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Domain Names Forum

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Domain name speculators and the domain name aftermarket
Should this business practice be regulated or outlawed?

 2:13 pm on Apr 28, 2006 (gmt 0)

I wanted to get a @@@@@.com domain

It was not in use but was registered by someone.

When I contacted him he priced it at 4000$
He seems to do it as a business..

It's was so frustrating, these fools (genius?) just register the site for 3-10$ and ask us such a huge price.

Is there no rule to protect domain names from such people. Is there any way out...



 12:24 am on May 2, 2006 (gmt 0)

Squatting implies that no payment has been made. whoever has the domain you want has paid for it, so it is rightly theirs.

If there are no tradmark issues then they aren't trying to exploite someone's business, or make money from someones reputation. Them they arn't doing any harm.

I've got a few domains which I don't use. at the time of registering I had planed to do something with it, does this make me a squatter, I don't think so.


 12:53 am on May 2, 2006 (gmt 0)

There is another way to look at this.

You say you "need that domain so much", so I guess you've got some great idea, an idea that revolves around the domain name, an idea that's going to make you lots of money. So it's okay for you to make off the domain but not him?


 4:35 pm on May 2, 2006 (gmt 0)

I love the attitude that because testy really wants it he should be allowed to have it. Maybe the owner really wants it too. And what happens when somebody comes along and wants it even more?

Last year I was planning out at a great project and was salivating over the perfect name, already taken of course. I send an email and got a quote back for $700. Not bad at all, but even at $700 my interest kind of evaporated. Turns out that I had a lot more desire for the name when the price was only $9 than I did when I had to pay fair market value.


 7:12 pm on May 2, 2006 (gmt 0)

You don't buy a domain and keep it maybe somebody want it or you may find some use of it, and you don't register a TM just to get a domain.
So, first develop your business, register your trade mark, and only then take legal actions.


 4:38 am on May 4, 2006 (gmt 0)

Thanks for all the replies & suggestions

I am yet to make up my mind.

But I know I have only two choice left as of now
a) Negotiate with the current registrant
b) Go for Trademark and take legal route

I will let you all know once I get a final result for it.


 5:29 am on May 4, 2006 (gmt 0)

OK, testy has had enough answers, but I would like to take the real estate analogy further.

Imagine this scenario. A large country has a lot of land available for development. There is a lot of unowned land that anyone can claim, a small block at a time, by paying a small fee to register their ownership.

It soon becomes clear that all the most useful unowned land is being registered by people who have no intention of using it, and this is holding back development by pushing up costs for people who do want to claim land to develop.

The government would probably make it harder to claim unowned land - e.g. by requiring that it is developed or by limiting how much any entity could claim (I believe there are historical precedents for this).

I certainly think that speculating in domains is an inethical way of making money as it contributes nothing to society - unlike speculation in financial instruments which helps makes market more liquid and efficient and therefore improves asset allocation.

The problem with regulating domain registrations is that the bureaucracy and extra expenses it creates could do more damage than the domain speculators.

There are a few possible solutions: banning multi year registrations (creating a lot of admin overhead for people who own thousands of domains), increasing registration costs (which is going to happen anyway for .coms) and limiting the number of domains any one entity can hold (if you had to register a new company for every 100 domains you hold, it would push costs WAY up).


 11:38 am on May 4, 2006 (gmt 0)

Not all names are registered for $10 to be sold for $4000 and rarely he has registered it himself,most likely he has bought it from someone

If you are holding tradmark on that name(without .com) then you fill out a case at WIPO but you should proove all three points at WIPO to get win the name


 4:30 am on May 5, 2006 (gmt 0)

Thanks for the link 'wmuser'

From the notes of WIPO

"Domain name disputes arise largely from the practice of cybersquatting, which involves the pre-emptive registration of trademarks by third parties as domain names. Cybersquatters exploit the first-come, first-served nature of the domain name registration system to register names of trademarks, famous people or businesses with which they have no connection. Since registration of domain names is relatively simple, cybersquatters can register numerous examples of such names as domain names. As the holders of these registrations, cybersquatters often then put the domain names up for auction, or offer them for sale directly to the company or person involved, at prices far beyond the cost of registration. Alternatively, they can keep the registration and use the name of the person or business associated with that domain name to attract business for their own sites"

[arbiter.wipo.int ]

I wish every one who might not have had the knowledge or WIPO/UDRP read atleast the faq.


 4:52 am on May 5, 2006 (gmt 0)

I wish every one who might not have had the knowledge or WIPO/UDRP read atleast the faq.

Are you saying some of us oughta read that? Some of us have. :)

Unfortunately, not all domain name registrants know that. Nor do they care to know.


 5:11 am on May 5, 2006 (gmt 0)

Cybersquatters can't buy them all. There are billions of combinations of words and extensions still available.

WEBMASTERBLUES.COM is available! haha


 9:45 am on May 5, 2006 (gmt 0)

A couple of observations and a suggestion

Perhaps the thought of somebody else making easy money is clouding your judgement. What somebody else paid is irrelevant. What you should focus on is how much is the name worth to you?

If you have only just realised that somebody has "your name" how can the current owner be cybersquatting, given he was unaware when he registered the name that sometime in the future you might feel the name should be yours?

Rather than trying to workout a way to take the name through legal technicalities perhaps you would be better spending your time trying to think of an alternative name that you could own - You never know somebody else might not have thought of it before you.


 1:08 pm on May 5, 2006 (gmt 0)

nice & mature observations gpmgroup

thanks for the suggestions.

I have discussed with the current registrant and I know what he is.

To make it a better case UDRP should also include domains named after/involving businesses which are exploited by cybersquatters (not just trademarks)


 2:38 pm on May 5, 2006 (gmt 0)

To make it a better case UDRP should also include domains named after/involving businesses which are exploited by cybersquatters (not just trademarks)

It does...

The only caveat being the company/business name in question must show some creativity/branding within its field of usage i.e. not just be a generic/descriptive industry wide term.


 2:40 pm on May 5, 2006 (gmt 0)

Hi Testy,

I think you probably didn't explain your motives clearly. From the sounds of it you have a business using the name of this domain but you do not have a trademark. Am I correct?

If this is the case then you can still do a UDRP even without having a trademark, but you will have to prove that the registrant bought and used the domain in bad faith. This would mean that he was aware of your business and sought to take advantage of the name you built up. If you cannot prove something like this you will not win the domain.

Since the registrant is not using the domain to compete with your business and did not approach you directly you might have a difficult time proving this.

If you do not have a case for bad faith then you have a simple decision, either you buy the domain or not. If you want the domain you will have to pay what the current owner wants. That's life. That's business.


 2:43 pm on May 5, 2006 (gmt 0)

If a website is unique and the content is better than anything out there then what does the specific domain name matter?

If the website is really great then it will thrive with or without the ideal domain name.

If you don't want to pay the $4000 fine but, can you blame the guy for trying? If he succeeds in selling for $4000 isn't it a smart transaction?

Successful business is all about thinking outside the box, so if a domain name costs to much then think of another name. Why spend so much wasted energy complaining about how expensive it is? Don't buy it if you think it is to high. You can have the best domain name in the world and if you have a poor marketing strategy then it won't mean a thing. I see a ton of bad domain names or what I would never have considered starting a site under being extremely successful because they have a good idea, great marketing plan and money. Just my thoughts


 3:15 pm on May 5, 2006 (gmt 0)

I wish paying $4,000.00 was all I had to do in some cases.
Man, gather that money and pay the guy if you really want the domain, because YES, it is like real estate analogy, like it or not, though "there's no perfect analogy" (my saying).

There are cases where domains are parked, earning PPC and the domainer don't want to sell. Worst, don't even want to hear offers (Marchex). Worse then worst, the domain is not in posession of a domainer but a lucky newbie who got it for regfee and ask you unreasonable prices like $500,000.00.

