Verisign Blames Google For Drop In Domain Registration & Renewal Rates

domain-namesThe number of new domains being registered, and existing domains being renewed, is slowing down and Verisign — the company that operates the .com and .net domain registries — says Google is a main reason why.

On the company’s Q3 earnings call yesterday, Verisign shared the following data related to domain registrations and renewals:

  • total .com and .net domain registrations grew only one percent in Q3, below the company’s previous guidance to investors
  • registrations of .net domains were down one percent from a year ago
  • the domain renewal rate was 72.3 percent in Q3, down from 72.9 percent in Q2 and from 73.3 percent a year ago

The company gave two reasons for the slowness in registrations and renewals: “macroeconomic headwinds” in Europe and changes in search engine algorithms — more specifically, Google’s ongoing changes.

CEO and President D. James Bidzos spent considerable time discussing Google’s impact, and not just related to the recent EMD update that targeted exact-match domains with low quality content, but also Google changes as far back as 2009.

First of all, you recall that back in 2009, that was really the first time that we saw a major change in search algorithms that targeted the monetization players who were essentially trying to exploit the search engine algorithm to get themselves placed higher in results so that they can drive traffic and monetize it themselves.

We saw that over a period of time, after those changes, there was some recovery and the monetization community adapted to it. We saw in 2012, changes which affected Q2, which we’ve discussed with you before.

I think there is a more serious effort by the search engine algorithm players here to sort of clean up search results and improve the quality, as Pat said, to drive some of the monetization community down further. So we discussed in the last call, the Panda and Penguin programs, for example, that Google utilized where they were targeting content farms, they were targeting keyword stuffers and now, they’re also targeting exact name matches, which typically are monetization names often.

So for example, if you search for purple blue widgets, and purplebluewidgets.com happens to be a registered domain, that in the past, would’ve been likely to score very high in the search results. However, if the search engine algorithm is tweaked to go out and consider other factors, the age of the domain, how many pages are on it, how fresh is some of the contents and give it a score, essentially, on how likely it is that it’s truly quality content that the searcher might be interested in versus something that had been set up for monetization purposes, I think the search engine algorithms are essentially targeting that kind of traffic to get it out.

Domain Name Wire has compiled some interesting data in its coverage of the Verisign call, showing how new .com/.net registrations have dropped from four million every quarter back in 2007-2008 to 1-2 million per quarter now (see the “Net” column below). And the yearly growth in new registrations, which used to be in the 20-30 percent range, is now down below 10 percent.

domain-registrations

Google’s Panda update and Penguin update could be said to impact domain registrations and renewals over the past couple years — Penguin was launched this past April, while Panda dates back to February 2011.

But what about 2009, when Verisign says it started seeing Google and search engine changes impact its business? Well, there was the Vince update in February of that year. At the time, Google referred to Vince as a “minor change” that relied more heavily on certain trust and quality signals. But to the search engine marketing industry, Vince was a change that favored brands and pushed them higher in Google’s search results. And that’s exactly the kind of change that would impact webmasters that were trying to make money online via new domains, parked domains and, really, any domain that didn’t meet Google’s standards for trust and quality.

In its call yesterday, Verisign told analysts that it expects to add between 0.9 million and 1.3 million new .com and .net domains in Q4 — down from the 1.4 million added in Q3.

(Stock image via Shutterstock.com. Used under license.)

Related Topics: Channel: SEO | Features: Analysis | Google | Google: EMD Update | Google: Panda Update | Google: SEO | SEO: Domain Names & URLs | Top News

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About The Author: is Editor-In-Chief of Search Engine Land. His news career includes time spent in TV, radio, and print journalism. His web career continues to include a small number of SEO and social media consulting clients, as well as regular speaking engagements at marketing events around the U.S. He recently launched a site dedicated to Google Glass called Glass Almanac and also blogs at Small Business Search Marketing. Matt can be found on Twitter at @MattMcGee and/or on Google Plus. You can read Matt's disclosures on his personal blog.

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  • Eyepaq

    my dog got runed over. I guess is Google’s fault as the driver might be upset and so he didn’t pay attention. he was upset that his wife is no longer happy since the brother of the neighbor that is into selling online fake viagra got his earnings down based on last EMD update … :D

  • Andrius

    Your comment is funny, but there are truth in verisign words. Domainers are happy cause they know there will be lot’s of EMD domains dropping soon

  • Alan

    There had to be a saturation point didn’t there? I bet we have hit it. Although Google intentionally or unintentionally had a hand in this. I still maintain Google is sick of seeing the cost of running Google bot go up. The less sites the less it costs them.

  • http://phill.co/ Phill

    I used to buy lots of domains. I did this purely cause I knew an exact match domain would make getting into the top 3 spots much easier. Google knew this too.

    I personally welcome the EMD update. It’s going cut out A LOT of crap. It’s no longer about who gets the best domain first. I certainly won’t be renewing a large portion of my domains.

    On the flip side, this could be a huge temporay scare tactic.

  • http://twitter.com/MaryKayLofurno Mary Kay Lofurno

    Sounds like Verisign did not have a strategy in place to combat these changes. Many companies have survived through penalties [JC Penny and other] and algo changes. They knew they were coming. I think this is more a statement about Verisign management.

  • Colin Guidi

    seems like all of Verisign’s “reasons” of being upset with the drop in registrations, are only due to Google trying to improve the quality of results by pushing EMDs further down if their content is rather poor.

    Verisign, dry your tears.

  • http://twitter.com/Indiainternet IndiaInternet

    Great… Its may be up down due to Google algorithm updates like EMD etc…

  • http://www.v2interactive.net/ Josh

    Right, because the increased limitations of quality TLD’s mixed with a crap economy is not to blame… Verisign has been in trouble for years, this is just a scapegoat.

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