discuss If Domain Investors are Squatters Then Domain Registrars Are the Biggest Ones of All

[TCK]

This article is not about bashing domain investors or domain registrars. Rather it is about setting misconceptions straight and putting things in perspective.

What motivated this piece is an article on the Forbes website that was reported on by TheDomains. It was about a “leadership strategist” and writer who was starting a new consulting business.

Read the entire piece here

It was written with the end-user as the target audience. What are your thoughts?

 

[Bob Hawkes]

In my long post somte time ago (just after the Verisign blog post) defending the domain market I make some analogies that might be helpful.

• Domains are created. They exist because someone came up with them. As with any creative product you must be highly compensated for a few to make up for those no one will choose.
• Investing in domains is somewhat like investing in startups. A few pay off even though most fail. If no one was creating and investing in domain names useful things like brandable marketplaces would not exist.
• If there was no domain aftermarket it would be hopelessly inefficient to find and make a transaction for a domain name. It would be like art locked away and forgotten in millions of attics. We indirectly fund and maintain a robust and efficient place to find domain names

Here is link to full opinion piece
https://nametalent.com/2018/11/why-we-need-the-domain-aftermarket/

Bob

 

[TCK]

It is still a general misconception among end-users who know very little about domain names and think that their choice should be available at $10 and if they offer $50 then they think its a great deal for the seller.

 

[Internet.Domains]

I still can't believe Verisign allowed an employee to call us "squatters."

It's like an employee of a medical insurance company calling a person who visited a doctor a "fraudster."

 

[TCK]

Someone wrote that if your register domain in advance it's a ranking signal for google to put your site SEO higher!

I think it may help new sites on new domains get out of Google’s sandbox sooner. Not sure how impactful to SEO that would be for established sites that have been renewing their domains for years. That’s because spammers only register for 1 year and then drop the domains, so Google keeps all new sites on new domains in a sandbox.

That is one of the benefits of buying aged domains.

 

[TCK]

@Bob Hawkes

Thanks for taking the time to read the article.

The point of the article is that domain registrars participate and benefit in a big way from the aftermarket, thanks in large part to domain investors. Yet the average person has no issue with that. But when investors sell domains independently, they are quickly labeled as “squatters”.

It’s like saying that auto dealerships are fine, but selling a car privately is unethical.

Lastly, the article points out that even registries are jumping on the bandwagon with premium pricing, which actually models aftermarket pricing, and even launching their own marketplaces exclusive to “premium” SLD/TLDs they control. In effect competing with registrars and investors.

There are also other arguments in the article that show why investors are not squatters.

 

[DomainGuy86]

If I buy a house wih my hard earned money and then sell it for a capital gain in a few years...is that squatting?

No, it's called capitalism and the idea of property rights enshrined into the law.

There are many alternatives available to projects if they need to seek out a name at a reasonable price (reg fee). SEO rankings have become a level playing field as long as you have some value to offer.

You have to pay to play...like everything else in life

Let's talk about how pharmaceutical companies markup items like epipens, to the detriment of those who need them.

A domain is a property with exclusive rights issued to the purchaser. Like a 20-year patent. Credit is given to those first-movers. Those salty about it should of been faster.

 

[DomainGuy86]

Without a domain aftermarket the registrars' profit would retreat significantly.

They need us just as much as we need them. This label of "squatting" is patently absurd...and really, registrars openly market their domain extensions and appraisal services solely to cater to domain investors.

Not to mention the shill bidding and expired domain sales that handsomely reward registrars further.

This is clearly a case of a for-profit company biting the hand that feeds them.

Must be trying to polish their image for strictly PR purposes...but anyone can see the hypocrisy.

What's not mentioned is the time, creativity, market research, and the millions in combined losses involved in domaining.

Our time and effort is worth something. The notion of "squatting" is antithetical to our very REAL work.

 

[ivey]

Once you paid for something; it's yours. End of story.

The creative part just reinforces it more.

There needs to be a movement to legally acknowledge domain names...as creative works just like art or music. Naming companies are a real thing...brands use these companies daily for products etc.

Especially brandables and two word domains...

But all in all; you paid for it. It's yours. How can you squat on your own property.
Those talking about squatting are the real squatters, to see your property and think it should be theirs without compensation.

 

[TCK]

Once you paid for something; it's yours. End of story.

But all in all; you paid for it. It's yours.

It’s not a question of ownership, imo. It’s people’s ignorance as to resale value.

Also, people spamming with bad domains just recently registered to sell at 10-100x the reg cost doesn’t help the perception.

 

[TCK]

We are squatters, and glorifying what we do doesn't change that fact.

Please don't write "we" because you do not speak for everyone.

I couldn't disagree with you more. You have a very narrow and short-sighted view. But you have that right.

