I'm happy to get a revision done to the report I sent out incorporating these points if that's thought useful. On 17/02/07, Roberto Gaetano <roberto@icann.org> wrote:
I believe this is the message that John sent to the alac public list about the domain name monetization. RG
(didn't ask for explicit permission, but since it was sent to the public list I assume it's OK)
-----Original Message----- From: owner-alac@icann.org [mailto:owner-alac@icann.org] On Behalf Of John L Sent: 21 August 2006 05:50 To: ALAC Subject: [alac] Re: Domain Monetization Background
Thanks for that useful summary. There are a few other points that are worth bringing out:
One is that there is a meaningful difference between domain monetization and domain tasting.
Monetization is a straightforward arbitrage between the cost of domain registrations and the revenue from as much pay-per-click traffic as the domain owner can get from people who visit web sites in the domain. It's a fundamentally sleazy business, since the web sites have no useful content and the way they get the traffic is basically by tricking people, either via typos or recently expired domains. But it's not the only sleazy thing that people do with domains, and it is not at all obvious to me why ICANN should do something special about this particular flavor of sleaze. If registrars are warehousing domains in violation of sections 3.7.4 and 3.7.9 of the registar agreement, I suppose that ICANN should slap their wrists, but that's trivial to circumvent by creating a nominally separate customer to hold the domains.
If we agree that this is a bad idea, it would be much more effective to persuade Google and Overture to stop paying for clicks on pages with no content, thereby dealing with a problem that is not limited to typo and expired domains. We've seen click arbitrage, people buying Google ads to drive traffic to pages that are simply other Google ads.
Domain tasting, on the other hand, uses the five day add grace period to register domains without paying for them. It stops being arbitrage and instead is somewhere between larceny and extortion, because the registration cost is zero. As many people, most eloquently Bob Parsons, have noted, it's exploiting a loophole that shouldn't be there in the first place. There was a great deal of debate both in the ICANN community and on the ICANN board about the deletion grace period, but none at all about add grace which was apparently tossed into the package by an ICANN staffer without asking anyone. So says Karl Auerbach, who was on the board at the time, and I haven't seen anything to the contrary from any other board member.
The usual explanation of domain tasting says that the registrars register millions of domains, watch the traffic, and then after 4.9 days they delete the ones that don't seem likely to make back the six bucks. I wouldn't be surprised if they just delete them all and then reregister what they can a few minutes later. The domains are all nearly worthless, so why take the risk of paying anything for them?
The add grace period is just a mistake. The problem it purports to solve is not and never was an important one. If you let an important domain expire, you risk losing the entire investment made in that domain over many years. But if you register a domain by mistake, the most you risk is the ten or twenty bucks you paid to register it.
Finally, it was completely predictable that people would abuse the ability to register domains for free. Back in the pre-ICANN days you registered a domain by sending mail to NSI, they sent back the confirmation, then you had several weeks to send them a check before they deleted the domain for non-payment. Pay per click hadn't been invented yet, so the abuse at that point was to squat on domains with interesting looking names and try to sell them before they were deleted.
R's, John
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