"Is the Domain Aftermarket Corrupt?"

[Ms Domainer]

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On my blog MsDomainer [dot] com (which is currently somewhat inactive), I just received the following comment on "Is the Domain Aftermarket Corrupt?" a October 7, 2007, post. In that post, I questioned the ethics of the domain aftermarket and how domains are captured and sold. My view now is slightly different than it was back then, although the halvarez scandal hasn't helped. I don't want to include the link here because it might appear that I'm trying to self promote my blog. Besides, due to my current circumstances, I haven't been updating much lately.

Offended, I was about to hit the "reject" button, but, then, I got to thinking, why censor what most people outside of domaining are really thinking?

You are all scum so you deserve whatever reaming you get by the other sharks in the fetid pool of murk you swim in. Purchasing any domain without the intention of starting a valid enterprise under that name and putting a website online at that address, is sleazy on par with real estate scams, spammers, and pyramid-scheme lowlifes.​

I realize that this is one view who happened upon my blog. But I do think that outside this industry, we ARE considered scum.

My question to all: how might this industry go about changing this negative viewpoint of legitimate domaining?

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[SpareDomains]

Because outside of domaining, holding many domains for the sole purpose of resale -- especially when they were purchased for regfee -- is not considered legitimate domain ownership by many.

my best end user sales were all purchased at reg fee or dropped domains picked up at reg fee so as long as the end users continue to buy them it finances the business model, if you are making consistent end user sales you are doing something right and the price you paid doesn't matter as a good domain is a good domain and while the whiners were out having fun many of us have sacrificed our time to stay up late and acquire these strong domains so it's only fair to be compensated for your time or compensated for the activities you missed out on by working all night, luckily for every whiner there is a end user that will pay a reasonable price, when I can buy 1 share of a stock for $7 and turn it into 1-10k I'll quit domaining but until that is possible domaining produces a greater return than I can find anywhere else and the opinions of the many no money whiners doesn't slow down my progress at all. Get your domains in all the major distribution channels that target end users and make sales and all the rest is just noise to ignore.

 

[RLW]

If you are a legitimate domainer, it is basically the same thing as owning undeveloped lots that are ready to be built on. It is a big difference than the shady tactics that many people use.

This whole thing reminds me of an argument the other day a friend had with an end user for a product generic. He basically said something like "You are paying $7/year, why should I pay $500". Many end users don't understand the benefits of owning relevant domains.

Brad

I think end users perfectly understand the benefits of owning a relevant domain. The only thing your quote from some guy that 'You are paying $7/year, why should I pay $500' proves is that end users don't understand why they should have to pay 7,142% of the amount that you are spending to maintain the domain (probably more when you take into account any earning on that domain).

I agree that a person selling anything is free to ask whatever price they want, but when a seller of something is asking for that much mark up, it's never going to look good.

Let me put it this way, let's say (and I wish this were true) I had a crap load of money. Everytime there was a land release or house for sale within 2 hours drive of where you live, I buy it. Sooner or later, you have a couple of kids or whatever and need a bigger house, or maybe something happens and you need to live closer to public transport or a hospital. You come to me and say hey... how much for that house there. My reply is.... I paid $500,000 for that house... you can have it for $35.7 million - take it or leave it. Are you going to pay that much?

And thats what an end users problem is. You have a domain that probably only has speculative value until it is developed, yet you mark the price up ridiculously high in the hope that sooner or later someone will give in and pay you. It's called highway robbery.

The reality is that if you sit back and say this is my price - take it or leave it - you will no doubt still get a few 'bites', but as a domainer your job is to on-sell domains, right?

So is it really the end user who has the lack of understanding? Or is it the domainer who isn't 'selling' the domain properly? The domainer (as a salesperson) needs to convince the end user that they need a domain, that this is the one for them, and that they should be buying it at this price. If you're having 'problems' with end users, then maybe its time that you brushed up on your sales skills, re-evaluated the domains you're trying to sell, re-thought your prices or moved on to another industry. Because when push comes to shove, in the sales world, if someone inquires about your product, thats usually a definite sale. People don't waste their time inquiring about something that they don't want.

 

[snoop]

I realize that this is one view who happened upon my blog. But I do think that outside this industry, we ARE considered scum.

