The Man Who Owns the Internet

Tefen writes "CNN Money posted this story about Kevin Ham, who has made a fortune gobbling up lapsed domain names and has recently launched a lucrative business partnership with Cameroon, the country which controls the .cm TLD. Since 2000 he has quietly cobbled together a portfolio of some 300,000 domains that, combined with several other ventures, generate an estimated $70 million a year in revenue."

Comments

So the market sure is promoting innovation

[andy314159pi]

Kevin Ham, who has made a fortune gobbling up lapsed domain names

The market sure is promoting innovation. He should feel proud of his great contributions and he has justly been rewarded.

Re:So the market sure is promoting innovation

[geekoid]

IF I made a fortune gobbling up prime real estate, nobody would care. why is this different?

Re:So the market sure is promoting innovation

[QuickFox]

If they simply auctioned them then the squatters would bid each other out of business. They do auction them. TFA tells about such an auction. Domain names for hundreds of thousands of dollars apiece. And yet profitable. Crazy.

Re:So the market sure is promoting innovation

[QuickFox]

And yet profitable. Why are so many people so upset about this particular scumbag making a huge profit this way? For years Google has been profiting far more by promoting this very thing.

Re:So the market sure is promoting innovation

[Chineseyes]

Let's say you buy a plot of land for $1M and sell it for $2M two years later. Where does that money come from?

Its funny how when people look at someone making $$ they always focus on the REWARD and never on the RISK

Let's say you buy a plot of land for $1M and sell it for $500K two years later. Where does that money come from? Yeah thats right the investors pocket. And thats not even including the taxes, insurance, $$ spent on improvements, interest paid on the loan the investor took out (flippers almost always use OPM in order to stay liquid), the points you get raped for by mortgage bankers on a residential deal and commercial lending is 100 times worse because there are no limits on the amount of points that can be charged.
Your comment wreaks of someone who never looks at the entire picture and probably watched some stupid "reality tv" show about flippers. Real estate investments are risky (ask the all the people in Fla. who are losing millions at this very moment) thus the high reward instead of complaining about flippers pick up a few books, grow a set of balls and invest yourself.

Full disclosure: In addition to being an S.E. I have been a Real Estate Agent for 8 years and a Real Estate Broker for 4 years.

Re:So the market sure is promoting innovation

[cgenman]

Real-estate is generally bought, developed, and sold at a profit. Net good happens there. Some real estate developers buy land they think will be profitable, and sell it months later once it is in demand. No net good, but the land usually flips within a reasonable amount of time and, hey, other landowners nearby are usually willing to sell.

Web squatters buy up huge swathes of land, then sit on them. They earn ad revenue from other people's mistypes, then a huge chunk of change when they finally decide to flip it. And during this time they've done NOTHING of net good for anyone. They've simply prevented anyone else from using the site name, usually for a long period of time, which causes an overall net loss.

The profit margins are atrocious. The site name that sold for 400,000 dollars? Yeah, they registered that for 20 bucks. The behaviors of squatters is equally atrocious. They frequently register typo domain names (slshdot.com, for example) to try to drive clicks. They automatically swoop in to register domain names that people forget to renew, then sell it back to them at extortive prices.

The domain name resolution service is a series of agreements amongst a group of dedicated nerds in an attempt to facilitate easy information distribution on the internet. By gaming the system, squatters are profiting while creating nothing, at the expense of people with real jobs and real work to do. It's taking a good-faith agreement and exploiting every loophole it can find. It's like spamming... it's legal, and it works, but it is a PITA for basically everyone. Unlike spamming, domain squatting and parking could be stopped, but nobody has moved to outlaw the practice yet.

Re:So the market sure is promoting innovation

[billcopc]

Domain names are not real estate. God I'm sick of that flawed analogy.

Domain names online are more like registered trademarks in real life. The difference being that you can't defend a trademark against a newcomer if all you've done with it is sit on it like an egg, which is what these "domainers" do.

I'm in the business of web business, and there is nothing that irritates me more than having an "AHA" moment, and finding out my great fun domain name is already taken by a squatter. They bring NOTHING to the table, and they're stopping me from doing something actually useful with the name rather than throw up a sleazy parking page with its own ad search engine.

I've often negotiated domain names away from their owners, mostly because they were normal people who simply bought a cool domain and lost interest. I've never paid the astronomical prices these squatters try to extort, the most I've paid for a name was $100 and that way mostly because the guy had registered it for 7 years, 2 years in he still just had the registrar's parking page on there. He was happy to recover his investment plus enough for a case of beer, and I was happy to get the name I wanted for a friend's blog.

