.COM Shrinks - Again!

The year was 2002 with the tech industry coming off the .com bubble bursting and .com recorded its first ever year of shrinkage going from 24.4M domains down to 23.2M.  It all started on March 15, 1985 with the first .com domain name registered: symbolics.com and it is still active today: https://symbolics.com

Let’s look at the nearly forty years since and the current market circumstances around .com’s second annual decline in history.

.com registrations first grew slowly through the next decade to approximately 9,000 domains registered by the end of 1995.  On September 15, 1997 google.com was registered. The .com boom occurred and peaked with 24.4M domains in 2001.  2002 brought the first year over year decline for .com of 5% to 23.2M domains. 

Registrations quickly recovered momentum and in 2003 registrations grew 16%.  Over the 20 years since, .com has grown an average of 10-11% annually.  This included the sub-prime mortgage meltdown in 2008 as well as through the launch over 1,000 TLDs with ICANN’s New gTLD program starting in 2014. This period saw highs of +30% growth in 2004 and 2005 and settled to 4-5% annual growth from 2017 – 2021.  The pandemic brought remote work that supported continued .com registration performance.  However, post-pandemic, 2022 brought only small positive growth of 0.3%.  During the pandemic web3 technologies began to gain traction and continued to expand post-pandemic. 

That brings us to 2023 year-end, only the second time that .com has declined in total domains year over year since inception in 1985.  Is this shrinkage a small bump in the road or are greater storm clouds on the horizon?  Historical performance would argue for a bump in the road. The .com registry has been the anchor of the domain industry and that position is not likely to change. However, the fringes may be vulnerable. 

As Internet growth expands further away from established North America and Europe, other TLD choices may eat into .com’s market share.  In 2023, .com lost 1.4% global market share falling from 45.8% to 44.4%.  A full 1.0% market share went to new gTLDs up from 7.8% to 8.8% and the remaining 0.4% market share to ccTLDs.

As we look forward, five possible scenarios of annual growth are outlined:

·      Recover to historic at +4%

·      Slight growth at +1%

·      Flat at 0%

·      Slight decline of -1% (continuing 2023 trend)

·      Real decline of -5% (extended .com bust)

The outer margin scenarios of +4/-5 % seem to both be lower probability in the short term.  .com has grown to 160M domains so 4% annual growth is 6.4M net additions above replacing the ~43M domains deleted (73% renewal rate) each year – or 50M new create each year equivalent of three new .de ccTLDs  annually.

For .com to shrink 5% annually, both new creates and renewal rates would need to falter.  While not at the 80% renewal rates of some ccTLDs, .com has been reliable at 72-73% for the last decade. For a substantial decline to occur, existing domain holder would need to shed their names in addition to new registrants choosing a different TLD.

The most likely scenarios are between +/-1%.   But so many factors are in play, which will occur? Will growth be slightly above or slightly below?  Will growing national identity in countries around the globe attract more ccTLD registrations?  Will .com continue to be the aspirational Internet address across the globe? Will new gTLDs carve away niche segments in 1,000 small cuts. Will web3 offer new use cases that promote or distract?

We won’t have long to wait to see as the Q1 DNIB will be released early April.  What are your thoughts?  Above or below the line?

Data sources:  Verisign Domain Name Industry Briefs (DNIB), ICANN Registry Reports, Pingdom.com