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Domain tasting is the practice of buying domain names for the purpose of trying them out based on profitability in ad traffic revenue, and then canceling the domain subscription within the grace period to get a refund if it does poorly. This grace period is usually five days and was put in place to allow legitimate purchasers a chance to return the domain in case unexpected things such as typos occurred.
Domain tasting is the process of registering multiple domain names for the purpose of determining which ones are worth keeping and then returning or refunding the ones that are less viable. The domain registrant usually does a cost-benefit analysis on each domain name to determine if their ad revenue will be substantial because they can generate traffic either because the name is easily searchable or it was already a relatively well-known domain name that just expired.
The Internet Corporation for Assigned Names and Numbers (ICANN) manages the distribution of domain names and has created the Add Grace Period (AGP), which gives customers five days to get a refund on a domain. This has been abused by domain tasters and has forced the ICANN to impose fines for returning domains beyond a certain number as of June of 2008. This then resulted in a 99.7% decrease in domain deletion from June 2008 to April 2009.
Reasons why domain tasting is lucrative: