Prices, Gouging and Haggling for Internet Domains?

GregStevensLA asks: "I'm considering paying for a 'premium' domain name for a small web start-up I want to form. The company that currently holds the domain name is offering it for $1500, but they made it clear to me that they expect a counter-offer and are 'willing to make a deal.' I've never done this before, and I have no idea what a reasonable counter-offer is. If I say 'I can't go above $1000' am I being too easy? Should I try to push for lower than that? My understanding is that these prices are hugely inflated anyway (i.e. pure profit going to companies that probably scooped up the domains for free). In some sense, paying anything beyond a registration fee is gouging, in my opinion. I don't want to be conned... on the other hand, this is the reality of business, and I don't want to come across as amateurish. Does anyone have any advice for this new-comer to domain name purchasing?"

Comments

That's nothing

[El Cubano]

The company that currently holds the domain name is offering it for $1500

I recently received a solicitation for a church domain name. I am the webmaster for my church and another church in North or South Carolina (I forget where), no longer needs one of their domain names. The church I attend has the same name, but is located in another state. Basically, the guy said he wanted to offer us first dibs. When we inquired as to how much he wanted, he said that it had been "appraised" at up to $20,000. Though, he was very nice about it and said that he would give it to us for $8000. Sheesh. I recommended to our pastor that he ignore the request since we already have a well known and establishd domain.

Offer the lowest price possible and test them out

[Centurix]

Really, you cannot trust anyone who spouts about counter offers. Offer them $150, a good offensive play.

Someone squatted on centurix.com and I asked them how much. $5000 was the reply, so I said $100 is my best offer, if that's not enough then have fun with the domain. They accepted, I had the domain for 2 years and just let it lapse, the same company bought it again after I had it. Good luck to them, my current domain suits us much better.

Get a trademark, then UDRP

[Animats]

One of the more useful things to do in domain disputes is to get a trademark. If you do business or have a product named "Zowie", get a trademark on "Zowie". It's not that hard, it costs a few hundred dollars, and the process is entirely on line. Doesn't matter what category of product the trademark is under, or even if it's on the principal register. You can almost always get registration on the supplemental register, which means you can't keep others from using the name, but they can't keep you from using it either.

Once you have a trademark on the domain that describes your stuff, you can make a cybersquatting complaint. If the domain owner is just parking the domain, under the Uniform Dispute Resolution Policy that's considered "use in bad faith". Then you send a letter to the domain owner, threatening a UDRP proceeding.

(If it's a "private registration", the registrar will now "uncloak" the domain so fast your head will spin, because they don't want to be the party to a UDRP proceeding or lawsuit.)

At this point, either the other side will offer to sell you the domain for less than a UDRP costs ($1000), or you go forward to a mandatory UDRP proceeding, which is an instant win when you have the trademark.

Re:Don't Buy It

[patio11]

Both Google and MySpace are intended to be what my father the real-estate agent would call "destination locations" -- you go out with the specific intent to patronize one or two of them, the same way you go out with the specific intent to patronize your bank. This is why a bank generally does not stress overmuch about being on a corner. You can compare this to gas stations, which are NOT destinations (nobody says "Hmm, I think I'll hop in the car and drive over to that Shell station on 67th street next to the Burger King") -- their location is critically important to them. Almost every gas station you find will be built on a corner, for maximum visiblity and accessibility.

In the Internet, things are almost completely reversed. If you're a destination, then you might well get accessed by the address bar (Amazon, Google, eBay, MySpace) -- its very important to you to have a punchy, memorable, very unambiguous (can't be mispelled or misremembered) name. If you're not a destination, you rely on people seeing you "from the road" as it were, and in today's internet "the road" is Google. Google doesn't care whether you have a maximally-punchy minimally-long domain name or not.

I wouldn't write a 45 letter domain name for the heck of it, but you can feel free to not treat "six to eight characters terminated with .com, and exactly equivalent to your business name" as the gospel anymore. You're the expert on your own business, so you're best qualified to determine whether your users will see you as a destination location or not.