Hey here's an idea: domain hoarding is like a patent holding company. They cheaply appropriate low-value virtual properties, sit on them forever until some enterprising young fellow with a bright idea comes along, and then pounce on him when the money's good. Now there's a fitting analogy, and we all hate IP warehouses now don't we ?

Re:So the market sure is promoting innovation

[timeOday]

Its funny how when people look at someone making $$ they always focus on the REWARD and never on the RISK

What about it? A poker game among friends in somebody's basement isn't economically productive, even though they're all risking their money.

A real investor puts their money into something productive, which could be anything from a movie studio to a car company, that produces wealth. It's not a zero sum game, since the process results in wealth creation.

Squatting on limited natural resources, like beach-front property, produces nothing, so it is a zero-sum game. That's OK for gamblers, but it's annoying when speculators are driving up prices for those of us who actually need housing to, you know, live in. Now if you are talking about somebody who buys a plot of land and builds a hotel on it (or other valuable improvements), that's different - they've actually put some work into creating value.

Re:So the market sure is promoting innovation

[yankpop]

In my experience, part of the risk is gambling that you'll be able to get zoning by-laws overturned, so that land you bought as cheap agricultural can be sold as as very expensive residential. There's enough money involved to seriously subvert the political system, making it very difficult for regular folks to get their politicians to stand behind the planning documents that are supposed to be safe-guarding the future of our communities. In the end the politicians get a nice campaign donation, and we're stuck with another eye-sore cookie-cutter subdivision on prime agricultural land.

Full disclosure: I've been involved with enough community groups fighting against such zoning by-law changes to have come to the conclusion that all land speculators are devil-spawn, although intellectually I know that's probably not true in all cases.

yp.

Re:So the market sure is promoting innovation

[Squalish]

How is Jeff Bezos a scumbag? AFAIK, he's earning honest money. You can't even say it's unethical just because people were careless enough to allow 1-Click to go unpatented. It's their responsibility. He's just making a profit off of other people's carelessness, which basically happens right across the board in the corporate culture.

How are squatters scumbags? AFAIK, they're earning honest money. You can't even say they're unethical just because people were careless enough to leave their building windows unbarred. It's their responsibility. He's just making a profit off of other people's carelessness, which basically happens right across the board in the street culture.

How were the pioneers of the American West scumbags? AFAIK, they were earning honest money. You can't even say they're unethical just because Native Americans were careless enough to leave their property un-deeded. It's their responsibility. They were just making a profit off of other people's carelessness, which basically happens right across the board in the frontier culture.

How are Nigerian 419 scammers scumbags? AFAIK, they're earning honest money. You can't even say it's unethical just because people were careless enough to allow their due diligence in researching moneymaking opportunities to fail. They're just making a profit off of other people's carelessness, which basically happens right across the board in internet culture.

If you put it that way, you can explain away anything. The only reason I'm not continuing to more heinous things is that doing so would break certain laws. Though it would not be unethical, and I would only profit from the carelessness you showed in crafting your argument (which is your responsibility), I choose not to break Godwin's Law because it's the right thing to do. And natural hair wigs were too expensive right across the board in 1940, even for curly hair.

Re:So the market sure is promoting innovation

[joto]

What this sort of squatting has done, in the end, is to utterly undermine and render worthless the notion of the domain name itself.

It's funny then, that every time I type google.com, or slashdot.org into my browser window I end up at the same page. I would say that domain names are not worthless.

trying to get meaningful domain names is pointless

It always was. Search.com is not Google. Chopper.com is not Harley Davidson. Yahoo.com is not about happy people. Amazon.com is not about tall and powerful women.

most people don't give the old notion of "you're only a professional if your email address has a legitimate domain" much thought any more.

Why should they? It's not like a con-man couldn't afford to buy a domain name, and rent some space on a server. This rule is as silly as insisting that "you're only a professional if you wear a tie".

Search engines have pretty much rendered moot the idea that the domain name itself need to have anything to do with the business or organization that runs it.

Yet for some unexplained reason, the Coca Cola Company decided that they wouldn't represent their company through the jfkojiovjojw2.com domain name, but decided to go for a meaningful one instead.

Having a bunch of domains == "owns the Internet"?

[dn15]

Sensational much?

Really?

[HomelessInLaJolla]

But the big money is in the aftermarket, where the most valuable names -- those that draw thousands of pageviews and throw off steady cash from Google's and Yahoo's pay-per-click ads -- are driving prices to dizzying heights Why do I suspect that his business colleagues are using botnets to artificially inflate those pageviews? If one follows the money paid in the advertising--whose pockets are he picking?

