End of Tasting? ICANN Fee rule change...

[Callmoney]

ICANN’s recent fee rule changed but , IMHO it will not stop domain tasting.

An excerpt from DomainNameWire :

Domain Tasting. ICANN’s change will stem but not eliminate domain tasting. Even with the 20 cent fee it can still be profitable. CADNA ran some (errant) numbers that sort of prove the point:

According to the results of the CADNA study, 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 (AGP).

I’m not sure if the guys at CADNA have kept up with the domain industry lately, but you can’t get domain names for $6.20 anymore. The wholesale price of a .com is $6.42 plus the $.20 fee, making it $6.62. (That price increases again later this year.) So that makes it $6.62 times 6,600 or $43,692. Also, the 20 cent fee will only apply to domains above the 10% threshold.

But CADNA’s point, that tasting will be more expensive but still profitable if done smartly, is correct.
A bigger detriment to mass domain name tasters is the falling value of parked domain names and trademark lawsuits.

 

[Peter]

The potential is indeed still there to make profitfrom tasting but what you will have now is the RISK that your % of domains making money is lower than expected massively increasing costs.

Now many will wonder if the risk is worth it.

 

[Domagon]

Exactly...

Domain tasting is all about doing large volume at virtually zero cost, including the ability to retain them indefinitely (domain kiting) for basically free by cycling them through multiple registrars.

The $0.20 fee, while seemingly small, substantially changes the tasting financial dynamic - just the fee alone equates to $200K per million domains tasted.

That cost alone wouldn't be a problem, if tasters could maintain the yields of the past, but I'd suspect much of the productive domains have been grabbed up already leaving little left worth tasting, let alone keeping.

Ron

 

[WORDSWORTH]

The potential is indeed still there to make profitfrom tasting but what you will have now is the RISK that your % of domains making money is lower than expected massively increasing costs.

Now many will wonder if the risk is worth it.

Or they will get smart and target only the likely traffic and revenue names by analyzing the metrics. That might tip the balance in their favour if they were keeping a higher % of names.

Matt.

 

[jmcc]

Or they will get smart and target only the likely traffic and revenue names by analyzing the metrics. That might tip the balance in their favour if they were keeping a higher % of names.

Well the days of hoovering up most of the dropped domains in com/net are over. The domain tasters may have to get a lot smarter. Inevitably they will miss a lot of domains and this should be a bit of a boost to the domainer industry. The zonefiles for the next few months should be very interesting. When PIR introduced the restocking fee for .org last year, it almost killed domain tasting overnight. The taster nameservers stood out due to the complete lack of activity after the fee was introducted. Prior to that they had been hoovering a lot of the .org drop.

Regards...jmcc

 

[Kate]

That could be good news if the tasters are removed from the equation.
Back in 2005 I could still catch drops manually :p

 

[jmcc]

That could be good news if the tasters are removed from the equation.
Back in 2005 I could still catch drops manually :p

Domain Tasters will not be completely eradicated. They will still be allowed to taste but the numbers will be highly restricted. It should change the dynamics of the situation somewhat.

Regards...jmcc

 

[dax44]

very good news - now I will have to think about what I register