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

Unfortunate

[eldavojohn]

When I've accidentally typed in an address wrong, I've been brought to a page with "premium" domains that a squatter is sitting on listing the prices for them. They were all pretty bland and stupid sites like a000.org or MedicMan.net but they listed the prices anywhere from $100 to $5,000. Unfortunately what you have to realize if you're going to make this offer is that they're doing this for those few times a year they strike it rich so it's probably going to be closer to $5,000 or more. If the site is like two last names or something readable, it's probably going to be pretty high cost. Far less than a court case you probably wouldn't win though.

The last thing you need to realize is that whatever money you give this guy is just going to fund him to buy up more domains and keep his hands on others longer. If you wanted to do the most conscious thing for the community, you would just find another domain and not give this scum one red cent.

Re:Unfortunate

[Anonymous Coward]

A co-worker of mine did that for a while.

He purchased a bunch of green bullshit names and then put add pages on them. When people contacted him about purchase he would be like, well it means a lot too me and I want to start a site, but I haven't done much yet, what is it worth to you?

Generally that was the end f it, but pretty much any offer was accepted.

I'd like to meet your coworker in the alley behind where you work. If you give him a whole bunch of whiskey so that he can barely stand before he gets there, maybe I could offer you some money once the trunk of my car shuts?

It would mean a lot to me ...

Re:Unfortunate

[Ed Avis]

The last thing you need to realize is that whatever money you give this guy is just going to fund him to buy up more domains and keep his hands on others longer.

That's the same if you buy anything from anybody. Do you believe that domain names should not be bought and sold but handed out by Santa according to who is good and who is naughty? If you accept that people have the right to resell domain names they own, it's entirely their own business what fee to charge. Of course if someone else owns something you want, and won't give it up without payment, it's natural to feel aggrieved and vilify the other person. That doesn't mean they are scum. It is the odd system of domain names and artificial scarcity that causes domain names to have a high value. Either pay what it's worth (and no, what it's worth is not the same as 'the price I think I should be able to buy it for') or choose a different domain.

Re:Unfortunate

[Anonymous Coward]

It's nothing personal; just business.

When watching movies, people cheer when the douchebag that keeps saying this gets shot to death (or fed into a wood chipper, or boiled alive, etc.)

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:Unfortunate

[mabhatter654]

As the original question is about purchasing a name for a company he hasn't started yet. That's not technically "cybersquatting", they got his name first. I agree, this is more of a "gold rush" issue where people stake claims on a bunch of land they don't intend to work, just in case somebody else might make money off "their" domain idea. The way the government dealt with it was requiring presence and requiring taxes be paid to keep physical land based on it's value, if you can't afford the property tax, then the land gets redistributed to somebody that can make enough money from the property to pay it.... There used to be a time "real" land was just as plentiful as domain names.. and we did just fine.

I think the solution was ICANN's idea to make the 20 cent fee non refundable, or to force registrars to actually take the money and stop "tasting" periods. Most of the professionals aren't paying, they just keep "tasting" names between shell companies. If there was a little bit of "treading water" added it would be more costly. It would still happen, but people would have to pay the $10 so they'd be "stuck" with it... for 10 or even 100 names that's not much money, but for the 10,000 these guys are running it would at least tie up their wallets.

Re:Unfortunate

[BrokenHalo]

No, what you say is nonsense. If you buy up a domain name to which you have no legitimate right, just for the purpose of extorting money from or preventing use by someone who does, then you are just being an asswipe. Just because the law doesn't prevent you from doing this doesn't mean your action has any moral legitimacy.

By your reasoning, the Mafia's protection rackets in the 1920s and '30s would have been perfectly legitimate, since there was no legal system to prevent it.

Make an offer

[Chrisq]

If they are a squatter they will have contact info on their page. If not you can find the registered owner with WHOIS. I would make them a reasonable offer and stick to it. Remember that there may be available alternatives ( .org, .net, .us, etc.)

Re:Make an offer

[noundi]

There are always alternatives. The guy is however starting is business on the wrong end. My 2 cents are: register at another top domain, create a brand for yourself, if things work out fine then trademark that brand, then go ahead and seize any domain violating your trademark. Don't go worrying about the domain name to be perfect before you even have anything to showcase for, a domain is shit without content so focus on that first.

How badly do you need that address?

[Ihlosi]

(And whatever the answer to that question is - never, ever give it to the cybersquatter).

Don't sound too interested when talking to them, mention possible alternatives. Lower your offer if the negotiations drag out - cybersquatters are in this for the money, and not selling the name means that they're not making any.

Re:How badly do you need that address?

[Ihlosi]

mention possible alternatives.

