Domain Name Registrant Profile The Domain Name ... - VeriSign

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Domain Name Registrant Profile The Domain Name ... - VeriSign

The Domain Name Industry Brief

Volume 2 - Issue 3 - August 2005

Domain Name Registrant Profile

As the global registry operator for .com and .net,

VeriSign closely monitors the state of the domain

name industry through a variety of statistical and

analytical research. This brief provides a global

overview of the people and organizations who

register domain names, and their interests.


THE DOMAIN NAME INDUSTRY BRIEF - AUGUST 2005

+ Introduction

At the end of second quarter of 2005, 82.9 million domain names existed, an eight

percent growth from the first quarter. Who registered these domain names People who

register domain names are called “registrants” and they are a richly differentiated group

of Internet users who register a domain name for variety of reasons - both business and

personal. This report profiles these registrants and offers insights into their interest in

and uses of domain names. This report also presents potential opportunities to pursue in

four global markets: North America (Canada, Mexico, and the United States), Asia

(China, Japan and South Korea), Europe (the United Kingdom, Germany, and Spain),

and South America (Brazil).

Opportunities to

expand consumer

domain name

registrations exist.

+ Registrants at a Glance

A recent study that sampled .com and .net domain names to determine the breakdown

between business and consumer domain name registrations found that most, 75 percent,

are registered by businesses. This confirms the conventional wisdom, as well as earlier

studies. Only 22 percent were registered by individuals with the remaining three percent

unknown. 1 Given the recent explosion of user-generated content on the Internet such as

blogs and the increase in overall consumer usage of the Internet, the lack of growth of

domain name registration in the consumer sector is surprising.

Current registrant demographics demonstrate that there is a trend toward domain names

becoming more of a mass market product in North America, rather than just for early

adopters. As the domain name industry becomes more mature, and less of a leading

edge product, the demographic profile of registrants reflects more of an average or mass

market look. In North America, the consumer/small office-home office (SOHO)

registrants are older and predominately female with a lower annual income than

registrants in Europe and Asia. Europe and Asia are somewhat less developed for domain

names as demonstrated by their highly male registrants who skew younger, thus

reflecting a more leading edge demographic. In Brazil, a developing market, the

consumer/SOHO registrant base is young and closely divided between men and

women. 2

Registrant Demographics

(Consumer/SOHO)

Sources: European Domain Name

Study, Markitecture, September

2004; Asia Domain Name Study,

Windward Directives, March 2005;

North America Domain Name

Study, Windward Directives, June

2005, Brazil Domain Name Study,

Datafohla, November 2004.

1 VeriSign, July 2005.

2 Unless otherwise noted, registrant data

reported in this report is drawn from the

following studies: European Domain Name

Study, Markitecture, September 2004; Asia

Domain Name Study, Windward Directives,

March 2005; North America Domain Name

Study, Windward Directives, June 2005,

Brazil Domain Name Study, Datafohla,

November 2004.

Registrant Demographics (Consumer/SOHO)

47 32

36

38% 62% 63% 37% 63% 37% 55% 45%

North America

($47K)

Europe

($63K)

Asia

($57K)

+ Registrant Attitudes Toward the Internet

Data about registrant attitudes toward technology and the Internet reveal business

opportunities, particularly in the area of helping people feel more comfortable with

creating and maintaining Web sites, especially in North America and Asia. Only 19

percent of American registrants consider themselves on the cutting edge of trying new

technologies and 28 percent feel competent about Web site creation and maintenance.

Only 21 percent of Asian registrants feel comfortable with Web site creation and

maintenance with the same percentage putting themselves at the cutting edge of

technology. These registrants are new to domain names and related technologies. In

addition, the high usage rate for the wireless Internet in Asia may mean that Internet

29

Brazil

($29K)

Male

Female

Age

$ Income

2


THE DOMAIN NAME INDUSTRY BRIEF - AUGUST 2005

Tools to help registrants

with Web site development

and maintenance are key to

attracting new registrations

in North America and Asia

Internationalized Domain

Names could be a large

market opportunity in Asia

and Brazil.

users are focused on wireless technologies and less so on traditional wired” technologies

like domain names and Web sites. In contrast, the majority, 53 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.

Overall, business registrants believe that the Internet has helped their business.

Europeans, at 71 percent, felt strongly about the impact of the Internet on their

business. Asian registrants followed at 67 percent and North Americans were somewhat

less satisfied at 58 percent. Business registrants in North America do an evenly

distributed mix of business with international, national, regional, and local customers.

European business registrants sell to an almost evenly divided mix of international and

national customers while the Asian business registrants focus on national customers.

