MARINA DEL REY, CA — Apparently fazed by the recent outcry over Network Solutions Inc. “front-running” domain names, the Internet Corporation for Assigned Names and Numbers last week resolved to curtail “domain tasting” by making domain-registration fees non-refundable.Front-running arises from an artifact in the registration process that allows people to register domains that were not purchased immediately after they were searched on a registrar’s website. As NSI employs it, domains that are searched but not purchased immediately are held “in reserve” for four days, during which time the name appears taken when users search for it on other registrars’ sites. Instead of the standard “this name is taken” message, however, users encounter a message indicating the domain name is available exclusively through Network Solutions. If no one buys the domain during the four-day period, NSI returns it to open stock and ICANN refunds the 20-cent registration fee the registrar was charged.
Front-running also can be used by unscrupulous sorts who obtain search data from registrars with the intention of buying researched domains and then reselling them to the original inquirer at a higher price.
The process is allowed under the Add Grace Period (AGP) clause in ICANN’s contract with domain registries. It was designed to ensure registrars didn’t get stuck with fees for domain names users registered in error and generally has been extended to the users themselves.
Front-running is closely related to “domain tasting,” a controversial “try before you buy” registration plan instituted last year by the Internet Corporation for Assigned Names and Numbers. Tasting allows registrants to purchase a domain name, try it out for up to five days and then return it and receive a refund of all fees (ICANN’s and the registrar’s) if the domain does not meet expectations. The practice is popular with “domainers,” or those who monetize undeveloped URLS by circulating traffic through them or buying, selling and trading them for profit.
Tasting has been a serious challenge for the internet community and has grown exponentially since 2004, according to ICANN. In January 2007, the top 10 domain tasters accounted for 95-percent of all deleted dot-com and dot-net domain names, or 45,450,897 domain names out of 47,824,131 total deletes.
Consequently, during a special meeting on January 23rd, ICANN’s board of directors admitted the AGP has not served the purpose for which it was intended and should be discontinued.
“Domain tasting has been an issue for the internet community, and ICANN is offering this proposal as a way to stop tasting,” ICANN President and Chief Executive Officer Dr. Paul Twomey noted. “Charging the ICANN fee as soon as a domain name is registered would close the loophole used by tasters to test a domain name’s profitability for free.
“This idea came from the ICANN community and we think it is a viable solution the Internet community has been seeking,” he added.
The proposal, formalized by a resolution, will be part of the ICANN budget process for the fiscal year starting July 1st, 2008. The early draft version of the budget will be discussed during ICANN’s New Delhi meeting February 10th-15th. Pending approval by registrars representing two-thirds of fees collected, the budget is expected to be finalized by June.
ICANN also considered instituting a mandatory domain-name restocking fee at the registry level, but the idea was discarded as problematic because pricing and imposition of fees for registry services is not within ICANN’s authority.
The day after ICANN announced its intentions, a confidential source reportedly told Domain Tools blogger Jay Westerdal that before the end of February Google will pull the plug on allowing domains that have been registered for fewer than five days to participate in its advertising- and traffic-management program AdSense for Domains.
According to Westerdal, “This potential new policy change by Google could stop all domain tasting in its tracks.”
Westerdal also said the policy change could cost Google millions in annual revenue, based on court documents indicating one of Google’s AdSense for Domains partners generated $3 million in one recent month through domain tasting — and that was after Google’s revenue share.
Westerdal said he expects Yahoo to follow suit soon for similar reasons: An increasing number of civil court cases are naming advertising partners of both search giants as copyright and trademark infringers, and the search engines are worried they may be next in litigants’ sights.