My question to all: how might this industry go about changing this negative viewpoint of legitimate domaining?

I think this is a commonly held view by tech type people. I think the industry does have a fair degree of negative perception in the outside community generally though. Perhaps comparable to a used car salesmen or lawyers. You could also compare to any other speculative activity, are land hoarders perceived well? How about people who speculate on financial markets?

What can be done, honestly I don't think much. The perception is not completely undeserved.

 

[DU]

People hate car salesman. People hate the porn industry. People hate the McFatty fast food chains. People hate domainers. WGaF?

You want to know why people hate domainers ? Because every frackin search for something useful ends up dumping you on some pos parked page, or worse, some pos mini-site that looks like its trying to provide information but is nothing more than stolen text, stolen pictures with annoying ads. I've seen VERY few mini-sites with original content. I've seen many that have the same text "I used to do this but now I do that... " really? You're the magic multiplying personality.

Summary: Most domainers INHIBIT the ability to get to USEFUL information.

It's passive spamming. You can't defend it morally or ethically.

I also don't think you need to; however, the opinion that others hold is a result. Sure it's your right to do whatever you want. It's your right to justify it however you like. But the results of the endevors of millions is the setting of public perception. But again, WGaF?

The interesting thing is that companies/products are now deliberately creating names that are "nonsense"or meaningless. I rarely visit any site that's "keyword".com because it's invariably a pos crap parked page. I'd go to fotogear.com before I'd go to camera.com... (I'd actually go to stevedigicams) and studies are showing that this is true of the millenials.

The industry is killing itself. Like all other industries.. there will be those who make $$$, those who lost $$$ and those who made $0. Within 2-3 years we'll see the first sign of the fractured internet based on the hidden web (started with url shorteners and clouds... and extrapolating from that).

Just an opinion. Full disclosure: I have lost about $24.

 

[equity78]

Well first off Mickey Mouse its not a small world after all, its a very big world. A lot of people out there with agendas. The only people who care about what domainers think are domainers.

#1 I am still not sure that the term "Domainer" is a universal definition. Someone with 100 CVCV .info and Rick Schwartz are both domainers ? That's like saying Vanilla Ice and Frank Sinatra were both vocalists.

#2 There is no unity in this "industry" which I use loosely, I am not sure because I reg domains and you reg domains we are apart of the same team. There are people that reg adult names, I know plenty of people who despise adult and certainly do not want to be on the same team with those who own adult. Then there are those who own TM many big guys got their start there, legit now but used the tm to fuel the business.

For what Ms.Domainer is looking for I think the DNOA tried that, the ICA is being reformed according to Michael Berkens from thedomains.com. But getting everyone to agree is hard.

This is a subjective business, not objective. Every domain is unique. Put 1 name or 100 names up for appraisal and you will get 100 out of 100 different opinions. No uniformity.

Price also plays into everything. I agree with the comment some get pissed that someone won't sell a domain that supposedly only the prospective buyer would buy. But it costs $8 to hold. For someone in the 100 to 500 domain range, they probably can hold for a long time. Someone with 10,000 names probably needs to move some names.

Take a look at this week's sales report. I bet someone probably offered $200 for Backpage.net and got turned down. They then said that low life scum, that was a fair offer, its a .net, no real commercial appeal. That low life scum sold it for $10,000 this week. What about Xtips.com someone probably offered $100 on SEDO and got no where. Thought what a low life, who would want besides me ? The low life sold it this week for $5840. Its not hard to turn down $1500 even though its a great return on $8, not if you see greater value.

And for the developer, if you have a great idea the domain will not hold it back, greatness is not held back by a domain. Made up names such as Xerox,Google,Ebay,Yahoo,Delicious,Facebook,Twitter,etc........ Did not need the generic, Craig did not say I need classifieds.com, CraigsList worked fine.