In Asia, Korean and Chinese consumer SOHO respondents are more likely to have used

Internationalized Domain Names (IDNs) or domain names that use local language

characters. Chinese respondents are most open to the future use of IDNs. Alternate

forms of Web navigation such as Internet keywords have been marketed in Asia, thus

increasing the awareness of the ability to use non-ASCII characters to navigate the

Internet. Brazilian respondents also show interest in IDNs. The interest in IDNs likely

stems from nationalism and pride in their language.

Length of Time Connected to the Internet (Consumer/SOHO Registrants)

Length of Time Connected to

the Internet (Consumer/SOHO

Registrants)

Sources: European Domain Name

Study, Markitecture, September

2004; Asia Domain Name Study,

Windward Directives, March 2005;

North America Domain Name

Study, Windward Directives, June

2005, Brazil Domain Name Study,

Datafohla, November 2004.

Internet access from home

Asia

North America

Europe

Brazil 19%

8% 70%

40%

27%

3% 5 years

10% 23% 5.8 years

38%

31%

24% 7% 7.2 years

19%

60%

15% 6% 7.4 years

0 2

4

6

8

Length of time connected to the internet

Cable Modem DSL Dial Up Wireless/Other/Don’t Know

Under-penetrated regions of

the world are good

opportunities for expanding

domain name registrations:

Asia (China, Taiwan); Latin

America (Brazil)

3 Zooknic, July 2004 and May 2005.

+ Domain Name Penetration

The longer Internet users have been connected to the Internet, the larger the domain

name penetration rate among these users. North American and European registrants

have been online for 7.2 and 7.4 years respectively. They also have the largest

penetration of domain name registrations among Internet users at 14 percent and 13

percent respectively. This finding is further supported by statistical analysis that shows

that bandwidth from a country to the rest of the world, the number of Internet users

and the number of Web sites that use encryption technologies for Web transactions

(SSL licenses) have significant explanatory power in predicting domain name registration

growth. 3 These variables represent characteristics of Internet usage and not surprisingly,

North America and Europe rate highly in these areas with the Asia region growing

rapidly.

Europe holds the edge over North America in the total number of domain names. Of

other regions examined in this report, South America and Africa/Middle East, though

still small when compared to more developed regions, are growing rapidly in their

3


THE DOMAIN NAME INDUSTRY BRIEF - AUGUST 2005

Average Number of

Domain Names Registered

per Registrant

Sources: European Domain Name

Study, Markitecture, September

2004; Asia Domain Name Study,

Windward Directives, March 2005;

North America Domain Name

Study, Windward Directives, June

2005.

Average Number of Domain Names

Registered per Registrant

Japan 1.0

United States 1.2

Korea 1.3

Canada 1.3

China 1.4

Mexico 1.6

domain name registrations, 52

percent and 40 percent growth

second quarter 2005 over

second quarter 2004,

respectively. This growth, albeit

on a small base, comes despite

the finding that many in these

regions are not familiar with

domain names.

Spain 1.8

Overall, registrants have

United Kingdom 2.1

registered about 1.6 domain

Germany 2.5 name registrations each. Recent

studies reveal that as a region,

0 1 2 3 European registrants 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 each. 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 may

be attributable to strong use of Country Code Top Level Domain Names (ccTLDs) to

serve not only their home country but also the entire European region. For example,

Germany and the United Kingdom have the largest number of ccTLDs in terms of

domain name base.

Domain Name Registrations

by Geography

Sources: Zooknic, July 2005;

ClickZ Stats, July 2005.

14%

Domain Name Registrations by Geography

13%

32m 246m

Europe

3%

31m 221m

North America

8%

3m 43m

South America

6%

1m 19m

Africa / Middle East

10m 324m

Asia / Pacific

Domain Names Internet Users % Penetration Rate

Customer service tops

the list as the most

important factor when

choosing a registrar

+ How Registrants Select Vendors and Use Their Domain Names

Across all four regions, registrants choose their domain name vendor based on four

principal criteria: customer service, ease of use, help with search engine listings, and

providing email service. They also consider the availability and quality of support with

Web site development, domain name hosting services, and local language domain

names (IDNs). The most important factor is excellent customer service but registrants

are increasingly putting weight on the ability to get their domain name listed in major

search engines.

4


THE DOMAIN NAME INDUSTRY BRIEF - AUGUST 2005

Registrants are looking for

domain names to help

them enter the global

marketplace

Registrants across all four geographical regions register domain names for the primary

purpose of sending and receiving email. Establishing a professional image for their

business ranks second or third across all the regions. In Asia, almost half of the

registrants register a domain name for brand protection. Brazil places high value, 86

percent of those surveyed, on reaching out to the global market. The same is true of

Europe, where, particularly in Germany, registrants see the global outreach possibilities

inherent in a domain name. Registrants are also using their domain names for setting up

Web sites. In a recent study of all .com and .net domain names, 75 percent of the

names were associated with a Web site.

