for domain names — Verisign issues

Firm states it can’t predict if surge will continue, nor what renewal rates will be.

.Com registry Verisign issued a statement today regarding an upcoming presentation at a financial conference and provided commentary on the Chinese domain name market. Domain name registrations in China are leading to an outsized performance in domain name registrations this quarter.

The firm stated its domain name base is up 4.1 million for .com and .net this quarter as of November 22, 2015. The firm noted:

…While there continues to be demand for domain names globally, the recent increased volume for Verisign’s top level domains, as well as top level domains of other registries, during the fourth quarter is coming largely through registrars in China.

In the past, Verisign has discussed many factors that affect the demand for domain names, counting, but not limited to economic, social, and regulatory conditions, Internet adoption, Internet penetration, and increasing e-commerce. In addition to these factors affecting demand, Verisign is also evaluating additional potential factors unique to China that may also be responsible for the recent increased volume of fresh registrations in China.

In no particular order, these potential factors, or combination of factors, could include, but may not be limited to, government initiatives in China to develop their online economy such as ‘Internet Plus;’ registry and registrar regulatory requirements; cultural influences such as the popularity of numeric domain names; increasing competition amongst Chinese registrars; potential increases in domain name investment activity; and recent capital markets volatility and access to capital in China.

Verisign cannot predict if or how long this increased pace of gross additions will continue and we cannot at this time predict what the renewal rate for these domain names will be. Verisign has noted in the past that renewal rates for domain names registered in emerging markets, such as China, have historically been lower than those registered in more developed markets. Verisign will continue to evaluate these and potentially other factors and expects to have additional information related to the domain name base on Verisign’s fourth quarter and full year 2015 earnings call.