Domain Industry News

Acknowledging the Anti-Cybersquatting Act

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According to Josh Bourne of the newly formed Coalition Against Domain Name Abuse (CADNA), over 22,000 domain names are infringing upon Apple’s iPhone trademark. This problem was originally identified on Jay Westerdal’s blog earlier this month. In many cases, I would bet Bourne is accurate, and this is a huge problem for generic domain investors. The amount of Ebay auctions for iPhone-related domain names clearly show that many of these people are buying iPhone-related names in order to make a profit from Apple’s iPhone trademark. Alternatively, many of these domain names are currently parked and earning PPC revenue. This makes it very easy for people outside of the domain investment business to label ALL domain owners/investors as cybersquatters. The major discrepancy I have is that there ARE legitmate uses for iPhone domain names (forums, tools, fixes…etc) that don’t intend to profit from the trademark. For this blog post, my intent is to only highlight the illegitimate uses of trademarks in domain names.

I’m not a judge of character, but this type of low hanging fruit is easy for the CADNA people to grab and gain the support of large companies and the mainstream, which can be seen simply by viewing the listing of industry giants that are members of their organization.

In my opinion, there are two different types of cybersquatters:
1) People who don’t know about the Lanham Act and are unaware that are committing a crime when they blatantly register a domain name BECAUSE it’s of value due to the trademark.
2) People who believe the revenue from their trademark domain names outweigh the risks of owning them.

There are also reasons why trademarked names are profitable:
1) People register these names and put them for sale on sites like Ebay because other people actually bid on them, creating a market for this type of name. People bid on these names because they are either stupid, uninformed, risk takers, or all of the above.
2) Large search companies actually provide PPC payouts to owners of TM domain names. If TM domain names weren’t profitable on their own, people wouldn’t waste their money and take unnecessary risks.
3) Registrars don’t prohibit people from registering trademarks (other than their own, of course). Although it would be a subjective process, nothing to my knowledge prevents people from registering trademarks. This would be bad, because the folks at Apple Vacations, for example, would have unfairly run into problems when they registered their domain name. Perhaps blocking the obvious trademarks (like Microsoft, Google, Yahoo…etc) would help fix things, although that too could be considered infringement on freedom of speech.

In my opinion, a majority of trademark inclusive domain names aren’t owned by malicious people, but rather those who don’t know it is against the law. As a measure against unlawfully registering a domain name with a trademark, what if registrars required consumers to check off a box acknowledging that they are aware of the Lanham Act and its penalties before every registration? Perhaps even a brief summary of the law along with the possible penalties of owning/selling/profiting from a trademarked name would act as a deterrent to people who may be unknowingly committing a crime.

I have seen beginner domain investors posting on domain forums, and many are shocked/scared when they read about the ramifications of being sued for violating the Lanham Act. As much as the domain investment community has grown, there are countless people trying to make money in it who may not know the laws, and by giving them a copy of the law (either in full legal terminology or in layman’s terms), they may reconsider at the point of purchase.

Free .mobi Domain Name!

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I received an interesting email promotion from Network Solutions today.

“Register a new .com, .net, .org, .biz, .info, .us or .name domain name extension for any term and get a free .mobi domain name for a 1-year term.”

I guess they have resorted to just giving .mobi names away. I use my Blackberry’s web browser all the time, but I have not had the need or desire to use the .mobi extension. Even though the Weather Channel has a “mobile compatible” website at Weather.mobi, I can still access my local weather by using Weather.com on my Blackberry. I still don’t see a need for this extension.

Great PR Opportunity

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I think it would be an AWESOME opportunity for either domain investors with connections or the ICA to step in and help this Congressman retrieve his domain name at registration fee cost to him.

http://www.denverpost.com/news/ci_6369057

To sum this up, the first term congressman had his domain name expire (not close to being a generic/defensible name), and someone bought it and has pornographic PPC links up at Sedo. According to the article, everytime the staff called Sedo to attempt to buy it, the price increased. Although the congressman should have renewed his domain name, he is nice enough not to file a UDRP or lawsuit, which would have proliferated the public opinion that all domain investors have bad intentions. Is there any way we can help? How can we help? This is an opportunity to show that there is only a small percentage of people in this business who aren’t ethical, and the rest of us are hard working people not not trying to profit off of an innocent mistake or in tragedy in too many cases (VA Tech, Katrina, Columbine…etc way too many to name).

Overcoming the Cybersquatting Label

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http://www.ricksblog.com/my_weblog/2007/07/the-c-word-expo.html

No matter what you personally think of Rick Schwartz, he is on spot with this recent blog post. Domain owners and investors hold valuable pieces of virtual property, and some people who didn’t have the foresight to buy domain names while they were relatively cheap have been attempting to tarnish the image of generic domain owners by publicly labeling this group as “cybersquatters.” What has caused domain names to increase in value has also caused domain owners to be the target of what Rick refers to as “cyber bullies.” Fortunately, I believe domain owners are better equipped to protect our domain names than those who lost large land claims out west, but we need to be vigilant and support organizations such as the Internet Commerce Association. I have pledged to become a member as soon as they take Paypal or AmEx!

