ICANN gears up for Domain Tasting

DomainTools (www.domaintools.com) Internet stats report 98,338,819 active domain and over 311,589,135 deleted domains (more than 3 times the active domain). Thanks to Domain Tasting!

Domain tasting is the practice of a domain name registrant using the 5-day “grace period” at the beginning of the registration of an ICANN-regulated second level domain to test the marketability of the domain. During this period, when a registration must be fully refunded by the domain registry, a cost-benefit analysis is conducted by the registrant on the viability of deriving income from advertisements being placed on the domain’s web site.

Domains that are deemed “successes” and retained in registrant’s portfolio often represent domains that were previously used and have since expired, misspellings of other popular sites, or generic terms that may receive type-in traffic. These domains are usually still active in search engines and other hyperlinks and therefore receive enough traffic such that advertising revenue exceeds the cost of the registration. The registrant may also derive revenue from eventual sale of the domain, at a premium, to a third party.

In a recent move, ICANN recently announced the domain fee ($0.20) payable on all domains regardless of whether they are deleted within the 5 day grace period. This would effectively make the practice of domain tasting unviable.

Google has recently said that their AdSense program will now look for domain names that are repeatedly registered and dropped. They say they will drop these domains (but they don’t mention banning the users) from the AdSense program.

In April 2006, out of 35 million registrations, only a little more than 2 million were permanent or actually purchased. By February 2007, the CEO of GoDaddy reported that of 55.1 million domain names registered, 51.5 million were canceled and refunded just before the 5 day grace period expired and only 3.6 million domain names were actually kept.

Domain tasting should not be confused with domain kiting, which is the process of deleting a domain name during the five-day grace period and immediately re-registering it for another five-day period. This process is repeated any number of times with the end result of having the domain registered without ever actually paying for it.

Domain name front running is the practice whereby a domain name registrar uses insider information to register domains for the purpose of re-selling them or earning revenue via ads placed on the domains landing page. By registering the domains, the registrar locks out other potential registrars from selling the domain to a customer. The registrar typically takes advantage of the 5-day “domain tasting” trial period, where the domain can be locked without payment.

In January 2008 it was reported that Network Solutions uses data collected from their web-based WHOIS search to register every domain that users check for availability.

Popularity: 13% [?]

This entry was posted in Domains. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *