Wednesday, January 30, 2008

First Google then ICANN Halt Domain Tasting

In the mid 90's there was a gold rush on domain names. The practice of Cybersquatting was rampant. I knew of a couple of companies that made some big dollars registering names for web sites that they had no personal use for, but could sell to other parties who did need them for big bucks later on.

Cybersquatting, according to the United States federal law known as the Anticybersquatting Consumer Protection Act, is "registering, trafficking in, or using a domain name with bad-faith intent to profit from the goodwill of a trademark belonging to someone else."

I remember mentioning to someone at a conference that I was going to register my own name (which was available at that time) and by the time I got back to Seattle it had been registered. The company (if it was a company) that owned it wanted thousands of dollars for it.

We've since saturated the domain name market and although the costs to register names has gone down, incidents of cybersquatting are less prevalent.

However, a new game came to town with the advent of Adsense and automation. Companies would take advantage of a five day grace period for paying for domain names and "kite" the names for those five days, drop them and immediately re-register. This made them in effect free domain names.

The practice became known as Domain Tasting.

According to Wikipedia,

Domains that are deemed "successes" and retained in registrant's portfolio often represent domains that were previously used and have since expired, misspellings of other popular sites, or generic terms that may receive type-in traffic. These domains are usually still active in search engines and other hyperlinks and therefore receive enough traffic such that advertising revenue exceeds the cost of the registration. The registrant may also derive revenue from eventual sale of the domain, at a premium, to a third party.

By registering them large quantity, and placing Ads on the pages that people would visit, the companies made big advertising dollars for pages which essentially redirected the user by serving them up ads that looked like new search links.

But not for much longer. Google has taken steps to stop the practice, though it stands to lose millions in advertising dollar by doing so.

ICANN, the Internet Corporation for Assigned Names and Numbers, is following suit.

P.S. Whoever picked up my name eventually let it expire and I registered it last year.

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