Is the Web shrinking?

The first documented evidence of the growing number of abandoned domain names on the Internet is proof of something that analysts have said for months – if there was dot-com madness, it is most definitely over.

The Web Server Survey, completed by Bath, England-based Netcraft, looked at Web server software usage on Internet connected computers, and shows that around 130,000 owners dropped their domains over the last three months.

Toronto-based Internet author Rick Broadhead said there are a number of reasons we are seeing this first shift in Internet growth now.

“Many of these names were created during the dot-com boom years and a lot of those sites have disappeared,” he said. “Secondly, there were a lot of people registering names in that period, because people hoped that someone would come knocking on their door and offer them a large sum of money to turn over the domain name. A lot of people also had business ideas that they were developing and they wanted to get the name for when the business went forward. Now, a lot of those ideas are not being pursued.”

And a lot of those domain names were bought and never used. The Canadian Internet Registration Authority (CIRA) will have released about 20,000 expired .ca Internet domain names in mid-January and, following that, will continue to release expired names daily.

CIRA spokesperson Gabriel Ahad said that while the numbers are shrinking, the kind of drop that the Netcraft survey shows is a small percentage decrease.

“What this really means … is that the Internet as a means of communications for people and business is maturing,” he said. “We are seeing owners of .ca Web sites becoming more educated in Web site management practices. In the past, an organization may have registered 10 names when, over time, they realize they only need one or two. Also, the initial frenzy has turned into a sober second thought and that’s a good thing, because as we become more experienced about use of the Internet, we will see a better use of the Internet.”

The survey concludes that the primary reason for the drop is a decrease in the number of registered domain names, as the number of domains not renewed exceeds new registrations. “Domains bought during the rampant domain-name speculation of late 1999 are now coming up for two-year renewal, and many are being abandoned,” reads the survey which was released in December and was made up of responses from 36,276,252 sites. “Over the last three months the number of .com domains has dropped by about 130,000, though earlier quarters this year still saw increases. Domain-name speculation accelerated during 2000, so it will be interesting to see how the number of sites changes during 2002. The introduction of the new domains such as .biz, and increasing Internet development in parts of the world, will counter the abandonment of existing domains.”

The simple explanation, according to Broadhead, is that the market has declined and people are just deciding there is no point to holding onto these names. That being said, he pointed out that a decreasing number of domain names does not mean the Internet is shrinking. Quite to the contrary – it’s growing in leaps and bounds.

“I wouldn’t read too much into this,” he said. “Some people are saying that the Internet is shrinking and I think that is probably overreacting. That’s how the story has been spun, but I wouldn’t characterize it like that. A Web site is different from a Web page, and just because one Web site is shut down, it doesn’t say anything about the Web sites out there that continue to grow in terms of numbers of pages.”

He added that the Internet also continues to grow in terms of traffic and users, so the evidence is pointing in the exact opposite direction that the study suggests.

“The only implication I can see is anyone in the business of selling domain names, well, the demand just isn’t there as much as it used to be,” he said. “The decentralization of the domain name industry means you have all these companies competing for business. That’s meant that prices have fallen and some sites are trying to make it up in volume. That’s tough, and I know it is, because of the number of Spam mails I get trying to sell me a dot name address. Every day I get something, so obviously they are desperate and they are resorting to this mass marketing.”

Gaylen Duncan, president of the Information Technology Association of Canada (ITAC), says he thinks the study is a bellwether for the industry.

“If Internet growth is going to slow down or even retrench, then if you are in the hardware or communications industry, it’s going to have an impact,” he said. “It could be amalgamation, companies going out of business, or simply rationalization. It’s a harbinger of the temperature of the business and it is clear that the temperature is much lower than it was a year ago. Anyone who doesn’t believe they have gone through a terrible year and is just waking up to it by reading this survey is stone-dead.”