Domain Tasting: Hard to Swallow - Technical Changes Increase Profit
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The landscape changed a bit in late 2004. At that time, VeriSign started allowing domain names to go live almost right away rather than having to wait up to 12 hours. Also, traffic on the Internet had increased significantly. Between those two factors, domain tasters could find out more quickly whether a particular domain name yielded a good return on investment. So the modern era of domain tasters could register lots of domain names more quickly, and delete them even faster in the hopes of flying under the radar of registries and registrars.
By this time Google’s AdSense and AdWords programs were in operation, which made domain tasting even more profitable. This let domain tasters keep even more of the domains they had registered than before. More domain names being held onto meant more money in the pockets of VeriSign and other registries, because more domain name registrations went past the grace period and were actually paid for by the registrants. So VeriSign and other registries (and ICANN, for that matter) were a little less inclined to discourage this generation of domain tasters.
But these domain tasters work a little differently. Large scale commercial registrants register domain names based on queries put into search engines, and many of these include a trademark of some kind. At the same time as domain tasting became more popular, so did phishing – con artists setting up web sites designed to look just like another site (usually of some kind of financial institution) in order to lure victims into giving them information which they could use for purposes of identity theft. In response to phishing issues, many firms hired trademark monitoring services, which then found tons of domains that were variants of their clients’ trademarks. Naturally, they assumed that they were phishing sites, at least at first. This is one of the reasons domain tasting is controversial (more on that in a bit).
In any case, there can be little doubt of the profitability of domain tasting these days. For example, some tasters don’t keep their domain names, but sell them. An article in Times Online noted that the “secondary market for domain names, which incorporates both the sale of popular names and the advertising revenues they bring in, is thought to be worth several billion dollars worldwide.” When you consider that the practice entails no risk, it’s no wonder that the number of domain names being sampled on any given day have gone from 100,000 in late 2004 to around four million today. Those numbers come from Jay Westerdal, CEO of consulting firm Name Intelligence Inc.
Next: A Market Consequence? >>
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