This seems to be an obvious case of multimillion dollar fraud yet I can see how it would be difficult to investigate and prove.

And what few people know is that he's also the man behind the domain world's latest scheme: profiting from traffic generated by the millions of people who mistakenly type ".cm" instead of ".com" at the end of a domain name And advertisers accept his claims of legitimate page views without any skepticism? I get the feeling that the American investment money and the government subidies going into online conglomerates are being seriously screwed.

Re:Really?

[Solandri]

Why do I suspect that his business colleagues are using botnets to artificially inflate those pageviews? If one follows the money paid in the advertising--whose pockets are he picking?

The most lucrative sites are general names, not typosquats. You're probably correct that most people who make a typo just ignore the ads and type in the URL again. But a surprising number of people who are, say, visiting Palm Springs will just type www.palmsprings.com into their browser, bypassing search engines like Google (dunno if that's a real site, but my guess would be it almost certainly is). These people will click on the ads on that site because it's exactly what they're searching for. I suspect most of the revenue comes from these types of domains. The article does focus on typos (mainly typos in .com), but that's probably because that's where all the new domain acquisition business is. Nearly all the "good" domain names under .com were sold long ago.

What?

[spellraiser]

I thought this guy owned the Internet.

Re:Does ANYONE click on those ads?

[mobby_6kl]

Yes. Because people will click on anything.

IP addresses

[Anonymous Coward]

Block outgoing TCP packets on port 80 to these IP addresses:
64.20.33.115
64.20.33.131
64.20.49.210
64.40.116.41
66.45.231.154
69.46.226.166
204.13.160.26
204.13.160.129
208.254.26.132
208.254.26.140
209.200.153.152
216.34.131.135
217.68.70.69
That should get rid of many pages you get to when you type "typos".

I have no hesitation

[jeevesbond]

Having been on the wrong side of 'cybersquatters' this is an issue close to my heart. I wouldn't mind if these people took a domain and did something useful with it, but instead they just plaster it with advertising and watch the cash roll in.

Am not even that bitter (it wasn't even me that lost the domain but the previous owner of my site), what makes me angry is the way these people just leech ad views without giving anything back. Scummy blighters, the lot of them!

Problem is what should be done about these people? It's not as if the government(s) of the world are competent enough to deal with problems like these (tubes anyone). ICANN is the organisation we should turn to: perhaps make a rule that the owner of a domain has to actually do something with it within a set period of time (say 6 months to a year). If all they've done in that time is plaster it in advertising (or have done nothing) it should return to the pool, perhaps with a bar disallowing the ghastly spammer from buying it again for a year.

This is pretty controversial and I suppose if someone pays for something they have a right to do what they like with it. That doesn't detract from the fact that these people are like parasites, filling the Internet with rubbish and getting in the way of those of us who just want to provide a service.

Alternative headline

[Zouden]

"Ham Just As Bad As Spam"

I wish they would raise annual fees

[Schlemphfer]

As a website publisher, I think it would be very much in the public interest to raise annual registration fees to, say, $70 a year. At that price, domain parking for "junk" domains would be prohibitively expensive.

Mixed amongst these junk domains are some great names that deserve to be developed, and will be if they are available. Unfortunately, the bottom-feeders of the online world have control of this vast assortment of names, which they are essentially holding largely for ransom purposes. I think that's a scummy way to make a living. But it's possible so long as annual registration fees are less than the small amounts of revenue that can be generated through generic google adsense programs and their ilk.

I would love to see the price of annual registration hit the point where, say, the guy who owns "waterfalls.com" would have to develop it in a meaningful way or surrender it. Sitting on a domain and putting up generic ads should be a losing proposition financially, and an increased annual fee would correct this situation and work to the public good.

Who's paying for those clicks?

[Animats]

Somebody is paying for all those clicks, and they're probably not getting much actual business from them. Advertisers are getting fed up with paying for "clicks", just as they did with "banner views" a few years back. The trend is towards paying only for actual sales directly derived from an ad. That's what "Google Checkout" is really about.

It's not hard to filter out typosquatting sites. We do it with SiteTruth, which tries to find the real-world business behind the web site, and down-rates the ones where it can't be found. Almost all the typosquatting sites are anonymous. Some of them have reasonably high Google rankings, because they have inbound links, but as soon as you look behind the facade of the web site, it's clear there's nothing behind them.

