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|Domain name speculators and the domain name aftermarket|
Should this business practice be regulated or outlawed?
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...
|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.
|There are companies that specialise in ready-made "generic" companies with strong generic names. |
Most trade in shelf companies is not based on grabbing names. People buy them as it is faster and easier than doing an incorporation yourself. The names are often changed - quite the opposite of the domain market.
The mark-up over the incorporation cost is small - again unlike the domain market. Neither does anyone keep a huge stock of companies available - just enough to meet demand.
The reason is that companies are expensive to register and keep registered - there is a lesson there for the domain market.
In the coming 10 years, your company value on Internet and trust is assessed by your .com domain. If you dont own a .com domain, then people think that you are a rookie and avoid purchasing from you. Will you buy things from example.com or The-example-store.com or theexample.biz?
Right now, single keyword.com and double keywordkeyword.com domains are over. In future, there will be no meaningful .com domains to register and then the real value of .com domain will surface.
Try to buy that domain from the owner if you are dead serious about your business plans. Just think it as a form of investment for acquring a piece of land to setup your online virtual shop.
|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). |
Not necessarily - anyone with a portfolio of strong, generic domains is probably making a nice income from direct navigation traffic. The asking price will reflect the anticipated loss of revenue from selling the domain.
For larger/high-quality portfolios we're talking some very big numbers. Certain single-word .coms would easily make a profit even with a $500/year registration fee - the little guys would be the ones to get hurt.
Edwin nice post
All more or less good .com names were regsitered before 1997 but by that time teh registration cost was higher as i remember
Not so many folks were lucky enough to get into internet "land rush" before 1997
The practice of buying domain and not using it should be controlled. You cannot get a subnet of ips without having to justify it. This should be the case for domains as well. If you don't use it you lose it.
Nevertheless, we all know that this will never happen, regulators are too busy protecting big crops and not the small business owner who is just being introduced to the internet.
Hi Webwork, do you or anyone else know of a past case of reverse hijacking ever filed in Federal Court? The reason I ask is it would allow me to copy the case filing documents and forms as far as the legal language and words go (will customize it too where needed), and then file a case on a pro-se basis in my local court?
The reason I want to do it myself is that the attorney I spoke to about reverse domain hijacking wanted a substantial retainer fee to handle the case and he said I likely would not be able t get monetary damages so the money spent hiring an attorney would be lost. However, if I do it pro-se the cost is insignificant to me, all I need is a case so I know how to do it and what to cite, typical kind of pleadings, the way to word things, written style, and the formalities, etc.
|The practice of buying domain and not using it should be controlled. |
So I can't register/buy a domain name I'll build a website for but didn't do so right away because I got distracted by more "pressing" concerns?
Don't get some of us started here.
not necessarily, but if there is still no content after an year, maybe you should let someone else have it?
Personally I think the best thing to do would be to increase the cost of registering and to require some paperwork - the cost of handling paperwork would have little impact on most of us, but would make life very difficult for people who abuse the system by registering thousands of names.
The problem with this whole notion is that many of you are trying to reason and/or justify why you have a greater claim to a domain than someone else. And in some cases I would tend to agree, but the whole:
"you have had a domian for x months and it is parked I should get it now"
I find to be silly. Yes some people scooped up most of the good names. But so what?!?! Some of the most popular websites have the most undesciptive domain names imaginable, in fact for 2 of the big SE I couldn't have come up with names that less describe what you will get when you arrive there.
Are you telling me that they should have given up when they came to find that. SerachTheweb.com was taken?!?!? Please, that is crazy. I mean it has been suggested that if you have a company Example Inc and you can't get example.com that the guy who has it can ride your coat tails to glory, I disagree still. There was a post on here a while back about adsense.com.... Trust me they aren't making money off it.
I want to go crazy posting examples of URLs by big companies that don't have their comapny name as the domain. (but that is a WebmasterWorld no-no for good reasons) but try it out, you will see a lot of major comapnies don't have their name .com
Most people use search engines to find what they want, I for example when looking to find Example Inc's website. I don't type in Example.com I search Example Inc in a search engine... That is why if you have the proper branding, more relevent site, better content, and you are the actual compay then you are what people will find when doing websearches. The fact that someone has yourComanyName "dot" com is not really the point.
Also if you are the actual company then natural incoming links referencing you company will exist.
I honestly think people are giving to much weight to your domain matching your comany name exactly.
Because once "Example Inc" turns into a real brand people will try to find you by typing in example.com.
Maybe some will but they will soon see they are at the wrong site and then will do a Websearch as will most.
Because when you tell them to go to "ExampleIncOnline.net" by the time they get home they will type in Example.com anyway.