I agree with some great comments here Carlton,SpareDomains,Fm1234. Carlton is right IMO that anyone with that comment is not rational. This is an easy business to get into, unlike real estate. So people at least think oh real estate the person is legit because they must have had money to get started in the business. I agree some prices are off the chart and not realistic, but people also say a pair of jeans should not cost $300 or a ball player should make $10,000,000 a year. Who says that ? Well lots of people, those who cannot afford $300 jeans, those who cannot play ball. Maybe its an intellectual elitist who feels they are superior to "some dumb jock" in their opinion. They cannot get over the fact they make $100,000 a year or less and he makes $10,000,000. Get over it, certain things have more perceived value, whether true or not. I certainly think a firemen does a hell of a lot more for society than a ball player, BUT society will not pay the firemen the salary they should get {IF THAT's POSSIBLE) considering the risk. So people will always complain about someone making money easier than them. When people hear a domainer brag, "I made $200 while I slept" some people think SON OF A B****. I work my ass off for $200.

Then you have the tech elitist, who either believe everything should be free or are pissed they did not reg everything in 94 when they were the only genius who knew about the Arpa Net.

For those that want all of this for free, I ask what do you for a living for free ? Will you build my computer and network for free ? Probably not.

I think you got to do what you think is right, I think a universal domainer group and agreeing on principle will not happen. I am not against it but I think too many opinions and it is a loosely knit industry that really only gets together for parties at the playboy mansion. Maybe there should be 400 domainers showing up at an ICANN meeting, stating their agenda. Maybe picket parking companies and Google demanding transparency.

I think a lot of people got into domaining because it seems "easy". Its not but people think it. They read DN Journal sales report and think wow.
There will always be the envious, the elitist and those trying to steal domains. Everyone needs to stay on top of their portfolio and have realistic expectations. Again IMO

 

[Kate]

You want to know why people hate domainers ? Because every frackin search for something useful ends up dumping you on some pos parked page, or worse, some pos mini-site that looks like its trying to provide information but is nothing more than stolen text, stolen pictures with annoying ads. I've seen VERY few mini-sites with original content. I've seen many that have the same text "I used to do this but now I do that... " really? You're the magic multiplying personality.

I think that most of the time it's not domainers running that type of MFA sites, but wannabe webmasters. Ironically those are the same people that bash domainers for having parked domains :lol:
Actually the distinction between domainer and webmasters is blurred because you can be both at the same time.

When I do a search in google I almost never stumble upon parked pages (they are recognized as such by google and penalized), but often I come across crappy MFA sites. This is the real spam.
Bottom line: domainers are not the top culprits IMO.

 

[SpareDomains]

I think that most of the time it's not domainers running that type of MFA sites, but wannabe webmasters. Ironically those are the same people that bash domainers for having parked domains :lol:
Actually the distinction between domainer and webmasters is blurred because you can be both at the same time.

When I do a search in google I almost never stumble upon parked pages (they are recognized as such by google and penalized), but often I come across crappy MFA sites. This is the real spam.
Bottom line: domainers are not the top culprits IMO.

I agree some made for adsense site with 90% google ads on it and some recycled articles found on 1,000 other sites provides little value and is no better than a parked page. I think anyone planning on building garbage and calling it development should just leave their names parked as usually the earnings are higher anyway. I do like the direction some companies are taking like SmartName as you can turn your domains into stores powered by shopping.com which at least provides a good end user experience if the domain name matches the product listings of the store. Good development means producing unique content and quite a few people just smack up recycled trash in 2 minutes and think they are better than someone who just parks domains. I do full on development, park domains and I create product stores and I think quite a few of us use a combo of strategies for different domains.

 

[enlytend]

Every time this issue comes up in a domain forum, the thread always turns defensive and usually very emotional besides.

The issue isn't "is domaining wrong/bad/immoral/unethical/illegal" etc. We're domainers. WE all agree that the business model of buying/selling/parking domains is a legitimate way to earn income.

The issue also isn't "should/shouldn't non-domainers have that perception of us". It doesn't matter so much why the perception exists or if it is or isn't justified.

The negative perception exists. The question is: " now what can we do about it?"

If your answer to that is "who cares?", take a look at some of the things that "anti domainers" have been trying to push through legal venues, ICANN and elsewhere. (Many of these have been detailed on the ICA site.)

If they were to succeed, there would BE no domain industry, as we know it. That's why it matters.

Put the emotional stuff aside - there's a problem here, how do we solve it?

