Are New Generic Top-Level Domains Creating Confusion?

VeriSign reports third quarter fiscal 2013 earnings and warns of potential impact from hundreds of new top-level domains flooding the Internet.

VeriSign holds a unique place in the infrastructure of the Internet, managing root DNS functions and working as the custodian of the .com and .net domain names. Over the course of 2014, hundreds of new generic Top Level Domains (gTLDs) have entered the Internet, which is now confusing the marketplace, according to VeriSign's CEO.

James Bidzos, CEO of VeriSign, made the comments about the impact of new gTLDs during his company's third quarter earnings call on October 23. For the quarter, VeriSign reported revenue of $255 million, for a 4.7 percent year-over-year gain. Net Income grew to $95 million, up from $81 million in the third quarter of 2013.

One of the key metrics that VeriSign tracks is the number of active .com and .net registered domains, which grew by 3.3 percent year-over-year. At the end of the third quarter, VeriSign reported that there were 114.9 million .com and 15.1 million .net domain names.

George Kilguss CFO of VeriSign said during his company's earnings call that .net domain growth has been relatively flat all year. The reason is that .net, as is the case with other top level domains, is being impacted by the launch of all the new gTLDs.

The new gTLD program officially kicked off in June of 2011, after years of debate. In June 2012, ICANN announced that 1,900 new name applications had been submitted for the program. While many new names have now been added, some are more popular than others. Among the most popular new gTLDs are .guru, .berlin and .xyz.

Kilguss said that so far the new gTLDs have accumulated about 2.8 million registrations so far this year.

"There is quite a bit of confusion in the marketplace, and I think it's having some effects on the industry as a total as a whole," Kilguss said.

While the new gTLDs are impacting the market, Bidzos emphasized that the .com domain remains strong.

"Dot com is going to be celebrating its 30th year in 2015 next year and .com also enjoys the longest track record of uninterrupted DNS service, 100 percent uptime in excess of 17 years now," Bidzos said. "So I think .com is just a strong and trusted brand."

Bidzos added that trusted brands always do well. While .net is also a trusted brand, he cautioned that it is likely to be impacted by the new gTLDs and potentially confusion issues.

"I mean, we're seeing hundreds of more new gTLDs coming and they're coming at the rate of many every single week," Bidzos said. "So that confusion is likely to get worse."

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and Follow him on Twitter @TechJournalist

Photo courtesy of Shutterstock.

Tags: VeriSign, Domain Name Service, dotcom

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