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03 Feb 2008

There's a lot of money in domain tasting ICANN

Dell's anti-tasting suit that I wrote about in December has been heating up, according to court documents filed in January. There's been a lot of predictable legal skirmishing in which the defendant registrars deny that they're also the registrants, claim that they're really outside the US so they haven't been served, argue about some server disks that the allegedly non-US defendant has at a data center in Florida, and so forth, but what really jumps out are the arguments about how much money this suit is (again allegedly) costing the defendants.

Last year Dell got a court order both to have Google freeze the defendants' Adsense account, and have Verisign freeze the domains they had registered. Both of those provoked howls of outrage.

For the Google account, the howls asserted that there was $2.5 million frozen in the adsense account, apparently one month's payment. They later agreed that each month the first million goes into Dell's escrow account, the second million goes to the defendants, and above that they split it 50/50. Back in December I was wondering how they could afford the multi-million registry deposit you need to do high volume domain tasting, since registrars have to pay in advance even though they get their money back when they refund the domains. Now we know the answer to that question.

The other complaint was that the defendants were losing $20,000 per day due to unwanted renewals of frozen domains. Divide that by the registry fee, and that's 3000 domains per day, which is probably a pretty good estimate of the number of tasted domains they keep. The resolution there was to give a neutral CPA a list of the revenue for the previous month, with instructions to dump anything that wasn't making $8/yr annualized, and an option for Dell to keep anything they claimed was their trademark.

So these tell us that there's lots of money in tasting, and it's a game of huge volume, finding the 3000 domains out of each day's million that will net two bucks a year.

  posted at: 21:35 :: permanent link to this entry :: 0 comments
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