Cybersquatters or domain investors?

Discussion in 'Ecommerce Forum' started by DPS1, Dec 11, 2013.

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  1. DPS1

    DPS1 UKBF Newcomer Free Member

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    I recently inquired about the purchase of a fairly generic domain name for a small business I was thinking of starting. I was quoted $250,000!

    I ignored the quote and moved on but when I was chased up by the agent selling the domain, I went into a rant about how I think that people buying domains to hold businesses to ransom is immoral and that it stifles enterprise.

    The agent replied that often people have bought a domain for a high cost, with the intention of starting a business, but that it's not worked out so they're trying to recoup costs.

    He also said that large companies like Microsoft own thousands of domains from businesses they have bought and should they give them away?

    I argued that they (hopefully) buy businesses for the value of its products or services and the demand for those products or services, not to cash-in on a domain name.

    How do other people feel about this, if anything?
    Posted: Dec 11, 2013 By: DPS1 Member since: Jun 19, 2012
  2. fisicx

    fisicx It's Major Clanger! Staff Member

    31,885 9,381
    Just find another name. This has been going on since the internet started and is no different to the large supermarkets buying up land to prevent competitors encroaching.

    In fact you are better off with a really nondescript but memorable domain name as it means you can expand or change your business and use the same domain name.

    I own a whole bunch of domain name some of which I may develop and some which I will sit on. One is used purly for email - there will never be a business or a website.
    Posted: Dec 11, 2013 By: fisicx Member since: Sep 12, 2006
  3. monaghan

    monaghan UKBF Contributor Free Member

    98 23
    As stated above, there is nothing different from supermarkets, number plates and so on, people seem to get upset about domains but not about other "land grabs".
    Posted: Dec 11, 2013 By: monaghan Member since: Nov 5, 2013
  4. LinkBright Media

    LinkBright Media UKBF Regular Full Member - Verified Business

    291 33
    I find this very frustrating too - these companies are *never* going to sell the majority of those domains at the stupid prices they ask so the whole exercise is just a complete waste of time. They'd be better off asking sensible prices - their turnover would increase exponentially I'm sure. Curious what they were asking a quarter of a million for though!
    Posted: Dec 11, 2013 By: LinkBright Media Member since: May 15, 2010
  5. DPS1

    DPS1 UKBF Newcomer Free Member

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    '' is what they want $250k for.

    In response to the comment that it's the same as supermarkets etc, that's just something else that's wrong. It's bad for customers and bad for the economy. And it drives up commercial property prices which makes things worse still.

    I think domains should all be leased at a fixed price. If u don't have a genuine use for it, somebody else will.
    Posted: Dec 12, 2013 By: DPS1 Member since: Jun 19, 2012
  6. RogerBa

    RogerBa UKBF Regular Free Member

    129 35
    To be honest I just take it as life, get used to it and as you say, move on.

    I could look back to when "real names" first appeared, I remember typing in numbers rather than names, sadly I was not very well off then or I would have bought a whole bunch of names, I can even recall looking at 2 and 3 letter .com and domains and thinking should I buy those, I didn't and hence I'm not living on an island in the sun now.

    The only way to partially stop it would be to vastly increase the annual costs, I'm sure the big boys would just absorb it but many smaller domain investors would be forced into selling and at much reduced prices I suspect, but do we all want that?? I doubt it.
    Posted: Dec 12, 2013 By: RogerBa Member since: Sep 17, 2012
  7. RepricerExpress

    RepricerExpress UKBF Regular Full Member

    200 50
    I guess it would be so hard to police the reasons someone has bought a domain name. As others have said, at some time or other we think of a great domain name, link it in our heads to a business idea and buy it with the intention of doing something 'in the future' with it.

    The idea of leasing is interesting, but people would simply set up a page and say they're using it for contact details only. Easy to circumvent those sorts of restrictions.

    The advice given, to move on and pick a new domain is your best bet. Event Hire is great but I bet your company would be more specific to a location or niche market—your domain should reflect that instead of a generic term anyhow.
    Posted: Dec 12, 2013 By: RepricerExpress Member since: Sep 5, 2013
  8. zigojacko

    zigojacko I say it how it is Full Member - Verified Business

    3,609 1,144
    Just play the waiting game, they always start with ridiculous prices and when no-one bits, they end up lowering the price by as much as 90% in some cases.

    Alternatively, just use a different domain that is available.
    Posted: Dec 12, 2013 By: zigojacko Member since: Dec 7, 2009
  9. antropy

    antropy OpenCart Experts Full Member - Verified Business

    3,545 601
    I think to the right company a domain like IS worth $250,000 in marketing terms.

