ICANN's 'Tasting' Solution Termed Partial Success

The Coalition Against Domain Name Abuse (CADNA), a coalition comprised of 11 globally recognized brand-name companies, says it recognizes ICANN's solution to the problem of domain "tasting" as a partial success.

ICANN recently put forth a proposal to address tasting due in large part to CADNA's championing of this issue and because of objective research and analysis of the proposed solutions conducted by the coalition. Unfortunately, it is unlikely that the proposed solution will adequately address domain name tasting.

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 (AGP). 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.

In January, the ICANN board approved a measure to make the 20-cent registration fee non-refundable. In June, ICANN voted on a further measure that would only allow registrars refunds up to 10 percent of net new registrations or fifty 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 percent threshold, CADNA says.

CADNA says that since 2006, it has been the galvanizing voice on the issue of tasting. CADNA says it has worked tirelessly to raise awareness about tasting as the newest form of domain name monetization and has rallied support among businesses, lawmakers, and members of the media to pressure ICANN into taking more immediate action.

According to VeriSign's June 2007 Domain Industry Brief, $1.46 was the average amount paid per advertising click for the first quarter of 2007. Domain name speculators that place sponsored ads on their websites typically earn half of this amount per click.

CADNA's 2007 drop-catching study uncovered that 6.6 percent of dot-COM domains were registered immediately after post-expiration deletion and kept throughout the timeframe of the study. In other words, 6.6 percent of names were quickly deemed worthy of registration and development. By the end of the study, the percentage of names that were ultimately kept climbed to 25 percent, but that took sifting into account as some names were kited -- the practice of repeatedly tasting a domain. The 6.6 percent of the sample is the subset of names that immediately proved their value.

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 AGP.

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, CADNA says. 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, CADNA adds.

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Forum: Curbing International Domain Name Abuses

This past Thursday, the Coalition Against Domain Name Abuse (CADNA) held its London Online Brand Abuses and Internet Governance Education Forum.

Broad in its geographical scope, the forum welcomed companies from the US, UK, Belgium, Netherlands and Switzerland, with half of the attendees representing Global 500 companies, according to an announcement of the event.

These attendees came together because of concerns over issues such as online brand dilution and the often-ineffective governance of ICANN. This was the first of two international Online Brand Abuses & Internet Governance Education Forums to be hosted by CADNA, both aimed at
creating a global network of brand owners in order to share the latest in proactive, reactive and preventative domain name strategies.

there are over 1.4 billion Internet users, and online advertising is projected to grow to over $80 billion in the next 3 years. The Internet makes it easy for brands to move into new markets, but unfortunately criminals enjoy the same perks- inexpensive and easy access to services and
consumers. This forum brought together brands from across the globe to share collective knowledge, experiences and strategies for combating brand infringement, harmful diversion, phishing and other online abuses such as counterfeiting. With the high margins posted by online criminals--many cybersquatted domains that are simply used to post sponsored advertisements produce $10,000 per year and cost just $10 to maintain--it is clear that this form of online abuse needs attention. CADNA forums open avenues for communication and cooperation between brand owners so that they can have a collective voice with which to effectively protest these practices.

The keynote speaker at this CADNA-hosted event was Jonathan Zittrain, chair in Internet Governance and Regulation at Oxford University, principal of the Oxford Internet Institute and a Berkman Visiting Professor for Entrepreneurial Legal Studies at Harvard Law School, where he co-founded Harvard Law School's Berkman Center for Internet & Society. Zittrain's presentation reviewed the evolution of the Internet from an open, simple, and informal environment to a structured corporation. He argues that this evolution came about because of entrepreneurial, technical and regulatory opportunities that the Internet provided, and was dictated by the individuals at the helm of ICANN, who often took decisive positions
on a piecemeal basis, without a holistic understanding of the Internet landscape that they were creating.

Also among the speakers was Martin Sutton, a representative for prominent CADNA member HSBC. HSBC represents the type of global company that can contribute to and benefit from an international coalition aimed at raising awareness and combating online abuse. "The Internet is young, and online abuse will continue to occur," says Sutton. "It is key to have an
effective strategy and policy, as well as the type of industry collaboration that CADNA offers, in order to protect brands and consumers."

Member representatives of Bacardi & Company Limited and DIRECTV, Inc. also
shared their views on domain name system challenges and solutions.

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Conservatives Cheer Rejection of 'XXX' Internet Domain

Conservative groups are cheering a move by the Internet Corporation for Assigned Names and Numbers (ICANN) for rejecting a proposal that would create a ".xxx" domain address to house pornographic websites.

The ICANN board voted 9-5 to reject the domain, which is the third rejection within the last seven years.

"This is a victory for the American public and our supporters who by the thousands contacted the Commerce Department and ICANN to voice opposition to a XXX domain. Instead of relegating porn to a specific domain, the government would have actually been facilitating the adult industry's growth. In other words, the XXX would have established a virtual red light district, giving pornographers even more opportunities to flood our homes, libraries and communities with illegal, hardcore obscenity," says Tony Perkins, president of the Family Research Council.

Daniel Weiss, Focus on the Family senior analyst for media and sexuality, says: "ICANN's decisive vote against the .xxx top-level domain is great newsfor families around the world. From the very beginning this idea held outfalse hope for parents concerned with filth on the Internet.

It's a strange notion to suggest that we can help kids by sanctioning, endorsing and proliferating the very material that threatens them.

"True and lasting protection will only come from vigorous enforcement of federal obscenity laws. Without the help of federal law enforcement, parents will always be fighting an uphill battle to protect their children," Weiss adds.

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