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Domain Tasting

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Domain tasting is the practice of a domain name registrant using the five-day “grace period” (the Add Grace Period or AGP) at the beginning of the registration of an ICANN-regulated second-level domain to test the marketability of the domain. During this period, when a registration must be fully refunded by the domain name registry, a cost-benefit analysis is conducted by the registrant on the viability of deriving income from advertisements being placed on the domain’s website.

Domains that are deemed “successes” and retained in a registrant’s portfolio often represent domains that were previously used and have since expired, misspellings of other popular sites, or generic terms that may receive type-in traffic. These domains are usually still active in search engines and other hyperlinks and therefore receive enough traffic such that advertising revenue exceeds the cost of the registration. The registrant may also derive revenue from eventual sale of the domain, at a premium, to a third party.

Domain tasting was successful and used widely because it was offerred for free, or nearly free, thereby allowing domainers to test out any domain name with little to no risk prior to purchase.

In January 2008, ICANN proposed several possible solutions, including that the exemption on transaction costs (US$ 0.20) during the five-day grace period be abandoned, which would effectively make the practice of domain tasting not viable. The ICANN operating plan and budget for Fiscal Year 2009 included a section intended to deal with the problem of Domain tasting. The transaction fee of $0.20 will be applied to domains deleted in the Add Grace Period where the number of such domains exceeds 10% of the net new registrations or 50 domains, whichever is greater. The “net new registrations” is defined as the number of new registrations less the number of domains deleted in the Add Grace Period. The ICANN operating plan and budget was approved at the ICANN board meeting in Paris, France on 26 June 2008.

Starting in April 2009, many top level domains (TLDs) began transitioning from the $0.20 fee for excess domains deleted to implementing a policy resulting in a fee equal to registering the domain, generally several dollars in cost.

ICANN reported on August, 12 2009, that prior to implementing excess domain deletion charges, the peak month for domain tastings was over 15 million domain names. After the $0.20 fee was implemented, this dropped to around 2 million domain names per month. As a result of the further increase in charges for excess domain deletions, implemented starting April 2009, the number of domain tastings dropped to below 60 thousand per month.

Domain tasting still exists, but only in limited fashion and requires a non-refundable fee. See Dynadot for details on their grace period deletion.

Domain tasting should not be confused with domain kiting.

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