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     overview

This note considers domain name tasting.

It covers -

• introduction - what is domain name tasting?
• basis - how does it work?
• prevalence - how much tasting, how lucrative?
• issues - trademark infringement, fairness and other concerns

It supplements discussion of the domain name system, registrars, domain name portfolios and online resource identification.

     introduction

Domain name tasting (aka domain kiting) involves opportunistic and large scale registration (and deregistration) of domain names by domain name registrars within a grace period in order to identify whether particular names can be retailed to consumers at premium prices or to generate revenue through monetisation, in particular through a domain name portfolio.

As a practice it is increasingly common, given the cut-throat nature of much of the domain name industry and the weakness or complicity of regulators. It has been defended as a legitimate business practice. It has been attacked as inappropriate exploitation of relationships, with registrars abusing a favoured position, and as something that increases costs and delays for ordinary domain name registrants.

     basis

In the domain name system (DNS) registrants acquire a right to use a domain name, ie an address in cyberspace. That right is limited: it is equivalent to a lease rather than what most people consider as ownership, although much media coverage of domain names refers to their "sale".

Most names are acquired from domain name registrars, agents of the domain name registry for each ccTLD or gTLD. Those registrars (and ISPs, law firms, web designers and others who act for them) are equivalent to retailers, with the registry acting as a wholesaler. Wholesale and retail activity for a particular TLD is usually overseen by a domain name manager, a body such as ICANN or auDA. Rules for that activity vary from TLD to TLD; the dot-au regime for example is stricter - and arguably more effective - than that for the dot-com and dot-net gTLDs.

As intermediaries between each TLD registry and consumers, registrars typically enjoy a short grace period in handling registrations. During that period they are able to register and delete a name without a penalty. Deletion might occur because the registrant on whose behalf they undertook the registration indicated that an error had been made. That error usually involves a typo, for example an extra character or misplaced letter.

Correction through deletion during the grace period means that the registrant is not saddled with a mispelt domain name. Most registries and registrars are highly automated, with electronic payment systems for transactions between those parties, and they usually handle a large number of registrations each day. Some registries have accordingly established automated refund systems for the cancellation by registrars of domain names during the grace period. Others simply accommodate cancellations during that period through a reconciliation of accounts, ie money does not actually move back to the particular registrar.

In discussing internet searching and domain name portfolios this site notes that some users attempt to intuit online resources by guessing a domain name rather than using a search engine, directory, link from a web page or pointer such as an URL published on a business card, t-shirt or back of a bus. Others know the correct domain name but mis-key it, for example add an extra letter or two. Intuition and mis-keying an address may lead the user to an unintended domain name.

Arrival at that address in cyberspace can be commodified, with the visitor -

• encountering advertising for a specific product or service or
• viewing a set of links intended to lead onwards to another site (while meanwhile boosting its search ranking) or
• merely being automatically forwarded to another site, one that might have no relationship with the initial destination

Some mis-keyed names are more common than others. Intuition favours particular mispellings or guesses. Some names - and thus sites - thus attract more traffic than their variants. Those names are commercially more attractive.

Domain name tasting represents an empirical identification of the most favoured names: those that are more likely to be found by accident and indeed are more likely to be found in some searches than other names.

It involves registrars or their associates 'tasting' which names are most likely to be visited by

• automatically registering names
• seeing whether they are visited
• deleting the unvisited or less visited at the end of the grace period

Names for registration by tasters may be generated from a database, using algorithms that predict likely mispellings.

They may also include names that have previously been registered but have either been deliberately abandoned (ie the registrant has chosen not to renew the registration) or accidentally not reregistered (eg the registrant simply forgot to reregister the name or was unaware that renewal was due).

     prevalence?

Figures for the amount of tasting in gTLDs and ccTLDs are problematical.

By mid-2006 it was common to see claims that over 90% of all registration activity in some TLDs (for example dot-org and dot-com) involved tasting.

John Levine commented that

So-called domain tasting is one of the more unpleasant developments in the domain business in the past year. Domain speculators are registering millions of domains without paying for them, in a business model not unlike running a condiment business by visiting every fast food restaurant in town and scooping up all of the ketchup packets.