 

[SpareDomains]

WE all agree that the business model of buying/selling/parking domains is a legitimate way to earn income.

rewind the clock a few years and I agree with this statement, fast forward to today and I think every domain forum is starting to increase with jealous people that don't agree with this statement. I'm not a gardener so I don't join gardening forums. Yet more non-domainers continue to join domain forums just to argue that domaining is wrong because their portfolios are weak and they are upset they can't build on a premium domain even though their development skills wouldn't do the domain justice. A successful domain organization would be nice but until that gets developed keep some cash on hand and just make the phone call to a good domain lawyer when a situation presents itself. A few that come to mind...

John Berryhill
Brett Lewis
Ari Goldberger
Howard Neu

Every time this issue comes up in a domain forum, the thread always turns defensive and usually very emotional besides.

which I think is normal as there is only so much garbage you can allow someone to speak before you defend your actions, then after a round or two of that you say who cares what the crybabies think and continue focusing on whatever you are doing parking, developing etc... and moving your business forward as the opinions of weak minded people that blame their failures on someone else has no bearing on my business model. Get your domains listed in the sales channels that exist that target end users and ignore the haters. When you have consistent end user sales figures then you realize you are doing something right or enough end users see the value in your inventory and that is the only opinion that matters. DNOA was a good model that included all of us at a low cost unfortunately it didn't pan out. ICA was a high priced model that excluded the majority of domainers as the entry cost was high and that didn't pan out. I think the best chance of success will come from a mid range model that a common domainer can afford as there is power in numbers, a low model won't work as someone has to pay Phil Corwin or whoever is designated to represent us as a group without powerful representation doesn't help much.

 

[enlytend]

which I think is normal as there is only so much garbage you can allow someone to speak before you defend your actions, then after a round or two of that you say who cares what the crybabies think and continue focusing on whatever you are doing parking, developing etc... and moving your business forward as the opinions of weak minded people that blame their failures on someone else has no bearing on my business model.

I understand and appreciate how you and others feel about this on a personal level - I'm saying this is an INDUSTRY issue, not an individual issue. As a individual, of course you should just go about running/building your business and ignore those types of distractions.

I still maintain that emotions are counterproductive to solving problems.

 

[Ms Domainer]

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equity78,

Your post is one of the most rational I have seen, although the other comments here are good as well.

Certainly it's more rational than the commentator on my blog, though he somehow struck a raw nerve (I don't plan to engage him in an argument, so I haven't and won't answer him).

We ARE a diverse group; I certainly wouldn't want to be placed in the same category as a spammer or cybersquatter, and I have no intention of attending a conference whose main event takes place in the Playboy mansion (which I believe adds to the negative reputation of domainers, who are often seen as overgrown adolescent boys--that's the stereotype, anyway.)

But, in truth, we are a more diverse group than outsiders might think. I don't fit the stereotype. I'm female, older (never you mind how old--let's just say I remember the 60's), not a big party gal (though I'm not opposed to a big stiff drink or two with friends--after that, it can get ugly), and have another career (which I like). But when I stumbled upon domaining, I was hooked (before that, I was more likely to visit the casinos of Atlantic City, now, not so much).

Like many domainers, I have a form of ADD. I once took medicine for it, and I HATED what it did to me and decided I liked having ADD and told everyone, "Stop trying to fix me!" I don't even think it's a disease, it's just a chemical difference. I just work on managing my impulse issues, which, with age, have not really subsided. So no cure here wanted.

I think my code of ethics idea is fanciful at best--I think I realized it while I was writing that first post in this thread.

I never got the sense that ICA was interested in developing a code of ethics; what killed ICA, I think, was its elitest attitude and special interest mentality, which most domainers recognized and rejected. They wanted our money but never our voice...

In any case, this has been an interesting discussion.


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[fm1234]

posted by enlytend:

The negative perception exists. The question is: " now what can we do about it?"

If your answer to that is "who cares?", take a look at some of the things that "anti domainers" have been trying to push through legal venues, ICANN and elsewhere. (Many of these have been detailed on the ICA site.)

If they were to succeed, there would BE no domain industry, as we know it. That's why it matters.

Put the emotional stuff aside - there's a problem here, how do we solve it?