    Google used to consider the domain name as one of the most important factors in ranking for keywords followed by the URL, <title> tag and <h1> tag. I believe this has changed recently and they now put less importance on the domain name.
    Posted: Dec 12, 2013 By: antropy Member since: Aug 2, 2010
  10. DPS1

    DPS1 UKBF Newcomer Free Member

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    "The idea of leasing is interesting, but people would simply set up a page and say they're using it for contact details only. Easy to circumvent those sorts of restrictions."

    Thanks for posts everyone. I don't have enough posts to quote properly but the above was from RepricerExpress.

    I have thought about setting up a sort of hosting site to lease names from. As an example, if my site were called host. com (sorry for the spaces, I can't post links) and a customer wanted to lease 'eventhire' then their address would become .com.

    It's a bit like if you have a site built in an off-the-shelf developer suite and they host the name for you - like socialengine etc.

    I think this solves a few problems - if the names are only leased and can't be sold, people won't lease them for any reason other than to build a genuine site. If they lease a name to protect an existing site that they're not using but want to cash in on, we could re-lease the name (would have to explain this up front in T&C's).

    Also, as more and more domain extensions (e.g. .com, .co, .org...) are created, it becomes increasingly difficult for users to remember the correct extension for the site they want to find. If, as an example, built a big enough brand, users would find it easier to remember this single domain format. And I don't think it would impact customers SEO much either.

    Posted: Dec 12, 2013 By: DPS1 Member since: Jun 19, 2012
  11. fisicx

    fisicx It's Major Clanger! Staff Member

    31,885 9,381
    It's a pretty daft name for a website.

    What does 'event hire' even mean? Marquee Hire or Event Lighting Hire I can understand but 'event hire' is just two random words.

    And it's a .com. If you are targeting the UK you really need the not the .com

    And what happens after a year if you decides to branch out into event promotion? The domain name is now worthless.

    With regards your domain lease idea, it's already being done by a number of companies, being just one of them.
    Posted: Dec 12, 2013 By: fisicx Member since: Sep 12, 2006
  12. DPS1

    DPS1 UKBF Newcomer Free Member

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    Tell me what you really think! :)

    Fair enough, I wouldn't say 'event' and 'hire' are two just two random words but this wasn't the point of my post anyway, it was more about the issue of cybersquatting.

    Just checked - it's not quite the same as I have in mind. They sell through 3rd parties and any names you search gives you a whole list of different formats that you can purchase - this only complicates things for your users.

    I'm saying build a brand that only leases names in a single format and always at the same price. It levels the playing field for everyone and simplifies the end user experience.
    Posted: Dec 12, 2013 By: DPS1 Member since: Jun 19, 2012
  13. Karimbo

    Karimbo UKBF Ace Free Member

    1,794 188
    no point in getting angry over it. They have their price and wil hold onto that price until they get a close offer. They wouldn't even entertain a "reasonable" offer.

    They way they work is they have tens of thousands of domain names. Most will never be bought so they will recur a £8 a year overhead. They might have a few gems in their collection and they're banking on a few astonishing deals. They're looking for the next twitter/facebook investors to come in and buy a domain so they are priced like that.
    Posted: Dec 12, 2013 By: Karimbo Member since: Nov 5, 2011
  14. GelatoChef

    GelatoChef UKBF Newcomer Free Member

    26 0
    His reply is an interesting one I hadn't thought of before
    Posted: Dec 14, 2013 By: GelatoChef Member since: Jul 2, 2013
  15. GelatoChef

    GelatoChef UKBF Newcomer Free Member

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    I can't imagine too many websites worth $250,000 that have been undeveloped though.
    Posted: Dec 14, 2013 By: GelatoChef Member since: Jul 2, 2013
  16. Karimbo

    Karimbo UKBF Ace Free Member

    1,794 188
    He's a salesman and what he said was a masterful rebuttal but highly unlikely to be representative of what goes on in the domain flipping industry as a whole.
    Posted: Dec 14, 2013 By: Karimbo Member since: Nov 5, 2011
  17. sambarnes90

    sambarnes90 UKBF Regular Free Member

    136 47
    I work in the domain name industry and closely with a number of domain investors.

    There's a MASSIVE gulf between domain name flipping and domain name investing.

    Domain name investors are serious people. They can spend huge amounts of money securing really generic names that they hope hold intrinsic value because of their broad appeal. They then spend huge amounts of money maintaining these portfolios.

