An article yesterday about the domain name business appeared in Investors Business Daily which uses the domain Investors.com.
Its amazing how clueless major publications are still when it comes to domains.
The article focused around new businesses trying to obtain domains on the secondary market in this case a company called BlueGrass, which seemed to obtain the .com., .net and .org version for a total of just $17,500.
However the three domains were owned by three different people causing them to spend more on the .net than the .com.
The article states:
“”BlueGlass is an example of the millions of dollars companies spend for Internet addresses. Rising prices for addresses are a problem that won’t subside soon, says Frederick Felman, chief marketing officer for MarkMonitor, a consulting firm that helps companies protect their brand names on the Internet.””
Now how does the author say that BlueGrass is an example of the million of dollars companies spend for domain names, when they only spent $17,500?
Here another huge inconsistency in the story.
It quotes Scott Schwartz of Cozen O’Connor, a law firm that specializes in trademark law as saying:
“”Snatching up domain names on spec “has become a sophisticated business,” said S.
“Domain name owners aren’t just college kids trying to register funny names in their spare time, but multimillion-dollar companies that have giant portfolios of domain names,” he said. “It’s a bit like the Wild West.”
Yet check out the titled of the article:
“Cybersquatters Camp At Dot-Com”
At the same time they talk about the domain aftermarket being dominated by multimillion dollars companies, they still use in the title the story the “C” word.
Not only do they use the “C” word, they don’t even define it properly.
According to Investors The term “cybersquatters, refers to those who lock up domain names in hopes of selling them to brand owners for a big payday.”
Wrong.
The federal laws concerning domains went into effect in 1999.
This is 2010.
That’s 11 years.
Don’t you think that a major business publication would understand what Cybersquatting is by now?
The other issue is why in this day and age does mainstream media think that paying $17,500 for a .com, .net and .org is somehow newsworthy to begin with?
I mean $17,500 is really peanuts for a permanent address on the most important medium in the world.
Does Investor.com write about each company that spends $100K or more for a 30 second spot on national TV every single night?
Does Investors.com write about each company that takes over a storefront and sinks hundreds of thousands of dollars to get it up and running.
Of course not.
So there still is this mindset that spending any money on a domain, is somehow extraordinary.
“Domain you think that a major business publication would understand what is Cybersquatting and what is not by now?” “domain” replacing “do”?
Referring to Blueglass as Bluegrass while quoting the right name underneath? You should take your time while writing for the blog that is #1 in terms of # of readers. Is High.com priceless?
Even an article with a negative slant like that one could be a good thing if it also is pointing out the merits and monetary rewards of owning domains. Maybe it would arouse the interest of just one investor who might catch the fever and make a few of us the better for it. One can only hope this is the case.
“So there still is this mindset that spending any money on a domain, is somehow extraordinary” — yes there is, yet it is still a very lucrative business if you can identify the right domains. Imagine what it will be like when, sooner or later, this mindset shifts.
I have experienced dealing with the multibillion dollars corporation having 2000 names in its portfolio. One of its methods is to use its Trademarks, including the common dictionary word, and the UDRP process to acquire the bulk of the names of interest. This corporation buys the names they cannot win, with nondisclosure agreements. Almost every time one makes search using the trademark oridinary word name, this corporation’s listings come first in the search engine results, accompanied by the search engine ads. Does this trademark holder, also a domain name portfolio holder, and a domainer, fit the “cybersquatter” description?
No RL ….they fit the theif description of many corportations.
They’ll treat you worse than an alley mugger in New Orleans.
$100K for a 30-second spot on TV? Huh. Not worth 1/10th of that. I havent watched commercials in ages, since I got a DVR.
Mike
Me neither but $100K is on the low end
http://adage.com/article?article_id=139923
Now that we’re all thinking “big company” as portfolio name holder, any chance we could loose the silly term “domainer” and go back to the much nicer and more appropriate term, “domain professional”?
There is second page to that article where they discuss the difference between cybersquatting and speculating.
RL +1
Imagine if every business aiming to register a trademark whined about “trademark squatters” when their expensive trademark search firm told them their preferred marks, though not in use as far as they could see, were already registered.
Forget about these terms, “cybersquatter”, “domainer”, etc. They only serve to indicate a lack of comprehension of the packet-switched networks we’re now apparently hooked on. Ever wondered what happened to ISDN? Some are happy about the transition, others are not. These networks are displacing print and TV for the purposes of advertising. Advertising is what supports those older mediums, and it’s what will support this “new” one. Obviously, many are unhappy about these changes, including old school publications like the one that published this article.