If I see a domain I want and I see it belongs to a domainer, I think "wheew, at least I know I can buy it."


 3:35 pm on May 5, 2006 (gmt 0)

...lucky newbie who got it for regfee and ask you unreasonable prices like $500,000.00.

That is indeed very annoying, as a lot of relatively useless domains are listed on aftermarket sites for hundreds of thousands of dollars. Which sometimes makes me feel stupid, as right now I have a rather rare web hosting domain listed for just $100.00. I never bought to resell it. Since I bought the domain, other projects have come up, and I simply don't have the time to develop it.

And that is not the definition of cybersquatting (unless someone has a legitimate TM claim to it, in which case I'd give up the domain without any drama).


 4:59 pm on May 5, 2006 (gmt 0)

Actually domain speculators do at least guarantee that the domain can be bought (or UDRP'ed) so don't complain. If you have a legitamite right to a domain, for $1500-$3000 you can UDRP it back. If you don't have a right to it, that's called reverse-cybersquatting and it's frowned upon.

Consider that corporations like Microsoft own "firefly.com" and don't use it, don't have a product ever named that, but just sit on it. Good luck ever getting it away from them.

In this day and age you are better off with a unique domain name, not a word-for-word one, and use search engine optimization. Unless it's very short, no-one types it in anymore.

Consider "zipzoomfly" and "newegg". Totally unique names, no need to have "computerstuffforsale.com"


 5:38 pm on May 5, 2006 (gmt 0)

Unless it's very short, no-one types it in anymore.

Ummmm . . are you in the market for buying long URLs . . cause that bit of advice flies in the face of mounting evidence that a) people DO type in long URLs (I have a few); and, b) people who are so focused that they labor to type in a long URL are the same people who convert well if the landing page is connected to the URL's subject. (ChicagoBlueWidgets.com). Expect to see more and more of them. They work and people do type them.

Of course, one should take into consideration the value of a lead that converts from a long URL when considering registering it. I'll take 3 type-ins a year for a domain that converts 1 person and results in a $10,000 fee.

I need to stop giving away such tips for free. Ignore those long URLs. No one types them in.


 6:57 pm on May 5, 2006 (gmt 0)

testy, I've been in your exact same situation about half a dozen times over the past few years. You have three choices...

1 - Stomp your feet and whine that it's just not fair.

2 - Find an alternative domain name.

3 - Pay the guy what the domain is worth.

I've done all of them but #3 has worked the best for me.


 7:21 pm on May 5, 2006 (gmt 0)

I like number 2 best.

Lets say your comany name is

Example Inc

So you have to have example.com

But why?

What is wrong with:

There are so many varients you can make. Giving these people money is just feeding the market you seem to hate so much, as do I. So why encourage it? The only reason squatting exists is because people are paying.

I had a few domains I grabbed about 2 years ago because I knew they would become popular once certain products of the same name were released..... But I placed articles, relevent external links, NO ADS and I nurtured the domains to where they was being hit by all major SE bots, had listed rankings, and some established traffic. I had no trouble getting 5-6 thousand each, but I developed them I didn't harm them in any way so in my eyes it was fair to sell them at a premium.


 7:28 pm on May 5, 2006 (gmt 0)

Well, there are benefits to short domain names. You can possibly argue that www.microsoftnetwork.com is better or just as good as www.msn.com. Or maybe you can, but I won't buy it.

Addendum: Interestingly enough www.microsoftnetwork.com doesn't redirect to MSN, but Microsoft owns the domain.


 7:48 pm on May 5, 2006 (gmt 0)

$5000 is a bargain. The "businessman" trying to resell the domain name I want is asking for $500,000.


 8:43 pm on May 5, 2006 (gmt 0)

Lets say your comany name is

Example Inc

So you have to have example.com

But why?

Because once "Example Inc" turns into a real brand people will try to find you by typing in example.com.

Because when you tell them to go to "ExampleIncOnline.net" by the time they get home they will type in Example.com anyway.

Because "ExampleCompanyInc.com" Looks cheap and example.com looks like you take your business seriously.

Because the longer you wait the more expensive example.com will become. Once you build your brand and the domain is getting hundreds of type ins a day, the current registrar will be making even more parking revenue redirecting traffic to your site (or your competitors).

Of course he opens with a big number like $4k - counter with $1k and get on with your day. You have absolutely no trademark claim. Even if you do get a trademark registration, he had it before your trademark kicked in.

YES - the domain system needs an overhaul! But in the meantime, pay the man and go about your business.


 10:56 pm on May 5, 2006 (gmt 0)

b) Go for Trademark and take legal route

Too late. You can't come along years after some domain has been taken, register a brand new trademark, then attack the original registrant for infringing on a trademark THAT DIDN'T EVEN EXIST when they registered it! Only a psychic could be expected to know about a trademark registration that was filed AFTER they registered a domain name...

That's not to say that companies haven't tried the above ludicrous approach, but unless they had other strong supporting evidence such as an effective common-law trademark from substantial widespread use in commerce prior to the actual trademark filing they've lost every single time.

As others have posted, if you believe you have the LEGAL right to a domain name (not "I want it so I should get it" but actual documentable legally binding evidence proving that it should be yours) then you may still be able to win at UDRP without a formal trademark.

If you don't have that kind of supporting evidence now, a new trademark registration will not advance your case one iota. In that situation, your options are A) pay the asking price or B) find something else, but either way you've got nothing to complain about since the domain was never going to be "yours" anyway.


 12:44 pm on May 6, 2006 (gmt 0)

Demaestro, I could not understand your last para

Thanks otc_cmnn - after all the suggestions from all the experienced heads here I have made my mind to go for a negotiation. The name, I feel is important for me. Hope I get it this way.

YES - the domain system needs an overhaul!.

One request to all the webmasters here. My intention to post here is not to hurt any one personally. I request few of the webmasters here to restrain from personal attacks or using needless words.

We all should know that we can be right & can even be wrong.

In general, when many of us have a similar view and when we express it together at the same point of time, it can even become a source for a change.


 5:15 pm on May 6, 2006 (gmt 0)

But I know I have only two choice left as of now
a) Negotiate with the current registrant
b) Go for Trademark and take legal route

It is at least hypocritical the way you put the issue of ethics here.
You obiously didn't want to hear Webwork in message #15.

Try this link for more info: [en.wikipedia.org...]


 6:59 pm on May 6, 2006 (gmt 0)

I think there are two subjects here, that should not be confused:

1.) Squatting: domains that are the same as or sound a lot like, a recognised company/establishment.

2.) Other domains that are bought by the thousand by companies who's main purpose is to sell them on.

My business creates and manages websites for other companies. It is infuriating when we try to buy a name for them. We try hundreds of variations of the words our client wants, they are almost always being hogged but not being used.

We NEVER pay those guys, we just keep going, getting more imaginative till we find an availabile name.

Real estate is not the right analogy. Real estate is analogous to web space. I think a closer analogy is that of legal company names like SoAndDo Ltd, or SoAndso Inc. Do people buy thousands of company names in the hope others will buy from them at a huge price? I don't think so (someone correct me, I don't know much about the legal name business).

ICANN make a new type of name available because the others are used up. As soon as a new type of name is available, the domain hogs buy up everything that anyone could want - I suspect they setup dictionary robots to auto buy everything. It is not realistic, most of those names will never be used, when there are legitimate businesses that could use them.

...limiting the number of domains any one entity can hold.
I strongly agree! I propose a new rule for ICANN - a person or establishment can own up to 20 domains at the usual price, any extra should cost $500 each. That would stop this nonsense.

