How Insiders Leverage the AGP to Avert Domain Name Investment Risks

The Coalition Against Domain Name Abuse (CADNA) has released a study on drop-catching. Drop-catching is an enabler for other domain abuses such as tasting, kiting and typosquatting. Large registrars and others that have the means to test domains on a large scale have harnessed this technique and built a business around taking advantage of ICANN’s Add Drop Grace Period (AGP).

This study provides quantitative data on drop-catching and domain name registration trends and as a result can be used to gain insight into the world of Web traffic monetization. Armed with this knowledge, brand owners can better understand how cybersquatters operate and can avoid being targeted in the future.

Drop-catching refers to the process whereby a domain that has expired is released into the pool of available names and is instantly re-registered by another party. Typically the new registrant has no knowledge of the existing “traffic value” of the name.

CADNA’s study, which tracked 17,000 randomly selected Dot-ORG, Dot-COM and Dot-NET domain names after their scheduled expiration on September 18th, 2007, found that 100% of the Dot-COM and Dot-NET domains were instantly registered after they were released. 39.8% of Dot-COMs and 32.2% of Dot-NETs were added and dropped again throughout the study via a practice known as kiting. The initial registration of all deleting domains and the subsequent domain tasting and kiting that occurred points to a willingness on the part of drop-catchers to continuously register domain names since they can be tested and easily returned with no monetary penalty.

The results also show that 87% of Dot-COM drop catchers use the domain names for pay-per-click (PPC) sites. They have no interest in these domain names other than leveraging them to post PPC ads and turn a profit. Interestingly, only 67% of Dot-ORG drop catchers use the domains they catch to post these sites most likely because Dot-ORG names are harder to monetize due to the lack of type-in traffic and because they tend to be used for more legitimate purposes.

Whether employed by a few select parties or used more broadly, this behavior limits consumer choice, preys on consumers through criminal schemes to defraud them and negatively impacts the experiences of all Internet users.

The purpose of this white paper is to better inform lawmakers, policymakers (ICANN), brand owners, the media and others about the solutions being discussed and considered.

Click here to access the white paper, “Drop-Catching.”

We hope it will generate more informed opinions and lead to better decisions regarding the resolution of this situation.

Thank you,

Josh Bourne & Phil Lodico
Managing Partners, FairWinds Partners LLC

Directors, The Coalition Against Domain Name Abuse