System would discount price of domain names until a buyer is found.
VeriSign has devised a system to sell more dropping domain names by discounting their price over time.
Details of the idea are in a patent application the company filed in 2009 that was just published today.
U.S. patent application number 12/504396 (pdf) for “METHOD AND SYSTEM FOR SALE OF DOMAIN NAMES” describes a way that a domain name registry can discount the price of domain names within a short window after a domain name deletes in an effort to find a new registrant for the new domain.
It’s sort of like a reverse auction. As an example, for the three hours after a domain deletes it would be available at the standard registration price. During the next three hours the price would drop perhaps 50 cents, repeating every so many hours until the price hits a floor.
Practically speaking this would allow registrants to buy a domain name that they estimate will earn less than the normal registration cost in parking revenue during the first year. If I estimate that a domain name will earn $5 in the first year then I would wait until the price on the domain dropped to below $5 before registering it.
In VeriSign’s example, the price of the domain name would return to full price after a short time period, such as the end of the drop day.
I should stress that this is merely a patent application and I’m not aware of any plans by VeriSign to introduce such a system.
VeriSign also filed a patent application for a system that would estimate the likelihood of a domain name being renewed.