As the .eu top-level domain (TLD) celebrates its first anniversary, some experts last week claimed that the actions of domain-name speculators may have scared off potential customers and restricted growth.

Despite high initial interest that saw 700,000 domain names created in the first few hours of the launch day on 7 April 2006, the total number a year later has reached only 2.6 million, with 439,500 in the UK.

Soon after .eu was launched, it was discovered that domain speculators had exploited loopholes in the registration process. They set themselves up as registrars, with the intent of buying up specific names in high demand and selling them on later at a large profit, a process known as warehousing.

The .eu registry Eurid was eventually forced to suspend 74,000 domain names and sue 400 registrars for breach of contract.

Phil Turnbull of web hosting specialist Hostway said the debacle had a detrimental effect on the growth of the domain name.

“It’s unfortunate that what could have been an enormously successful domain name launch was marred by a number of unscrupulous registrars, who seem to have deterred other firms from registering for the domain,” Turnbull said.

But Patrik Lindén of Eurid played down the impact of the fake registrars, adding that the domain has exceeded all expectations.

“About 70 percent of all registered domain names are registered by companies or organisations and we are also starting to see .eu domain names used in advertising,” Lindén said.

Eleanor Bradley, director of operations at .uk registry Nominet, said that although there is a market for a European regional TLD, many firms grabbed a .eu suffix at the outset merely to protect their brand and not to use actively.

“But despite some teething issues with bogus registrars, whichever way you look at it, 2.6 million in one year is significant and the .eu TLD is here to stay,” Bradley added.

Meanwhile, about six months after the .mobi TLD for mobile web sites was opened to the public, registry dotMobi said the total number of registered domains is approaching 500,000.