Domain blogs have been buzzing about Google and ICANN’s recent move to “kill domain tasting”. Upon a closer look Domain Name News felt that initial reports were largely exaggerated .
Naturally that exaggeration perpetuated through out the web with a myriad of other bloggers like Jay, Sahar, Brett, Elliot, John Levine and even ZDnet and TechCrunch picking up the story and discussing this topic.
First let’s look at Google.
We followed up with Google to see exactly what they were trying to stop and maybe get some more insight in to their reasoning. Brandon McCormick who was mentioned in some of these articles was our first point of contact and he passed us on to PR rep Daniel Rubin at Google.
In our first email with Daniel, Domain Name News inquired : “It sounds [to me] like the information published is saying that any domain younger than 5 days will not receive any advertising from the Google Adsense for Domains feed. Is this correct?”
Daniel responded: “To answer your question, this does not affect domains that are less than five days old. We have long discouraged domain kiting as a practice. In order to more effectively deter it, we will monitor domains that are added and dropped during the grace period. We will no longer serve ads to domains we have determined to be used for kiting. We believe that this policy will have a positive impact for users and domain purchasers across the web.”
It seems clear based on this email that Google is actually tracking domains that are being kited and are only really trying to prevent this practice and not specifically tasting. Google may be worried about specific cases where domain kiters were being sued by trademark complainants as Brett mentioned in his blog post.
As a follow up and to clarify we asked: “When you say “domain kiting”, you are referring to domains that are registered time and again, but each time no longer than the 5 day grace period? ”
Daniel responded: “Yes, we are referring to domains that are registered time and again.”
Much of the exaggeration in these posts seems to center around terminology. Brett Fausett even mentioned he was corrected by Jay Westerdal that the majority of tasters are actually kiting the domains. It seems important to DomainNameNews then to get the wording right. There is an important difference between kiting and tasting. From Wikipedia :
Domain tasting should not be confused with domain kiting, which is the process of deleting a domain name during the five-day grace period and immediately re-registering it for another five-day period. This process is repeated any number of times with the end result of having the domain registered without ever actually paying for it.
Domain tasting operations register bulk batches of domain names and keep the domain name that they believe will make them a return and delete the rest. Often times the taster will use a search company to place ads on the domain for that 5 day period in order to assess whether a domain name is worth keeping. Currently if the domain is deleted within the 5 day window there is no fee involved. This led to the abusive practice known as domain kiting. The kiter would register a bulk list of domains and keep them for the 5 day period and then delete and re-register the domain for another 5 day period, never paying for the domain or a fee. The practice does tie up large sums of money, as the registry requires registrars to prepay for registering domains.
Google doesn’t appear to be concerned with tasting but rather kiting. Even though many companies rely on Google to monetize domains, the companies that participate in domain tasting also have the resources, statistics and expertise to know when a domain is worth keeping. Some do not even need to monetize through Google to judge if a domain is worth keeping. Many can judge what domains to keep largely based on the traffic alone. Even if Google was preventing them from monetizing during this 5 day window, domain tasting will still occur. The experienced companies know what domains will make money and can still buy based on traffic numbers and estimated returns.
Shortly after the news hit about Google stopping kiting, the ICANN board published their decision on a vote to change the fee structure on domains. This was read as another attempt to stop tasting. On closer inspection though, it would seem that their efforts would be similar to Google’s efforts and merely a way to stop kiting and not necessarily to stop tasting. Tasters would incur a fee for every domain tasted but this likely will not deter them entirely.
“The Board resolves (2008.01.04) to encourage ICANN’s budgetary process to include fees for all domains added, including domains added during the AGP, and encourages community discussion involved in developing the ICANN budget, subject to both Board approval and registrar approval of this fee.” – Preliminary Report for the Special Meeting of the ICANN Board of Directors
ICANN fees are currently not levied on domains that are ran through the
RGP AGP loophole that domain tasting and kiting operations use. The new fee should stop kiting of domains outright since kiting relies on never paying anything for a domain name. The impact on domain tasting, however, likely will not be as severe.
Many companies participating in domain tasting have registrar accreditations that give them the lowest possible price. However other participants have also been able to taste domains at registrars where they are paying per domain fees for tasting domains already. If participants are able to afford the cost of this fee and still participate in tasting, adding this new fee will not likely kill domain tasting. Rather, the lists of domains tasters run will be more thoroughly reviewed before tasting and the keep rate may change dramatically. Essentially, the cost of tasting has increased which will slow down these operations.
Domain kiting is now dead (as is NSI Front Running operation). There is no longer any way to register and drop a domain without incurring a fee. Tasting operations now have a higher cost to operate, but they have not been stopped. The ability to still make a buck off of domains seems to be alive and well.
UPDATE : A well known domainer also pointed out that the ICANN fee and Google’s efforts will not prevent tasting of expiring domains. At roughly 20,000 expiring domains coming through daily, the total ICANN fees if someone picked them all up would be small in comparison to the amounts that are being spent currently to acquire these premium generic domains. A registrar who wanted to grab them all up and run them through a tasting operation would not feel a significant pinch in their pocketbook by this fee. Registrars with multiple connections are in a great position to do this and outfits like Enom/NameJet and SnapNames are in an even better position as they can offset the tasting by auctioning off some of the domains.