On Oct. 15, the wholesale price of a .com domain will go from $6 to $6.42, a 7 percent hike and the maximum annual percentage increase allowed under the March 2006 agreement with ICANN. A .net domain name will increase 10 percent, from 3.50 to $3.85.
My prediction: For every rate increase, intended to raise revenue, there will be an offsetting drop of registrations of marginal speculative and traffic generating domains. Thus, for every domain that is renewed, at a $.42 increase, the drop of any 1 domain will offset the added fees generated on 14.2 renewed domains.
Do the math: $6.00/$.42 = 14.2.
100,000 domains dropped = $600,000.00 decrease in revenue and on upwards from there.
Some day the monopolistic brain of Verisign might wake up to the idea that decreasing prices might result in increased registrations and renewals generating more revenue.
They just couldn't wait to raise rates.
Wait and see.
the idea that decreasing prices might result in increased registrations
Well at the same time, if it makes it a tad easier to get a decent .com domain name for real web sites, that might be a good thing.
At this time the whole domain industry smells fishy including in particular the role of ICANN.
They just couldn't wait to raise rates
OK, I'll play devil's advocate. :)
- This is the first increase since 1999
- It's 42¢. Not a "price hike", but one 42¢ increase in 8 years.
How much will it affect anyone other than domainers? There are thousands of users and companies paying $15 to $35 per year per domain, the increase is unlikely to affect the end prices of anything other than the ultra-low priced domain registrars and the bulk registrars.
Is the price increase necessary? That's unproven at best, but it is undeniable that there have been significant attacks on Verisigns DNS infrastructure and DNS root servers in the past few years. So, yes, we could have done without this price increase, but it isn't going to cause a crisis.
This doesn't pain me too much, probably becuase I remember the days when regs were $100 for two years. But aggregators and high volume portfolio owners will get hit.
But Webwork - I like your thinking. Lower base rates would likely spur higher renewal rates (lower drop rates), higher volume for new regs, and higher volume of long term regs.
@xbase234 - and domains used to be free before that? That $100 pricing has no relevance on VeriSign abusing their monopoly to make more money.
[edited by: encyclo at 7:01 pm (utc) on April 6, 2007]
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There are thousands of users and companies paying $15 to $35 per year per domain, the increase is unlikely to affect the end prices of anything other than the ultra-low priced domain registrars and the bulk registrars.
Sure, they run the risk of losing some customers if they raise their rates. But most of their customers are already the ones too lazy/ignorant to know they have cheaper options.
But I do agree that the low-price resellers are the ones most likely to be hit.
Most likely it's going to generate a huge number of early and multiple-year renewals this year before the increase, resulting in a much lower than average renewal rate next year. Which Verisign will try to use as an excuse to further maximize the increase in future years.
OK, I'll play devil's advocate. :)- This is the first increase since 1999
- It's 42¢. Not a "price hike", but one 42¢ increase in 8 years.
I'll play the devil's advocate to your devil's advocate :-)
This won't be the last increase.
More importantly, operating costs are a lot cheaper than they were in 1999, across the board. When you look at the amount of automation and how cheap the infrastructure has gotten, then it becomes clear that there should be a huge price increase (or rather a need).
Of course, we do have the issue of rising salaries. Whether that can be covered by the offset in lowered expenses, it's hard to say.
My take from this though is the annual rate of inflation of internet business costs vs. overall inflation costs - i.e. 7% vs. 3% (tops). They are obviously confident that the demand for internet domain name registrations will continue to rise over the coming year. Which, of course, is a positive sign for us webmasters!
[edited by: Chico_Loco at 8:23 am (utc) on April 7, 2007]
