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Renewed reasons to change names

BY J. CARLTON COLLINS, CPA

Please note: This item is from our archives and was published in 2014. It is provided for historical reference. The content may be out of date and links may no longer function.

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Q: Our two website domain names are coming up for renewal soon, and our current domain-name-hosting company charges a renewal fee of $37.99 per year per domain name. (We use another company for web hosting.) This seems high compared with other advertised domain-name-hosting fees I see, so we are considering switching to another agent. Should we switch? How much should we expect to pay? Which domain-name-hosting company do you recommend? What factors should we consider? What advantages does one hosting company provide over the others? What is involved in switching domain name providers?

A: Most domain-name-hosting companies advertise low first-year rates to attract customers and then charge much higher renewal fees. Because $37.99 seems like a rather high renewal rate, I believe you should consider transferring your domain names to a lower-cost registrar. Presented below are comments that I hope will sufficiently answer all of your questions.

1. Registries. VeriSign owns all .com and .net domain names, and these names are sold (or rented) by registrars (domain-name-hosting companies) such as GoDaddy, Network Solutions, and 1&1. 

2. Understanding registrars. There are currently 1,010 ICANN-accredited domain name registrars worldwide; a complete list of registrars is available at tinyurl.com/85v9xwl. GoDaddy is the top registrar with an estimated 31.5% market share. According to WebHosting.info, the top 10 U.S.-based registrars are those shown in Exhibit 1.

 

Many of the domain-name-hosting companies you see advertised are actually partners (or resellers) that work on behalf of the larger registrars listed above. For example, Name.com, HostGator.com, Namecheap.com, and Rackspace.com are officially eNom resellers, i.e., they sell domain names on behalf of eNom. (You may or may not find these partners listed as ICANN-accredited registrars.) Typically, these smaller registrars sell domain name rentals for far lower prices than their parent registrar, which may explain why you may never have heard of eNom, but you likely have heard of some of its more visible channel partners. It also explains why eNom’s renewal pricing is much higher than its partners’, as eNom seeks to avoid undermining its partner channel. Alternatively, GoDaddy sells domain names directly to consumers and does not support a partner channel, which helps explain why its renewal rates are lower than other top registrars’ renewal rates.     

3. Comparing registrars. Other than price, there is no known technical advantage to buying (or renting) your domain name from one registrar compared with another. However, some registrars bundle additional benefits or services that you may want to consider. For example, Cosmotown and 1&1 offer free WHOIS privacy (an option for hiding your identity and contact information from the public) while Namecheap and GoDaddy charge $2.88 and $9.99 annually, respectively, for this additional service.

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I will add that while I have no documented supporting data for the following statement, I suspect that my domain names registered at the EarthLink registrar (which caters more to business customers) have consistently ranked higher than my domain names registered to GoDaddy (which caters both to businesses and personal customers) in Google searches. Since Google keeps its search ranking algorithm a secret, there is no way of knowing for sure if the registrar or hosting agent is factored into the equation, but for many years I duplicated my accounting software website using two domain names held and hosted by separate registrars, and I often noted that the domain name held and hosted by EarthLink consistently ranked higher than the identical site held and hosted by GoDaddy.

4. Free renewals with web hosting. Some web-hosting companies provide free domain name renewal as part of their hosting plans. A partial list of such companies includes Arvixe (arvixe.com), Tiger Technologies (tigertech.net), Network Solutions (networksolutions.com), Register.com (register.com), iPower (ipower.com), DreamHost (dreamhost.com), and Yahoo! Small Business (tinyurl.com/3njq9). Check with your web-hosting vendor to see whether it includes free domain renewals, and if it does, you probably should transfer your domain name to that company.

5. Timing. Most registrars allow you to transfer a domain name without losing the time left on your previous domain registration rental, but you should check to be sure that any unexpired prior payments will carry forward.

6. Selecting a registrar. Exhibit 2 shows comparisons of renewal pricing for selected popular registrars as of March 2014.

 

* These registrars frequently offer special introductory rates or discounts for both first-year purchases and renewals. For example, GoDaddy periodically calls to offer me 30% savings over the above-listed rates to renew all of my domains and hosting accounts in advance of their expiration dates.

7. Switching. The steps for transferring a domain name from one hosting company to another generally include the following: (Note: The steps will depend on which companies you use for hosting and domain name protection.)

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  • If you have previously protected your domain name, you will need to have it unlocked so you can make changes. This will likely involve a time-sensitive verification email being sent to your registered email address, and you must respond to this verification request.
  • If you have made your domain private, you must also cancel your domain privacy.
  • Obtain an authorization transfer code from your current registrar.
  • Contact your new domain-name-hosting company and provide it with the relevant domain name information and authorization code.
  • Edit your hosted website’s DNS settings to point to the new domain name server.


To help you understand the domain name transfer process (which can be complicated), I transferred one of my Network Solutions-hosted domain names to GoDaddy, and the following is a brief explanation of the steps involved. The process took 35 minutes.

In my initial phone call to Network Solutions (which took approximately 10 minutes), I provided my account number and answered three security questions. The representative offered me a $27 renewal discount as an incentive not to transfer my domain name, but I proceeded with the transfer. She unlocked my domain name and said that my account would remain unlocked for 24 hours. Within three minutes I received an email (sent to my WHOIS authorized email account) containing the transfer authorization code. I then logged into my GoDaddy account (where this particular domain name is hosted) and initiated the transfer by selecting Domains, Transfer Domains. I entered the domain name, selected Go, and then renewed my domain name for an additional five years at $7.99 per year. Within two minutes I received an email from GoDaddy approving my transfer and providing me with a transaction ID and security codes, and requesting that I complete the process by authorizing the transfer. Finally, in my GoDaddy account I navigated to the Authorize Transfer page (shown below) and entered the transaction ID and security codes I received from GoDaddy and the transfer code I received from Network Solutions.

The confirmation page indicated it would take up to seven days to complete the transfer (because the web’s domain name servers are typically updated only once a week). I received official notice of a successful transfer within three days. As a result of this transfer, I will save $150 over the next five years, paying just $7.99 per year instead of $37.99 per year.