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.

Domain Roundtable Live Auction

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http://blog.domaintools.com/2007/07/domain-roundtable-auction-process/

Looks like another player has entered the live domain name auction arena, and I think this should be good for the domain investment business. Of course I like the lower commission, free bidding without mandatory attendance, and other features that will make this a smooth auction. It seems like an auction with 450 names will take quite some time though. Also of interest is that they will only permit 20 names to have reserve prices of $100k or higher. I am looking forward to watching this live online and possibly participating!

DNJournal TRAFFIC NY Recap

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http://www.dnjournal.com/cover/2007/july.htm

Kudos to Ron Jackson for another great TRAFFIC recap. If you couldn’t make it to the show in New York, this is probably the next best thing. I’m glad I had the chance to meet and speak with Ron and look forward to reading more of his articles.

Educating & Selling to End Users

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The goal of the Domain Distribution Network created and managed by Fabulous is to encourage end-users to purchase higher value domain names than they ordinarily would have considered. When a potential domain buyer searches for an unregistered domain name (at Godaddy for example), a list of Premium Domains appears, giving the searcher an opportunity to buy a better domain name than what they intended to find with their search. According to the DDN site:

There are approximately 6 million domains available for resale in the general market. Initially the DDN feed will offer over 500,000 of the highest quality domains available for resale. The average resale price of these domains is over 100 times the price of a new registration, and registrars typically average over $150 net revenue per domain sale.

Although this is a great opportunity to upsell an interested and presumably educated buyer, I think much more can be done to inform and educate end users about, and encourage end users to purchase generic domain names.

I think it would be in the best interest of the domain investment community and a company like Fabulous, BuyDomains.com, or an otherwise motivated company to sponsor workshops or seminars focused on teaching end users about domain names at industry specific tradeshows. I frequently see advertising agencies and consultants sponsoring lunch seminars at tradeshows to show how their particular company can help maximize advertising dollars. I believe if a company like Fabulous sent Dan Warner to teach a group of entrepreneurial business people how a generic domain name can help their business, it would be beneficial to the company and to the domain business at large. Let’s take the New York International Gift Fair as an example. If there was a Domain Distribution Network sponsored luncheon showing the advantages of owning a name like CheapPresents.com over SallysBirthdayPresents.com, the end users would “get it.”. Heck, this luncheon/seminar could be followed with a sale of targeted, well-priced domain names that could offset the cost of sponsorship and attendance. I bet there would be a residual impact as well when attendees return home after the conference to see what other names they can find using the DDN.

Small business owners are accustomed to dealing face-to-face with account representatives from the companies with whom they do business. Much of their business is done with a handshake in person at a tradeshow – especially when opening a new account with a supplier. For the most part, this is impossible to do on the Internet. To many small businesses, learning how to successfully operate with the help of the Internet is a daunting challenge. Why not meet with these business owners in person, make them feel comfortable and win their business? All of this can be accomplished by attending industry specific tradeshows.

A second idea I have to sell domain names to small business end users is to advertise industry specific domain names in industry specific publications. Kevin of BigTicketDomains.com did this on a broader scale in the Wall Street Journal. While this was a good idea and a nice starting point, I believe more success could be had if we target specific publications. If a group of domain owners with names in a specific industry got together and paid for a quarter page listing in that industry’s trade publication, I believe the results could be much different. I have been compiling a list of publications in various industries. I would be willing to share this with any interested parties – just drop me a line.

Ultimately, the more domain names that are developed into brands and websites, the better for the entire domain investment business. A few months ago, I noticed a Hermes store was opening on Wall Street across from the New York Stock Exchange. A few weeks later, I noticed a Tiffany’s was opening down the block, and two weeks ago I saw a Thomas Pink shop was opening very close as well. These were all preceded by the development of upscale condominiums in the Financial District. The point is that the more small businesses that develop generic domain names, the more others will want to emulate them and do the same. This will certainly increase the value of our premium generic domain names.

Small business owners are much more likely to develop domain names if they understand more about how a domain name works. I believe if we educate them, they will be much more inclined to buy our names. The platform has been created – now we must reach out and let the end users know where and why they need to be looking.

Silent Auction Thoughts

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After viewing the Moniker silent auction results, I found quite a few surprises:

In my opinion, there were a few good deals to be had. I believe the following domain purchase was an absolute steal for the price at which it sold:
Illustrate.com

I was surprised nobody picked up the following names, as I thought the reserve prices were more than fair:
Finances.com – $500,000
Whiskey.com – $470,600
Handhelds.com – $58,830

Another surprise to me was how much stock in numerics seems to have dropped. There were many NNN.com numeric names that seemed to have reasonable reserves ($5,890) but didn’t sell – 634.com , 547.com, 481.com, 643.com, 493.com, 342.com, 441.com…etc. There were also a few NN.com names that had higher reserves but didn’t sell. It isn’t very often that pure numeric .com names come onto the market, and I was surprised a speculator didn’t grab them.

I was also somewhat surprised that more .mobi names didn’t sell. I am not a big believer in this extension, but after reading how vigorously this extension has been defended by its supporters, I am surprised there wasn’t more action on them. Quite a few people have been posting that they made xxx% profit so far and still have quite a few .mobi names in their portfolios. If these people felt strongly about the extension, I would have thought they would be willing to reinvest and buy some of the names. One would think that reinvesting in a few of these names could have led to a round of “aftershocks” that followed when Rick Schwartz paid $200,000 for Flowers.mobi.

I believe many of these names will move now that the auctions have ended. Domain investors know the owners are interested in selling, owners know the domain investors at TRAFFIC thought their prices were too high, and I bet some compromises will be made to close some deals once.

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.

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