VeriSign's March 2006 report indicated that although most of the 450 plus ICANN gTLD registrars delete only few thousand domain names per month, seven registrars deleted over one million domain names in that month alone. Dotster for example registered some 946,953 names and deleted 1,920,658 domain names. Competitor Belgiumdomains registered 250,037 names and deleted 7,258,306 whereas GoDaddy registered 9,466,028 names in March and deleted only 141,182.

Those figures should be approached cautiously. GoDaddy, which has vehemently criticised Dotster for sniffing, has been accused of portfolio building.

How lucrative is domain sniffing? The answer to that question is not available. Registrars and TLD managers do not publish comprehensive figures on how much money is made from tasting-related advertising and domain name sales.

     issues

Tasting poses a number of issues for the DNS industry, government regulators and consumers.

Those issues include -

• impact on registry operation
• violation of trademark regimes
• 'repurposing' of registrations
• disquiet about TLD rules and managers
• creation of name scarcity
• conflict of interest

One complaint is that tasting degrades the performance of registry servers, consistent with claims that tasting represents 90% or even 99% of registrations in some TLDs.

Proponents of tasting typically respond that such delays are not substantial and can be addressed through enhancing the servers and software used by registries. That has resulted in rejoinders that tasters should make some financial contribution to such upgrades, as those costs are borne by all registrants.

Another issue is violation of trademarks and anti-squatting regimes, such as the US US Anti-Cybersquatting Consumer Protection Act (ACPA) discussed elsewhere on this site.

In principle it is clear that some tasting breaches those regimes: automated generation of names and temporary renewal of 'lapsed' registrations will inevitably result in some registrations that feature unauthorised use of trademarked words. In practice, although such registration is ethically dubious the use of the grace period means that few of the registrations are online for very long. That inhibits trademark owners seeking to exercise their rights under ACPA, the UDRP or other rights protection mechanisms.

A third issue - one that has attracted most attention from US politicians - is 'repurposing' of existing registrations. It is a problem broader than domain name tasting. It occurs when a registrant chooses not to renew a domain name registration or simply forgets to renew, with another entity then registering the name on expiring of the initial registration period.

People who are familiar with the site (for example because they have bookmarked it or found it through a search engine) or who have expectations about site content on the basis of the name might find that the new registrant has created a site with quite different content.

PIR, operator of the dot-org registry, thus illustrated its concerns about tasting by highlighting a rape crisis centre registration that had been 'rebirthed' as a site vending erotica. The ICANN Security & Stability Advisory Committee (SSAC) June 2006 Renewal Considerations for Domain Name Registrants report (PDF) noted instances where youth group sites had been reregistered to promote "Gute seiten aus dem erotik Internet", perhaps not what you would be expecting from Cub Scout Pack 216.

SSAC cogently notes that

registrants who elect to or unintentionally allow domain name registrations to expire may experience unanticipated consequences.

Online that is a fact of life and arguably TLD managers should not be required to go to extraordinary lengths in protecting registrants from self-inflicted pain.

A more subtle issue is consumer discontent with perceived laxity in rules established by TLD managers such as ICANN. As noted in the following page, some registrars have correctly indicated that tasting is permitted by existing agreements: it might be ethically problematical but it is not a formal breach of those agreements.

Critics of tasting sometimes claim that it denies 'legitimate' users from registering the tasted names. Proponents have responded that registration is typically on a first come, first serve basis and that if someone has registered the name that you want it is simply a matter of finding another name.

More disingenuously, they have claimed that tasting cannot result in a shortage of names available for registration, as tasting occurs only within the grace period, so that a name is only temporarily unavailable.

That claim is disingenous as registrars and portfolio builders, having determined a value for names through tasting may hold onto them beyond the grace period - ie not reverse the registration - in order to gain revenue through 'resale' on the secondary market or merely through pay-per-click advertising. It is also disingenuous as tasting is done automatically and may be cycled: a database registers, deletes, registers, deletes, registers and deletes a registration within a succession of grace periods.

It highlights questions about whose interests are being served. Is the registrar acting on its own behalf or on behalf of its customers? Does it give preferential treatment to its tasting at the expense of customers who do not have a relationship with the registry and do not have the software, hardware and financial capacity to engage in large-scale kiting?

   next page (responses to domain name tasting)