The Empire Strikes Back: “New” Verisign Hums a Familiar Tune

Losing your monopoly must be hard.

True, few companies ever experience that particular breed of angst, but if Verisign's reply to even modest success in the new gTLD marketplace is any indication, it must be very hard to say goodbye.

We understand why they're worried:

New .COM quality is abysmal. The quality of newly registered .COM names is dropping and has been for years. And there is nothing Verisign can do about it. So welcome to the fire sale. New .COM is as cheap as .XYZ. The average retail price of such .COM names has dropped to about $2.50 (one tenth the average retail price of new TLDs, and that price factors in the free new TLD names). New .COM renewal below 50%. The 2012 cohort of .COM new registrations renewed at just above 50%, the 2013 cohort at 50%, and the 2014 names will renew at below 50%. .COM is affinity-less. New TLDs such as .CHURCH and .PHOTOGRAPHY appeal to specific communities. Verisign cannot change the meaning of .COM to appeal to a community. Here come Google and Amazon. Meanwhile, Google applied for 101 TLDs, and Amazon for 78, with near zero of those launched in 2014, not to mention all the other large corporations launching brand and generic TLDs in 2015. (Johnson and Johnson paid over $3 million yesterday for the brand spanking new .BABY TLD.) Low consumer awareness... today, but not tomorrow. Consumers are not broadly aware of new TLDs, yet still there are 3.5 million names registered in them. The registrar channel is improving regarding new TLDs. Registrars are developing their search and purchase paths. These tools are improving as new TLD awareness and demand increase. It's only just started! Only a quarter of new TLDs are out, for an average of just six months, yet they have done 3.5 million new registrations at an average retail price of $25 (counting the free ones). In fact, I signed the .SCHOOL, .NEWS, .FOOTBALL and .GOLF registry contracts yesterday. You'll see these launched along with hundreds of others in 2015. The best are yet to come. That is 3.5 million names on mostly single-applicant TLDs. What will the highly contended TLDs that launch in 2015 do? Their own clients have jumped into competition. Verisign's clients applied for 220 new TLDs. Those clients think new TLDs will succeed even if their back-end provider, Verisign, does not. Usage of names in new TLDs is going up. We are monitoring usage on a month-to-month basis in Donuts TLDs and every month, usage increases. Registrars can do math. $25 retail with greater than 80% renewal for new TLDs vs. $2.50 retail with less than 50% renewal for new .COM — it's obvious that ancient .COM renewals are on autopilot and easy money for registrars, but regarding new names, registrars will figure out the long term customer value of new TLDs is greater than with new .COMs. Check out .NET. If you don't believe what's going to happen in .COM, look at what's already happening in .NET.

Maybe they don't see their own predicament because they're focused on generating fear, uncertainty and doubt, like the following:

1) "We've always had alternatives to .COM"

What is the fantastic alternative TLD that photographers always had before .PHOTOGRAPHY? Verisign says .BIZ, .INFO, .TV, .ORG, NET etc., are as attractive to photographers as . PHOTOGRAPHY. That .BIZ, .INFO, .TV, .ORG, .NET etc., have the same affinity to florists as does .FLORIST. That .BIZ, .INFO, .TV, .ORG, .NET etc., work for churches as well as does .CHURCH. They're really saying that??

It's understandable, since Verisign's pre-new gTLD marketing tag line could have been: ".COM: Because What Choice Do You Have?"

2) "The number of UDRP/URS cases in new TLDs is more than 15x higher than all other domains."

Apples, meet oranges. Of course there are more URS cases in new TLDs than .COM — the URS is not available in .COM. But it should be.

3) "Plurals and synonyms of new gTLDs [are]… making it difficult and confusing for registrants"

Verisign's registrant customers disagree. They use millions of synonyms and plurals in the .COM namespace apparently without much confusion. Verisign does not ban their usage there. People have been able to differentiate these words in English and other languages for centuries. I think they can cope with them in the Internet namespace.

We actually thought it would take a little longer to catch the attention of the 800-pound gorilla in the naming industry. The tired old thinking embodied in Verisign's response to our early success is one of the best validations yet that Donuts and other new registries are on the right track.

Written by Paul Stahura, Founder and CEO Donuts Inc.