Friday, June 3, 2011

Asian Internet by 2015: Good News for Numeric Domains

Business Insider reported this week on predictions that Asia will surpass North America in Internet traffic passing over networks by 2015. 

Asia currently accounts for 5,363 Petabytes per month (2010 figures), whereas North America accounts for 6,998 per month.  By 2015, however, the study conducted by Cisco projects that Asia will account for 24,112, as compared to 22,274 for North America.  The company expects global Internet traffic to grow by 4 times in the next five years, and presumably Asia will account for a larger share of the gain in part because internet penetration is still low there among the population at large, and growing much faster than the already-saturated North American market. 

What does this mean for numeric domains?

Well, if you look at prices for NNNN.com's (4 digit/number .com domains) as reported on this blog, you can see that prices for these domains are nearly double what they were two years ago, and even more for some of the higher priced sales.  This trend should continue as Chinese demand for numeric domains increases, given the popularity of numbers in Chinese culture, and the preference for numbers as opposed to western letter characters in domain names. 

Also, it may mean increased registration and buying pressure for NNNNN.com (5 digit/number) .com domains and other numeric domains.  More than 99% of the 100,000 NNNNN.com domains are currently registered.   But it was not always that way, here are three data points roughly evenly spaced out from the last several years:

February, 2008: 19,000 NNNNN.com domains available.
October, 2009: 9,300 NNNNN.com domains available.  Rate of registration 2/08-10/09: 15/day.
June, 2011: 750 NNNNN.com domains available.  Rate of registration 10/09-6/11: 13/day.

Nearly all of these registrations were made by Chinese domainers.  Of course, this analysis ignores the buyout in 2008 of these domains, which was not sustained.  But I think it makes sense to ignore the buyout in 2008, because it involved mainly western domainers, and did not seem to have an effect on the long-term registration trends for these domains of approximately 13-15/day, which is overwhelmingly due to registration by Chinese domainers.