Domain Name Stock Market

[Frank Michlick]

Fusu introduces Domain Stock Exchange in private beta

Fusu - The Domain Stock Exchange. The world’s first Domain Stock Exchange provides a secondary market trading platform for domain names.

Many times the concept of owning shares of of a premium domain name has been discussed, but now someone has stepped up to the plate and developed a service that allows domain owners to sell ownership of part of their domains. This allows them to gain immediate liquidity, without loosing control of their names. Investors can participate in the growth of domain values buy acquiring shares of domains.

More at DomainNameNews

 

[labrocca]

ICANN governs global domain regulatory issues.

ICANNs view is very limited. They are not a 'legal' body either. The UDRP isn't a court...it has one purpose. To dispute domain ownership. They won't and can't make legal rulings on income from domains.

Technically a domain belongs to the registrant listed in the "admin" contacts on the whois. The only legal way for a joint-ownership to be established is for a joint corp/LLC to be the owner of such a domain. Caveat emptor.

I agree..that's the only way legally a domain can be joint owned. Now if Fusu was a US or other strong government corporation (UK maybe?) that was a legal corporation and every participant signed proper contracts to be involved then maybe it could fly. It's actually an interesting concept. My concern here is who is coming up with the idea and how are they implementing it.

Judging by their non-response to some of the issues posted it makes me even more wary.

 

[Keynes]

ICANNs view is very limited. They are not a 'legal' body either. The UDRP isn't a court...it has one purpose. To dispute domain ownership. They won't and can't make legal rulings on income from domains.

WIPO is the body in question here, UDRP is the action to proceed to a WIPO panel. My point is that if there came a dispute over ownership in the context of a sale or legal action, then the admin contact would be considered the sole owner. If you look at how the recent Cowboys.com transaction was handled, you see a proper legal joint-ownership route that can be taken.

 

[TT]

I would think being a domain registered in Slovakian would exempt them from U.S. laws for the most part.

Here is a simple scenario....

Someone places 45% shares of gamble.com up at $3 a share. I buy 500 shares ($1500) and now own .5% of the domain as it's valued at $300k (low estimate). Gamble.com is parked making $500 a day and so I earn 50 cents a day (math?).

Alright...everything seems to be going just fine..a few months pass and I get paid for 6 months ($90). Then suddenly the payments stop. I invested $1500 and got what?

I contact the company and they say the owner of Gamble.com has decided to leave the exchange and park the domain at their own revenue account. What recourse do I have? How many here know Slovakian law? How many here are willing to pursue this in a court in a country whose legal system might be very questionable? UDRP won't help you. American Dept Of Justice won't help you either.

Now over a six month period people are getting paid..this encourages others to participate and they could potentially rake in millions over 6 months to a year and pay out a small percentage. I just don't see what's to prevent them from screwing people over.

Whenever you do a deal you want to do due diligence. You want to have assurances that you won't be screwed. These assurances are normally some legal document in a jurisdiction that has actual laws preventing scams.

How many of you would sign up to a paypal like service whose home country is Slovakia?

A 10 second search at Google found me this article:

http://news.bbc.co.uk/1/hi/business/1846516.stm



There is more to read on the BBC page but you get the picture. I give credit to the Slovakians for having some creative ideas on the pyramid scheme but I won't be investing a single penny into Eastern Europe until the lawless scammers are held accountable.

If the owners of Fusu want to step forward and pronounce all the legal steps they have taken to assure us this isn't some long-term pyramid scheme scam then please...by all means post what you have.

One thing I would like to see is an American Company that is going to hold the domains in escrow backed by an insurance company. Licensed and Bonded as they say. A good lawyer with a good name (like Mr. Berryhill) holding the funds in escrow and the names in a special account would probably reassure the domaining community that this is legit.

Fusu.com currently has no listed TOS or policies stated. I have to assume to enter their beta a legal document must be agreed to. One for domain owners and one for investors most likely. I would like to see both posted either here or on their site.



