VeriSign (VRSN) recently announced that more than 6.1 million
domain names were registered in the fourth quarter of 2012.
According to its recently published "The Domain Name Industry
Brief", domain name registrations increased 2.5% sequentially to
252 million at the end of the fourth quarter.
For the eighth consecutive quarter, domain name registrations
improved by more than 2.0%. On a year-over-year basis, worldwide
registrations jumped 11.8% (26.6 million). Excluding .tk (this
registry offers both free and paid domain names), year-over-year
growth rate was 8.9% in the fourth quarter of 2012.
Country Code Top-Level Domains ("ccTLDs") increased 21.6% year
over year and 5.0% sequentially to 110.2 million in 2012. The
growth was across all Top-Level Domains (TLDs) as both .com and
.net grew substantially during the quarter. On a combined basis,
.com and .net domain names improved 6.4% year over year to
approximately 121.1 million.
New .com and .net registrations were 8.0 million, slightly
better than 7.9 million reported in the year-ago quarter. Renewal
rate for .com and .net was 72.9% in the last quarter, up 40 basis
points on a sequential basis. In the fourth quarter, VeriSign's
average daily Domain Name System (DNS) query load was 77 billion,
up 16.0% sequentially and 21.5% from the year-ago quarter.
VeriSign announced that .com continued to maintain its #1 slot
as the largest TLD, followed by .de (Germany) and .net. The biggest
improvement was for .cn (China), which moved up two places in the
rankings to end the quarter at #7, while .info moved one step down
In its latest Industry Brief, VeriSign highlighted the
opportunities and challenges of the growing "Big Data". VeriSign
cited a study conducted by International Business Machines
(IBM) , which estimates that more than 2.5 quintillion
bytes of data are generated every day. IBM's study also noted that
90% of current worldwide data have been generated over the last two
We believe that increasing domain name registration, the renewal
of the .com contract and the price hike in .net domain name will
boost VeriSign's top-line growth in the near term. Additionally,
VeriSign has significant growth opportunities from its network
security products as Distributed Denial of Service (DDoS) attacks
continue to grow.
However, the negative impact of search engine adjustments on
domain monetization and increasing operating expenses related to
the .com contract renewal remain the primary headwinds in the near
term. Moreover, significant competition from AT&T Inc.
(T) and Verizon (VZ) in
the network intelligence and availability ("NIA") segment remains a
Currently, VeriSign has a Zacks Rank #3 (Hold).INTL BUS MACH (IBM): Free Stock Analysis ReportAT&T INC (T): Free Stock Analysis ReportVERISIGN INC (VRSN): Free Stock Analysis ReportVERIZON COMM (VZ): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment