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Domain Registration Loophole

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It’s always satisfying to learn something new about an industry, and today brings to light a marketing practice, I never knew existed.

AP explores a loophole with domain registration
, which allows anyone to return a registered domain name within 5 days and get a full refund. This has led to hundreds of thousands of domain speculators and search arbitragers registering domain names, testing which ones do well for type-in traffic, and getting a full refund on any duds.

During the grace period, the entrepreneur puts up a Web page featuring keyword search ads and receives a commission on each ad clickedAddresses likely to generate more than the $6 annual cost of domain name are kept – not a high threshold given how lucrative search advertising is these daysThe rest are thrown back into the pool on the fourth or fifth day, only to be grabbed by another group of domain name tasters.

How many people are actually engaging this practice? Of the domain names registered in 2006, only 2% of them were legitimate with an estimated 1.2 million domain names a day tested by marketers known as "tasters".

Ok, so here’s a question for you

1. Who knew about this loophole?

2. Who’s actively "tasting" domain names?

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