GoDaddy.com’s Bob Parsons is speaking out about the abuse and leading a charge against what is called domain “kiting,” referring to the fly-by-night nature of the operation.
The statistics Parsons cites on his blog are hard to ignore.
Parsons estimates there are 3.5 million .com names involved in an add/drop scheme daily.
“During the week of March 27 - April 2, 2006, 5,822,881 .com names were registered,” Parsons writes on his blog. “Of those names, only 455,918 .com names were actually retained after the grace period expired. Of the .COM names registered during the above week, 5,366,963 — or 92.1 percent — were dropped during the grace period. Once again, at least 99 percent of these were dropped by registrars participating in the add/drop scheme.”
The add/drop scheme gets set into motion when registrars make large cash deposits into the VeriSign registry. They then register as many domain names as possible and erect traffic links tailored to the website’s name. This is done so that when a surfer lands on the page, they will be inclined to click around, which makes the registrar money.
Even if money has been made through advertising revenue, the registrar can still request an instant refund if made within the allotted five-day period.
Parsons explains that the add/drop schemer decides to keep a domain name if the revenue defrays the operating cost of the deposit to register the domain for a year. Some domains are caught up in this scheme continually if they prove to be profitable.
“I propose we make the ICANN fee non refundable upon the registration of every domain name, and have it debited out of the funds on deposit at the Registry,” Parsons wrote. “The net effect of this would be every time a domain name is registered, the registrar would have to pay ICANN 25 cents. This would bring the add/drop scheme to a screeching halt.”
Registries also are harmed by this act, which is not illegal. While the Registry does receive funds on deposit, it can’t report the monies as income, and it doesn’t generate enough interest to cover the processing fees associated with registration and the eventual drop.
While Parsons thinks this is a simple solution to a growing problem he sees troubled waters ahead.
“There is a small problem with this approach: ICANN is a consensus-based organization and of course, many registrars are participating in the add/drop scheme,” wrote Parsons. “It will be interesting to see how ICANN steps up to handle this problem now that it is in the light.”
Parsons claims GoDaddy.com and its affiliates are not involved in this scheme.