My guess...as an illegal scam.

Thats what I wanted to say, Labrocca my hats off to you this business is volitile enough without having to have another bogus scam running amuck within the industry.

 

[Jokez Guy]

Now I can finally afford sex.com :hehe:

hahahahahaha Id be interested in it too :sold:

 

[Niamod]

On the surface, it seems like an excellent idea. There's no sense speculating as to the legal ramifications, SEC (which may not even have any involvement in this type of thing) etc. until more details are given (assuming it was a legitimate post).

I for one would be very interested in having a percentage ownership in a premium domain(s), assuming reputable parties are involved. I often invest in the stock of publicly traded companies that I want ownership in. I buy some "big caps", some exchange traded funds/mutual funds (groups of stocks) and some purely speculative stocks without proven track records hoping to "hit the big one". Why can't the same theory apply to domains someday?

Whether it's fusu or someone else, the idea is compelling. I wish them success.

Bill

 

[zero_haze_au]

ICANN governs global domain regulatory issues.

My advice is to steer clear, and consult an attorney if you're seriously considering joint ownership of a domain.

Totally Agree, just because they write up a contract saying 'person X' owns x amount in this name, does not over rule the ICANN rules.

Unless this is backed by ICANN, don't throw your money away. If you want to throw your money somewhere, throw it to me. :hehe:

 

[dbdomains]

It is an interesting idea. One we have toyed with since 1999. However, it is much more complicated in practice than on paper.

 

[italiandragon]

I would think being a domain registered in Slovakian would exempt them from U.S. laws for the most part.

Here is a simple scenario....

Someone places 45% shares of gamble.com up at $3 a share. I buy 500 shares ($1500) and now own .5% of the domain as it's valued at $300k (low estimate). Gamble.com is parked making $500 a day and so I earn 50 cents a day (math?).

Alright...everything seems to be going just fine..a few months pass and I get paid for 6 months ($90). Then suddenly the payments stop. I invested $1500 and got what?

I contact the company and they say the owner of Gamble.com has decided to leave the exchange and park the domain at their own revenue account. What recourse do I have? How many here know Slovakian law? How many here are willing to pursue this in a court in a country whose legal system might be very questionable? UDRP won't help you. American Dept Of Justice won't help you either.

Now over a six month period people are getting paid..this encourages others to participate and they could potentially rake in millions over 6 months to a year and pay out a small percentage. I just don't see what's to prevent them from screwing people over.

Whenever you do a deal you want to do due diligence. You want to have assurances that you won't be screwed. These assurances are normally some legal document in a jurisdiction that has actual laws preventing scams.

How many of you would sign up to a paypal like service whose home country is Slovakia?

A 10 second search at Google found me this article:

http://news.bbc.co.uk/1/hi/business/1846516.stm



There is more to read on the BBC page but you get the picture. I give credit to the Slovakians for having some creative ideas on the pyramid scheme but I won't be investing a single penny into Eastern Europe until the lawless scammers are held accountable.

If the owners of Fusu want to step forward and pronounce all the legal steps they have taken to assure us this isn't some long-term pyramid scheme scam then please...by all means post what you have.

One thing I would like to see is an American Company that is going to hold the domains in escrow backed by an insurance company. Licensed and Bonded as they say. A good lawyer with a good name (like Mr. Berryhill) holding the funds in escrow and the names in a special account would probably reassure the domaining community that this is legit.

Fusu.com currently has no listed TOS or policies stated. I have to assume to enter their beta a legal document must be agreed to. One for domain owners and one for investors most likely. I would like to see both posted either here or on their site.



My guess...as an illegal scam.

labrocca, maybe you should consider that the article was from early 2002 , 6 years ago.

And also before to judge so bad Est Europe I`d advice you to take a good look at the financial frauds happening from decades in the Usa......take a name you may know: ENRON

Regarding scammers, I`m pretty sure there are more scammers from the Usa then from the rest of the World all together.