    A domain name investor will never hold a domain name ransom to another business. They've purchased a domain name (probably at quite a high cost already) and they'll set it for what they believe is the right price!

    Imagine if you bought a shop in an emerging area for £50k 20 years ago. You've spent time and money keeping it up to date and maintaining it. You now hope to sell it for £500k, which is in line with similar properties in the area since investment has been pumped in and the big boys of retail have boosted the price of commercial property in the area and there's much less to go around as more of the property is taken! (Basic supply / demand, consider that in the domain name industry, where the very best names were taken early, there's now millions and millions of domains registered and not that many good ones to go around any more!)

    Would you just sell up if somebody came along and offered £100k? Of course not. Could you argue that person was stifling business? Of course not. They're just holding out for the price that they want.

    They don't squat on already trademarked terms or try and steal other businesses traffic. Good domain investors make a lot of money, they're not interested in your startup wanting an incredibly valuable domain at a seriously cut price, they're wanting the big money from the big players in whichever industry the domain relates to.

    Domain flipping normally takes a mediocre domain and puts up generally quite poor sites to sell for a quick profit. A lot of people are making good money from this too! But I can assure you, they're nowhere near in the same league as the real domain investors out there.

    Why should they give them away?

    They are a business asset, brought rightfully by Microsoft at some point not infringing on anyone's trademarks!

    To help stop the Cybersquatting problem, which by the way I totally disagree with, there's a process called UDRP for most domain types.

    This means if you can prove that someone is squatting on a term that you've trademarked, or is using the domain name in bad faith to damage your company reputation, steal your traffic or a variety of other things, you can force that name into your own ownership.

    So ICANN (the governing body of domains) have at least put something into place to stop this as much as they can.

    Don't be bitter because someone had the foresight to register that domain name years ago and invest their time and money at a time when it was available!

    Think outside the box! look at ccTLDs that have now become gTLDs like .co or .io? Try adding your location into your domain name? Spend a few hours coming up with an original name for your site!

    There are still lots of good domain names out there, I see people registering them every day!

    Sorry to sound a little harsh to the person mentioned in the OP, but I think it's a bit arrogant to say people should give up assets they've secured legally just because someone else wants to use it.

    People who don't understand the industry don't see this, hopefully a few more people will after reading this post ...
    Posted: Dec 16, 2013 By: sambarnes90 Member since: Mar 16, 2012
  18. chrismci

    chrismci UKBF Newcomer Free Member

    1 0
    "people seem to get upset about domains but not about other land grabs"

    And for good reason. Buyers of land or property have lots of satisfactory alternatives. Not so the domain buyer who desires one particular .com or (eg. to match name of business). The seller has a monopoly.

    “They'd be better off asking sensible prices”

    Not so unfortunately. The home owner who asks a multiple of market value will never sell. But the domain seller maximises income by so doing. The jackpots scored from buyers desperate to acquire a particular domain, more than compensate for prices being so high that the majority of stock gets left on the shelf.
    Posted: Dec 18, 2013 By: chrismci Member since: Mar 8, 2013
  19. The web design girl

    The web design girl UKBF Newcomer Free Member

    35 6
    Im with you on this one, it infuriates me when people buy domains just to hold them for ransom.
    I wish there was a law that said they had to use used within a specific period or the buyer would lose them and they would become available on the open market again...

    Someone has been sitting on a domain for 10 years that is the .com to one of our companies. He ignores all requests to buy it from him. We lose so much work due to people sending to the .com instead by mistake.
    Posted: Dec 19, 2013 By: The web design girl Member since: Dec 18, 2013
  20. 10032012

    10032012 UKBF Newcomer Free Member

    1,962 323 is seriously limited in potential.

    The world is brand orientated, relatively few descriptive real-word brands out there... instead of
    instead of

    No, not at all. Once you have purchased the over-expensive domain name you are in significant debt before you began and this isn't including developing the website, and other costs!

    back to ...

    Domain name flipping is brilliant as there is always some mug out there willing to spend money on pointless worthless domain names. At this sort of money, no..

    You do not hire an event. The name sounds rather premium at first glance.

    You might hire a car or a new employee.

    You might hire the village hall, a field or smoke machine.... for an event.

    If you have a company that creates events and market them, go ahead and offer them something silly like $20,000... Just someone setting a date and a venue; with or without furnishings or equipment; and telling everyone about it... who is going to then buy the right to that event?! Maybe its a gap in the market but I find it pointless.
    Posted: Dec 21, 2013 By: 10032012 Member since: Mar 10, 2012
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