Stock Analysis firm Trefis had some interesting comments on Verisign in a note entitled “Drop In Verisign Shares Highlights Risks Associated With Domain Business”
The note went on to say that the biggest risk to the Verisign business is growth in ccTLD domain names.
Trefis didn’t mention the new gTLD’s at all.
It would be one thing to mention new gTLD’s and then conclude that the wouldn’t impact Verisign market share of the global domain market, but for the company not to even mention new gTLD’s makes it look like Trefis doesn’t even know they exist.
Regarding the contract to run the .net and .com registry, all Trefis had to say was that “Losing the contract for either of these domain names come 2018 would mean a severe cut in the company’s top line”
The post did not mention ICANN or the impact that the US possibility giving up oversight might effect the contract the next time it comes up for renewal.
Here is the post:
How Will Losing The .com/.net Contract Impact VeriSign?
VeriSign is the sole registrar for the .com/.net domain names, and had a market share of approximately 46.7% in global top level domain name registrations in 2013. At the end of Q3FY13, VeriSign had a total of 126 million .com and .net domain names registered in the adjusted zone out of a total 265 million domain names registered globally.
Losing the contract for either of these domain names come 2018 would mean a severe cut in the company’s top line. You can take a look at the impact a loss in contract to another registry service provider such as Neustar on VeriSign’s stock by changing its share of all domain registrations worldwide.
“Currently, we believe the only threat to VeriSign’s market share in the global domain name registrations market is from country code top level domain names (ccTLDs). ccTLD registrations reached 119.5 million at the end of Q3FY13 and have been increasing at almost three times the growth rate in .com/.net domain names. “
“This rapid increase in ccTLD registrations, combined with restrictions on domain name pricing, have strained top line growth for VeriSign, which fell to 10.5% in 2013 from 13% in 2012. ”
“We expect VeriSign’s market share to decline gradually until the end of our review period as ccTLD registrations continue to grab potential .com/.net registrants.””