Domain Tasting - 14th August 2007

The Internet Corporation for Assigned Names and Numbers (ICANN), the quasi-independent organization that oversees domain and registry practices, have launched an investigation into the practice of "domain tasting."

Domain tasting occurs when registrants take advantage of the grace period offered by ICANN when registering new domains in order to test profitability. Registrants have five days to finalize the purchase, and if they decide against it during the Add Grace Period (AGP), they are refunded registration fees.

Within that period, domain tasters will measure the popularity of the site to see if the potential revenue will surpass the yearly registration fee (approximately $6).

Six dollars seems like an innocuous amount in isolation, but when this is manipulated on larger scales, it can have big impacts. For example, a domainer can buy up 10,000 domains, slap AdSense ads on them and monitor their profitability for four days.

If 200 of those made-for-AdSense sites show a positive profitability, the domainer can return the other 9,800 and repeat the process. This can go on, obviously, indefinitely.

It may be safe to say that smaller, less inventive (read: less weasely) business owners don't think in gaming terms. They have an idea for a business, a domain name they like, and then register the site without even realizing there is a grace period to begin with.

But it may have larger implications than just bulk domainers being clever enough to leverage a bureaucratic loophole. Manipulation like this can affect organic rankings in the search results, and most likely has a direct impact on the cost per click of paid advertisements.

And there's where the smaller businesses (i.e., not so much the search engines) have a problem.

ICANN's seems to not like this practice, as it does tend to screw with their numbers (and revenues), but ICANN being the quasi-governmental entity that it is, it has to go through the proper channels before cracking down.

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