While your points are valid regarding the risks of such idea without valid security measures , your view is very towards other countries need some update.

Now, imagine how people from Slovakia would feel reading your post. :td:

 

[Mike]

labrocca, maybe you should consider that the article was from early 2002 , 6 years ago.

And also before to judge so bad Est Europe I`d advice you to take a good look at the financial frauds happening from decades in the Usa......take a name you may know: ENRON

Regarding scammers, I`m pretty sure there are more scammers from the Usa then from the rest of the World all together.

While your points are valid regarding the risks of such idea without valid security measures , your view is very towards other countries need some update.

Now, imagine how people from Slovakia would feel reading your post. :td:

Granted, Labrocca's finger pointing and generalization summarizing an entire country as scammers may be a bit "over the top".
Let's leave the country association aside for a moment, strip his post from all geographic references, and he still has a VERY valid point!
What are the assurances? What's the insurance for investors? In a global environment, who's accountable and by what standards of measure? Which laws are applicable? There are a trillion questions that would have to be clarified and answered before anyone should consider to trust or invest in this type of venture.

Aside, it's really impossible to tailor scamming in Eastern European countries towards Slovakia alone, i've just ran into a scammer from Poland that cost me 40€ (US$60), heavily assisted and condoned by PayPal - an American company.

M.

 

[nicholas]

It is an interesting idea. One we have toyed with since 1999. However, it is much more complicated in practice than on paper.

Looking at the concerns above, anyone for a fantasy domain name stock/spot market instead? Other categories have it (blogging, sports, etc.); the domain name industry would be perfect for it.

Seriously though, whether it's in an Eastern European country, Africa or the US, the issue here really is that just like standard real-world markets, this one entails real money for an intangible good and will need proper oversight, enforcement and accountability. I really like this idea but unfortunately, so far this concept lacks any clear evidence towards that.

 

[tobiasr]

I'm sorry, I totally missed this thread. I guess we also have been too busy prepping for launch!

Just reading up on this, you all bring up valid points regarding the security of the exchange. I think if it was easier to do it, someone else would have done it a while ago!

Indeed, our first fulltime hire was a Slovak lawyer.

Just a few points:
- We are not issuing actual securities or shares; we have a contract about future rights (such as the right to participate on revenue on a sale of the domain), and as such, we are not regulated by securities laws in Slovakia.
- ICANN is not involved in this; since we don't change the majority ownership of domains, the registrant and admin-c never change.
- How do prevent that a domain is sold or moved bypassing investors? We require domains to be at specific registrars that will notify us *before* key domain events (owner change, transfer requests, etc).
- How do we determine a domain's value? We don't; either the domain is listed on the Exchange using the owner's valuation, or it goes through an auction process to determine the demand. Either way, the market determines the value.

We are currently preparing for opening up our limited Closed Beta (which had 100 domainers as participants; we had a domainer make $5,000 listing his name, and an investor make $4,000 in investment gains). We will also announce a strategic partner from the domain industry at Domainfest; and finally we plan to launch the whole thing at the Traffic conference in Las Vegas.

On this path, I am sure we will still learn many things, but I think the benefits this could bring to the domain industry are significant enough to go for it.

I'd be happy to answer other questions and I appreciate all the interest!

-Tobias

 

[labrocca]

Thanks for response sir.

Can you elaborate on the list of registrars you have partnered with?

- How do prevent that a domain is sold or moved bypassing investors? We require domains to be at specific registrars that will notify us *before* key domain events (owner change, transfer requests, etc).

 

[tobiasr]

Labrocca, so far we have EuroDNS and Easyspace, after we launch the public beta we will make it a priority to add more.