According to the Anticybersquatting Consumer Protection Act, a law amended to the Lanham Act in 1999, cybersquatting

“is registering, trafficking in, or using a domain name with bad-faith intent to profit from the goodwill of a trademark belonging to someone else.”

The term “cybersquatting” is clearly derived from the word “squatting,” which is loosely defined as people living in a property in which they have no right to live, frequently without the owner’s knowledge, and certainly without his approval. The owner in the case of cybersquatting is the trademark owner. When people refer to generic domain owners as cybersquatters, they are either slandering this group or they are ignorant about the topic they are addressing. Generic domain name owners pay for the right to use their domain name in any way they choose. If they want to develop their domain name into a huge brand like Hotels.com, they have every right to do so. If they wish to place relevant advertising links on their page, they have the right to do that, too! Just because a domain name isn’t developed, doesn’t mean someone else should have the rights to the name. It doesn’t work in the case of physical property, and it doesn’t work for cyber property either.

Domain names such as Devices.com are considered generic because a company can’t claim ownership of that particular word as there are far too many people who would conceivably have the rights to that term as well. Assuming the domain name is generic, nobody has the right to decide whether one particular company or person deserves to own that domain name over somebody with equal rights. “Cyber bullies” attempt to sully the image of generic domain name holders in a slanderous way, and whether it is intentional or just uninformed writing, ignorance is never a valid defense.

Kudos to Rick for writing his post, and kudos to Ron Jackson of DNJournal for including this in The Lowdown section of DNJournal.com.

Marchex News & Potential Impact on Domain Investors

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In the largest-scale Web site launch of its kind, Marchex, Inc. today announced that it has launched more than 100,000 of its local and vertical Web sites, publishing more than one billion Web pages of content, features and functionality for consumers looking for local services and information online, along with highly targeted local advertising inventory.

It would be very cool if they used an automated program to generate this unique content. This would open up an opportunity for domain investors with similar names to put our names on their platform and share the revenue. I know my names like FloridaRadiologists.com would have a higher CTR if contact information for actual radiologists in Florida was presented instead of the random Florida links, completely unrelated to radiology, that now show when you visit.

Back on June 1st, in an article about the Domain Distribution Network that was created by Fabulous, Frank Schilling noted:

Folks, this is a game-changer. Ask your registrar, if they are opted into this system.. Or better yet, get your own registrar.. Because based on what I’m seeing here, nothing is going to expire anymore in future and your names are going to become much more valuable — Heck .. many of your best names are probably still sitting in the available pool right now, unregistered!! Go!

What sells?
Any product or service with cityname: Delawarehomedecoration.com, toledoplasticsurgery.com, fargoplumbers.com, losangelestrashremoval.com (this style of regional name is the hottest seller)

Since I have been a buyer of these types of names for some time, I have noticed a definite decrease in the amount of names like these that are available. Many people may have purchased the names simply to resell on the DDN, however, if Marchex were to open this opportunity up to individual domain investors, everyone would be a winner:

Example: Direct navigator is looking for the phone numbers of a few radiologists in Florida.
Direct Navigator —-> Types in FloridaRadiologists.com into his browser and finds a doctor in his area.
Marchex —> Paid for the click, shared with domain owner
Domain Owner —-> Paid for the click
Doctor —-> Receives phone call from potential patient

To me, it looks like a win/win situation for everyone. Perhaps other parking companies will become more than just parking companies and solve how to do this across all parked domain names. This will change the game for certain.

My Experience with SnapNames Seller Program (beta)

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Up until about a month ago, I was never an active SnapNames user. At most, I may have been involved in five auctions over the course of three years, but I heard (and observed) some great sales that occurred on their platform. When I was made aware of a new beta test allowing ordinary people (like me) to auction names on SN, I was immediately intrigued. I wondered whether they would have more success selling my names than I had listing them in various forums and emailing my contacts. I decided to list a small group of decent names, and I didn’t set a reserve. I also listed one “premium” name, and I set a small reserve of $500. If it sold for the reserve price, I would take a loss, but domain investing is a gamble, so I rolled the dice.

To my surprise, a great number of my names sold! In fact, I had listed a group of them on another forum for $25/each to clear out some inventory less than two months before. My premium name sold for over $4,500 and had a bidding battle at the end. All in all, I have done two rounds of testing at SN, and here are the stats:

1) My sales rate on the domain names I submitted was 63%. Of the 30 names I submitted, 19 of them sold.

2) Of the 19 that sold, 63% of those sold for more than the $60 dollar reserve price.

In my opinion, at the present time, the only downsides to this program are the high rate of commission, currently 20%, and also the length of time it takes to disperse funds, sometimes up to a month. As I understand it, there aren’t any discounts on high value names, but a representative from SN may comment and confirm this or hopefully correct my error! All in all, the higher commission fee is worth it for the amount of names that were sold.

From what I heard, the manual process of reporting the auctions is going to become an automated process at the end of this month, which will allow me to view the names that are in auction and the number of bids. This is much easier than emailing the folks at SN – although to their credit, they always responded to me in a timely manner with the details I needed.

I just authorized a group of 60 names to be auctioned, and I will give an update once the auctions have finished. Based on the first two rounds of testing, I think they have a winning program!

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