ICANN Does Some Domain Taste Testing
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 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.
They put out the following notice over the weekend:
In view of the increase in domain tasting…the GNSO Council recently considered an Issues Report on Domain Tasting and resolved to form an ad hoc group for further fact-finding on the effects of this practice. The ad hoc group has prepared these questions to assist in gathering facts and opinions, while inviting both qualitative and quantitative input.
The fact-finding mission includes some interesting questions. The questionnaire asks: which industries benefit and which ones suffer; whether there is a security and stability issue associated; what are the reasons for the practice.
But more importantly to those in the domain game, the inquiry seeks guidance on just how ICANN should handle the situation. Suggested options are as follows:
A) eliminating the AGP so that domain registration fees are non-refundable between registry and registrar;
B) making the ICANN annual transaction fee (currently 0.20 USD per year) apply to names deleted during the AGP, or to a significant portion of them;
C) imposing registry ‘excess deletion fees’ charged to registrars for disproportionate deletes (for example in .org, PIR registry charges 0.05 USD per deleted domain if more than 90% of domains are deleted in a given time period).
This suggests that something will be done about domain tasting, and that earlier questions merely seek additional justifications. And that will leave a bad taste in the mouths of a few.
But that few will most likely be the ones making a tidy profit by gaming the system.
"If ICANN did away with the five-day grace period on bulk buys only," suggests Susan Coppersmith, Director of Sales for iEntry, Inc., the publisher of WebProNews, "it would possibly help clean up organic search – could actually help the traditional small business owner be found a little easier. I think it would also make the quality of the click better in paid search campaigns."