Domain Tasting and Kiting

Imagine if you could buy stocks, but have a 5 day grace period to test them for profitability before you had to actually pay for them. What if, at the end of those 5 days, you could decide that you didn’t really want the stock and could return it without having to pay for it, as if you had never owned it. And if you decided you wanted the stock, because it had suddenly tripled in value, you still only had to pay the price from 5 days ago.

Sounds like an investor’s dream, doesn’t it? Well, this is exactly what some Registrars are doing with domain names.

Some Registrars are picking up any domains that they can get their hands on, whether it’s worth something or not. Because they have 5 days before they actually have to pay for the name (VeriSign will refund their registration fee if they delete the domain name within 5 days), they use that time to test whether or not the domain name gets any traffic. If the name proves profitable (i.e. it can make money as a parked PPC page), they keep it. If it not, they delete it.

Some domainers believe domain tasting is the elephant in the industry’s living room; something everyone keeps tip-toeing around, yet no one does anything about. Other don’t see a problem with the practice. Instead, they see it as another part of the free enterprise mindset that the online world so strongly promotes and protects.

Those For and Against Domain Tasting

The chief complaint against domain tasting is that it prevents would be investors or consumers from finding the domain names they want or need. While this may or may not be a valid complaint, those on the other side claim that it’s like the pot calling the kettle black when hearing it from the mouths of domainers. After all, their living depends on their ability to choose and register domains that other people will want—and then try to sell the domain names for inflated prices.

One of the other complaints is that domain tasting drains resources. Some venture that there will eventually be more ‘tasted’ domains registered in a Registry’s database than real domains. This constant addition and deletion of domain names (ones that, for the most part, will never actually become valid registrations) puts a strain on the system, makes it more difficult for Registrars to keep updated records, and confuses the industry as a whole.

Those not opposed to domain tasting tend to agree that the rapid flow of information could cause a few minor problems, but that the system will be able to handle the load. They also point out that as the system continues to develop, so will the means to manage what could today be called an ‘overload’.

Finally, there are those who are worried for the reputation of domainers on a whole. These are the ones who want the ‘cybersquatter’ label, which is often given to anyone who buys and sells domains, erased from the majority view.

Their chief complaint is that domain tasting is often a way to capitalize on trademarked names or typos of those names. Since it is largely an automated system, with a minor amount of human intervention, it’s easy for typos and trademarked names to get mixed in with the millions of domain names being tasted. This sort of ‘bad publicity’, they claim, is the very last thing the domain industry needs.

In their minds, the entire tasting system will soon get swept away in a series of court hearings and legislation as many tasting companies are now in court battles with big companies who are suing for trademark infringement. They’re afraid that innocent domainers, by mere industry association, will get swept along with it. This could conceivably cause hundreds of legitimate domain owners to lose their assets in one swift ruling. “The walls will come crashing down,” they warn, “and all those hiding under the shelters will be crushed.”

Many disagree though. The public opinion, they say, is already cast in stone and fighting for the rights of domainers would be more productive than trying to preserve a ‘good name’ that never existed and never will.

The other side argues back though, stating that these are the same people who believed cybersquatting would never become illegal, and that the first come / first serve mentality would always reign, no matter what the circumstances.

Both sides have equally valid points and both sides are adamant about their opinions.

The Difference between Domain Tasting and Domain Kiting

Domain tasting involves registering a domain and letting it drop if it doesn’t prove valuable within the initial 5 day period after registration. Domain kiting, on the other hand, is when a domain company ‘tastes’ a domain for the standard five days and then drops it only so that a ‘sister’ domain company can pick it up again. Two or three companies do this in a cycle and, in theory, it allows them to hold the domain indefinitely without ever paying for it.

One of the more controversial issues around domain kiting is that only Registrars can effectively engage in the practice. Some Registrars have given their customers the opportunity to taste a domain, but the time it would take for a normal Registrar’s customer to kite a domain (when considering that time is money) would surpass the standard, yearly registration fee.

Why ICANN and Registries Haven’t Taken a Stand

ICANN, the body that governs the domain name system, is very slow to move on anything. It had taken them several years to decide to add a few TLDs to the system; it’ll probably take them even longer to decide whether or not to do something about kiting and tasting. Often, these matters end up taking care of themselves. For example, one of the biggest kiting rings is now being sued by Dell for trademark infringements. In other words, underhanded dealers usually end up hanging themselves if given enough rope.

As for the Registries, like VeriSign, kiting and tasting are not necessarily bad for them. Remember that the Registries still collect the $6 on registrations, whether they’re canceled in five days or not. If you multiply that $6 by millions, you’ve got a sizable chunk of money sitting in a bank account earning interest.
Now many of the domain names being kited or tasted would never have been touched by domainers…so the Registry is ‘holding’ a lot of money that otherwise, they never would have touched.

As of August 2009, a new ICANN policy which charges a fee for excessive returns has curbed the practice of domain tasting.

How Domain Tasters Find Names

When a domain name expires, any Registrar has the opportunity to pick it up again. If there is a lot of demand for the domain name, the Registrar who snatches it up first will often auction it off to several bidding domainers. Domain tasters, on the other hand, try to snag all expiring domain names, keeping only the ones with a steady line of traffic.

Some domainers claim that soon, not a single expiring domain will ever truly become available to the public, especially those domain names that are considered valuable. These desirable domain names are not actually registered until after they’ve proven their worth. Those names that that have no worth are either dropped or deleted and re-registered by a different company, or one affiliated with the original taster (in other words, they kite the domain).

Domain Front Runners

Front running is a term given to domain tasters who collect the information used in whois queries and register names that a user is searching for before the user is able to register the name themselves. We’ll look at front running in more detail in the next section.