Verisign has warned investors to be wary of a sudden upsurge in registrations of .com domain names. In a filing to the US Securities and Exchange Commission, Verisign said âthere was a higher volume of gross additions, during the third quarter, in international markets, particularly Asia.â
According to the filing, âas of November 22, 2015 Verisignâs domain name base totaled 139.3 million, up 4.1 million from September 30, 2015. While there continues to be demand for domain names globally, the recent increased volume for Verisignâs top level domains, as well as top level domains of other registries, during the fourth quarter is coming largely through registrars in China.â
âIn the past, Verisign has discussed many factors that affect the demand for domain names, including, but not limited to economic, social, and regulatory conditions, Internet adoption, Internet penetration, and increasing e-commerce. In addition to these factors affecting demand, Verisign is also evaluating additional potential factors unique to China that may also be responsible for the recent increased volume of new registrations in China.â
âIn no particular order, these potential factors, or combination of factors, could include, but may not be limited to, government initiatives in China to develop their online economy such as âInternet Plus;â registry and registrar regulatory requirements; cultural influences such as the popularity of numeric domain names; increasing competition amongst Chinese registrars; potential increases in domain name investment activity; and recent capital markets volatility and access to capital in China.
âVerisign cannot predict if or how long this increased pace of gross additions will continue and we cannot at this time predict what the renewal rate for these domain names will be. Verisign has noted in the past that renewal rates for domain names registered in emerging markets, such as China, have historically been lower than those registered in more developed markets. Verisign will continue to evaluate these and potentially other factors and expects to have additional information related to the domain name base on Verisignâs fourth quarter and full year 2015 earnings call.â
And .com may not be the only TLD benefiting from Chinese interest. According to Domain Incite, there have been âover 440,000 domains added to its .xyz zone file in the last three weeks, bringing its total to over 1.5 million, which appear to be largely coming through Chinese registrars.â