WEBMASTERBLUES.COM is available! haha
However all the useful and meaningful names are being hogged in their thousands by those who do not use them as domains are intened to be used, they may be showing the same ads, on ten thousand domains, but they are waiting for those big money offers to come in for this or that name (and all the little offers). This practice is stifeling the growith of the web, and preventing the small businesses that just want a quality name for the intended price of a domain. I'm not talking about business.com or home.com etc, I mean the countless 2 and 3 word names that should be available to those who would use them as THE name to represent their organisation.


 10:11 pm on May 6, 2006 (gmt 0)

We NEVER pay those guys, we just keep going, getting more imaginative till we find an availabile name.

Did you ever wonder how much money you may actually be costing your clients?

Let's say a domain owner wants $5,000 for a domain, and the company that really needs it is not willing to pay it and makes other plans. The domain owner lost one potential sale. The company lost an unknown amount of money, maybe $5,000, maybe $500,000, maybe the difference between success and failure of their business. They will never know. Nobody ever blames their failure on the wrong choice of domain name, but it is a reality on the web. In other words, sometimes you cannot afford NOT to buy it.


 3:30 am on May 7, 2006 (gmt 0)

I love the irony of this thread being on the front page with this thread...

[webmasterworld.com ]

That is basically a thread telling people there's money in doing exactly what this thread is complaining about calls unethical.


 4:42 am on May 7, 2006 (gmt 0)

Real estate is not the right analogy. Real estate is analogous to web space. I think a closer analogy is that of legal company names like SoAndDo Ltd, or SoAndso Inc. Do people buy thousands of company names in the hope others will buy from them at a huge price? I don't think so (someone correct me, I don't know much about the legal name business).

Sure, that's done all the time. There are companies that specialise in ready-made "generic" companies with strong generic names.

The real estate analogy is actually pretty good. Domain name desirability is similar to distance from "commercially useful" location - you can buy land for a song up a barren mountain which will never get foot traffic (think sddshhf.com) but buying land in the heart of the commercial/business district of a major city (think majorgeneric.com) will cost millions-to-tens-of-millions of dollars.

And yet, at one time, even that valuable land sold for literally pennies or dollars. Some prescient folks who bought vast tracts of land for virtually nothing set the seeds of fortunes that have lasted for generations - equally, those folks who have spotted and exploited the huge opportunities in the generic domain name market are sitting on assets (and juicy revenue streams) worth a fortune.

Take Marchex's acquisition in December 2004 of a portfolio of over 100,000 domains for $155.2 million in cash (+ a stock component). The person who was prescient and visionary enough to painstakingly collect those 100,000 domains over the previous decade saw a return that was likely between 50x-100x the total paid for the domains. That's just good business.

It's ridiculous to suggest retroactive rules to try and claw back generic domains from investors - might as well try and implement laws to claw back land from real estate investors, or stock from people who bought at pre-IPO prices (another good comparison - people get to buy Microsoft or Google at $1/stock or less if they're in the know and have the right connections and enough money and now they're seeing returns in the 100x++ bracket)

You can't go into an art gallery and argue that you are "entitled" to a Picasso for $500 because they're making a hefty profit on the cost of the paint, and it's unfair that they have 1,000 paintings in storage or on display when the supply of desirable paintings is limited... so why should you be entitled to a domain name at a ridiculously sub-market-value price because it happened to initially "not cost much"?

Nobody is forcing you to buy domains in the aftermarket, but just because you don't want to/can't afford to do so doesn't magically make the market "illegitimate" or the prices being asked a rip-off.

Domain names are BIG BUSINESS and getting bigger every day - witness the live domain auction that generated over $2,000,000 in domain sales over a 3-hour period at the recent T.R.A.F.F.I.C. show in Las Vegas.

There is no crime, no fraud, no deceit, no cheating, no shady business practice involved in owning a portfolio of top GENERIC domains - all you need to do (or to have done at the time) is/was to go out into the aftermarket and buy them, or to register them from scratch.

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