When it all pans out, when people settle in and accept the change… we’ll simply have:
“Domain name registrant.”
“Advertising firm.”
No silly “cyber” labels. No whining about who has what.
This technology, i.e. packet-switched networks, is *not* new. We’ve been pushing packets around, and rebranding the same original ideas as “innovation”, since the 60’s. What is “new” is the growing widespread acceptance and use of it. It’s amazing!
Most of the old, established magazines and newspapers are burdened by the change. Can we really expect them to be sympathetic to those who are benefitting from the change (e.g. profitable domain name registrants)?
I AM VERY CONFUSED
So if i went somewhere and liked it and wanted to buy a piece of land there to build a house on
do i scream and shout if someone all ready owns that land No i dont the market has a loose value attached and i make a simple decision do i want it at that price or not simple
because a Domain investor has the foresight to research his market and buy keyword heavy
Domains that could be attractive to a company or themselves as a income stream he/she is considered a pariah were if one was to do this is the property or stock market there a hero
the more wealthy of the domainers should group together and pool some of there cash
to engage P R experts to enlighten the masses
this would help clean up the industries image and also help increase values
Personally own 3,500 plus domains and prefer having these as a investment rather than the
stock market as returns can be fantastic i purchased a domain earlier this year Personalinjury.org for approx 4,000 usd and have all ready turned down 2 offers
one for 10,000 made 4 weeks after purchase and just last week 25,000 dollars
why because like a piece of land if i develop it it will realise a better figure
As enquiries more and more are generated by users on the internet because of factors
such a speed, cost time ,saving the ease of access then it is not unusual for internet real estate to increase in value in a time were traditional real estate is loosing its value
And as the traditional real estate market has operators in different areas so does internet investing Domain Names are only one area there are many other areas in this sophisticated
market were were one can earn a income “if they know what there are doing ” development
lead generation after all a company lives or dies buy its enquiries and the internet is
proven to be the lowest acquisition cost arena to generate these sales enquiries which obviously then reflects in the value of a website or the potential a unused Domain
could be as a web site
Dont fight it embrace it and make some money
But remember to take good advise as in Domaining as with any other industry there are
ANGEL`S and demon`s
To see this industry in full swing check out Domainfest.com there is a big meeting in new york
this august or you could register and see the prices Domains are fetching with there online auction
I wish we could get rid of of the “domaining” and “domainer” terms for many reasons. I feel strongly that it would be beneficial for all domain names and site holders not to be associated with these terms. I know it is not just domains but also multiple sites and media that are all of interest to serious domain name portfolio holders. For individuals, groups, and corporation, it makes strategic, financial and commercial sense to aggregate many sites. Why do we need to separate ourselves from the rest of business world? We need equality: why should any corporate entity have different rights than an individual? In this part of the world anyone has rights to have access to the internet, and to register multiple names. We just have common interests to dicuss any benefits that may arise from this opportunity.
You wont like the answer but America puts big business interests before the individual
they want to scam your vote to allow them to serve there masters on the gravy train of stealing
the public’s money
why do you think you are so much in debt so you can be controlled by bankers and who is being used as collateral the tax payer because through there payments the payments to
the federal reserve come who is the fed not the government thats for sure
a group of wealthy bankers Rothschild’s Rockefeller etc that profit hugely by printing your
money and charging a fortune to do so and whilst doing so gain more control over your country
just look at the last 25 years and tell me different and the effect it has had on the world
INTERNET INVESTING HOW ABOUT THOSE AS A NEW DESCRIPTION
DOMAIN INVESTOR
Good point, MHB. On a larger scale, I’m convinced that everything which has to do with the Internet is not taken seriously by the mainstream medias.
I guess we’ll have to wait about 15 years before the Internet enters in the popular culture, just like television which was totally unknown in the 1960s.
If you want to make a person understand why domains can be so valuable, you need to make them think in reverse. Ask them how much they think Google would want to sell google.com – obviously it’s priceless, and they can see that. Same with hotels.com. They can then begin to think of domains in the right way instead of an intangible, replacable item.
The land analogy is a dubious one. Domainers often ignore the rules that normally determine asset prices.
A guide to fair price is cost of replacement (with something of similar quality). Land and most other assets are marketed at close to this price. If not, buyers will select an equally useful plot elsewhere.
