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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?"
I was at a wedding over the weekend and one of the people at our table was talking about how their son runs a fairly profitable business in providing capital specifically for the purchasing of domain names. I can't recall if the business model involved a fixed interest rate, or a percentage of income, but it's the sort thing i never thought you could finance. I wonder how long before they start packaging them and selling them as securities on Wall Street :-)
-Chris
--an unbreakable toy is useful for breaking other toys--
One option already noted is giving a reasonable offer and sticking with it.
Another option is simply asking for a quote, but don't for the love of god tell them you're planning a business. Rather just send an informal message in the style of "I think $domain is a cool name, yadda yadda...".
Personally I'd opt for trying to figure out a name for the business that's not taken. Nonsense words that are easy to learn and not profanity in major languages are good bets.
.: Max Romantschuk
My boss received an e-mail from a cybersquatter that sought to sell us a URL that was very similar to a URL we currently owned. My boss, being the URL hound he is asked me to purchase it. I offered the squatterâ(TM)s auto-bid website $50, which it automatically turned down and told me I had to offer a minimum of $500. I walked from the deal, only to receive an e-mail an hour later from the squatter, agreeing to my $50 bid.
I offered to cover a squatter's registration costs, $10/month hosting costs since he purchased the domain, and a 10% premium for the domain. This worked out to $120-ish.
He laughed at me and said he got that much profit a year out of letting the domain just sit and serve ads.
So we went and bought .band, .info, and .net instead for less than $120.
-Pope Peter Porker, S.O.W., K.M.K.R., U.G.O.A., F.S.G.S.D.
Hi,
I had to solve such a problem once for a customer of us. A domain expired by accident and fell into the hands of a domainsquatter. The poor ex-owner had already advertisement material printed with his domain name on it. Damages would have ranged at about 10K$.
The problem: If a german company tries to purchase the domain, the prices tend to skyrocket (probably the same for US companies). So we created a fake russian student (not very rich) who wanted to use the domain for his private web site. He had a russian email address, had a small home page with his russian ISP etc. This way with a little negotiation, we managed to purchase the domain at a very reasonable price.
You have to be careful to become the owner of the domain. At first they tried to "lease" the domain to us by just setting the records. But it was completely in accordance with our virtual pesonality to display some paranoia and insist on a complete domain transfer.
Sincerely yours, Martin
Bad analogy. More like (where domain tasting in in play, which is a fair portion of the time) you have a shop selling land at a given price for the area. You then prevent anyone entering this shop to bid on the land at a fair price, so nobody can buy it.
You then sit a crack hut on this site, and claim that "it's a fair use", and you take a cut of the crack sales as "rent".
When the rest of the area becomes built up (by whatever means), all of a sudden, this piece of land is valuable, but still nobody can get in to buy this plot of land from the vendor, at the fair price.
One day, somebody asks to purchase this, and you quote them a price 100 fold the price of the surrounding land plots, because otherwise they can take the business elsewhere.
It's legal, but it's definitely not ethical.
Choose a name that someone's already using, and then seize their domain for using that name?
In my understanding using and obvious cybersquatting isn't the same thing in court. If I'm not mistaken these issues occur very frequently, sort of. A while back Madonna sezied madonna.com, which was used as a legitimate adult site, not related to madonna at all. Madonna means virgin, which of course is also very related to the porn industry, so it wasn't a question of copying Madonnas brand, but rather another use for the name. Of course Madonna won this case, as you understand, and thus she could seize madonna.com.
:)
This example might not be 100% related to the issue at hand, but it proves that domain seizures due to trademark can and have occurred across markets.
And FYI just because there was no outrage on Slashdot it doesn't mean it didn't happen.
I am the lawn!
"Business" is not a limited natural resource. Land is. People deserve money for developing real estate, but people who get rich simply speculating on unimproved properties are leeches on society, because they create nothing yet get to spend lots of money on things that other people work to create. There are thousands of people across the country who think they are special because they have lots of money when all they did was live in a place with lots of housing inflation. They only worse people are their heirs. It's funny how people get all worked up about "welfare moms" who take a few $K out of the economy without working for it when there are other people putting in nothing and taking out millions due to quirks in the economy, and how we manage natural resources.
