Verisign has recently declared that short sellers misjudged the potential impact of Google’s discontinuation of its AdSense for Domains (AFD) program on .com registrations. Following the closure of AFD at the end of Q3, concerns rose about how this would affect the domain industry, particularly regarding the revenue from parked domains.
During Verisign’s Q3 earnings call, analysts inquired about the situation’s implications for .com registrations. Although the company chose to downplay the potential negative effects, it did not disclose specific data indicating how many .com domains were primarily registered for monetization. This lack of information prompted some short sellers to forecast significant adverse effects on .com domains.
However, Verisign later clarified that its internal analyses revealed that only 2% of its domain portfolio—totaling 171.9 million domains at the time—was used for monetization through parking. As the fourth quarter approaches its end, Verisign has reported no noticeable changes in the rate of deletions among .com domains.
While the suspension of AFD may slightly dampen registration growth and contribute to some deletions, the impact appears to extend beyond .com domains. Notably, several new top-level domains that relied on bulk registrations for monetization are also experiencing challenges due to AFD’s closure. It may even lead some registrars to increase prices, especially if their business models depended partly on parked domain revenue.
In comparing the short sellers’ analysis with Verisign’s findings, it seems that Verisign’s outlook is closer to reality, suggesting that while there are some effects from the AFD closure, they may not be as severe as initially anticipated.
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