VeriSign’s Naming Business Health Checkup: Online Ad Network Weakness Hurting Us

For another sign of the times, have a closer look at VeriSign’s Internet naming business and its health during Q408: in its earnings announcement call yesterday. Some numbers on new name registrations in .com and .net “zones”, as troubled times continue for ad-supported domain businesses:

— We processed 6.3 million new domain name registrations during Q408, compared with 7.5 million names during Q407. The decline..reflects the continuation of weakness in names registered for the purpose of participating in online advertising networks as the Earnings Per Click or EPC or domain name holders continues to weaken.
— We expect online advertising will increasingly become a smaller part of our Naming business…currently these names make up 7 percent of the adjusted zone for registered names and .com and .net names….As a result we plan to discontinue the reporting of metrics for online advertising after this quarter.
— New name registrations or traditional names during Q4 were approximately 5.9 million, 12 percent lower than Q407…On a net basis, there was a decline of one million online advertising names.
— Typically, Q1 is our strongest quarter for new name registrations and we expect that this will be the case this year as well, however, given the composition of the expiring name base, we also expect that Q1 will also see the highest number of non-renewals.

As for its continued efforts to sell off the rest of its non-core businesses and focus on Internet infrastructure services, interim CEO Jim Bidzos had this to say about the still-slow process: “We have now sold seven smaller businesses plus the remaining interest of the Jamba joint venture. Since our last earnings conference call, we’ve sold three additional businesses including post paid billing, communications consulting, and the 3united portion of the messaging business.Since beginning the process late in ’07, we’ve now received net proceeds of approximately $300 million from these sales and the sale of our interest in the Jamba joint venture. At this time, we have five businesses remaining for sale, including communications, enterprise security, messaging, and two small businesses, one of which we expect will close shortly.”