So the flip side:
I have a client that is three years past due on paying me for hosting & registrations...
(yeah, I know, shame on me mostly).
Anyway, yes she's three years past due on 5 active domains (all redir to one site). I've been covering her, but in reality I'm planning on taking all but one domain and "parking them". Nice older gal, trying to make some money selling artwork. I'm willing to charity case one domain for her, but not five.
Now the million dollar question:
Am I a sleeze for parking the other four domains and trying to sell them? (I think not).
-nB
whois gawk date unzip strip find touch finger mount join nice man top fsck grep eject more yes exit umount sleep dump
Ticketmaster is guilty of this. Bruce Springstein did a series of concerts and wanted his regular street-level fans to be able to attend. Ticketmaster and Bruce's management agreed upon a range of ticket prices.
Ticketmaster operates a few subsidiary companies that also sell tickets. These companies bought the Springstein tickets at face value and turned around and sold them with a scalper's mark-up. The common folk were then priced out of the Bruce Springstein concerts and the Boss didn't see any of that premium pricing in the form of additional revenue.
$5 / month hosted VPS on linux = awesome!
Domains aren't land. There are some analogous aspects, but it's not the same thing, so we shouldn't expect to treat them exactly the same way as real property.
But as long as we're doing it, lets stretch the analogy a little bit. The law (IANAL) protects the property owners rights, but the law is also vested in seeing that land is actually *used*. This is why there are "adverse possession" laws. Also known as "squatters rights". In essence, the domain resellers are the property "owners" and people who want to use that land are the "squatters". Squatters (people who want unused land) in the real world actually have rights, unlike in cyberspace.
Squatters rights typically work like this: if you can squat on a persons land for a certain amount of time (say, 7 years) without them kicking you off it, YOU OWN THE LAND, because you were actually using it. Part of this law means that owners actually need to "regularly" walk their property to make sure that it's secure, etc., that nobody is squatting on it. And if you can use and occupy the land, and the other owner wasn't using it, you get to keep it and they lose.
The point here is that good use of limited resources (such as domains and land) is of value to society and thus to the law.
But adverse possession law doesn't work in cyberspace, for at least two reasons. First, the domain "property" owner can "walk" his property 3 billion times a second, even if he's not actually using it, because it doesn't occupy any physical space. Instead, its "size" is more a function of how useful it is within cyberspace. "buy.com" is the Louisiana Purchase compared to "xvlskdjf234235.org", which is like the one-room "garden" apartment you rent. So this unfairly supports domain resellers because they can be everywhere at once.
Secondly, there's no (legal) way to adversely possess a domain. Even if the reseller isn't using the domain to serve ads, you can't go and squat on it (to prove that you'll use it even though the owner isn't), because you'd have to hack his gibsons to do it.
Even overlooking the impossibility of adversely possessing a domain from a reseller, the issue is complicated by the fact that it's difficult to determine what legitimate use *is* in cyberspace. For example, just because there's no website doesn't mean it's not serving email. But what about ad sites or search portals? Is that a legitimate use? In the real world, you might buy property to put up a billboard, or more likely, you lease space from an owner to put up a billboard. (The owner uses the land, and you pay the owner for the right to place an advertisement there. Like *normal* Internet advertising.)
But a great domain doing nothing but serving ads might be analogous to buying Nebraska in order to paint the whole thing as a billboard for transcontinental flights. The owner of Nebraska probably makes money off it, and in some sense is "using it," but not really in the way that we understand land is meant to be used, and not in the way that is most obvious or suitable for the land in question.
So what does all this mean? Speculation can be appropriate, but it only works if it is practically limited by how long you expect to sit on the property, and by how much property you can speculate on. Instead, all domains cost basically the same no matter how good they are -- this is completely unlike real property where the initial and continuing costs (such as taxes, insurance, etc.) to the owner are based on some preexisting market cost. We also need to be able to define what it means to actually use property in cyberspace if we want to design a system that supports good use of cyberproperty.
Unfortunately, as things stand, we treat domain resellers as property owners, with all of the advantages and none of the disadvantages. They have all of the leverage, so the system naturally breaks.