The Future of .COM Pricing (original) (raw)

When you’ve been around the domain industry for as long as I have, you start to lose track of time. I was reminded late last year that the 6-year agreement Verisign struck with ICANN in 2012 to operate .com will be up for expiration in November of this year.

Now, I don’t for a second believe that .com will be operated by any other party, as Verisign’s contract does give them the presumptive right of renewal. But what will be interesting to watch is what happens to Verisign’s ability to increase the wholesale cost of .com names.

The 2012 agreement actually afforded Verisign the ability to increase prices by 7%, up to four times over the 6-year course of the contract. However, when the US Commerce Department approved the agreement, it did so without the ability for Verisign to implement those price increases.

At that time, the wholesale price of a .com domain was 7.85,andthat’swhereitstandstodaywiththepricestoregistrarsbeingfrozen.Underthetermsoftheoriginal2012agreement,.compricescouldhavebeenashighas7.85, and that’s where it stands today with the prices to registrars being frozen. Under the terms of the original 2012 agreement, .com prices could have been as high as 7.85,andthat’swhereitstandstodaywiththepricestoregistrarsbeingfrozen.Underthetermsoftheoriginal2012agreement,.compricescouldhavebeenashighas10.26 today had Verisign taken advantage of their price increases.

As an aside, I’ve long thought that the price of a single .com domain was incredibly inexpensive when you think about it in comparison to other costs of running a business.

While I don’t have any concrete insight into whether the price freeze will continue, there is obviously a new administration in Washington DC. Their view on this agreement could be different than the previous administration. Since this administration has come into office, we have seen a number of pro-business initiatives undertaken, so perhaps that will carry over to the Verisign agreement as well.

Another big difference today is that the domain market, in general, is vastly different than it was in 2012—with the introduction of hundreds of new gTLDs. There are exponentially more alternatives to .com today than there were 6 years ago, so it’s possible that too will have an impact on the decision.

With over 131 million registered .com names, it will be interesting to see how a potential increase of a few dollars per name would play out in the market, and the impact that it would have on corporate domain portfolios which are still largely comprised of .com names.