Domain tasters … they are hungry09/23/2011
If you find a good domain name, buy it immediately. Special companies buy your searched domain if they can make a buck. The practice is called domain name front running. Never research possible online brands and domain name purchases with a search engine or Internet domain registrar because these entities might sell your clickstream data to domain tasters or domain kiters. The practice is fairly widespread.
Here is how it works. Tasters use the five-day "grace period" (the Add Grace Period or AGP) at the beginning of the registration of an ICANN-regulated second-level domain to test and measure the profitability of domaining. Domaining is the practice of monetizing and reselling domains. The primary monetization method is Google AdSense. If the domain tests well the taster purchases the domain and then offers it for sale in the after-market or keeps it because it generates a small amount of advertising revenue. With enough domains, a domainer can make millions.
In April 2006, 51.2 million domain names were refunded. In 2008, Network Solutions was accused of a tasting technique called domain name front running: a way of holding the domain within a registrar so that it could not be purchased elsewhere. By 2009 the practice of tasting was out of control.
In January 2009, a $0.20 fee was implemented for dropping a domain during the AGP. Three months later, many top level domains moved to steeper fees for dropping. However, some did not and still allow tasting. Instituting fees decreased the practice of tasting to less than 100,000 a month (the current estimate). Only the registrars know the real numbers.
Some tasters kite domains. Domain kiting is the process of deleting a domain name during the five-day grace period and then immediately re-registering the domain for another five days. The process can be repeated a number of times resulting in the domain being registered without paying the full fee.
In the modern tasting era a taster can tie up a domain name, using data purchased from the registrar or ISP clickstream or 404 data for 10-20 days for less than a buck. During this small time period the kiter will offer the domain for sale, usually $500-$3,000. Consumers and businesses who had been conducting domain research will often pay when their favorate names are suddenly taken. The result is huge profits for the tasters. This is a numbers game. In 2011 there are only a handful of large tasters. They operate freely within smaller registrars who turn a blind eye to the practice to increase the number of registrations secured and renewed.
Reverse tasting is done by registrars who change the DNS nameservers on domains that enter the expiration or grace period (if you’ve ever gone past your expiration or renewal date your domain may have been reverse tasted). Domains often resolve for 30 days after expiration. In this practice the registrar or parking services determines which domains have traffic before they are actually released for resale. The golden domains are immediately purchased or pre-registered and never hit the true marketplace.
I could keep writing on this topic but will spare you because I’ve made my point. The underbelly of the interactive world is a rough and tumble place where greed rules. If you find a good domain name, buy it. If you’re not going do so immediately, caveat emptor.
Two of my favorite places to research brands and domains include Domains Bot: www.domainsbot.com and the US Patient and Trademark Office: www.uspto.gov. In our experience, we have found these sites to be safe.