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Great UDRP Advice


Mike gives some fantastic advice about dealing with trademark names and the subsequent UDRP or C&D that might ensue. Not only is Mike one of the premier domain investors in the world. he is also an attorney with an extensive legal background. His advice is on the money, and I think it’s a very good read.
Check out The Domains blog when you get a chance today.

Category Killer Domains Still a Hot Commodity

Much like New York City taxi cab medallions, which are always highly coveted at auction, category killer domain names will always defy current market conditions. While I do think much of the domain industry is in the midst of a slow down, there are always going to be sectors of the industry that perform particularly well, regardless of of the health of the economy. Because category killer generic .com domain names are irreplaceable, when one is put on the market, the price can go through the roof.
On the flip side of things, I think people are spending less money on average domain names, which may be felt by many in the industry, since a vast majority of people own average domain names. I also believe some people think their domain names are worth more than the market will pay, and they are setting the prices far too high to have success. I am not really referring to a specific domain name here, but I am speaking in general terms. If you are going to entrust a domain auction house to sell your domain name, and you are going to allow them to lock the name up for 60 or 90 days after the auction, you might as well make the price reasonable.
Unless you own a genuine category killer domain name, I think you might want to reconsider your asking prices. Instead of trying to get rich on a single domain name, why not reduce your price, sell a name for a handsome profit margin, and reinvest it in other great domain names? There are plenty of times I have sold names for prices I believe are far less than optimal, but I have reinvested in more and better domain names every time, and I haven’t regretted a sale yet.

Pop-Unders on Network Solutions Parked Pages?

I recently noticed the webcam for Lowell.com was no longer functioning. I visited the website of the funeral home that operates the webcam, and I came across a Network Solutions landing page. While I initially thought they must be making some changes to the site, I didn’t contact the funeral home to ask if something was amiss. Needless to say, I always have my pop-up blocker on, so I went back to the business of developing Lowell.com and didn’t really think twice.
Today, while in the process of doing something that required me to disable my pop-up blocker, I noticed their site wasn’t working again. After seeing the Network Solutions landing page (image below), I clicked away and got a pop-under with PPC links on it. While the header of the pop-up says “http://kolmic.com – Mcdonoughfuneralhome.com” the body doesn’t look similar to anything of Network Solutions’.
The domain name registration is current – and in fact registered through August of 2013. Has anyone seen this before? Is Network Solutions adding annoying pop-unders to their parked pages to monetize them even more than going beyond the standard single page PPC links or is something else going on here?

McDonough Landing PageMcDonough Pop-Under

Domain as Leverage in Negotiating Tactic


Shame on Vancouver’s Stanley Park board of directors for trying to use a local entrepreneur’s domain name as a negotiation tactic in a license renegotiation. According to an article in the Vancouver Sun, the Stanley Park board of directors seems to be using carriage entrepreneur Gerry O’Neil’s StanleyPark.com domain name as a leverage in their negotiations. O’Neil’s carriage company calls Vancouver’s famous Stanley Park it’s home, and they offer carriage rides in the park, as they’ve done since 1985.
An excerpt from a 2005 letter sent to O’Neil asking him to relinquish his domain name reveals the underlying negotiation tactic:

“We are aware that your current licence [sp] agreement with the board expires on April 30, 2008, and that you will likely wish to negotiate a renewal term in the near future.”

To me, this looks like they are trying to tell O’Neil that they will not look favorably upon his renewal application should he not turn over the domain name to them. Not only does O’Neil have every right to his domain name, he is also an advocate for the park. In fact, in his current license renegotiation, he has indicated that he is willing to pay $200,000 towards improvements in the park over 10 years, while the park only wants a 5 year deal with $100,000 in improvements.
If the Stanley Park board of directors wants the domain name badly enough, they should pay him a fair price. Perhaps they should commit to the $200,000 in park improvements in exchange for the domain name to save O’Neil’s company a considerable amount of money. Had they had the foresight to register the domain name before O’Neil, they wouldn’t be in this predicament.
It’s a shame that another group believes they have the right to a privately held domain name owned by someone else. They are lucky that a park supporter such as O’Neil owns the domain name rather than someone else who could use it for other purposes that might not be in the park’s interest.
Special thanks to DomainReport.ca for spotting this.

Generating Revenue While Building Your Brand

Although I haven’t set a merchandise shop up for Lowell.com yet, I’ve heard that these shops can be a nice source of passive revenue, and they help build brand recognition. David Castello emailed me to let me know about a large hat sale that was made via the Nashville.com merchandise shop.
While CCIN netted a couple hundred dollars from the order of 55 hats, the greater benefit is that there will be a bunch of people receiving hats with their logo, and hopefully some of them will actually be worn by those who receive the hat! While many entrepreneurs pay big bucks for various branded tsotchkes to give away, having a shop allows people to actually brand your site for you! CafePress offers an easy to use and operate white label shop, and I plan to set mine up in the next couple of weeks.
This is one reason why having a fun logo is important to set your brand apart from other websites.

Importance of Having Cash on Hand


While it is generally a good business practice to keep an adequate amount of cash on hand to cover expenses for at least a few months, there are plenty of reasons why it is necessary to do so if you are in the domain industry. Aside from the lost opportunity of not being able to purchase a domain name that can help your business, you never know when unexpected liabilities will pop-up, and money will be needed.
A perfect example is the LH.com legal situation. While we can all assume FMA has adequate cash to pay for the defense of LH.com, smaller domain investors might not have had the cash. I would peg the re-seller/need to liquidate quickly value of LH.com in the ballpark of $300,000 (not taking the offers received or anything else other than the 2 good letters into consideration). Had a domain investor saved up and purchased LH.com as his prize investment, there is a good chance he would have been drained of his cash reserves. While he holds a high value domain name, you can’t really pay the bills with this paper worth.
Now say a UDRP is filed against the domain name. The ballpark cost for a UDRP defense is anywhere from $5,000 – $15,000 (very high) if you hire a competent domain attorney. With that said, if the UDRP defense was unsuccessful, the domain owner would be on the hook for the defense fees, and he would have lost this $300,000 hypothetical paper value. If a federal lawsuit would follow this action, as it could be the only way to recover the domain name, the cost of this could be in then tens to hundreds of thousands of dollars. While it is possible to sue for attorney’s fees, I don’t know the success rate of that.
The point of this is that we often jump on great domain deals when they come up, but as business people, we need to be mindful of the cash we have in reserve. Even though the interest rates in American banks are very low and we all assume that most of our premium domain names are fairly liquid, we need to realize that our domain names could be frozen and contested by overreaching corporate entities, and we need to be prepared to defend them.

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