ICANN Kills Domain Tasting

[jmcc]

In all the talk of new gTLDs, the story about Domain Tasting being killed seems to have been ignored. In the budget for Fiscal Year 2009 passed by ICANN today, there is a provision to apply a transaction fee of $0.20 to every domain deleted in the Add Grace Period over a certain level. The level, the "net new registrations" level is defined in the budget as being the number of new domains less the number of domains deleted in the AGP for a given month. The limit is 10% of the net new registrations or 50 domains, whichever is the greater.

This will shut down most Domain Tasting and perhaps domain kiting. Domain Tasting relies on the exploitation of the Add Grace Period (AGP). The tasters will register or taste domains and delete non-performing domains before they effectively have to pay for them. This move changes the economics of the Domain Tasting process. Looking at the .org figures from 2007, this move will not completely kill Domain Tasting. However as with .org, the imposition of the transaction fee on excessive AGP deletions will seriously curtail the practice. The budget enters into effect on 01/July/2008. It should be interesting to see .com and .net return to a more linear growth and deletion pattern.

There is an unexpected effect in that it will seriously alter the domain valuation system. The artificial scarcity caused by having millions of domains tied up in tasting and kiting has made some domains more valuable and it can be argued that it was at the heart of the LLLL.com craze. But with more domains entering the market, the value of these bubble type domains will drop. The effect may not be immediately apparent but it may also hit composite keyword type domains in .com as well.

Regards...jmcc

 

[Shasta]

......The artificial scarcity caused by having millions of domains tied up in tasting and kiting has made some domains more valuable and it can be argued that it was at the heart of the LLLL.com craze.....
Regards...jmcc

I think that the heart of the LLLL.com craze was the realization the LL.com domains were selling for over $100,000, LLL.com's for over $7,000, L-L.com's for over $2,000, etc... In general the taster's have mainly beein interested in keyword rich domains for parking revenue. IMO short domain collecting is a different niche market.

 

[jmcc]

I think that the heart of the LLLL.com craze was the realization the LL.com domains were selling for over $100,000, LLL.com's for over $7,000, L-L.com's for over $2,000, etc... In general the taster's have mainly beein interested in keyword rich domains for parking revenue. IMO short domain collecting is a different niche market.

Possibly. But I think that the lack of good domains coming back on to the market was a factor in the craze. If there had been a proper new/deletion cycle then the LLLL.com market would have been a lot smaller.

Regards...jmcc

 

[Rob J]

So, how is this going to affect dropcatch auction sites like Snap and Pool? Don't they taste 10's of thousands of domains every day?

 

[jmcc]

So, how is this going to affect dropcatch auction sites like Snap and Pool? Don't they taste 10's of thousands of domains every day?

They will have to concentrate on domains where there are pre-orders and potentially high value domains.

Regards...jmcc

 

[accent]

There was a lot of tasting of LLLL.coms when they were available. I kept records on a small segment (3 premium with W) for a while and it was on the level of 20% of the availables about a year before the buyout. It meant that a buyer did not get a complete picture of what was available, thus (IMHO) reducing sales of LLLLs a bit. The reason I was recording them was to pick up domains that were not purchasable when I first looked.

DYYO.com was the most important information source at the time. Their numbers were held for a few days to allow for tasting. So when DYYO stated there were 50,000 LLLLs unregistered that included, say, 10,000 that were being tasted.

I never have seen an explanation why the tasters were so interested in LLLLs - there were several doing it. Perhaps it was because all LLLL.coms get a trickle of traffic. But then why did they not just taste them all?