.Com/.Net Web Sites*

Parked Web sites

Live Web sites

No Web sites

.Com/.Net Web Sites

12%

62%

25%

Source: Cyveillance, August 2005

* Due to numerical rounding, percentages

may not equal 100%.

0 10 20 30 40 50 60 70 80 90 100

Total Domain Names Spidered = 45,285,276

Percent of all Domain Names Resolving to a Web site = 75%

+ How Satisfied Are Registrants

Registrants are generally satisfied with their domain name and associated Web sites and

email service. In North America, 69 percent of business registrants are satisfied that their

Web sites make it easier for customers to find them; and also help them communicate

with their customers, vendors, and suppliers. North American consumer/SOHO

registrants’ reasons track with those of business registrants and add that their Web sites

have achieved the goals set for them. European satisfaction levels across Germany, Spain

and the U.K., track closely with North America for the same reasons. Similarly, Asian

business domain name owners put “making it easier for my customers to find me” at the

top of their list, while the consumer/SOHO constituency value their Web sites for

allowing them to communicate with people who have similar interests. In Brazil, where,

among consumers the idea of domain names is still a novelty, many registrants would

feel more comfortable using Portuguese language IDNs.

+ Likelihood to Renew

Overwhelmingly, across all geographies, in both business and consumer segments

registrants are likely to renew their domain names-the average number of registrants

likely to renew, across regions is approximately 71 percent. 4 This desire to renew reflects

broad satisfaction with the results the domain names have helped business and consumer

registrants achieve, whether it’s the establishment of a professional image, extending a

global reach, improving local appeal, or protecting their business or personal name. The

reasons offered for not renewing their domain name are around the cost of setting up

and maintaining a Web site and no longer using the domain name.

4 The actual registry renewal rate for .com

and .net in the second quarter of 2005 was

75%. The 71% figure includes responses for

all domain names registered by our study

respondents.

+ Conclusions and Opportunities

Domain name registrants are a varied group across regions and demographics but they

share their domain name registration in common. With the growth of the Internet

penetrating more deeply across the world, it makes sense that the domain name

registrants become more difficult to categorize - they are reflecting the diversity of the

world itself.

5


THE DOMAIN NAME INDUSTRY BRIEF - AUGUST 2005

In general, registrants want their domain name registration and usage to be simple. They

want help along the way, not only in tying a Web site and email services to a domain

name but also to make it a successful tool for their goals whether that is being found by

prospective customers, serving current customers, establishing a professional image or

simply improving communications. Activities that generate awareness of domain names

and emphasize their ease of use will prove beneficial in making potential registrants

more comfortable with the Internet and domain name registration.

Each of the geographical market areas examined in this report offers different

opportunities for increasing domain name registrations

· In North America, particularly in the United States and Canada, domain name

registration is becoming more of a mass market product, thus the prospective

registrant target is less technologically savvy than in the past. It will be

important to educate them on the value of domain names as well as offer

assistance in setting up a Web site and making it successful. Mexican registrants

are more reflective of early adopters but would still benefit from awareness and

educational efforts.

· In Asia, Internet usage and access is rapidly growing as are the numbers of

domain name registrants. With China emerging as an Internet player, there is

the opportunity for domain name registrations to explode. The importance of

the wireless Internet and strong broadband Internet access will impact the

methods used to reach prospective registrants and the value proposition. There is

also opportunity to reinforce the benefits of multiple domain name registrations.

· In Europe, a major opportunity lies with lapsed registrants who are considering

registering a domain name again. Helping these prospective registrants set up a

successful Web site makes the domain name “an essential”, and diminishes the

possibility of more attrition. Certain European countries, such as Spain, are less

developed in terms of domain name registrations and offer opportunity to

reinforce the benefits of domain name registration.

· In Brazil, there is a low level of awareness about the registration and use of a

domain name. The key will be to educate the businesses and cutting edge

consumers on the value proposition of domain names as well as how to register

and use one. It will be very important to offer simple package solutions that will

get new registrants up and running quickly. For current registrants, there is

opportunity to expand multiple domain name registrations for complimentary

uses as well as brand protection. Brazilians also show interest in using

Portuguese language and characters in domain names more frequently.

+ Learn More

To subscribe to or access the archives for the Domain Name Industry Briefs, please go

to www.verisign.com/domainbrief. You can also email your comments or questions to

domainbrief@verisign.com.

+ About VeriSign

VeriSign, Inc. delivers critical infrastructure services that make the Internet and

telecommunications networks more intelligent, reliable, and secure. Every day, VeriSign

helps thousands of businesses and millions of consumers connect, communicate, and

transact with confidence.

© 2005 VeriSign, Inc. All rights reserved.

VeriSign, the VeriSign logo “Where it all comes together,” and other trademarks, service marks, and designs are registered or

unregistered trademarks of VeriSign and its subsidiaries in the United States and in foreign countries. August 2005 (VNDS) 00021284

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