What is domain name tasting?
Domain name tasting is the practice of registering a domain name and placing pay-per-click ads on it for five days (or less) in an effort to gauge whether the ads will make more than the annual cost of the domain.
If the ads are projected to make more than the cost price of the domain ($6 for a dotcom), the domain is retained. But if it looks likely to make less than that sum over the course of a year, the domain is dropped, with full use made of the five-day "grace period" to avoid incurring a fee.
The five-day grace period was originally introduced to give people a fall-back in case they registered the wrong domain by mistake (a misspelling for example). If returned within five days, there is no charge for a domain.
Business model
Increased sophistication and automation of domain registering systems has made mass-registration and return of domains feasible. The result has been a profit incentive for accredited registrars to pick up and drop domains.
This has led to a vast increase in the number of domains registered and dropped each day. The combined .com and .net monthly report for January, 2007 shows that the top ten registrars engaged in domain tasting accounted for 95% of all deleted .com and .net domain names.
Some argue this is undermining confidence in the domain name system since it becomes difficult, if not impossible, for individuals to register expiring domains.
They also argue that a small number of companies are profiting from the exploitation in a loophole in the domain name registration system and want the rules changed to remove the profit incentive.
An industry has rapidly grown up around the practice, with individuals taking part in mass registration known as "domainers". Domainers argue they run entirely legitimate businesses based around the sale and resale of a common commodity - as happens in many other industries.
What is ICANN's role?
ICANN accredits and monitors both registrars (companies that buy domains) and many registries (such as dotcom, dotnet) through contracts. These contracts define rules and guidelines surrounding the registration of domain names.
It is within ICANN's power to remove or change the five-day grace period, although such a step would only be taken after consultation and agreement across the Internet community. ICANN can also change contracts in order to inhibit activities deemed to damage the security and stability of the domain name system.
The situation is far from clean-cut however. Some argue that the five-day grace period is useful for spotting and removing illegal activity online. And there is concern that by changing the rules to restrict commercial activity, ICANN may be stepping away from its remit to encourage competition across the Internet.
Resources
ICANN has played host to a number of public meetings and workshops on the domain tasting issue. Links to full transcripts of those meeting are given below:
- 27 June 2006: Domain tasting workshop
- 6 December 2006: Domain name marketplace.
- 25 March 2007: How the Marketplace for Expiring Names Has Changed
- 25 March 2007: Domain name secondary market
- 24 June 2007: Domain tasting tutorial
ICANN staff prepared an issues paper on domain tasting in June 2007. You can download it here [pdf].