With all this "domaining", link-based page rank is no longer meaningful for small and medium business sites. With hundreds of thousands of phony domains, all linking to each other, a growing fraction of business links are just noise. Search engines try to filter out this stuff, but it's like spam filtering; it mostly works, but isn't airtight. With a high volume of junk sites, enough bad links get through to affect ranking.

The other two web-based sources of credibility, user-provided ratings and blogs, are also collapsing. Blog spam is a huge problem. Not only do existing blogs get spammed, millions of automatically created dummy blogs full of spam have been created. Until recently, user provided ratings had some credibility, but now there's a Collactive, which has a sort of spam engine for ratings, Digg, Reddit, and such. (Their slogan: "It's good to be popular").

Amusingly, in this world of spam, Usenet, where spam began, has become almost spam-free.

Automated registration bots?

[Anonymous Coward]

If you read the article, you find that this guy took a whole list of registered domains for any given day, compared them with a list from the previous day, and figured out which domains had expired. He then apparently used some sort of automated registration script to grab the domains that had expired.

I want to register the .com, .net and .org domains of my family name. The .com is currently taken, but expires in about a month. If what I read is correct, some slimebag domainer will use their lists and bots to automatically register the domain name I want mere seconds after its expiration.

All registrars should prohibit scripted registrations by using human verification picture codes. In the mean time, I need to figure out how to make sure I can instantly register the domain I want.

All greed, no value

[tomstdenis]

Once advertisers switch to pay-per-sale from pay-per-click these people will disappear. They provide next to no value and routinely snap up useful names and host garbage on them.

For example, look at libtomcrypt.org. The links there have NOTHING to do with LibTomCrypt. Someone looking for my projects will be disappointed to find links to random commercial shit [most of which is snake oil]. Of course in that case I didn't care about the domain [after Dan Kaminsky failed to renew it, it was taken by a usenet troll, then lapsed again and was immediately bought by the domainer].

Personally I wish all the worst in the world for this person. He spends his time and energy ruining what was supposed to be a good and just goal of widespread communication and equality. If he thinks he's a "good person" he's sadly mistaken.

Tom

Re:Does ANYONE click on those ads?

[QuickFox]

To make to people and/or businesses paying to advertise on those "sites" have to pay more for the clicks. You're just enriching the scumbags who make the sites. The advertisers don't chose to appear on such sites, they're just regular customers buying ads from Yahoo, Google etc. Most advertisers are probably completely unaware that companies like Google enable and encourage this sort of thing.

Kevin Ham? Isn't he related to...

[Anonymous Coward]

Kevin Bacon

Mmmmm, pork rinds...

[DeathElk]

Is Kevin Ham related in some way to Kevin Bacon? I wonder if there's a Kevin Pork or a Kevin Prosciutto out there somewhere...

Read it. He doesn't make 70 mil a year.

[Jack9]

"generate an estimated $70 million a year in revenue" although the actual numbers are more like a couple hundred grand AT MOST. This is a market fluff piece blathering on about how it could be a goldmine but nobody can prove it other than he has a nice flat. Next article was about how someone invented cold fusion but couldnt show it to the public for fear of the power companies killing them. Yawn.

Flotsom and jetsam

[rinkjustice]

I remember when I had the website hardcorelinux.com - a fairly popular linux website back in the day - until I suffered a number of personal and financial setbacks and in the process my domain name expired and was yoinked from me. The site became a viagra-selling website and now it's a link referrer for software and oil and gas(?).

The problem I have with squatters are they hang on to domain names and do nothing with them. It becames another piece of internet flotsam, and it offers no value to anyone.

Re:Having a bunch of domains == "owns the Internet

[RealGrouchy]

Sensational indeed.

A far more Fair and Balanced headline would read:

The Man Who Owns The Internet?

- RG>

He is a domain squatter

[Orion Blastar]

when a domain expires, he squats on it and pays to register it in his name or his company's name. Then he puts up a dummy web site with advertising on it that looks like original content that pays him for click throughs so when someone surfs to an expired domain name, they think it is the original web page and start clicking links.

Then when someone has a company of the same name, or sees that their domain expired and they didn't renew it in time, he will offer to sell it to them for a few thousand dollars. If he needs money he just auctions off some domain names on eBay, and when those expire he buys them back cheaper and tries to sell it again.

This looks like it is more profitable than trading stocks. Just start buying off expired domain names for like $35 for a full year with a domain parking service that allows you to place advertising on it. Then sell the domain for thousands to some company that wants it that badly.

I think this guy and guys like him are the reason why we can't get six letter domain names anymore and have to opt for twelve or twenty letter domain names.