The international nature of the market makes it very difficult to envision how any such legal initiatives would function, even in the unlikely event that any were passed without being watered down to the point of being paper tigers.

Again though, I have to wonder how many speculators and salesmen in markets across the board, from carriage whips to microchips, have had these same discussions with peers over the last few centuries. Everybody hates a speculator. Everybody hates a salesman. Everybody hates feeling like "his" idea wasn't that original. (ie. when a guy has an idea for a site and his top ten "original" domain choices are all taken.) People in this general business meme of domaining, developing, SEO, SE spamming etc. touch on all four of those points at some point during the course of the day.

Mahalo built a whole business model around badmouthing people in this business (speculators and SEO-focused developers) essentially building reputation capital and market share and media buzz on the foundation of people's loathing for this business, and then started cashing in by ... getting into this business.

Public perception is clouded by the lack of differentiation between an SEO company and a SERP spammer, between a build-n-hold site developer and a buy-n-flip domainer, etc.; additionally, the low cost barrier to entry (both in terms of money and expertise) while acting as a great enabler for who knows how many people to experiment with a new career, make more money, educate themselves about different web technologies and languages also makes it difficult for any kind of floodgate to be erected against spammers, malware exploiters and other miscreants who inarguably are out there and unfortunately tend to get lumped into the same or similar categories with honest people trying to make an honest living.

You want to work on public perception, try pointing out the benefits of low costs to entry and the international nature of the business -- these same points are often trotted out as problems by the haters, so turn their arguments against them and let them go pick on someone else.


Frank

 

[DubDubDubDot]

while the whiners were out having fun many of us have sacrificed our time to stay up late and acquire these strong domains so it's only fair to be compensated for your time

I don't disagree with you, but you have to see the other side of the argument also.

It's like taking a truck around to every store in your town and buying all of the toilet paper. Then you sell it at a markup to the "whiners who were out having fun" while you were buying it all up.

You have to admit, it does sound shady. But it goes with being a domainer.

 

[SpareDomains]

I don't disagree with you, but you have to see the other side of the argument also.

It's like taking a truck around to every store in your town and buying all of the toilet paper. Then you sell it at a markup to the "whiners who were out having fun" while you were buying it all up.

You have to admit, it does sound shady. But it goes with being a domainer.

Difference is most of the good domains were bought years ago so it's not so much of just driving around and buying up everything in sight it's more of having the vision that domains would be a powerful marketing tool years before this became a reality. The time spent acquiring those domains and the vision to predict the future deserves a fair price. I can't stress enough for everyone to get their domains in the sales channels that target end users as then the opinion of 1 end user that pays 5-10k for a hand registered domain will trump the opinion of 50 guys that offered you $50 that whine because they were playing video games instead of thinking ahead.

 

[bmugford]

I don't see how buying domains is anything like hoarding toilet paper.

Unlike toilet paper, which is a limited supply, there are basically an unlimited supply or domains (keyword, brandables, extensions). Domains can be created instantly unlike toiler paper.

If someone wants to launch a clothing product line they don't even need a domain with Clothing in it, they can just make up some brandable and use that. There are an endless number of options.

Buying and selling domains is a perfectly legitimate business if done the right way.

Brad

I don't disagree with you, but you have to see the other side of the argument also.

It's like taking a truck around to every store in your town and buying all of the toilet paper. Then you sell it at a markup to the "whiners who were out having fun" while you were buying it all up.

You have to admit, it does sound shady. But it goes with being a domainer.

 

[DubDubDubDot]

they are upset they can't build on a premium domain even though their development skills wouldn't do the domain justice.

I wouldn't suggest that developers who can't afford a domain are not talented developers.

A perfect example is when the VC money started to dry up and the startups couldn't afford to spend $10,000 or $50,000 or whatever on a domain anymore. So they made up a 5L or 6L word and got it for regfee. That domain style was born out of developers believing that domainers charge too much, and now it is a perfectly viable option for any developer who shares that belief.

The bottom line is that a $10,000 domain offered by a domainer is now competing against the 5L or 6L available at GoDaddy for regfee.

 

[mrjohn]

The bottom line is that a $10,000 domain offered by a domainer is now competing against the 5L or 6L available at GoDaddy for regfee.