Clarification: Mention the existence of possible alternatives, but not what they are (or they'll be cybersquatted, too).

no

[larry bagina]

You don't own the trademark and even if you registered for it, you're doing so too late. Either pay for it or find another name. If it's a low volume domain (or one they scooped up when it expired) they may not renew it, in which case you can get it that way, if you want to wait.

If your business plan depends on owning one specific domain then your business plan sucks.

Be Crafty - negotiate well.

[gurps_npc]

I would suggest finding another Domain that they own and first asking them if you could buy that one. That will give you a high end price. Tell them no thank you. Wait a day and say you also like the real one. Then offer to buy it at 1/2 the price they gave for the first one.

Re:Be Crafty - negotiate well.

[morgan_greywolf]

I would suggest finding another Domain that they own and first asking them if you could buy that one. That will give you a high end price. Tell them no thank you. Wait a day and say you also like the real one. Then offer to buy it at 1/2 the price they gave for the first one.

Above all else, be prepared to walk away. It's only a domain name, there are lots of others, and if the guy isn't willing to give you a decent price you can afford to pay, tell him you're not interested. It's like buying a car: there's lots of wiggle room (even more than there is with a car!). Just like in poker, you always wait until the absolute last minute to show 'em your cards.

low ball

[tresstatus]

within the past year, my company went around purchasing the .net, .us, .biz, etc TLDs for our domain. none of them were taken except for the .net version. we called the guy up and said we were interested and asked what his asking price was. he said $2000, to which we said that was way too high. he came back to us with, "well how much do you want to offer for it". i think that our final buying price was between $300 and $500.

in that experience, i realized that some squatters are just one or two guys that sat around and registered a ton of domains for a couple of dollars a piece. they are going to use the car salesman mentality by "hit em really high... then scrape them off the ceiling so you can get the price you want to sell for". so they slap you with the $2000 as their asking price knowing that you won't pay it. they know that you won't come back with a $50 offer since their first offer was so high. if they had first said $500, then you probably wouldn't offer them as much. if you really want to play their game and you are just getting started, it might be safe to just kill your webserver while you are on the phone with them so that they can't see what type of company you are or if you has the money bags.

anyway, just go into it like you are buying a car. don't seem too interested or you will pay way more than you should.

Make up another name

[Anonymous Coward]

Many of the successful internet companies make up their own name. google, hulu, reddit, slashdot, etc. Make up a word that doesn't exist and go with it.

Don't play by their rules.

[KyroTerra]

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.

Obvious Solution

[charliebear]

Just wait until it expires, then swoop in and register it. /then email the squatter and ask them if they want to buy it back

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.

Easy

[Jamamala]

Give us the address, we'll give his server so much traffic he'll be begging to give the domain away.

Don't look big

[superdana]

We buy a lot of domains where I work--a big honkin' national enterprise--but we never use our work email addresses when we approach a squatter. That way we don't tip them off to how much money we have. So, my advice is to be aware of how you present yourself, and be careful not to give the squatter the impression that you're anything more than a casual buyer. Don't mention that you have a partner, for example, and don't reveal why you want the domain.

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.

Your customers won't care

[Opportunist]

They will not type in your company name in the URL bar and add .com. They will type your company name into google and click on the result. If they're recurring customers, they will bookmark your page.

URLs are no longer really important. I know people who have no idea what that funny bar on top of their browser is for that displays some funky random characters whenever they click on a link and a page loads.

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.

Capitalist Pig-Dogs

[EgoWumpus]

Without getting all commie, people who have a lot of money, or opportunity, or options, always whine "It's nothing personal, just business." When you have the option to buy domains and sell them for 100x-1000x the price, why wouldn't you? Legally, of course, it's totally legit. Ethically, it's totally not. And I'll tell you why.

When you buy a piece of land, the law assumes that you are doing your bit to maintain and develop that land. In fact, most property law revolves around that idea of having to put work into it. You pay taxes on it, and you are generally expected to be doing something to maintain it's value. When a property falls into total - or dangerous - disrepair, they come to you with the fines. If your sidewalk is hazardous, you can get sued. This is all considered the price of ownership.

With domains, there is no such cost associated. In fact, all that buying up domains does is suck money from actual wealth-generating sectors of the economy. If I start a business called AwesomeWorldChangingWidgets, I can't get that domain if you're squatting on it without first paying you way more for that domain than you did. Now, if you were society at large, and that additional value was being spread across those people who help to bring value to the domain name itself (such as the internet routers, the municipalities that maintain fiber, ICANN, or any of the host of other sectors that make the Internet viable), that would be fair. But you're just taking the money and running: you're taking the money for someone else's work.

The only complaint anyone ever has with capitalism is the 'I got here first' problem. When you start out with resources others didn't have a fair opportunity at, and then exchange them for disproportionately large sums of money, you're playing into this. Yes, it makes your life easier, but you've only helped yourself - and at the expense of literally everyone else. That makes you unethical.