But domains are often priced at a multiple of replacement cost, because sellers know that the buyer may lack a good alternative eg. If their business or product name happens to match the .com.
One often hears the statement, ‘a domain is worth what someone is prepared to pay for it’. But the fair price is not what the highest bidder is prepared to pay. It is a dollar more than the second highest bidder is prepared to pay.
“Ask them how much they think Google would want to sell google.com ”
🙂 So how much would you have paid for Google.com in 1995 ?
What I really wanted to know is: Considering the seller of BlueGrass.com, .net and .org owned it first, did they run a business AT ALL related to these internet domains, or ever considered doing so? One can’t honestly think its HONEST to speculate on anything at all. Specullation is what is, speculation. And it is never good. There are people who profit from work, and there are leeches, who like vampires, never really produced a thing, making his life on other people’s cost.
So, that’s what I think. If you buy a domain to make a business around it, ok. If you do so just to let it sitting, planning to make some easy money extorting from productive fellows, well there’s a no-no.
It’s really not cool, but still, you can do that. It’s socially acceptable, an financially viable. Don’t know what the big deal is, just assuming that. let them talk, your domains won’t get one dollar cheaper because of that.
But that’s what I think – and wtf am I to have a say?
Good luck!
In time – pelase don’t try and compare BlueGrass.com, Google.com and Hotels.com. If you want to have a serious conversation, YOU KNOW that those are three completely different kind of names.
@ Einstein
The google.com analogy is to impress the non believers with the realisation of how important a domain name is. Google.com has become priceless to their corporation (due to their use of it).
Some domains have great value as they give their user a flying start that ensures they can become a player in their market; hence the hotels.com analogy. Once they’ve grasped that, they can easier undestand where the value lies.
Mike,
As usual you make some great points. It’s too bad these publications won’t allow some balance in these articles. Why won’t they introduce a domainer’s perspective? Would make for a much more educational and interesting piece. Reminds me of NPR, you rarely get the other side of the coin when it comes to promoting their agenda.
Mtn.
Fabio
If I buy shares of Citibank today for $4 a share from someone who already owns the stock and sell them for $10 six months from now, well isn’t that speculating?
Of course because the shares could be worth $2 in six months.
I could even buy shares in Google and take the risk of increase or decrease, or I can short the stock hoping that the stock will go down
I could even buy or sell short term options on the stock hoping it do or doesn’t hit any certain price points by a certain date.
How about buying gold or oil or any other traded commodity? Or options or futures related to it.
How about buying or selling currency, all based on speculation, or what we call investment.
Does the guy who buys 1,000 calls on Google with a 510 strike price “produce” anything.
No he invests, speculates and drives a huge part of the economy.
I think you missed the point regarding the land point of view my fault i prefer talker
as i am a bit dyslexic but that has never stopped me
what i was trying to say is everyone has the right to buy a piece of land correct and develop
it using his/own judgement
the internet is the same its no different we all have the ability to buy a domain or domains
and develop then or just own them like a piece of land
to say no one should be allowed to have one with out having having a business is wrong
everybody in life has the opportunity to follow his dreams and try and make a buck or in my case a pound
i think its naive to think to think other wise as this is the spirit that most of us that have other business operate by
Fabio i dont take kindly to being called a leach as i have purchased over 3,500 domains
and at the time of writing i am in Romania opening a development office there
to turn them into lead generation machines which can then be sold on with a transparent
history.
speculation is a basic part of life either in finding a partner in life our a partner in business
in setting or back to cave man times with hunting
i do not site on company names but operate in the keyword heavy area as this brings in the best free traffic
Sorry about the leech/vampire thing. As english is not first language, I kind of run short of politer terms and end up in a black/white sort of text.
I just need to make it clear I do not condemn this activity. I can see society needs this kind of money flow. I jsut think we shouldn’t be mad about how they call it.
It’s a funny coincidence MHB mentioned operating short term stock options, as I actually do that. Risk big, gain big. Or sometimes loose big, too – I’ve been through both, believe me.
I’m just trying this domaining deal now, because I see a much smaller risk. And I don’t care about this black hat/white hat thing. There is no bonus for playing fair. How much more do you make for following the rules? I have considered typos, and even the C word. Didn’t do it, though – all I could think of were already taken.
I wander how much they paid for their own domain, investors.com ? and you are right, when are these people going to realize that owning the quality domain that match the business name/model, is much better than 1 month of TV ads. And then maybe they should compare costs. And I mean 1 month not just 30 sec.
@James – “If you want to make a person understand why domains can be so valuable, you need to make them think in reverse. Ask them how much they think Google would want to sell google.com – obviously it’s priceless, and they can see that. Same with hotels.com. They can then begin to think of domains in the right way instead of an intangible, replacable item.”
Interesting post “think in reverse”. This illustrates how unused quality domains can become synonymous with a strong internet presence. Some companies get this right off … while others have to grow into that realization.
Hey Fabio thanks for that
i love the way people are saying 30 seconds = 100,000 and yes of course a good keyword heavy domain is worth its weight in gold
i think the company that owns creditcards.com and another domain which are both gr8 businesses sold for 350,000,000 dollars
i dont know if i am breaking the rules but can anyone help me sell InterestOnly.com 🙂
If that company paid $17.5K for the three domains and paid more for the .net than the .com, then I think they got a smokin’ deal on BlueGrass.com. Will Investors.com call them cybersquatters if they end up selling the domain for several times what they paid for it?
Oh, BlueGlass.com. Well, then, the company could be accused of cybersquatting for taking the .net and .org domains, even though they don’t intend to use them, as those domains could be legitimately used in a different field of activity. Instead, they criticize the people who sold them the domains.
Fucking ingrates…
In general, it’s better mainstream don’t get the domains from the start. Imagine the competition you’d face in expiring domains auctions if they expired at all.=)
yup. there are benefits to being a geek with a mind for business. i’m sure the “mainstream” could name at least two examples, whose companies are reporting record profits in the midst of an economic downturn.
to get a good perspective, people who are coming into “domaining” fresh should read as many cases as they can from the days before there was an anti-cybersquatting law: early 90’s. many of these are still online if you search for them. mcdonalds.com, which settled amicably, was probably the most well-publicised. if i remember correctly the “domainer” in that case was a journalist for a well-known newspaper. but there are many others, and probably even more that were never reported. **please read these before you opine on “domaining”.** i remember one from the 90’s where the registrant agreed to give up the domain name to the trademark owner, a very large well-known company, only upon written agreement that the company would pay for his daughter’s university education. they agreed. how’s that for “cybersquatting”?
in any event, a law was passed and this type of behavior has been illegal since the mid-90’s (but only with respect to domains that could be confused with trademarks).
indeed maybe it’s good that most people are computer-phobic and math-phobic and are generaly underinformed on how the domain system works. try stopping people on the street and ask them “what’s a domain?” this ignorance is what creates opportunity. alas, there are a lot of immature kids and shady people that are involved with “domaining”. as it’s unregulated this should not be a surprise. but, i’ll bet if you look hard enough, you can find the same sort of immorality, dishonesty and deception in any highly regulated business sector. in these more well-regarded sectors, regulations exist because without them people could not be trusted to “do the right thing”, and perhaps things would look much like do with “domaining”.
the internet and the commerce that traverses it is still in its infancy. and so it’s quite “raw”.
@RL
I like your request to have the domaining industry lose the terms “domaining” and “domainers”. However, I like to think I’m a pretty creative guy, and I couldn’t come up with any other terminology to define someone who “invests in domains”. If you have one, I’d love to hear it. Anyone? It would something we could all embrace and swing it around to the dummies out there writing articles calling us “cybersquatters”.
Em-Bee, I think it would behoove you to make a “add-on suggestion” to your article that all domainers interested hit the publication with some objective points about “domain investing”. Those who read this article, and may be surprised at the value of domains, might get some good education from comments from the folks reading your article.
Great scoop — and another one bites the dust.
From one steve to another Domain investors Domain developers
the are Domain names after all i know one of the guys did not like land analogy
but for values to rise etc people have to understand and they understand land
and like i said if some of the big players put together for a pr company to improve the image
also prices would rise again
there is now a actual domain investment fund running out of the caymans to
one of the biggest problems is google its self as with algorithm changes at a blink of a eye
its difficult to get investor companies to pay higher values while there are moving foundations. and google is so big it does not care change the algorithm
collect more ppc revenue so yes its interesting its a little complicated but the returns are fantastic just my thoughts
they’re arguing again over at circleid about who gets the right to display ads. if you want to understand “domaining” in the context of the bigger picture, then you first need to understand the question of: who gets to show ads on the strange or nonexistant domain names that people type in? (guess what? for as long as the domain name system has existed, people have continued to type bizarre, irrational, nonsensical things into their browsers… it’s and no one can stop them from doing so. it’s documented.)
so, should the domain registrant, who paid for the name listing, have the exclusive right to show ads? or should the dns provider have this exclusive right? should the dns provider be an isp? or should it be some other company? should is be the user herself?
one thing is for certain. someone, whether “domainer”, isp, dns provider, etc. is going to show ads when people type in these peculiar names. in this respect, it does not matter who controls those names. someone can write software or change the system in such a way that control over the names shifts from one party toward another, but still, *ads will be shown*. money will be made. does it matter who makes that money?
i think to the circleid crowd, it most definitely does. have a look and decide for yourself. circleid dot com.
on circleid we have a classic case of “use my software not his”. maybe software should not be a “service”. consider the principal-agent problem. and then add in george akerlof’s ideas on asymmetric information. it’s not a good situation for the uninformed user.
some programmers only feel good if people use their software. that’s the cause of much needless propaganda, aka “FUD”, even when the software is “free” and “open source”. in this case, the “free” software is actually a commercial enterprise. companies pay for support and a “non-profit” organisation pays developers to work on the software. and the root server in question (“[his] resources”) is run by a private, and not impartial, individual. oh, and the software is some of the most bug-ridden in the history of open source software. almost forgot to mention that minor point.
then there are other “programmers” who write software for themselves, and for the challenge of it, and maybe share it if anyone else has interest. now that’s the smart way.
in any event, the software at issue, which does have a high rate of use, is not the best “free” alternative available. this may not yet be widely known. but what happens if more and more people learn that other free alternatives are simpler, faster and more secure? i think they will. this software is already being used on the root server and tld levels. it’s performance and reliability is being proven day after day. it’s only a matter of time.
unless those other folks agree with the idea of blacklisting domains, this person’s biased plan is doomed to fail, as his other similar plans have failed in the past.
what does this have to do with “domaining”? well, it is another example of the akerlof principle i mentioned above: asymmetric information. asymmetry of information is what allows “domainers” to make money.
so the biased individual running [“his”] root server and hiding the insufficiencies of his widely deployed software (and spreading FUD about alternative software) relies on asymmetrical information to make money, just like the “domainer”.
neither wants everyone else to know what he knows. perhaps because if the information held by him and by “users” was symmetrical, there might be no “opportunity”.
why is it so many people in programming and IT seem to prefer the approach of “give the user everything and let them sort it out or filter out what they don’t want” (which of course cannot work: due to information asymmetry, they rarely will know how/what to do, and the task is overwhelming)? maybe because it creates work for developers? no, that’s too cynical. what if the approach was “let the user take what he needs and leave the rest”. this is so much more simple. and efficient.
i don’t even use dns when i don’t have to, which is most of the time. i prefer the hosts file. simple, safe and reliable.
other folks= authors of the other, better alternative software
i doubt they are as biased
one more interesting thing to note:
it is journalists like the ones authoring these articles who sometimes enter into the “domaining” business, in an even more “morally questionable” capacity than those they once wrote about.
cases in point: barefruit and paxfire
one of them was founded by a former usa today journalist
their business: showing ISP’s how to use wildcard domains to catch nonregistered domains and non-registered typos on registered domains
incidentally, for any trademark owners who might be reading: these “services” sold to ISP’s are indiscriminate of trademarks. so you are losing untold typo traffic to ISP’s with the help of these companies, e.g. the one run by the former journalist. you just can’t see this practice as easily as *registered* typo domains (there is no listing in whois to check). only the companies and the ISP’s know the dollar amounts you are losing. it is substantional, according to the marketing statements of the companies. some have said this is a class-action lawsuit waiting to happen.
it doesn’t stop there. the software makers are also taking a cut. when someone mistypes a trademark in their web browser, they are redirected to advertising. and the software maker is paid a percentage every time this happens. the revenue is not insubstantial. microsoft (internet explorer and msn, bing) and mozilla (partnered with google) are raking in millions from typos, including typos of trademarks.
this has all been said many times elsewhere. but then, so has the stuff that the forbes article is saying.
fair balance.
in some professions, typos are a big deal. (ask your lawyer for example what she thinks when she sees typos.) many professionals expend much effort to avoid typos and other mistakes that reflect poorly on their abilities. on the internet, typos are a big deal too. but people are very careless.