David Canton is a business lawyer and trade-mark agent with a practice focusing on technology issues and technology companies.



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February 25, 2008

Moves on to sour domain tasting

Tags: , , — David Canton @ 8:02 am

For the London Free Press – February 25, 2008

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If you’ve never heard of domain tasting, you’re not alone. To many looking to obtain Internet domain names, however, it’s a serious problem that is finally being addressed.

If you sign up for a new domain name, you are given a five-day grace period. Within this grace period you can cancel the domain name at no cost. This is meant to handle situations where domain name purchasers made a mistake, such as a spelling error.

This grace period has been exploited by people acquiring domain names in bulk. Through the use of software that automatically acquires domain names it is possible to test out large numbers of domain names to determine which ones have the potential to be profitable.

During the five-day grace period, click-through ads are placed on the temporarily acquired domains. If the ads generate sufficient revenue they may keep the domain names. This often occurs if the name is close to a real name, or is a logical guess at a web address. For the vast majority that have no immediate value, the domain names will be canceled within the five day grace period at no cost.

In other cases, the domain name will be allowed to lapse after five days and then be reacquired for an indefinite number of five-day periods. This practice of continually re-registering is known as kiting.

The sheer scale on which domain tasting can occur (as many as 90 per cent of new registrations can be attributed to domain tasting) makes it a problem largely due to its interference with those who want to get legitimate domain names for useful purposes.

After years of complaints, it seems that both Google and ICANN have decided to do something about the practice.

Google responded first by targeting domain tasters’ main source of revenue — advertisements placed on the temporarily registered domain names. Google recently announced it will not allow any Google AdSense ads to appear on domains that are being kited. AdSense allows domain registrants to generate web pages full of ads where no website content yet exists.

Google’s actions will undoubtedly have some impact. In the short term, domain tasters will be able to move to other platforms, unless they follow Google’s example. Some find Google’s decision to restrict the use of AdSense by domain tasters somewhat surprising, as they make money from the practice.

ICANN has looked at several potential methods of discouraging the practice of domain tasting. ICANN recently embraced the option of effectively deleting the grace period. This was accomplished by withdrawing ICANN’s waiver of ICANN’s non-refundable transaction fee to the deletion of names within the grace period.

While the fee is only 20 cents per registration, the scale of registrations should make this approach effective. In January, for example, 47,824,131 domain names were deleted. Ninety-five per cent of these deletes were by just 10 registrars. At $0.20 each, this would have cost over $9 million, significantly curtailing any chances for profit.

After years of complaints, it seems the growing problem of domain tasting may finally be solved.

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