Buyers Should Appreciate “Squatters”

Many people confuse domain squatting with domain investing. Some use the “squatter” term pejoratively, but others simply refer to people who hold portfolios of domain names as domain squatters. They’re not trying to be rude, but they don’t understand the difference between the perfectly legal business of investing in generic domain names vs. the business of monetizing trademark domain names, also known as cybersquatting. To many, it is one and the same.

People looking to buy domain names bristle at the fact that their coveted domain name is owned by a domain investor. “Squatter!” they might comment somewhere in anger. Nevermind the fact that the domain name has been registered for 20+ years and matches the name of hundreds of other companies. They’re angry because a domain investor has something they want, and the price seems high to them.

The reality is that they should appreciate the domain name is owned by an investor. This gives them the opportunity to acquire the domain name rather than having it owned by another company. Worse, perhaps, the domain name could be owned by a massive company, and even a solid six figure offer doesn’t move the needle enough to incentivize them to sell a domain name.

Doron Vermaat, Founder of Efty, posted a thread on Twitter to discuss this further:

Domain name investors often get a bad rap from outsiders. In fact, “domain squatters” are often targeted with vitriolic commentary. In reality, a domain name buyer should appreciate that

Elliot Silver
Elliot Silver
About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has closed eight figures in deals. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest. Reach out to Elliot: Twitter | Facebook | LinkedIn

4 COMMENTS

  1. So those oligarchs buying houses in London, Miami and all over the world and let the big nice houses sit—are they squatters or home investors or tax evaders?

  2. It’s great to see Elliot and Doron helping raise awareness of the important role that domain investors play in bringing liquidity to the domain name market.

    This issue has been of longstanding interest to the ICA. Nat Cohen and I, on behalf of the ICA made an extensive presentation on “Busting Secondary Market Myths” to an ICANN stakeholder group (NARALO) in 2020, which you can watch here: http://bit.ly/48JhPef

    We also published an in-depth article on CircleID exploring this issue in 2021 whch you can enjoy hereL https://circleid.com/posts/20210218-busting-domain-name-secondary-market-myths

    Thanks again for helping spread the word about the importance of domain name investors.

  3. Not sure if I agree with this. Between white (100% legit domain investing) and black (100% squatting) there are lots of shades of grey, and IMO a lot of it is dark.

    Sure, relatively speaking, a handful of domains are worth a nice sum and to ask for such sums is reasonable. But most of the millions of domains are just rubbish or close to it, yet “investors” hold for many hundreds if not thousands of dollars. Even the best portfolios have a low sell through rate… the not so good domains are likely in the “never sell” category yet they are usually priced quite high for what they are.

    Think about this analogy which IMO is more appropriate: most domains are like bread – plenty of them out there and easy to get. Bread is not expensive, unless it’s hoarded and its price is artificially inflated. It’s irrelevant whether 1 person or 1 million do the hoarding, they’re being hoarded, not because they’re worth much but because the price can be artificially raised (extortion). A claimed counter-argument might be that each domain (bread) is unique – sure they are unique (being alphanumeric identifiers of course they have to be) but they’re still just bread quality, perhaps 1 or 2 possible buyers at most, many with likely zero buyers, certainly at the prices being asked for. I have seen many domains being priced at $hundreds/$thousands and not selling for over 2 decades, most with zero offers, and sometimes being dropped, caught and then re-dropped.

    So when buyers witness actions like this it’s no wonder that they sometimes call domain owners “squatters”. To some extent I have to agree with them despite me also being a domain investor. The problem is that just a tiny fraction of domains have any real and solid value. Most are just bread but are not priced as such.

    No doubt my comment will offend. Sorry. But as both a buyer and investor I see both sides of the coin.

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