Problem With Getting a “Valuable” Brand Domain Name

During a meeting yesterday, Facebook announced a new product dubbed “Facebook Home.” According to a TechCrunch article about the product launch, Facebook Home “replaces your standard Android’s homescreen with an immersive Facebook experience featuring full-screen photos, status updates, and notifications.”

Like many domain investors likely did at around the same time of the news, I did a Whois search to see if Facebook had bought the FacebookHome.com domain name, and it appears that the company has owned it for quite some time. As  Bill Hartzer points out in an article on his blog, the company did not secure several alternative extensions for this particular product.

I think it’s arguable about whether Facebook needs to buy alternative extensions like FacebookHome.net and FacebookHome.org. It’s unlikely that those domain names will get any traffic, even if the company decides to use its FacebookHome.com for more than a forwarder (it’s currently forwarding to Facebook.com/home). However, the company might want to have control over those domain names to prevent someone else from using them in a manner that harms the company’s brand or confuses people into think they are Facebook properties.

It is sometimes reported that a domain owner “hit the lottery” when a company brands a new product or service and the domain name that matches the product or service belongs to someone else. However, unlike a keyword domain name (à la iWatch.com in the case of a potential Apple iWatch product), a brand domain name (such as FacebookHome.com) may actually become a liability for the owner instead of a profit center.

Some people think they might be able to squeeze out some money for brand domain names, assuming the company would rather pay a few hundred or maybe even thousand dollars instead of paying for a UDRP. That may be true, especially if they want/need the domain name very soon. On the other hand, many companies value principle over all else, and they would rather file a lawsuit or a UDRP to discourage others from registering domain names with their branding.

A lawsuit can result in significant penalties, and even though a UDRP would not cost the domain owner anything if he or she chooses not to respond, it would leave a black mark on that person’s record, jeopardizing other domain holdings (others can cite previous UDRP losses in UDRP filings).

At the end of the day, while it might seem serendipitous that a company brands a product or service where you own that trademarked domain name, it’s more likely going to be a problem for the domain owner that will be a time and financial drain instead of a lucrative payout.