Perspectives Reader,
The response to our recent article on Domain Name Tasting with the announcement of FairWinds' public policy initiative, the Coalition Against Domain Name Abuse (CADNA), was overwhelming. Shortly after our article's release, BusinessWeek also published a tasting article titled "The Great Internet Brand Rip-off."
With increased awareness of Domain Tasting in the business community due to these efforts coupled with the new U.S. Congress setting its agenda and the lack of a resolution on tasting committed to by Internet governance authorities, we believe this is a critical time to act.
Abusive Domain Name Tasting is a practice whereby a relatively small number of registrars and individuals register millions of domain names on a daily basis that often include brands and typographical errors of brands en masse and free of charge by exploiting the 5-day add/drop grace period. During this period, a name can be returned and all fees paid will be refunded for any reason. This allows the Tasters who participate in cybersquatting to more efficiently identify the domains that receive the most traffic.
The term "Domain Kiting" refers to the tasting practice of repeatedly adding and dropping the same domain name every few days in order to avoid the registration fee, while monetizing the traffic by loading the page with recycled pay-per-click (PPC) advertising links.
Pay-per-click Web site monetization is popular among Tasters and Kiters and the financial impact of these schemes is staggering in terms of customer confusion, brand dilution, lost sales, and referral fees (in the form of Keyword click fees) paid directly to Tasters.
Facts About Tasting:
- 30-32 million domain names are currently involved in tasting and kiting
- 4 million names are being tasted every day
- While ICANN is located in the U.S., this is a global issue affecting brand owners worldwide
- CADNA found that nearly 50% of domain name brand infringements could be part of active tasting schemes (or were registered after first being identified using the tasting tactic)
- CADNA research values the impact of tasting on TM holders to be in excess of $100,000 per major brand / per year based on:
- Estimated increase in search engine Keyword click fees
- Enforcement cost of addressing just 5% of the domains secured by Tasters
- This cost impact estimate does not include factors that are harder to generally quantify:
- Value of lost sales and leads
- Costs of dilution and bad customer experiences
- Opportunity cost of not owning domains that could be used to funnel traffic
- Millions of lost unique Web site visitor impressions per year
Increased Internet Health Risks:
- Tasted domains are optimal platforms from which to launch Phishing attacks (registrants are here today and gone tomorrow)
- The number of Web sites and the pace of activity severely hinder detection and enforcement efforts by trademark holders and law enforcement officials
Even though this topic has been the subject of frequent and open debates at ICANN meetings, there continues to be a lack of action addressing Domain Tasting. Some believe that ICANN has conflicts of interest that drive incentives to maintain the status quo. If not simply a result of too many initiatives and issues for ICANN's staff size, ICANN may have conflicts that emanate from pressure exerted by registries, from having too much to gain when every tasted name may lead to a 25¢ fee (it will make $1.5M if just 20% of the 30M tasted domains are deemed by Tasters to be worthy of registration), or from its own growth strategy - in that the dearth of good generic names available to the public due to tasting (restricting consumer choice) adds to the justification to launch additional Top Level Domains.
With the first session of the 110th U.S. Congress in its infancy, the legislative schedule is still developing. Presently, members are open to ideas and are looking for new issues to address. Now is the opportune time to get their attention. If you agree that Domain Tasting is a threat to your brands or are concerned about its impact on your company and on the welfare of the Internet in general, please join us in addressing this important issue.
Together, we can draw Congress's attention to this disturbing trend in an effort to schedule hearings and serve as a catalyst for ICANN and others to act in a timely manner.
The Coalition Against Domain Name Abuse has been incorporated as a 501(c)(6) not-for-profit organization to serve just this purpose. Your involvement is essential to curbing Domain Name Tasting and the associated hazards to your brands, and to safeguarding commerce on and consumers' trust in the Internet.
A core group is mobilizing to get the message to Congress before the window closes, but we need your help.
We ask thought leaders and leading brand holders to join and be recognized as part of CADNA's efforts to strike a better balance in the domain namespace between brand owners and others, to shape the debate, and to make the Internet safer for consumers and commerce. To find out more about what you can do to help, or to register as a supporting member, please contact us about CADNA.
Thank you,
Josh Bourne & Phil Lodico
Managing Partners, FairWinds Partners LLC
Directors, The Coalition Against Domain Name Abuse
