Domain kiting (also known as ‘domain tasting’) refers to the method of exploiting loopholes in ICANN’s (Internet Corporation for Assigned Names and Numbers) or other domain name registers’ (such as VeriSign) registration procedures in order to earn money from temporary domain registration or in order to test saleability or marketability of domain names.

Registry companies have noted an increasing number of potentially fraudulent activities in recent years. For May 2007, over 35 million domain names were registered but only 2.7 million were permanent. The other names were ‘supposedly’ sent back but there is no way at the moment of tracking whether they are being ‘reused’ in a domain kiting exercise.

How Domain Registration Works

Registering a domain name is a simple procedure. One comes up with a domain name, checks out its availability in domain-name registries and, if the name has not been registered, he ‘stakes his claim’ by complying with registry rules and regulations and pays a deposit for the use of the domain name.

Under ICANN rules, however, a registrant is given a five-day “grace period” from his initial registration to consider whether he intends to hold on to the name or not. If the registrant opts not to register the name, registration is withdrawn, the deposit fee is refunded and the name is made available to for registration again.

The procedure was established to enable registrants who filed for wrong names a time frame in which to correct his or her error, at no cost.

Domain Kiting: Common Modus Operandi

This ICANN procedure, however, has led to ‘domain tasting’ or ‘kiting’ wherein domain name investors register domain names then use the five-day grace period to generate revenue for themselves through search engine queries and pay-per-click advertising mechanisms. No cost is involved because they simply drop the name and claim the refund at the end of the grace period. In effect, domain kiters make money out of domains they did not pay for.

At the same time, an unscrupulous domain registrant could use false names and contact numbers when registering the domain name then continually ‘refresh’ his registration (e.g. registering for the same domain under a different name every time the grace period expires). This way, he continues using the domain name to generate income for himself without paying the requisite fee.

Domain name investors often register more than just generic names. Typically, they also register ‘typos’; ‘misspelled’ domain names which can happen if people are not paying attention to what they’re typing such as “glfshoes”, “gulfshoes”, and so on instead of “golf shoes”. This can generate income for the registrant if there are enough people who make such a mistake and ‘land’ on their site.

Another, marginally legal approach is for the unscrupulous is to register typos of well-known brands or companies (e.g. microsogt.com), and set up mini-websites with search engine links or ads on these domain names generating revenue not only from the domain names but also what is seen as a fraudulent use of patented brand names.