Regulations put forward by the government overseer of the registry have turned people off of .cn, causing it to fall from second to fourth on the list of total domain name registrations, according to VeriSign's June 2010 domain report.
It now trails Germany's .de as the second most popular country code top-level domain, or ccTLD.
VeriSign's report looked at the domain registry for the first quarter of 2010. It said ccTLD domain name registrations dropped by 2.9% quarter on quarter, largely because of .cn's decline. Total top level domain names (TLDs), which also include generic or gTLDs such as .com and .net, increased by around 0.6% from the fourth quarter of 2009.
There are two main reasons for the poor showing by .cn. One is companies that sell the names had been offering cheap prices for registration, sometimes as low as 15 cents. After .cn grew in popularity and promotional periods ended, it bumped up renewal and new domain name costs, lowering demand.
The second and more important reason is because of regulations put forward late last year by the China Internet Network Information Center (CNNIC), the government agency run by the Ministry of Industry and Information Technology that oversees the .cn registry.
The rules required new .cn domain name holders to show their business licenses and photo ID to Chinese authorities when registering. The government then said it wanted to see the same information from pre-existing holders. Most domain authorities require just a name, an address, and a phone number.
CNNIC said it was instituting the new rules to crack down on pornography. But most analysts consider it a pretext for Beijing's efforts to ramp up censorship.
The change led millions of .cn domain names to drop off, according to Pingdom.com.
Since the new rules were put into place, many Web users in China have avoided the new regulations by registering domain names abroad. But doing so does little against China's censorship authorities; they simply block overseas sites they find objectionable.
VeriSign said the largest TLDs in terms of base size at the end of the first quarter were .com, .de, .net, .cn, .uk, .org, .info, .nl (Netherlands), .eu, and .ru (Russia).