Domain name registration is one of the most vital aspects to getting a website on the Internet. A domain name registrar is a business accredited by a generic top-level domain (gTLD) registry or country-code top-level domain (ccTLD) registry to reserve specific Internet names or addresses while complying with federal laws regarding registration. In short, the domain name registrar reserves the name and legally sells it to the public.
History of Domain Name Registration
Until 1999, there was a monopoly in the domain name registration business which was held by Network Solutions (NSI). This company was the first in the market and held all the competitive advantage including exclusive rights to .com, .net and .org extensions. Around the end of the 20th century, other domain name registries began to form like NetNames. With the two companies in competition, the retail model of the industry began to emerge through direct competition.
Finally, in October 1998 the United States Department of Commerce amended the contract with NSI as a result of increasing pressure from the domain name registration industry. This amendment required the creation of a shared registration system that allowed multiple registrars to access the database. Therefore, the system known today was built and went live on November 30th, 1999 with the supervision of the Internet Corporation for Assigned Names and Numbers (ICANN).
Registrar and Registry Database Management
Domain registration information is managed by the registries which contract through domain registrars who provide this information to the public. Therefore, the registrar that a user selects is known as the designated registrar. As a result, only the designated registrar is able to modify information about that specific domain in the registry. One common occurrence is the transfer of domain names from one registrar to another. These must follow specific policies.
Furthermore, when a registrar registers a .com domain extension, the business must pay $7.34 to VeriSign who is the registry operator for all .com’s. The registrar is also subject to a small fee of $0.18 annually for administration of the name. The money is due directly to ICANN. Therefore, registrars price their products to cover the cost of both fees. For new companies attempting to enter this industry, the barriers of entry are now extremely high.
The majority of resellers also give affiliates the ability to provide users with registration. As of 2011, the cost of registration from either a reseller or directly from the registrar is approximately $7.50 per year to $35 per year depending on the name. In many instances, registrars offer free domains as long as it is paired with web hosting services.
The maximum registration period for a single domain name is 10 years. Many registrars offer a period of up to 100 years but this is simply accomplished through the registrar renewing the registration every 10 years for the customer. This 100 year registration would not be in the registry database.
The DNS Servers
Once a domain name is registered, a set of Start of Authority or SOA records are recorded which indicate the IP address of the DNS servers to confirm they are the authoritative body for the domain. This does not provide specific domain data, only a point of reference. The registration does not automatically require the change of DNS servers. The majority of registrars provide DNS hosting as a service free of charge. However, without DNS servers the registration is useless.
Transferring a Domain Name
As previously stated, the domain name transfer process involves changing the registrar of a domain to another. ICANN has identified a specific procedure that must be followed by all registrars.
First, the user must confirm the listed WHOIS information is correct, specifically the email address. Second, the user will be sent an authentication code from the previous registrar who removes holds that are on the domain. If the WHOIS information is not correct and was recently updated, the user must wait 12-24 hours prior to proceeding. This allows for the propagation of the updated information.
Second, the user must communicate with the new registrar informing them that he wishes to transfer for the domain name to that service. The user is required to supply the new registrar with the authentication code passed from the old registrar. This is to ensure the individual transferring the site is the actual owner of the site.
Third, the new registrar must acquire authorization from the administrative contact of the name holder. The transfer may only move forward once confirmation is granted that the transfer was received by the new registrar. The authorization is made by the Standard Form of Authorization which is sent via email to those listed in the WHOIS database. The name holder must then confirm receipt of this form followed by the electronic transfer of the name.
Fourth, the old registrar is required to contact the domain name holder to authenticate the transfer. In some instances, the domain name holder must return online management tools given to them through their monthly package. This will help expedite the domain name transfer to the new registrar.
Fifth, the old registrar will release the domain name by passing the authority to the new registrar. Finally, the new registrar will notify the user that the transfer was completed. In many cases, the new registrar copies the domain name server information and all content on the website so every aspect continues to function as normal. Once the process is complete, the new registrar is the authority of the domain name.
Although this appears to be a lengthy process with many rules, in actuality, these steps occur in a matter of 12 to 24 hours. However, if any discrepancies are found, the process can take up to five days. Unfortunately, many registrars will delay the transfer as long as possible. Once this is complete the domain cannot be transferred to another registrar for 60 days.
Domain Name Transfer Tips
It is never recommended that you transfer a domain name prior to expiration. Since the transfer can legally take up to 14 days, the domain can expire within that window. The result could be a loss in the domain name registration accompanied by a failure to transfer. To avoid this occurrence, users are advised to transfer the name well before expiration or renew the address prior to transfer.
