Verisign (NASDAQ:VRSN) just released some numbers which reveal the state of the Internet domain industry. The number of total domain names globally grew to more than 225 million by the end of 2011, up 10% year-over-year.  Verisign, which is the exclusive registrar for .com and .net domains, had more than 50% of the market, with around 113.8 million registered domains, an increase of 8% year-over-year.
Verisign competes with other domain name registry providers like NeuStar, Employ Media, and Afilias to win new and maintain existing registry rights. Its .com and .net domain registration business accounts for nearly 90% of its total value.
We expect Verisign’s total .com and .net registered domains to grow to more than 120 million by the end of 2012. However, despite the growth, we expect a marginal decline in its market share as the overall domain market grows faster and customers increasingly prefer other top level domains.
Verisign could also stand to generate some additional revenue from new gTLDs (custom domains like .google and .apple) by acting as the registry back-end provider for applicants. The revenue from its custom gTLD registrar business will be much less compared to revenue from its core business though, with a marginal impact on its price estimate.
We currently have a $39 Trefis price estimate for Verisign, which stands nearly 5% above its market price.Notes: