Buying a Domain From a Cybersquatter 800
Nevo writes "A partner and I are in the planning stages of a business. We've decided on a name that we'd like to use but the domain name is already registered. The owner has a single 'search' page up (similar to the one at www.goggle.com)... clearly not a legitimate business interest, but since we don't own a trademark on this name it doesn't qualify as bad faith, I don't think. Does anyone have any experience buying domains from these operators? Do you have any advice on how to approach the owners of these domains to get them at a reasonable cost?"
Financing Options Available (Score:5, Interesting)
I was at a wedding over the weekend and one of the people at our table was talking about how their son runs a fairly profitable business in providing capital specifically for the purchasing of domain names. I can't recall if the business model involved a fixed interest rate, or a percentage of income, but it's the sort thing i never thought you could finance. I wonder how long before they start packaging them and selling them as securities on Wall Street :-)
-Chris
Ideas (Score:5, Interesting)
One option already noted is giving a reasonable offer and sticking with it.
Another option is simply asking for a quote, but don't for the love of god tell them you're planning a business. Rather just send an informal message in the style of "I think $domain is a cool name, yadda yadda...".
Personally I'd opt for trying to figure out a name for the business that's not taken. Nonsense words that are easy to learn and not profanity in major languages are good bets.
Don't play by their rules. (Score:5, Interesting)
Re:Don't play by their rules. (Score:3, Interesting)
I had something pretty similar a couple of weeks back. I got an email from someone squatting on the domain "lovesthepython.com", basically along the lines of "You need to buy lovesthepython.com because you have lovesthepython.org and your website is missing out on traffic because it needs to be .com or people won't think it's a legitimate website" kind of pish. They were asking IIRC $1000 for it.
I emailed them back saying that a) there is no website or indeed anything at all at lovesthepython.org because I've done nothing with it since I bought it, b) lovesthepython.com doesn't sound as good and c) no bloody way would I pay $1000 but if they really wanted it shifted I'd take it off their hands for $10. Alternatively, if they wanted lovesthepython.org I'd happily accept $1000 for it, or they could make me an offer. No reply, so I guess they're not fussed either way
Special slashdot offer - if anyone here wants to buy lovesthepython.org then you have it for £60, or a large chinese takeaway and some beer.
Re:It's not going to happen (Score:5, Interesting)
I offered to cover a squatter's registration costs, $10/month hosting costs since he purchased the domain, and a 10% premium for the domain. This worked out to $120-ish.
He laughed at me and said he got that much profit a year out of letting the domain just sit and serve ads.
So we went and bought .band, .info, and .net instead for less than $120.
Trouble (Score:1, Interesting)
A company I know purchased a domain name. About $5000 after some long and drawn out negotiations, threatening a lawsuit, etc.
After they got it, they immediately regretted it. Turns out that some previous owner of the domain name had been involved in shady activities, at least to the point of sending spam.
Just about every mail recipient's spam filter ended up blacklisting their e-mails. Hardly a good start for a new business.
They're still sticking with it, trying to convince the spam filterers to de-list them. Not a straitforward process.
Squatter (Score:5, Interesting)
Hi,
I had to solve such a problem once for a customer of us. A domain expired by accident and fell into the hands of a domainsquatter. The poor ex-owner had already advertisement material printed with his domain name on it. Damages would have ranged at about 10K$.
The problem: If a german company tries to purchase the domain, the prices tend to skyrocket (probably the same for US companies). So we created a fake russian student (not very rich) who wanted to use the domain for his private web site. He had a russian email address, had a small home page with his russian ISP etc. This way with a little negotiation, we managed to purchase the domain at a very reasonable price.
You have to be careful to become the owner of the domain. At first they tried to "lease" the domain to us by just setting the records. But it was completely in accordance with our virtual pesonality to display some paranoia and insist on a complete domain transfer.
Sincerely yours, Martin
Suggestions (Score:3, Interesting)
First, decide on a price you are willing to pay and then vow not to go any higher. Don't look at the asking price, just decide what it's worth to you. Offer the squatter half that and if he haggles with you, be tough and then walk away if he wants higher than your top price. In fact, stop at about 3/4 of your top price then walk away for a few weeks. See if he calls you.
If you can't get it for the price you want, start looking into other variations on the domain. A domain is only as 'valuable' as the marketing you put behind it. So the domain itself won't make or break your business. You'd be better off investing that money into a good marketing campaign or branding/logo designer etc.
As for the actual transaction- don't buy it unless he is listing it through a legit registrar's after-market domain auctioning/selling system. Don't take the "send me the cash and I'll unlock it for transfer" line.
Protect yourself and get a lawyer to do the actual transaction.
Re:Unfortunate (Score:3, Interesting)
All that domain registration does is place a few letters in the address bar of people's browsers.
Slightly off-topic for the subject at hand - but it is also necessary for a browser to decide if an ssl certificate is appropriate for a given website, and allows for virtualhosts on a single web server. And allows smtp to work.
Re:I disagree (Score:2, Interesting)
Re:Unfortunate (Score:3, Interesting)
Re:Unfortunate (Score:4, Interesting)
Bad analogy. More like (where domain tasting in in play, which is a fair portion of the time) you have a shop selling land at a given price for the area. You then prevent anyone entering this shop to bid on the land at a fair price, so nobody can buy it.
You then sit a crack hut on this site, and claim that "it's a fair use", and you take a cut of the crack sales as "rent".
When the rest of the area becomes built up (by whatever means), all of a sudden, this piece of land is valuable, but still nobody can get in to buy this plot of land from the vendor, at the fair price.
One day, somebody asks to purchase this, and you quote them a price 100 fold the price of the surrounding land plots, because otherwise they can take the business elsewhere.
It's legal, but it's definitely not ethical.
Re:It's not going to happen (Score:3, Interesting)
Possibly? It's guaranteed a lie. Some of my Medium traffic sites, ones that get about 350-400 visitors a day dont net more than $80.00 a year in ad revenue. Plus I have real content not a clickfarm like a parked domain is.
Re:Make an offer (Score:4, Interesting)
Choose a name that someone's already using, and then seize their domain for using that name?
In my understanding using and obvious cybersquatting isn't the same thing in court. If I'm not mistaken these issues [dmoz.org] occur very frequently, sort of. A while back Madonna sezied madonna.com, which was used as a legitimate adult site, not related to madonna at all. Madonna means virgin, which of course is also very related to the porn industry, so it wasn't a question of copying Madonnas brand, but rather another use for the name. Of course Madonna won this case, as you understand, and thus she could seize madonna.com.
:)
This example might not be 100% related to the issue at hand, but it proves that domain seizures due to trademark can and have occurred across markets.
And FYI just because there was no outrage on Slashdot it doesn't mean it didn't happen.
Re:low ball (Score:1, Interesting)
There's a whole theory about it. Forgot the name, but it has to do with expectations. What it comes down to is that it's best if you make the opening bid.
If you bid, let's say, $50 and he comes up with a counteroffer of, let's say $2000, it's his bid that's ridiculously high and you have every moral right to be offended.
If he opens the bid at $2000 and you come back with $50, it's your offer that's ridiculously low and he has every moral right to be offended.
Researches stumbled upon this effect when they did some research into how happy people were vs. the sexual relations they had. If they asked the sexual relations question first, people responded much more positive to the second question (happiness), compared to when the happiness question was asked first.
So the first question, or bid, in a questionnaire or negotiation, will set the ballpark figure for the rest of the exchange. You can make use of that.
Re:Unfortunate (Score:4, Interesting)
Re:You really need help with this? (Score:3, Interesting)
Personally, I would make it a short one line email, "Is this domain for sale? If so, please respond with your asking price", then just take it from there.
Perhaps also simulate bad grammar and spelling, etc... to play upon any assumed correllation between education and wealth. Although that might cut both ways if they assume you're a sucker.
Re:How it's done - info from "the other side" (Score:3, Interesting)
Riiiiight... if you really wanted 'fair offers', wouldn't it be more productive to give some actual indication of what you think a fair offer is? It's all well and good to say "it's based on this, this, and this" and "we get offers that are two-three orders of magnitude out", but that's not saying much really without any kind of starting point (are people offering you one instead of a 1000 dollars/euros/whatevers or what?). If you can't/won't give an actual example of a fair offer, or even an indication of the ranges a fair offer might fall into, how can you expect others to?
You gave examples of three domains, "ghdn.com, geen.com, geek.com", what would you regard as fair offers - ballpark figures - on those for example?
Having asked that, I reckon you're trying for more of a generic "There's loads of demand, honest! Offer me loads of money or you won't get it! Muahahahaha!" approach here, rather than an actually helpful and informative approach, so I'm not really expecting an answer.
Re:Unfortunate (Score:5, Interesting)
So the flip side:
I have a client that is three years past due on paying me for hosting & registrations...
(yeah, I know, shame on me mostly).
Anyway, yes she's three years past due on 5 active domains (all redir to one site). I've been covering her, but in reality I'm planning on taking all but one domain and "parking them". Nice older gal, trying to make some money selling artwork. I'm willing to charity case one domain for her, but not five.
Now the million dollar question:
Am I a sleeze for parking the other four domains and trying to sell them? (I think not).
-nB
artist and fans get ripped off (Score:4, Interesting)
Ticketmaster is guilty of this. Bruce Springstein did a series of concerts and wanted his regular street-level fans to be able to attend. Ticketmaster and Bruce's management agreed upon a range of ticket prices.
Ticketmaster operates a few subsidiary companies that also sell tickets. These companies bought the Springstein tickets at face value and turned around and sold them with a scalper's mark-up [perezhilton.com]. The common folk were then priced out of the Bruce Springstein concerts and the Boss didn't see any of that premium pricing in the form of additional revenue.
Re:Unfortunate (Score:2, Interesting)
I fully support squatters and do not understand the hatred for them.
Here's why they're illegal and people hate them:
Say ConcertX has 1000 tickets for sale, real people buy 500 and scalpers buy 500. The scalpers charge double what the tickets normally cost and are able to unload 2/3 of their tickets at the inflated rate. The net result is that the concert goers on average have paid 40% more for admission and ConcertX loses out on concessions/tshirt sales from 167 concert goers. Arguably, from an economic standpoint, ConcertX should have charged double, but then they wouldn't have been able to fill the venue and give a real concert experience. Also, there is no reason that scalpers couldn't have pulled the same trick and charged quadruple once again causing the problem though on a smaller scale.
Domain squatters cause the same sort of problem. The "service" they provide by reselling domains is of such minimal value compared to the economic damage they cause that the practice should be abolished. Anecdotal story time: I once let a domain registration for a personal website lapse (I didn't use it much). Two days later I get an email from a squatter offering to sell it back to me for $500. How did the domain that only I'm interested in gain 100x times its market value in one year? It didn't. It's just a big scam.
[off topic: once again have to post as anon because whatever nitwit wrote slash did a crappy job. Can't stay logged in on chrome or IE on two different computers. -McBeer]
Re:Not quite that simple (Score:2, Interesting)
Keyword in domain is just one of literally hundreds of features that go into ranking function. Let's take your "buy flowers" search. The top hits are:
Looking at the top-5 (which is the ones anyone really ever see), one has one keyword (the top hit), two have both, and two have neither. If we take the entire top-10, we still only have three with both keywords, six with one, and three with none. So what can we conclude about this? First, it seems pretty obvious that the "buy" keyword in the domain isn't very useful, otherwise we'd have a lot more "buy foo" hits, however the "flowers" keyword seems pretty good. So why is that? Well if you're selling flowers, it certainly seems natural to put "flowers" in the name of your company, and then use your company name for your domain.
in meatspace, the law wants land to be used! (Score:3, Interesting)
Domains aren't land. There are some analogous aspects, but it's not the same thing, so we shouldn't expect to treat them exactly the same way as real property.
But as long as we're doing it, lets stretch the analogy a little bit. The law (IANAL) protects the property owners rights, but the law is also vested in seeing that land is actually *used*. This is why there are "adverse possession" laws. Also known as "squatters rights". In essence, the domain resellers are the property "owners" and people who want to use that land are the "squatters". Squatters (people who want unused land) in the real world actually have rights, unlike in cyberspace.
Squatters rights typically work like this: if you can squat on a persons land for a certain amount of time (say, 7 years) without them kicking you off it, YOU OWN THE LAND, because you were actually using it. Part of this law means that owners actually need to "regularly" walk their property to make sure that it's secure, etc., that nobody is squatting on it. And if you can use and occupy the land, and the other owner wasn't using it, you get to keep it and they lose.
The point here is that good use of limited resources (such as domains and land) is of value to society and thus to the law.
But adverse possession law doesn't work in cyberspace, for at least two reasons. First, the domain "property" owner can "walk" his property 3 billion times a second, even if he's not actually using it, because it doesn't occupy any physical space. Instead, its "size" is more a function of how useful it is within cyberspace. "buy.com" is the Louisiana Purchase compared to "xvlskdjf234235.org", which is like the one-room "garden" apartment you rent. So this unfairly supports domain resellers because they can be everywhere at once.
Secondly, there's no (legal) way to adversely possess a domain. Even if the reseller isn't using the domain to serve ads, you can't go and squat on it (to prove that you'll use it even though the owner isn't), because you'd have to hack his gibsons to do it.
Even overlooking the impossibility of adversely possessing a domain from a reseller, the issue is complicated by the fact that it's difficult to determine what legitimate use *is* in cyberspace. For example, just because there's no website doesn't mean it's not serving email. But what about ad sites or search portals? Is that a legitimate use? In the real world, you might buy property to put up a billboard, or more likely, you lease space from an owner to put up a billboard. (The owner uses the land, and you pay the owner for the right to place an advertisement there. Like *normal* Internet advertising.)
But a great domain doing nothing but serving ads might be analogous to buying Nebraska in order to paint the whole thing as a billboard for transcontinental flights. The owner of Nebraska probably makes money off it, and in some sense is "using it," but not really in the way that we understand land is meant to be used, and not in the way that is most obvious or suitable for the land in question.
So what does all this mean? Speculation can be appropriate, but it only works if it is practically limited by how long you expect to sit on the property, and by how much property you can speculate on. Instead, all domains cost basically the same no matter how good they are -- this is completely unlike real property where the initial and continuing costs (such as taxes, insurance, etc.) to the owner are based on some preexisting market cost. We also need to be able to define what it means to actually use property in cyberspace if we want to design a system that supports good use of cyberproperty.
Unfortunately, as things stand, we treat domain resellers as property owners, with all of the advantages and none of the disadvantages. They have all of the leverage, so the system naturally breaks.