The effect of the non-refundable 'tasting' fee is negligible from the domain taster's perspective

R E L A T E D C O N T E N T

Icann tasting solution a 'partial success'

Refund plan not strong enough, says Coalition Against Domain Name Abuse

Clement James, vnunet.com 30 Jun 2008

The Coalition Against Domain Name Abuse (Cadna) has described Icann's solution to the problem of domain 'tasting' as a "partial success".

Domain name tasting is the process by which registrants obtain a domain name and track its traffic over the course of the five-day Add Grace Period.

If it does not yield enough traffic to make it immediately profitable, the registrant drops the domain name within five days in order to get a refund of the 20 cent registration fee.

The Icann board approved a measure in January to make the 20 cent registration fee non-refundable.

The organisation voted on a further measure in June that would allow registrars refunds only up to 10 per cent of net new registrations or 50 domain names, whichever is greater.

The combined impact is that registrars will only be accountable for the non-refundable 20 cents on deletes beyond the 10 per cent threshold.

However, Cadna believes that it is unlikely that the proposed solution will adequately address domain name tasting.

The results of a Cadna study suggest that a registrant that registers 100,000 domain names would keep 6,600 of them on average.

At $6.20 each, the cost of these domain names would be $40,920. Paired with the 20 cent Icann fee for each of the 93,400 domains that were not kept, the total cost of the domains would be $59,600.

In other words, the taster would have spent $9 per profitable domain name that was identified via tasting and kept beyond the Add Grace Period.

The 20 cents that the registrant wasted on the names that were not worth keeping would be easily covered by the ample profit from the good names they identified through tasting.

The additional new cost per domain name would be $2.80. Since each click is worth 73 cents on average to a 'traffic-squatter' each domain name would need to receive just an additional 3.8 clicks in year one in order to make up the difference from the "inconvenient" Icann fee, the organisation said.

Cadna reckons that before the proposed Icann tariff on all added domains, a name needed to demonstrate that it could deliver 8.5 clicks per year.

With the Icann fee, a name needs to demonstrate that it can deliver 12.3 clicks per year in year one.

With so few paid-search ad clicks needed to break even either before or after Icann's 20 cent solution, the effect of the non-refundable fee is negligible from the domain taster's perspective.

"Unfortunately, it is therefore unlikely that Icann's new registration fee policy will completely eliminate the problem of domain tasting," Cadna said.

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