Mike Berkens reported on the Verisign earnings call yesterday. In the article, Mike’s takeaway was this:
Bottom line Verisign expects those domain names registered in the 4th quarter, which those in the domain investor community, know consisted of a lot of numeric domain names NNNNNNNN.com going into the 8,9 and even 10 digits long, and domain names containing random letters as well as number and letter combo domain names to renew at lower levels, even saying the 4th Q of 2016 might see the number of domain “deletions could exceed additions”:
If I had to take a guess, my guess would be that the renewal rate on these .com domain investments will be higher than some people seem to anticipate.
In my opinion, most people who buy domain names as investments have a longer horizon for their investments. I don’t hand register many domain names, but when I do, I generally plan to keep them for more than one year. Hand registrations are far less expensive for me than aftermarket acquisitions, and I don’t expect to sell the right away. I would guess investments are different than purchases for other reasons, and I would imagine renewal data from Verisign is different for domain names bought as investments.
I admittedly don’t fully understand the Chinese domain investment market very well. However, I do believe that investors looking to make money on their names have a longer horizon than one year.
In addition to this, I would also imagine that if some of these investors begin to drop their names, there would be others willing to buy them at expiry auctions (NameJet, SnapNames, GoDaddy, DropCatch…etc) when they come back on the market. This would also keep these domain names active.
I can’t imagine that these investors would have bought their .com domain names and be willing to dump them one year later. I suppose if they were able to register their names at a massive discount that is no longer available, they might be less inclined to renew, but I can’t speak about that.
If the Chinese domain investment market changes drastically before the end of this year, which I am not inclined to believe based on a variety of industry experts sharing their thoughts, then perhaps the renewal rate will be lower as predicted. My guess is that the renewal rate for the recently hand registered.com domain names will be higher than they historically have been. Yes, Verisign probably has data from registrars showing whether domain names are set on auto-renew or not, but I still think domain investors will keep their names longer than one year.
To my knowledge, I do not own Verisign stock, unless it is in a fund I don’t control. As you can see, Verisign is an advertiser.