If you view yourself as a "squatter", then you very likely are. You obviously don't think what you offer has much value to the buyer and you only want to make a quick buck or two. But I will tell you this, a real buyer will see that as well. That's why you will be flipping domains to other "squatters" and never make any serious money.

The way you view yourself will translate into how buyers view you. Domain investing is not domain flipping. Just because you know how to register domains and can list them for sale doesn't mean you have business acumen.

 

[Eagle578]

We are squatters, and glorifying what we do doesn't change that fact.

You can see it everyday, like someone grabbing a deleted .com like WhiteFencesAreGreat.com and then asking an end user to buy it for way higher the very next hour

I think if it were legal to capture air on earth, domainers would try to grab all the air and sell it to people to breathe... sure you can call it "capitalism" or the tragedy of the commons... But that doesn't make it right.

Like air, an obscure domain like WhiteFencesAreGreat.com would have been available for that one end user who was going to use it when the time came for him to search for it. But a domainer happened instead.

The dictionary definition of a squatter is the following:

"A person who unlawfully occupies an uninhabited building or unused land."

So, strictly speaking, the only squatters in the domain world would be those who succeed in stealing a domain, or acquiring a domain which has been stolen from someone. I'm not talking about catching a dropped domain, I mean illegally acquiring or buying an illegally held domain. That is wrong on any grounds, and most sensible people would put a stop to it if it is in their power to do so.

However, as @JayT mentioned, there is a category of people who would register or buy a domain which they know a person, company, etc. will want to buy very shortly, in order to sell it to them for a high profit margin once they do. Depending on the situation, that may be considered as morally wrong, and could be termed as squatting for that reason.

You are probably very familiar with it, but it's for the very reason above that many court cases are fought over domain names - i.e. domain owners being sued for assuming ownership of (or using) domains which infringe on copyright or trademark boundaries.

One of the key rules by which the courts determine their decision is... Was it acquired and used in good faith, or not?

If you want to have an interesting read about past domain lawsuits involving celebrities, search "Top five legal battles over celebrity domains." It will come up with a link to an article on Sedo's website.

 

[GenericDomainz]

Guys, if you register not for 1 year(and renew), but for all 10 years in first day, you are not "the squatter", you are "The Owner" :DDDD

 

[Bob Hawkes]

I think this article was discussed in another thread, but essentially it seems at least, an overly pro .inc take. The model of pushing it as your exact company name (at least in jurisdictions where that is inc) is not without merit. $2000 per year is a lot for a small company, although some of the extras they include will have value to some. For a big company $2000 is small change.

Bob

 

[TCK]

I think this article was discussed in another thread, but essentially it seems at least, an overly pro .inc take.

Yes, I am sure. However, the piece is not about that article. That article only served as the impetus. The piece is geared towards anyone who considers domain investors as "squatters". As mentioned, the intended audience is end-user.

 

[Bob Hawkes]

I think the article makes many good points, particularly pointing out that domain investors are not squatters. As mentioned many get it wrong. I like the article much more than title. Sure registrars now big part aftersale market but to me that is only loosely related to main article focus. Thanks for posting it.
Bob

 

[MolaRam]

So property investors must also be squatters because they bought the property of someone else's choice?

 

[Bob Hawkes]

I don't know if it will ever happen, but domain investing and the perception of domainers, in my opinion, would both be helped if the sell through rate was higher but price margin less. I can't really think of any comparable product, except possibly art, with such low probability of sale but high margin. It is only natural that people judge domains with the ruler of other products they buy.

Bob

 

[Eagle578]

If domainers are deemed to be squatters, then unfortunately every person, company, entity, whatever, who owns property or merchandise which they are not making use of but hold to sell for a profit later on, are squatters. For example... your local dairy.

Unfortunately the bias against domainers stems, in my opinion, largely from the fact that domains were once upon a time (essentially) free for all, but are now much less accessible due to "those" who recognized the business opportunity and were able to move with the times. I guess you could say, it is a lamentation... "Once upon a time, it wouldn't have cost me so much to obtain a good domain name... Those were the days..."

A bit like a modern property buyer in the US saying, "If only the early American settlers back in the 1700's would have refrained from claiming land which they didn't need, then I wouldn't have had to pay so much for a property now..."

As was the case with the early American settlers and many other nations in history, if there is unclaimed ground available and you claim it, its yours. Besides which, as @dnplaybook.com commented in another article, domainers don't simply grab good domains as easy as the flick of a finger and sell them for 1000 times the price. For the most part, it is a business which requires the input of large amounts of money, time, and other resources.

That's just my newbie opinion.

 

[JayT]

Anyone that says ALL domainers are squatters is the type to think govt. should / would allow tax on air...it's really that misguided.

 

[JayT]

On a similar topic, squatters should be held accountable a little more than they are...It's just hard to go after someone with nothing, or from anywhere in the world.