-Tobias

 

[gorilla_bob]

I'd love to SHORT FUSU.com ... can I do that? :P

JK,

From the looks at it FUSU does have some good strong points and all this is still in pioneering phase. Will one day the idea work? I most likely guarantee it will ... whenever there is a large sum of money involved, there will always be people to look to make it work.

This idea will steer the domain industry in the right direction and may skyrocket. One concern I do see is what do the domain owners do with the funds they receive? Do they develop them? What prevents them from funneling that money away? For instance, if I owned, BIGINVESTMENT.com, then people pour 1 million dollars to me, then I funnel the money in investment to my other corporations saying that I tried to develop BIGINVESTMENT.com, then even if the shares go down, since I still own the domain, there is still value to it. All I have to do is rebuy the shares at a very low rate (since there is no more worth to the name) and then take it out of the exchange and sell it in the aftermarket.

How will this be prevented?



- Bob

 

[tobiasr]

In Fusu's case I'd hope for LONG

This is prevented by this rule:

If you as domain owner get a BuyOut offer for a domain (somebody wants to buy the whole domain), then you can decide to accept or deny it. If the you accept, and the value of the BuyOut offer is higher than 150% of the current market value of the domain on Fusu, then the shareholders will be paid out. If the offer is for less than 150%, then you need approval of 90% of the shareholders (handled by Fusu).

-Tobias

 

[tobiasr]

I just wanted to let you know a bit early that we will announce public beta very soon. Please have a look at http://www.fusu.com.www.fusu.com

We have the T&C online now, so I will be happy to hear your feedback and criticism.

-Tobias

 

[nmr86]

im not putting my money in this !

 

[onewordonly]

Great idea but needs some credential & well trusted companies backing it and it could be the next big thing in domaining!

 

[smashfactory]

i read your rules- but if the domain remains in the hands of the owner, then how do you actually prevent them from just selling the name and not paying the shareholders?
if this was to happen, then it is now the responsibility of the shareholders to go after them for their money?

 

[tobiasr]

Smashfactory -

We require domains to be at certain registrars, which notify us and get our approval before a domain can be sold (transferred, owner changed).

You are right that this is one of the key points.

-Tobias

 

[smashfactory]

ok so the name must be at one of these registrars, and the owner agrees that he will not be able to move the name, because the registrar will not allow it to, unless he fulfills his obligation- right?

 

[tobiasr]

That's correct! Point 6.1 of the user agreement.

-Tobias

 

[smashfactory]

neat idea

but the thing to keep in mind is- this is a stock market, correct? even if the owner never sold or did anything- if the value of the name went down for some reason, and the owner did not try and sell the name- he got the original cash influx, but the shareholders are out of luck- like the real stockmarket- yes? or is the owner required to pay the shareholders back should the name drop in value?

sorry- just questions i have

 

[Mike]

Smashfactory -

We require domains to be at certain registrars, which notify us and get our approval before a domain can be sold (transferred, owner changed).

You are right that this is one of the key points.

-Tobias

There is no legal body on this planet that will enforce this rule.
There are no assurances, guarantees, insurances that can be provided to the investor other than the character of the domain owner, and that's a bit impossible to detect via a screen....
A simple notification from a registrar is not going to prevent domain transfers.
Who's liable? Under which laws and standards? How will this be administered and followed through? Who's going to pay for any resulting legal expenses? Who's regulating the exchange?
Unless you find a way to provide GLOBALLY valid assurances for investors, and regulations for domain owners you're open to a wide variety of scams, dubious activities in terms of funds exchanging hands, artificially inflated domain values, a new version of "insider trading", etc.

M.

 

[bradocconor]

The only way it would even come close to working were if they were to have the domain in escrow and not be removed unless it is sold. then what benifit do you as an investor get to owning it unless it is sold? They said somewhere in this thread that it was the owners decision to pay a "dividend" to shareholders of revenue but wasnt mandatory. Also what if someone decides to pull a "Whitehouse.com" and ruin debt.com or some other great domain again SOL (SH*T Out of Luck)