If the domain name does in fact expire, acquiring it could be difficult, expensive and time consuming. Following expiration, the status of the domain name goes through a variety of management phases for many months resulting in digital entity being unavailable for a long period of time.
Domain Drop Catching
Drop catching is the practice of attempting to quickly register a specific domain name for a customer if it becomes available. This practice is catching a dropped when it expires due to the owner not wishing to renew or not renewing in time. Surprisingly, despite warnings of the expiration of a domain, many owners do not take the time to renew their domain and lose it.
A Questionable Domain Registration Practice
A domain drop registrar is one that registers Internet domain names immediately after they expire which cause them to be deleted from the domain name registry. To accomplish this task, drop registrars use automated software that is capable of sending up to 250 simultaneous requests to register the name first. Since this is considered abuse in the eyes of ICANN, in conjunction with VeriSign the two have limited the number of simultaneous requests to 250.
Domain Name Transferring Scams
Domain slamming is the largest type of transfer scam and is comprised of registrars using viral marketing , VeriSign services, and the Domain Registry of America to deceive customers into switching from their registrar to this new company. This can result in being transferred to another company that is more expensive or even a loss of the domain name.
Rankings of Registrars
Several online organizations publish ranked lists of domain registrars with the exact number of domain names registered at each company. The lists differ with regards to which top-level domains are used, whether the data is absolute and how often the registrars are updated. However, the lists are similar in that they all use the maximum sixteen gTLD’s that have existed since December 2009.
The published reports are comprised of a plethora of information. For instance, monthly (with a three day delay) reports developed by the top sixteen registries. These reports catalog the exact number of domains registered as per ICANN-accredited registrars. Also released is a monthly (three day delay) list of registrars by volume of customers.
Furthermore, weekly information is circulated which provides rankings and total domains per registrar. This encompasses .com, .net, .info, .biz and .us in the totals. This information is derived from associated name servers and IP address under specific registrars as opposed to using the WHOIS database. This method of data collection causes the reported numbers to be lower than the sites.
Additionally, yearly data is distributed including .com, .info, .biz, .us and .net. This metric cites daily changes as their basis for yearly reporting. Unfortunately this has proven to be the least accurate method of the bunch due to the daily fluctuation of numbers.
Although there are a number of registrars for which to choose, the top ten according to ICANN (based on number of registrants) include:
• Go Daddy
• Network Solutions
• Schlund & Partner
• Melbourne IT
• Wild West Domains
As the largest domain registrar and web hosting provider in the world, Go Daddy currently maintains almost 32 percent of the global market share. Based out of the United States, Go Daddy holds 38.5 million domains and continues to show a significant increase, even over the past few months.
The next closest domain name registrar on the list is Enom which preservers 8.5 percent of the marketplace. Also headquartered in the United States, Enom manages over 10 million total domain names with continued growth. At only 2 percent less than Enom, Tucows sustains 6.5 percent global market share. Started in Canada, Tucows has administered domain name services to almost 8 million customers and is showing an explosion of growth.
The next registrar on the list is Network Solutions which has conserved 4.3 percent market share equaling 5.2 million domain names. Network Solutions was founded in the United States.
Founded in Australia, Melbourne IT retains 3.4 percent of the global marketplace and 4.1 million total domains.
Wild West Domains is the seventh largest registrar with 2.7 percent of the market and 3.3 million domains.
Moniker is the eighth largest registrar maintaining 2.4 percent of the market and 2.8 million total domains across the globe. Unfortunately, Moniker has plateaued and is beginning to decrease with the number of total domains. In the week between February 28th and March 7th, the company has lost almost 10,000 domain names. This number is quite significant for a smaller registrar.
ResellerClub.com holds approximately 2.2 percent of the market consisting of almost 2.7 million total domains. Due to its significant growth over the past month, ResellerClub.com has the potential to surpass Moniker in the rankings.
Finally, the infamous Register.com preserves just under 2 percent market share with 2.3 million total domains. After an initial strong growth at the beginning of 2011, Register.com has plateaued since February 28th. This does not necessarily indicate a negative trend, it is simply neutral.
Domain name registration is one of the most competitive industries in the digital world, aside from web hosting. Each day, new registrars are popping up on the Internet and fighting for your business. To differentiate, many registrars are also full-service web hosting providers that offer a plethora of services. This retains customers by allowing them to have the best of both worlds in a single place.
The barriers to enter this industry are quite high with companies like Go Daddy expanding on a daily basis. The direction the trend appears to be heading in is toward a few large registrars that dominate the market. Although there will be less choices, the price is sure to drop to ensure competing businesses.