Not much faith in your customer? Instead tell them to search example inc in their favorite search engine, rather then typing it in. You would be surprised how many people don't even know what an address bar is or how to type in an URL directly. Applies mostly to people over 35 but I find myself explaining this to many of my clients. I tell instruct them to go to example.com and then they end up typing that into Google and call back to ask me which result to pick. (sigh)
Because "ExampleCompanyInc.com" Looks cheap and example.com looks like you take your business seriously.
Maybe in your eyes but that seems extreme. I have never heard of someone associating the success of a business based on the website URL.
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).
Or the longer you wait the more the guy hoping you will pay will come to see that you don't care about his domain and he will hopfully come to see it is only worth what someone is willing to pay. I still think you are giving to much power to the type in. Do you get that many hits without a reference?
YES - the domain system needs an overhaul! But in the meantime, pay the man and go about your business.
See this is so condraticting, you want people to stop parking on domains and then you suggest they fuel the market by paying, further showing those doing this that registering people's business names is in itself a viable business.
Quit paying these jerks and soon this market will go away.
Will you buy things from example.com or The-example-store.com or theexample.biz?
I will buy from the best priced, most professinal looking site with a good reputation. Also the one that comes up higher in my search results. A site with SSL in the credit card auth pages. One that has it's own payment gateway rather then a paypal one. Basically sites with good reputaion and ease of use. I don't give a flying .... what the URL is. Even if it was TheWorstStoreInTheWrold "dot" com. If they had a great rep, did good business and I could find them in SE then yes I would buy.
I mean we as internet tech savy people look at the URL we are at, but that isn't most of the world. Most of the worlds eyes glaze over when you say URL
Would you buy something from me just because I have a domain name that makes you feel all warm and fuzzy even if the site looked like crap and you couldn't find a good review of it, Had no SSL, Emailed your credit card number back to you. All the bad stuff, would you buy becuase I have the better domain?
Doubtful in my eyes. but if yes then I also have a bridge in Brooklin you may be interested in ;)
|The practice of buying domain and not using it should be controlled. |
Who would judge if it's being used?
"goto www.xyz.com the'rrrrrrrrrre great"
That would be using the domain, right.
|The problem with this whole notion is that many of you are trying to reason and/or justify why you have a greater claim to a domain than someone else. |
Exactly. And if people start applying that to everything else in life, imagine how many unwanted problems we'll start having.
Am I getting no response to my Post #67 because it's posted in the wrong forum perhaps? It appears the posts here are on a different tangent.
Would appreciate Webwork moving it somewhere else if appropriate (or some replies if it stays here). Thanks.
I'm not sure if that helps, but googling for "site:wipo.int reverse hijacking" brings some info about it.
Thanks, I looked at it anyway but already realized that only covers WIPO kind of cases where at the end of the anti-cybersquatting case the panel also ruled there was reverse hijacking.
That is not really what I am looking for as I am looking to take pre-emptive action and be the plaintiff in the US Federal Court in situations where I have been threatened or harassed to get my domain but they never actually file a Wipo.
I am weary of the harassment and want to be more pro-active by filing suit myself (which does not involve Wipo or the National Arbitration forum), I am talking about a civil court case.
Anyone know of a court case ever filed?
Trader, I'm not certain that you will be better off taking preemptive action.
Preemptive action would likely take the form of a Declaratory Judgment action.
There may be advantages to moving ahead with your projects whilst the "claimant" sits on their rights. "Laches" is one legal principal that comes to mind when your claimant doesn't take timely action, despite knowledge, and you advance your plans - in part due to the fact that no one followed through.
I'll sue when a wrong had been done and it's clear the other side is a S.O.B. who is of the mind that he/she is "in control" - i.e., a confidence man, a bully, a can do no wrong type, tough guy, grifter, a "you can't tell me" type, etc. I've been taught not to tell such a fool that you are going to hit them. Just hit them.
When I'm dealing with somone who is concerned about getting sued my advice, more often than not, it to "wait for the other shoe to drop" (after the menacing letter). I may respond to the threat/menace forcefully but I'm not one to utter a "go ahead, sue my client, make my day" letter. That's for the other side to decide. I'm just an inert big stick that has no interest in splintering. :)
The guys who are experts about guns advise that you never say, to the person holding the gun, "Go ahead and shoot me". Quite often those are the words last heard before a gunshot.
Don't shoot. Just load up on ammo and keep your powder dry. Chances are that seeing you armed and ready might be sufficient to win the day.
One man's view of the world. YMMV.
Thanks Webwork, very thought provoking and well said.
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