Domain Name Speculation - Domain Name Speculation and The Rise of Pay Per Click Websites

Domain Name Speculation and The Rise of Pay Per Click Websites

Cybersquatting has a clear legal definition. The problem is that the legal arguments of what constitutes cybersquatting tend to be lost when people land on a webpage with only Pay per click ('PPC') advertising and nothing else. It is often assumed that such a domain is "cybersquatted", especially when the person is searching for the domain in order to register it.

The ease with which PPC revenue could be derived from parked domains effectively created a situation where domains were being registered purely for their type-in traffic. Many of exact phrases that people were searching for in search engines were being registered for the sole purpose of serving PPC advertising. The COM TLD grew from 23,662,001 registered domains 1 January 2003 to 80,759,835 registered domains as of 1 January 2009. While part of that increase in the number of registered domain names is due to the increase in ecommerce and business conducted online, some of the increase is due to the ease of generating revenue from PPC and type-in traffic. Domain tasting, a practice by which millions of domains would be registered for a limited period (the five day Add Grace Period during which a domain could be deleted without the registrar effectively having to pay a registration fee to ICANN) and only those generating sufficient revenue from PPC advertising would be retained, also served to increase the number of domains registered. This practice involved domain name registrars being created purely for the purpose of domain tasting. The situation became so bad in 2007 that ICANN was forced to take action. In June 2008 ICANN added a provision to its Fiscal Year 2009 budget to limit the number of domains that a registrar could delete using the Add Grace Period before having to pay the ICANN fee. The effect of this was to massively curtail the number of domains deleted in .com and .net during the Add Grace Period. From June 2008 to April 2009, AGP deletions fell by 99.7%.

The March 2006 Verisign Domain Brief stated that out of approximately 57.37 million COM and NET websites spidered, 26% were single page websites, 60% were multipage websites and 14% had no associated websites. Numerically, the number of single page websites was approximately 14.91 million. The single page websites websites include under-construction, brochure-ware and parked pages in addition to online advertising revenue generating (PPC) parked pages.

The latest statistics for domain name usage quoted in the Verisign Domain Brief for June 2009 states that of the 92 million COM and NET domain names, 24% of these domains have one page websites, 64% have multipage websites and 12% have no associated websites. In purely numerical terms, those single page websites would account for approximately 22 million COM and NET websites. The survey quoted in the Verisign Domain Brief does not explain the methodology or provide anything other than a summary of the results. However this is effectively a rise in single page websites of just over 7 million websites.

Some hosters such as Godaddy have their own domain parking systems and allow unused domains to be parked with the registrant receiving a share of the PPC revenue earned. Other hosters have similar systems.