Dutch domain name market stable in first half year 2022

International outlook less positive

Europe on the globe, where the Netherlands is colored with the colors of the Dutch flag.

In recent months, the domain name market has remained stable in the Netherlands and elsewhere. Nevertheless, the troubled outlook for the global economy has implications for our industry. So, what's currently happening in the market, and what can we expect from 2022? Broadly speaking, conditions are stable in the Netherlands, but less certain elsewhere.

Dutch market stable after two lively years

Following lively growth in 2020 and 2021, the Dutch domain name market was stable in the early months of this year. The market barely grew in overall terms, with the total number of Dutch-registered domain names increasing by less than 0.1 percent to stand at about ten million. Of those, roughly 6.25 million are .nls. The figures confirm the Dutch market as one of the biggest in the world.

Registrations and cancellations stable at 2019 levels

For the Dutch market, the good news is that registrations remain at, or slightly above, their pre-pandemic level. It seems that the businesses that moved online en masse during lockdown are generally keeping their websites, while other businesses continue to invest in their internet presence.

Line chart showing the development of the .nl domain in the years 2019-2022

Dutch companies look abroad again

Not unexpectedly, the registration of domain names with extensions other than .nl has started to increase again. After two years when international trade was suppressed by the pandemic, Dutch companies are turning their attention to international markets once more. For example, the number of Dutch-registered .com domain names increased by 4 per cent in the space of twelve months. That's double the global percentage. The growth of Dutch-registered domain names using the extensions of neighbouring countries – Germany's .de, France's .fr and Belgium's .be – wasn't far behind. Notably, the European Union's .eu TLD wasn't a beneficiary of the trend. Indeed, the number of Dutch-registered .eu domain names has fallen by 1.5 per cent in the space of a year.

Bar chart showing the growth rate of the .fr, .de, .com, .be, .org, .nl and .eu domain in the period April 2021 - April 2022.

Global developments: are the results posted by big registrars a worry?

What about global trends? Everyone in our industry is now asking how the market will develop as we enter a new, post-pandemic period. The Q1 results posted by the first big registrars and Verisign therefore attracted a lot of attention. The numbers provided a mixed picture. Canadian firm Tucows – Wix.com's domain name supplier – was the post prominent outfit to report feeling the effects of post-covid blues.

Verisign: .com growing more slowly in 2022

One notable item of discouraging market news involved Verisign, the company behind .com. After warning that growth in 2022 wouldn't match the previous year, the company saw its value tumble by 35 per cent. Yet Verisign's profitability is not in doubt, following a further 7 per cent hike in the price of .com registrations this year. And the .com domain continues to grow: the number of registered names increased by a further 2 per cent.

GoDaddy leans on aftermarket sales

Although the world's biggest registrar, GoDaddy, provided much more positive news, the company's numbers should be interpreted cautiously. Income from hosting and domain names was reported under the same heading as earnings from the secondary domain name market. So the result can't be compared directly with the year before. Particularly given that GoDaddy's CEO Aman Bhutani has said that aftermarket sales are an important contributor to the company's results. That raises questions about the profitability of the hundred million-plus domain names and websites managed by GoDaddy. The associated earnings clearly fall short of the company's income from selling thousands of domain names on the secondary market. Results published by fellow registrar Centralnic reveal a similar trend: earnings are up, but the proportion coming from new domain names and websites is down.

Aftermarket vulnerable due to crypto devaluation

Another development affecting the domain name sale and resale markets is the drop in cryptocurrency values. Last year, domain names incorporating cryptocurrency keywords were extremely popular with sellers and traders, but demand has plummeted with currency values. The strongest pointer to the downturn comes from the domain names in the blockchain that are linked to cryptocurrencies and aren't included in the root (.eth domain names). In recent weeks, the .eth domain has lost nearly 80 per cent of its value. Clearly ICANN's warning about the risks associated with domain names in the blockchain were well founded.

Interesting times ahead

In short, after two very strong years, our industry is entering a less certain period. A period in which, for the time being at least, the Netherlands stands out with its stable market and growing appetite for international investment.