Buying a Domain From a Cybersquatter

Nevo writes "A partner and I are in the planning stages of a business. We've decided on a name that we'd like to use but the domain name is already registered. The owner has a single 'search' page up (similar to the one at www.goggle.com)... clearly not a legitimate business interest, but since we don't own a trademark on this name it doesn't qualify as bad faith, I don't think. Does anyone have any experience buying domains from these operators? Do you have any advice on how to approach the owners of these domains to get them at a reasonable cost?"

Comments

Three pieces of advice

[salesgeek]

Here's a quick warning: there's a lot of scamming in the domain marktplace. It's easy for scammers to get you to buy, then never transfer the domain.

1. Set your PayPal account to draw against a credit card, not your bank account. You have both your credit card's consumer protections as well as PayPal's this way, the difference being you can actually get someone on the phone at your credit card company. When they yank the money from PayPal, suddenly PayPal will care.
2. Use an escrow service. Buyer puts the money in, you transfer the domain, and then you get paid. Most scams happen when people do direct purchases. Lots of domainers use escrow.com. It works.
3. Make sure you are dealing with a legitimate business or a real person. A little due diligence goes a long way.

How it's done - info from "the other side"

[Etylowy]

First of all what you are describing is not cybersquating - it's no trademark, not a domain typo - there is no bad faith. The domain has been registered by a domainer - a domain trader that buys premium domains treating them as an investment.
When you type in the domain name you will see a domain parking page - a website filled with some adds in order to earn some money to finance the cost of domain renewal plus sometimes a few bucks extra. The domain is not indexed by google - it's a mutual agreement between large domain parkings and google - not in index, yet with google ads.

As the domain is not registered as a clear example of cybersquating (and so is not getting a lot of traffic) you can be pretty sure it's for sale - that's where we earn money.

The domain value is based on (in no particular order):
1. domain length - the shorter the more expensive.
2. tld - .com is the most expensive
3. the acctual domain name - if it is just a bunch of unpronaucable letters it will be cheap, if it's a word it will cost ya, especially if it means something. some random examples ghdn.com < geen.com < geek.com

If you want to buy the domain make an offer, but a fair one or you will be added to ignore list after the first message. We get loads of offers which are too low by two-three orders of magnitude and reading all off them is not really an option.

Once you agree on the price do use one of the domain markets that offers escrow - sorry I can't really point you to a speciffic site, as I deal exlusively in eastern european tlds and we have some local markets.

Re:Unfortunate

[aaarrrgggh]

I appreciate the idealism here, but it isn't always so simple. We paid a squatter $3k for our domain when we really had better things to spend our money on; that was 5% of our start-up capital. We still regard it as the best investment we made. (Our original name was 25 characters and we got down to 7)

Just be sure to set up a backup domain name in case things fall through and to give yourself better bargaining position. I think he wanted $6k for it.

Another word to the wise-- don't make a domain extortion be your first purchase for a start-up. Sort out more important things first like getting clients. If your web presence is all you have going, things get harder.

Re:url?

[TheRaven64]

Use the Microsoft approach (see MikeRoweSoft.com). Make a large offer for the domain. Once they accept, withdraw the offer and forward the paperwork to ICANN. The agreement to sell can then be used as evidence in arbitration and the anti-cybersquatting rules mean that they can have the domain taken away from them.