Domain Tasting: A Market in Free-Fall
The world of domain names is currently experiencing a crisis, but in contrary to all the talk about economic meltdowns, this crisis is actually good news. We’re not talking about a crisis in domain name registrations (a sector that doesn’t seem to be affected by the recession hitting the rest of the world), but rather a crisis in domain tasting registrations.
For those of you unfamiliar with domain tasting, here’s how it works:
Someone registers a generic domain name and tests its effectiveness during 5 days; if after 5 days he/she decides that the domain name is not financially advantageous, he/she can cancel his/her registration and can get fully reimbursed for the original registration fees. Most of us are unaware of the large percentage of domain names that never reach their 6th day of life. Here are some statistics to show you just how commonly this happens:
- in April 2006, out of 35 million domain name registrations, only 2 million were confirmed after the tasting period (5.7%);
- in February 2007, 51.5 million out of 55.1 million domain name registrations were cancelled (only 6.5% were confirmed);
- in June 2008, 17.6 million domain names were cancelled after the tasting period;
- in July 2008, that figure had dropped to 2.8 million.
This is due to the fact that the ICANN (Internet Corporation for Assigned Names and Numbers) has decided to impose a 20 cent tax on each domain name registration that is cancelled after five days for all registrars who cancel over 10% of their registrations. Out of these 2.8 million registrars, 2.6 million had to pay 20 cents (which equates to $520,000 for the not-for-profit association…but that’s a whole different story).
It’s likely for this reason that the number of temporary registrations keeps falling. As time goes on we will be able to decide if this was a hard hit just for domainers (people who register domain names in masses…also another story) or whether it has hit registrars the same.
The impact of this decision is also felt in the domain name monitoring services we offer our clients. I didn’t understand why domain name registration numbers dropped this summer and I always thought it was because domainers took vacations like the rest of us. I was mistaken. It’s not the numbers of domain name registrations that are falling, it’s the number of cancelled registration procedures that tumbled.
Sources:
wikipedia
domainnamewire.com
Image source:
Google Images
Adapted by: Jessica Hartstein
Tags: domain name, domain name registration, domain tasting
