AdSense Arbitragers Using Free Domain Names Thanks to Loophole
Monday, February 19th, 2007;
-- Andy Beal |
It’s always satisfying to learn something new about an industry, and today brings to light a marketing practice, I never knew existed.
AP explores a loophole with domain registration, which allows anyone to return a registered domain name within 5 days and get a full refund. This has led to hundreds of thousands of domain speculators and search arbitragers registering domain names, testing which ones do well for type-in traffic, and getting a full refund on any duds.
During the grace period, the entrepreneur puts up a Web page featuring keyword search ads and receives a commission on each ad clicked…Addresses likely to generate more than the $6 annual cost of domain name are kept — not a high threshold given how lucrative search advertising is these days…The rest are thrown back into the pool on the fourth or fifth day, only to be grabbed by another group of domain name tasters.
How many people are actually engaging this practice? Of the domain names registered in 2006, only 2% of them were legitimate with an estimated 1.2 million domain names a day tested by marketers known as “tasters”.
Ok, so here’s a question for you…
- Who knew about this loophole?
- Who’s actively “tasting” domain names?
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February 19th, 2007 at 10:51 am
Domain kiting is not exactly a new phenomenon.
February 19th, 2007 at 10:56 am
[...] Arbitrage and Domain Names Apparently, you have 5 days to return a domain name after purchase. Wish I knew this before… So, some arbitragers are buying domain names, seeing what kind of type in traffic they get and returning the duds. Interesting tactic. Anyhow, source is: AdSense Arbitragers Using Free Domain Names Thanks to Loophole | Marketing Pilgrim __________________ Are you a n00b? Don’t want to get bitch slapped for being stupid? Then don’t ask that question just yet…SEARCH the forums first asshat. Tattoed Marketer - My blog MyBlogLog Profile Copeac is the Shiz nizzle, that’s all you need to know [...]
February 19th, 2007 at 11:21 am
Bob Parsons mad a big deal about this about a year ago. The blackhats have been hoping to keep this out of the spotlight but it looks like people are finally starting to see the problem of this so called loophole. Although I wouldn’t really call it a loophole since ICANN doesn’t seem to frown on this practice and continues to let this problem grow.
February 19th, 2007 at 11:40 am
Agreed Mark, if it accounts for so many domain registrations, ICANN would be crazy to pull the plug on the “try before you buy” option.
February 19th, 2007 at 12:10 pm
Why shouldn’t ICANN pull the plug on “try before you buy”? As far as I understand it, they’re not making any money off it.
February 19th, 2007 at 1:44 pm
ICANN charges a fixed non refundable $0.25 on each new domain registration. So now you have to target domains a little more, instead of registering and trying just anything like when it was free.
Still worth it for lots of people though, and a nice source of income for ICANN…
February 19th, 2007 at 4:13 pm
Wow so they’ve finally figured it out. Took them long enough. This has been going on for a bout a year now. Plus it really doesn’t hurt anyone if you think about it. Check out WF forums they have a ton of posts on this.
Thank You
February 19th, 2007 at 8:44 pm
Good post. I’m glad to see this scourge exposed since it has probably affected more people than we realize. Some companies have taken this form of arbitrage to the next level. One in particular seems to have an arrangement with GoDaddy.com in which they are somehow able to pre-emptively buy (steal) domain names that regular people attempt to register, almost in real-time. The person attempting to buy the domain receives an email offer to sell the same domain (that cost only a few dollars until just then) for $1000. Another recurring theme: if the original buyer doesn’t respond to the $1000 extortion offer, the domain usually goes back on sale 4-5 days later.
If these complaints are true, which I believe they are due to the varied sources, the companies involved need to be avoided at all costs.
The comments in this post are more than convincing:
http://toadstool.se/journal/2005/11/11/giving-away-my-dreamhost-passwo rd-to-unasi-inc
February 20th, 2007 at 10:31 am
I have heard of this practice before, most notable from Bob Parsons’ well-justified rants. My friend was trying to pick up a domain a few days ago and was upset with me that someone else was able to get it before GoDaddy picked it up for him. A few days later he got back to me that he got the domain. Apparently someone used this very practice and thankfully didn’t want the domain.
February 20th, 2007 at 6:26 pm
Now that I know that, I’ll try checking again a few days later every time I try to register a domain that is taken by search domainers. It’ll be interesting to see if any of them are tasted.
October 11th, 2007 at 10:27 pm
Seems fair enough to me - they make the rules and they allow it so what’s all the fuss about? In fact I think I’ll try it for myself