Domain name cancellation rate slows

Last year, the number of .nl domain names grew by more than 80,000. The main reason was that fewer names were cancelled than had been expected. As well as reflecting a change in the way people view domain names, that welcome development highlights a new economic mood.

Will the internet economy keep growing in 2017? 2016: a good year for .nl
Super bowl

Why cancel?

Not all domain name cancellations are carefully thought through. The recent hacking of the Dutch police is a good example of the pitfalls that await the unwary. People often cancel domain names for financial reasons: the name isn't being used, so there seems no reason to go on paying for it. Asked why they cancelled, people will typically say things such as "the project didn't go ahead," or "we don't use that brand any more."

Good news for the economy

Against that backdrop, a slowdown in cancellations spells good news for the economy. Historical data indicates that growth in the domain name market often heralds an economic upturn. Because, when the economy's doing well, the project does go ahead. Our own research into trends in internet use reveals a similar picture: last year, the number of businesses expecting their on-line turnover and their domain name portfolio to grow was significantly higher than in 2014.

Value of a domain name

Another, less obvious reason why the appetite to cancel has waned is that more people and organisations now recognise the intrinsic value of a domain name. It often costs just a few euros a year to retain a domain name that's worth hundreds on the resale market. In the past, many registrants have been kicking themselves after discovering that a domain name that they cast aside has been reregistered and sold on at a substantial profit. There's now a greater realisation that, if a domain name is no longer needed, the best policy may not be to cancel it, but to put it on the market yourself. Anecdotally, it seems that fewer people are unintentionally letting others cash in on their assets.

Super Bowl

It's also worth noting that the value of a domain name is on the up once more. In recent years, companies have tended to look to the use of hashtags on social media for branding. In 2016, however, many turned their focus back to domain names. Anyone who watched the half-time commercials during the US Super Bowl earlier this month will have seen a good sign of that. For the first time in years, the number of ads containing domain names exceeded the number that referred viewers to Facebook pages or Twitter hashtags.