I think that a large number of people buying domains can't get their first choice name because some "parked domain monetization" operation (cyber-squatter) owns it and is making money running ads on the page. The trick is to sign up for millions of domain names; set up pages and run ads on them; after 1 day delete domains that have no traffic; after 3 days delete names that have some traffic; after 5 days delete pages with marginal traffic; keep the 1% of pages that have enough traffic to be worth keeping the domain. Because of the refund policy, the 99% of pages deleted before the 5 day grace period are refunded in full and the "monetizer" gets to keep the ad revenue generated over those 5 days. (This is called "domain tasting".) See the DNForum page for more information on how this business works. Interestingly, I think Google AdSense probably has boosted the viability of this business. I wonder what percentage of Google's posted $2bn (or so) / yr "traffic acquisition costs" goes to this business. According to Ram Mohan from Afilias, 3 of the big 5 registrars say that they make over $5m-$8m / year from parked domain monetization pages. This means that these people are making more than that from these pages and Google and other ad servers even more.
I wonder if there is any way to close this loophole that effectively enables a no-risk business. I think these monetization businesses are a net-negative value to the community and seems like a loophole exploit. On the other hand, refunds are a legitimate service for legitimate registrants. It is VERY difficult to tell the difference between a legitimate and illegitimate registrant.
In the jungle of such pages, the Kevin Kelly page stands out as my favorite example of responsible domain name use.
WSJ November 17, 2005: "Revenue from text ads on these sites will total $400 million to $600 million world-wide this year and may reach $1 billion by 2007, according to Susquehanna Financial Group analysts Marianne Wolk and Roxane Previty, who track the online ad industry."
|Data Center||Policy & Regulation|
|DNS Security||Regional Registries|
|Domain Names||Registry Services|
|Intellectual Property||Top-Level Domains|
|Internet of Things||Web|
|Internet Protocol||White Space|
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Afilias - Mobile & Web Services