Not sure if this has been posted, but it could be quite significant if it ever got rolled out, either to LOOK's benefit or detriment, depending on who does it...
VeriSign Mulls Way to Make Money from Typos
By Kevin Murphy
VeriSign Inc is testing changes to its domain name system services, which could generate tens of millions in revenue a year for itself and partners, and which would impact the way almost every internet user surfs the web.
A VeriSign spokesperson confirmed yesterday that the company is internally testing a system whereby web domain name lookups in the .com and .net domains that would normally return error messages would instead return a web page.
Such a service was tested in May by NeuStar Inc, which runs .biz and .us. In Neustar's trial, instead of error messages web users received a search engine page provided by sponsored search provider LookSmart Ltd. VeriSign's test is similar.
"Like many registries, we're continually exploring ideas on how to enhance the user experience," the VeriSign spokesperson said, confirming a report in Friday's Wall Street Journal and declining further comment.
VeriSign operates the .com and .net domain name registries. When a user enters a URL from those domains into a web browser or email client, it is looked up in a DNS hierarchy that ends at VeriSign's authoritative servers.
Currently, VeriSign says it handles about nine billion DNS lookups per day. It is estimated that 800 million to 900 million queries result in an error message because the domain does not exist, often because the user has typed it incorrectly.
Ram Mohan, CTO of Afilias Ltd, which operates .info, said approximately 10% to 12% of queries to the .info registry infrastructure are misspelled or for non-existent domains. He said he believes VeriSign's .com and .net registry has a similar ratio.
Currently, the number of queries VeriSign handles has no direct bearing on how much revenue it generates, but if the company could find a way to monetize the error traffic, it could generate tens of millions of dollars every year.
NeuStar was the first major top-level domain (TLD) operator to try out such a service. In May, the company entered a trial with Paxfire Inc, a virtually unknown Washington DC-based "internet traffic brokerage" startup.
Paxfire's idea is to act as a middleman between search engine providers and companies that have the means to drive traffic to them, especially domain name registries, according to Paxfire CEO Alan Sullivan.
Sullivan said Paxfire, which expects to offer a hosted service that returns web pages instead of error messages, has seen interest from many search engine providers and TLD operators, particularly overseas companies offering country-code TLDs.
If VeriSign were to offer such a service, it would likely be of concern to Microsoft Corp and America Online Inc, which could stand to lose money, as well as the intellectual property lobby and advocates of adherence to internet standards.
A service where error messages are intercepted at the DNS level would usually override similar systems where errors are intercepted at the client (such as in Microsoft's Internet Explorer) or ISP (such as AOL's flagship online service).
Currently, both AOL and Microsoft intercept error traffic and instead redirect users to search engine pages they operate. Sometimes, this equates to a paid click. A Microsoft spokesperson told the WSJ that this revenue is a "non-trivial" amount.
It's difficult to determine exactly how much revenue VeriSign could create. Back-of-the-envelope calculations suggest that VeriSign could create revenue of $1m per day for itself and partners if it could convert 0.3% of its error messages into paid clicks.
That's based on estimates (from Afilias's Mohan) that VeriSign's .com and .net registry returns about 800 million error messages a day, and the average pay-per-click of $0.40 reported by paid search leader Overture Services Inc in the second quarter 2003.
Paxfire's Sullivan said that during the NeuStar test, users chose to query the LookSmart search engine they were presented with 35% of the time, but this may have been artificially high due to the novelty value.
It's difficult to say how many of those queries turned into a revenue event, Sullivan said. However, he estimates that registries could probably convert 0.1% of their error traffic into a paid click using Paxfire's service.
"It's found money," Afilias's Mohan said. He added that Afilias has no current plans to introduce a similar system under .info, but he did not rule it out.
Paxfire's Sullivan said: "You can be assured that if VeriSign does this, then everybody [every other registry] is doing this." Paxfire is not currently working with VeriSign, however, he said.
A spokesperson for LookSmart said that the NeuStar/Paxfire test never evolved into a formal deal. He said: "The whole positioning for LookSmart is to provide as much relevancy as possible, and those two deals were not in line with that strategy".
If VeriSign's plan gets beyond the test phase, it could hit some hurdles, particularly due to its contract with the Internet Corp for Assigned Names and Numbers, which manages aspects of the DNS under contract with the US government.
"It would probably be something we would need in the contract," said ICANN gTLD registry liaison Tina Dam. "At this time we don't know the details of the service, so I can't really say."
"Some organizations have shown a propensity to make technical changes happen and then ask for permission later," Afilias's Mohan said. "Given the economics of it, I think that's what will happen here."
There's also the suggestion that returning live web pages instead of error messages could break with the Internet Engineering Task Force standards on how DNS should work. Some say it's a "gray area".
Afilias's Mohan said that, according to standards, DNS registries have to be "unambiguous, authoritative and accurate". Under an error interception system "the accuracy of the response is in question".
Paxfire's Sullivan said his company's service is set up so that only web traffic returns an IP address. Domain queries for non-web applications such as email or FTP are dropped or return error messages, he said.
Lastly, VeriSign may have to be concerned with intellectual property interests. Some could claim that returning a VeriSign page when a user enters a misspelled trademark is not too dissimilar to cybersquatting. Others say it's no different than a search engine returning a similar result.
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