There are some very successful domainers that are some of the biggest squatters of all, and no1 barely ever calls them out.

 

[Jv1999]

The dictionary definition of a squatter is the following:

"A person who unlawfully occupies an uninhabited building or unused land."

So, strictly speaking, the only squatters in the domain world would be those who succeed in stealing a domain, or acquiring a domain which has been stolen from someone. I'm not talking about catching a dropped domain, I mean illegally acquiring or buying an illegally held domain. That is wrong on any grounds, and most sensible people would put a stop to it if it is in their power to do so.

However, as @JayT mentioned, there is a category of people who would register or buy a domain which they know a person, company, etc. will want to buy very shortly, in order to sell it to them for a high profit margin once they do. That is, in my humble opinion, morally wrong, and could be termed as squatting for that reason.

You are probably very familiar with it, but it's for the very reason above that many court cases are fought over domain names - i.e. domain owners being sued for assuming ownership of domains which infringe on copyright or trademark boundaries.

One of the key rules by which the courts determine their decision is... Was it acquired and used in good faith, or not?

If you want to have an interesting read about past domain lawsuits involving celebrities, search "Top five legal battles over celebrity domains."

It's not about what's legal or not. Just as many here believe sending any kind of outbound is "spam," even though it's not... same can be said about squatting.

Doesn't matter if it's legal, what matters is what most people consider it or feel it is.

For example, in U.S. gas stations, you'll often see the gas price "x.57" or "2.57" but there are two extra columns after the "7" that are superscripted and smaller that say "99." That means they're actually charging $2.5799 per galon, which is basically $2.58. Gas stations often compete over each other for lowest priced gas, so that 1 cent makes a big difference.

You wouldn't see the "99" unless you actually drove into the gas station. But the "lower" price attracts people in.

Lots of people say such pricing is "misrepresentation" / "false advertising" / "misleading." But the legal definition of advertising misrepresentation is when you omit or add a "material fact." And this wouldn't count as that because you can clearly see the "99" if you drive in...

So just like that.

 

[Eagle578]

It's not about what's legal or not. Just as many here believe sending any kind of outbound is "spam," even though it's not... same can be said about squatting.

Doesn't matter if it's legal, what matters is what most people consider it or feel it is.

For example, in U.S. gas stations, you'll often see the gas price "x.57" or "2.57" but there are two extra columns after the "7" that are superscripted and smaller that say "99." That means they're actually charging $2.5799 per galon, which is basically $2.58. Gas stations often compete over each other for lowest priced gas, so that 1 cent makes a big difference.

You wouldn't see the "99" unless you actually drove into the gas station. But the "lower" price attracts people in.

Lots of people say such pricing is "misrepresentation" / "false advertising" / "misleading." But the legal definition of advertising misrepresentation is when you omit or add a "material fact." And this wouldn't count as that because you can clearly see the "99" if you drive in...

So just like that.

My friend, if you say that we cannot base our viewpoints on the foundational meaning of words, then that makes the whole discussion moot. Not only that, but English as a whole has lost its meaning.

The point that both of us are actually getting at is exactly what I said before - that the term "squatter" or "cybersquatter" is mainly applicable on moral grounds. Where we see fit to place the boundary is the difference. But, that should still come back to what the term means as per definition - otherwise we are saying that we disregard meaning and define ourselves by feelings instead... Which being the case, places us in a whirlpool of opinions, as what one person considers wrong isn't considered wrong by another.

Overall, I believe domaining (when done within the boundaries which I mentioned in my previous post) is as legitimate a business as buying and selling property or goods are. The only difference is that property as a free resource ceased a long time ago... But domains, very recently, and still in the process.

 

[JayT]

Me? I think we're getting too mixed up in semantics. If they register before with inside info, or after, trademark or not, I think it's all squatting. Sure we can break it down, i just don't see a reason, as their intent and method is all the same. Like you even said, it's really comes down to intent and even morals. Some don't even know it's wrong. I just said, some domainers are clearly registering domains with trademark etc. Again, some do this habitually, and for a long time. I call them squatters, you can call it whatever.

I am not trying to say most domainers do this, but there are some that get away with it. Them getting away with it gives these other people calling us ALL squatters something to work with.

 

[Grego85]

^ selling off a domain they don't legitimately own. They were used as a registar to register a domain, when that registration lapses, it should go through the drop process. Why should they have a right to auction off that asset that they really never owned, just because they were the registrar used in the first place. It might not be the exact definition of squatting, but pretty close. At least domainers actually purchase the domain legitimately and actually own it.

And I'm aware that the registrar has to renew the domain after expiration to satisfy the grace period, but that rule in no way was meant to allow the registrars to auction off free assets. The domain was first paid for by the user, and the registrar is reimbursed if the domain gets through the grace period. No risk for them, just free money. Its not right. AND it weakens true competition amongst domainers.