Controversy is brewing about domain registrar company Network Solutions’ newly instituted practice of automatically registering domain names users search for and then jacking up the price during ICANN’s return grace period.
Critics call it “extortion,” but Network Solutions calls it a service to protect customers from the practice of “front running.” The extra charge is, assumedly, the protection fee — you know, just like the one the mob offers.
On his blog, Shashi Bellamkonda, who works for Network Solutions, defines “front running” this way:
“Front Running” occurs when a domain name is registered, typically by someone outside of the United States, just minutes or hours after someone else has conducted a domain name search at a registrar site or has performed a WHOIS query for the domain. The reason people “front run” domains is to conduct what is called “tasting” to see how much money they can make on a domain name through pay-per-click ads or by re-selling the domain in the aftermarket at a highly marked up price.
But this is different, he says.
Several angry bloggers have posted about it, including Domain Tools’ Jay Westerdal (listed here as one of the Internet’s youngest and richest entrepreneurs) and well-known search engine marketing manager Bill Hartzer, of MarketNet.
They, along with several others, tested and confirmed that when they conducted a WHOIS search on Network Solution’s site but didn’t register it, Network Solutions would register it immediately and offer it for sale for $34.99, nearly $30 above the going price, depending on where you buy.
Immediately, as illustrated in several comment threads, critics were searching for domains like domainkitingiswrong.com and various expletive phrases paired up with NetworkSolutions, all of which, at least temporarily are/were owned by the company afterwards.
Though critics are challenging the ethics of the practice, especially when it comes from one of the largest and oldest domain registrars around, and labeling it front running, extortion, domain kiting, and domain tasting, a spokesperson called it “a customer protection measure to protect customers from frontrunners.”
The company line from Bellamkonda and from spokesperson Susan Wade is that what Network Solutions is doing is different from frontrunning or domain tasting in that they release the domain at the conclusion of ICANN’s grace period and do not monetize or domains.
Still, people are pretty upset with them. Hartzer believes that Network Solutions may reverse the new policy based on customer backlash, but the controversy could also have a more positive impact. “It’s bringing the domain tasting and kiting issue to the forefront,” he said. “ICANN domain tasting has been around for a while and people have been taking advantage of it.”
ICANN announced in August it would be launching an investigation into the practice of domain tasting and called for examples of abuses.
