The Ethics and Economics of Domain Tasting

You may have heard of the term “domain tasting” but may not know what it actually means. Domain tasting is a tactic that is used by people who make income from online advertising to find profitable domain names.

Domain tasting occurs after a person registers a domain. Domain name registrations come with a grace period. In most situations, a person will let this grace period expire and keep the domain. However, if the purchaser chooses to do so, he or she can cancel the domain during that grace period and get their money back.

A domain taster takes advantage of this situation. During the grace period, the domain taster will check to see how much traffic the domain receives. Once the grace period is almost over, that person will then analyze whether or not keeping the domain name would be profitable. If the domain name is profitable, the domain taster will keep the domain. If not, the domain registration will be canceled.

The domain taster won’t just purchase any domain. A domain is purchased because the person who registers it thinks that there’s a possibility that the domain will receive traffic. The person will then receive revenue from advertisements placed on the site. 

Domain names that may be tasted include domains that are almost identical to the domain names of already popular websites. Domain names misspelling Google, Amazon, Twitter, and Facebook have been the target of this practice. If an internet user accidentally types in that misspelling by mistake, she can be taken to the misspelled domain name and be presented with the advertisements.

Another common example of a domain that may be tasted is the domain for a site that has shut down. When a popular site shuts down, the owner will usually let the domain name registration lapse. However, former visitors to the site may still try to access the site through that domain. In other cases, the shut down site may have several incoming links from other websites. Quite often, these links will stay up on those sites for long periods after the actual site has shut down. It is the hope of the domain taster to take advantage of all that traffic and use it to make a profit.

In other cases, the domain tasted will simply be a generic term that the domain taster believes may be entered into a navigation bar. Whatever the belief regarding a domain tasted is, a determination of whether or not to keep it will be made before the end of the grace period.

The benefit for people who make income from online advertising here is obvious. Instead of investing money in a website that may not get a lot of traffic, a person can taste the domain and make a reasoned analysis on whether or not to keep it. Due to this benefit, domain tasting has become extremely popular in the past few years.

Domain tasting, however, has also become very controversial. Many people believe this use of the grace period amounts to abuse and should be done away with. In most cases, the domain name is canceled before the grace period ends. Domain tasting reached its peak in 2006 when, of the 35 million domain names registered, only 2 million weren’t cancelled before the end of the grace period. 

Certain domain name registrars such as GoDaddy saw this as a big problem. Other registrars took a more relaxed stance on the issue under the assumption that domain tasting actually increases eventual purchases of domains. 

However, those against domain tasting were eventually able to convince ICANN, the institution that manages domain names and IP addresses, to take action. To address the problem, ICANN introduced a 20 cent transaction fee in 2008. In 2009, this fee for canceling before the grace period had ended was raised to several dollars for top level domain names. 

Due to the fact that most domain registrations cost at least several dollars, the amount of domain tasting taking place has reduced dramatically. The number of domain names registered has dropped significantly to near 60,000 per month. Whether or not domain name tasting is ethical, it appears it is no longer as profitable as it once was.

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