Despite making wholesale price cuts of 26 per cent, IE Domain Registry, the company which operates the .ie address space on the internet, saw only a 15 per cent drop in profits to €734,058 for 2006.

In its annual report published today, the registry said that net growth in registration of new domains was 30 per cent, with 22,590 new .ie addresses registered during the year. Revenue from registrations fell only 2 per cent to €2,309,332.

Strong growth has continued into 2007, with 7,213 addresses registered in the first quarter - the most the registry has ever dealt with in a single quarter.

The domain registry cut prices a further 13 per cent in January.

In the report, chief executive David Curtin cautions that there is a small correlation between domain costs and numbers of new registrations as the cost of the domain is small relative to the other costs involved in establishing a website.

Mr Curtin said that it had been a "great year" for the registry and a number of other factors had driven growth.

These include enhancements to its own systems which improved the automated service which was offered to its resellers, the general buoyancy of the economy and wider broadband availability, which meant that more small businesses were starting to trade online.

Approximately 98 per cent of .ie web addresses are sold through the registry's network of resellers.

Due to the improvements in automation, Mr Curtin said that most new registrations are now turned around in a couple of hours.

By the end of 2006, members' funds had doubled on the previous year to €1.54 million. The company's tax bill fell significantly from €116,944 in 2005 to €87,728 in 2006, largely due to capital allowances as a result of its investments in infrastructure.

Earlier this year, US security software company McAfee identified .ie as the second safest top-level internet domain in the world.

Mr Curtin said that this was because all applications are authenticated to ensure the identity of the company or individual is established.

In a joint venture with Austrian registry IPA, the IE Domain Registry has won a five-year contract to operate Ireland's national Enum registry.

This system will enable people to be contacted through a variety of electronic media, provided the caller has their registered landline number.

Enum will launch in Ireland on Thursday and Mr Curtin said that he expected it to be a "slow burner", until the convergence of telecommunications and internet services became more common.