There are dozens of quiet but profitable businesses in the Internet ecosystem and “domain tasting” is one of them. According to DomainTools, Google is about to put this business out of business. In so doing, it also may slightly reduce its own AdSense revenue.
The domain registrars allow you to rescind any domain purchase within a short grace period. This has led to a cottage industry of “domain tasters” who buy millions of domains, stick Google AdSense on them, and then collect revenue until they have to give the domains back. (A real-world analogy might be buying a house, renting it for a weekend, and then rescinding the sale.)
One purpose of domain tasting is to see which domains get a lot of natural or accidental traffic–and then to keep those and give the others back. With Google AdSense, domain tasters have also been able to collect revenue, too. Until now.
A confidential informant says Google will stop monetizing all domains if they are less then five days old. This potential new policy change by Google could stop all Domain Tasting in its tracks. The Add Grace Period (AGP) is a time period when registrars can delete a domain at no cost, but in this time frame a registrant could register millions of these temporary domains and place Google Adsense for Domains on them. The result is the ability to produce millions of temporary websites that literally generate millions of dollars in income per week for Google.
It was disclosed in court that one partner that Google had was generating as much as $3 million dollars a month from the practice and that was after Google’s revenue share. Oversee.net and other companies have been using this practice for years and it will have a direct impact on them. The gravy train of free money might be coming to a halt very fast. This policy change at Google should be announced to the channel partners soon and it will have a huge echoing impact on the Industry.
If true, this is a smart long-term decision for Google (higher quality inventory, fewer accidental clicks, etc.). Depending on how large the domain tasting industry is, it might also have a minor impact on the company’s AdSense revenue.
If Google cuts off the domain tasters, the tasters will obviously rush right over to Yahoo. But DomainTools predicts that Yahoo will soon follow suit.
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