Google moves against domain tasting

There has been a lot of talk about Google’s impending move to fight domain tasting. For those in the dark, Wikiepedia defines domaing tasting as:

Domain tasting is the practice of a domain name registrant using the five-day “grace period” at the beginning of the registration of an ICANN-regulated generic top-level domain to test the marketability of the domain. During this period, when a registration must be fully refunded by the domain registry, a cost-benefit analysis is conducted by the registrant on the viability of deriving income from advertisements being placed on the domain’s web site.

Domaing kiting, on the other hand is chain domain tasting:

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.

Now, according to Jay Westerdal of DomainTools, Google intends to stop Domain Tasting in its tracks.

A confidential informant says Google will stop monetizing all domains if they are less then five days old. This potential new policy change by Google could stop all Domain Tasting in its tracks. The Add Grace Period (AGP) is a time period when registrars can delete a domain at no cost, but in this time frame a registrant could register millions of these temporary domains and place Google Adsense for Domains on them. The result is the ability to produce millions of temporary websites that literally generate millions of dollars in income per week for Google.

If you don’t realize what was happening, here is the lowdown. There are companies out there (a lot of them) , that literally taste or kite thousands of domains at a time. Because the Grace period is five days, and tasting/kiting for these companies is absolutely free, any revenue obtained from ads placed on these domains is basically pure profit.

Interestingly, Techcrunch picked up on Jay’s story and commented that there are other potential ad sources for Domain Tasters out there and that Google’s move will not completely close down the practice of Domain Tasting. However, I believe neither Techcrunch nor Westerdal touched on another aspect of this phenomenon.

A lot of tasting is done for the purposes of “tasting” a domain. Although kiting as defined above might be solely used to gain profit from basically free domain names, “tasting” has been conventionally done to actually “taste” a domain and figure out whether it’s worth registering. When you “taste” a thousand domains and find out that 50 are producing revenue that will justify a $7 purchase, you register those 50 and add them to your parked portfolio. This sort of tasting will be severely affected by Google’s move as well, since it will be a lot harder for tasters to deduce domain value once the new rules are in place.

Google’s impending move will also not do anything to stop companies like NetSol from tasting domains for 5 day periods in order to monopolize the domain industry. What’s more, if there are less taste-for-profit players in the game, I am sure more companies might attempt doing what NetSol does in order to gain advantage in the Domain name industry.

We shall have to wait and see how this story develops.

This entry was posted on Friday, January 25th, 2008 at 7:48 pm and is filed under Domain News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.