Too true. +1

As for VC money, it's not that VC money has dried up, it's that VC are getting savvier.

The truth is, from a startup standpoint, if you're investing more than a few thousand cash into the first six months of the things life -- and that means domains, programmers, designers, servers, everything -- you're doing it wrong.

A lot of ideas seem good until the rubber hits the road. I developed a site a few years ago that allows you to upload Excel sheets, convert them into databases and then embed them with JavaScript seamlessly into any site (the remote, use example demo, resided on a GeoCities server and provided full interactive DB search).

Here was the kicker: it was astonishing the number of DMCA notice the site generated.

Why?

It turns out that people were uploading crucial and sensitive corporate data to the site!

Imagine if I had sunk thousands of dollars into that site only to discover that it was basically a DMCA takedown generator.

That's the dilemma every startup faces: no matter how sure you are about an idea, everything goes out the window once your users decide what they want to do with the thing.

 

[SpareDomains]

I wouldn't suggest that developers who can't afford a domain are not talented developers.

A perfect example is when the VC money started to dry up and the startups couldn't afford to spend $10,000 or $50,000 or whatever on a domain anymore. So they made up a 5L or 6L word and got it for regfee. That domain style was born out of developers believing that domainers charge too much, and now it is a perfectly viable option for any developer who shares that belief.

The bottom line is that a $10,000 domain offered by a domainer is now competing against the 5L or 6L available at GoDaddy for regfee.

I agree, that was more directed at somebody that offers you $25 because they wanna build a super dooper mini-site on the domain. If somebody knows they can develop the domain into a profitable business they won't even flinch at a few k as running 1 ad in a magazine would be more. The problem with a brandable domain is if you don't have advertising dollars to promote it nobody will ever search for it. Take a keyword generic .com that describes the exact product/service you sell and it makes life so much easier.

I have built fully developed sites on brandable and generic domains for 8+ years. Is it crucial to have a keyword generic domain? no Does it help? yes, not only from easier search ranking but if the domain has any form of type in traffic it converts like mad as I have built similar stores on brandables and generics and watched the generics trump the brandables in sales with zero promotion done. type in traffic is gold.

The $50,000 price range you mentioned is not where my sales occur. I am generally in the 1-10k range and more often in the 2500-7500 range. For me it's not about selling a domain for a million it's about selling a $7 investment to an end user business in the 1-10k range. 98% of what I own today were all $7 hand registered or dropped pick-ups at reg fee since about 2002 and a few a few years earlier. I'm just saying the options are there...

Sedo - The world's leading domain marketplace*-*Sedo.com
Afternic Promotion Upgrades
Home - Domain Distribution Network
Get top dollar for your domain name!

whether a domainer promotes their domains where end users shop and are willing to buy in the 1-10k range or they flip in forums for $50 is up to them but I see quite a few small business domains continue to sell each week including quite a few unreported sales...

Biking.com Brakes at $250,000 to Top This Week's Sales Chart - South African ccTLD Takes #2 Spot

 

[DubDubDubDot]

The problem with a brandable domain is if you don't have advertising dollars to promote it nobody will ever search for it.

That was more true 10 years ago than it is now. Owning a keyword domain provides no ranking guarantees anymore. The weight for the keyword being in the domain is quite small. While that may contradict what 99% of domainers say, it is indeed true.

 

[SpareDomains]

That was more true 10 years ago than it is now. Owning a keyword domain provides no ranking guarantees anymore. The weight for the keyword being in the domain is quite small. While that may contradict what 99% of domainers say, it is indeed true.

a brandable domain has zero searches for it a month, only reason a google, yahoo, bing etc... works is because they dump millions of dollars in advertising at it to make it a household name, when you own a dead on keyword product domain then you understand the power of type in traffic as you don't even need search rankings then, I actually see more than a small increase with my own product domains as I have quite a few with minimal development on the front page across the board with google, yahoo and bing. The trickle of existing type in traffic on keyword .com domains is fact whether you gain a search advantage or not and that type in traffic produces sales. Googles new caffeine algorithm is no secret that it favors keywords as well so I think the advantage is more than your stated quite small.