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VeriSign Issues Quarterly Domain Name Industry Brief
Overall Domain Name Registration Reaches New Record at 82.9 M
Registrations Rise Eight Percent Since First Quarter, 2005
Mountain View, CA. – August 17, 2005 - VeriSign, Inc. (Nasdaq:
VRSN), the leading provider of intelligent infrastructure services for
the Internet and telecommunications networks, today released the VeriSign®
Domain Name Industry Brief for the second quarter of 2005. According
to the report, which highlights key industry data for worldwide domain
name activity, total domain name registrations reached an all-time high
of 82.9 million, representing an eight percent growth since the first
quarter of 2005 and a 28 percent increase since the second quarter of
2004.
In supporting this growth, the VeriSign Domain Name
System (DNS) continued to maintain operational accuracy and stability
for 100 percent of the time during the second quarter of 2005.
Also today, VeriSign released the Domain Name Industry Brief Registrant
Profile offering insights into the people and organizations who register
domain names. Both reports can be found at http://www.verisign.com/domainbrief.
Increasing Growth
The domain name industry continued to experience strong growth
in the second quarter of 2005 as proven by the number of new domain
names registered at just over 8.1 million. This figure represents
a 16 percent increase since the first quarter of 2005 and a 63 percent
increase since the same period last year. Growth was driven by
price promotions, product bundling and the continued acceleration of
using domain names to generate Pay-Per-Click (PPC) advertising revenue.
The total number of .com and .net domain names grew
to 44.2 million by the end of the second quarter of 2005. This
represents a seven percent increase since the first quarter of 2005
and a 30 percent increase since the same period last year. Additionally,
4.2 million new .com and .net domain names were registered, representing
a one percent increase since the first quarter of 2005 and a 39 percent
increase since the same period last year.
Increasing Usage and Opportunities
- At 75 percent during
the second quarter of 2005, registry renewal rates for .com and .net
remain near historic highs. This upward trend in renewal rates began
in 2003 and continues to signal strength in the overall domain name
registration market.
- VeriSign processed
an average of 14.9 billion .com and .net queries per day in operating
the Internet infrastructure for .com and .net during the second quarter,
2005.
Growth in Queries:
The growth of queries and total users across the Internet has
accelerated the online advertising space. Online advertising, in particular
the Pay-Per-Click advertising market, represents the main driver behind
new domain name growth. Online advertising revenue is forecasted
to increase by 34 percent in 2005 and search engine marketing is forecasted
to increase 33 percent in 2005 (Source: IAB Internet Advertising Revenue Report for 2004).
These increases are occurring as online advertising gains share from
traditional outlets (Source: Forrester’s Consumer Technolgraphics August 2004 North American Devices,
Media, & Marketing Online Study).
In fact, time spent online is now about equal to time
spent watching television for most age demographics. Because people
are spending more time online, analysts expect advertising dollars to
follow user behavior. Currently, only 4 percent of advertising
budgets are spent online versus approximately 25 percent spent television
advertising. However, nearly 85 percent of advertisers plan to
increase online advertising budgets in 2005; and, 50 percent of those
plan to decrease the amount they spend on traditional advertising channels.
“For several years now, VeriSign has reported that
the number of queries it manages in operating .com and .net infrastructure
is consistently increasing,” said Mark McLaughlin, senior vice president
of VeriSign’s Information Services. “Today, we manage 14.9 billion queries
per day, on average, in running .com and .net. That number is doubling
about every 18 months, which tells us that email and Web traffic is
growing steadily. It stands to reason that advertising dollars would
find their way to where people are going---and that’s online. I think
that’s why you’re seeing such consistent growth in all facets of online
marketing.”
Top Level Domain Composition
.Com currently represents 47 percent of all registered domain
names. Collectively, the country code Top Level Domain names (ccTLDs)
, such as .de (Germany), .uk (United Kingdom), and .br (Brazil), account
for 35 percent, followed by .net at seven percent. Interestingly,
the .cn (China) ccTLD joined the ranks of other top ten ccTLDs this
quarter displacing .dk (Denmark) with a 23 percent growth in domain
names quarter after quarter. Historically, the top ten ccTLDs
account for the largest percentage of all ccTLD registrations; in the
second quarter of 2005, they account for 71 percent. Other Generic
Top Level Domain Names (gTLDs), such as .org, .biz, .info and .name,
now account for 11 percent of the market.
Registrant Profile Information
- In a recent VeriSign
study of .com and .net domain names, VeriSign found that 75 percent
of domain names are registered by businesses; 22 percent are registered
by individuals, and the remaining three percent are unknown. Given
the recent explosion of user-generated content on the Internet such
as blogs and the steady increase in overall consumer usage of the Internet,
the total number of current consumer registrations of .com and .net
domains is somewhat surprising.
- European registrants
feel the most tech savvy of all geographic regions. Fifty three percent,
of European registrants consider themselves on the cutting edge of trying
new technologies and 58 percent feel “very competent” when it comes
to creating and managing a Web site.
- European registrants
also register the highest number of domain names per registrant. German
registrants are at the top of the list with an average of 2.5 domain
names per registrant. The United States and Japan have the lowest number
of domain names per registrant at 1.2 and 1.0, respectively. The
higher registrations in Europe are attributable, in part, to strong
use of Country Code Top Level Domain Names (ccTLDs) which serve not
only their home country, but also the entire European region.
Germany and the United Kingdom have the largest number of ccTLDs in
terms of their overall domain name bases.
- Overall, most business
registrants believe that the Internet has helped their business. Europeans,
at 71 percent, felt the strongest that the Internet helped drive their
business, followed by Asian registrants at 67 percent and North Americans
at 58 percent.
VeriSign publishes the Domain Name Industry Brief
to provide Internet users throughout the world with significant statistical
and analytical research on the domain name industry and the Internet
as a whole. Copies of this quarter’s Domain Name Industry Brief, as
well as previous reports in the series, may be obtained at http://www.verisign.com/domainbrief.
About VeriSign
VeriSign, Inc. (Nasdaq: VRSN) delivers intelligent infrastructure
services that make the Internet and telecommunications networks more
reliable and secure. Every day VeriSign helps thousands of businesses
and millions of consumers conduct commerce and communications with confidence.
Additional news and information about the company is available at http://www.verisign.co.uk/.
For more information, contact:
VeriSign Media Relations: Patrick Burns, pburns@verisign.com,
703-948-4471
VeriSign Investor Relations: Tom McCallum, tmccallum@verisign.com,
650-426-3744
1VeriSign, July
2005.
Statements in this
announcement other than historical data and information constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. These statements
involve risks and uncertainties that could cause VeriSign's actual results
to differ materially from those stated or implied by such forward-looking
statements. The potential risks and uncertainties include, among others,
the uncertainty of future revenue and profitability and potential fluctuations
in quarterly operating results due to such factors as the inability
of VeriSign to successfully market domain services, including customer
acceptance of these services; and the inability of VeriSign to successfully
develop and market new products and services and customer acceptance
of any new products or services. More information about potential factors
that could affect the company's business and financial results is included
in VeriSign's filings with the Securities and Exchange Commission, including
in the company's Annual Report on Form 10-K for the year ended December
31, 2004 and quarterly reports on Form 10-Q. VeriSign undertakes no
obligation to update any of the forward-looking statement after the
date of this press release.
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