Protecting a local business name threatened by domain reseller

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I own a small local business that relies on a local clientele and have developed the domain 5 years ago and successfully get local hits and new clients.

to remain anonymous ... let's use www.dayretreatinc.com
*not the real name btw....

A domain reseller has owned the short version (less the inc) previously listed as $2000. We would pay like $250 max for the name but no go.. the reseller is holding out saying he can sell it to anyone in the world and has been sitting on it for the last 5 years.

We are doing fine with the ...inc.com, however the domain reseller owner has spoken to me recently saying that they are now going to develop the site if we don't buy it and it will confuse google and lessen the people finding us online therefore locally.

(1) Is this threat viable? or hot air?

On our site we actually have the HEADER TITLE of our business
example:
DAY RETREAT OF LOS ANGELES
instead of just the name Day Retreat... or Day Retreat Inc.

(2)Should we own and point a similar domain name to our existing site? i.e.: www.dayretreatoflosangeles
or www.dayretreatlosangeles.com (without the 'of')

Asking that specifically because adding 'of' only makes it longer... and is shorter always better?.. does one read better?.. I don't know. So would either of these make sense to own to protect our local business domain name in a future sense?

(3) would purchasing and pointing one of the new domain names actually help google in the case this domain developer does develop or sell the short version of our domain and a similar business springs up somewhere else in the world?

I haven't found similar questions or answers to this and I did try to visit the newbie FAQ here but it's not there any longer..

Please advise... thanks for your time.. all opinions will be read and considered..
 
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Just an opinion (and I don't know the whole situation)...

If your current domain is working well for you, then don't worry too much about a domainer holding something similar.

(1) Their threat is somewhat viable. However, it costs time and money to develop -- and more to be competitive. Of course, if the domainer had another possible buyer, they would sell it. If that's likely, you should consider how much the domain is worth to you and is likely worth to someone who might use it. Also, you might explore registering a trademark for your brand.

(2) Other names? probably not. If your search ranking is good, the best way to keep it is to have your existing site maintained with relevant, timely information.

(3) Creating a presence on facebook and twitter (include a link to your domain in the profiles) and using them to engage with customers/potential customers would probably work much better than the purchase of new domains.
 
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Jagusa... Thanks a bunch! yes we are at the top and first page for our local city.. there are always going to be similar businesses in other cities, but I think of how I search for a local business ( or key words) and always include the city name. So if another person owns and develops the domain somewhere else, it won't matter because we really aren't competing in a worldwide market..

Yes, we do both Facebook and twitter and have a twitter feed on the front page as well as always updating our content. I've been reading the forums here today and have learned a good deal I hadn't known . this is great:)
 
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If you can demonstrate that the domain holder is determined to harm your business and create confusion you could actually win a UDRP against him. I think you should at least keep an eye on that domain and make sure it's not used in a malicious way.
In fact it's very possible that the domain will be abandoned in a few years because it's not being used and it's likely to never sell. Just monitor the domain and wait. The lifespan of a domain name is often no more than a few years, so patience comes with rewards.

Now do you need that domain... only you know the answer. It depends on how much you are dedicated to the building of your brand. You say it's a small business.
While owning the shorter/pure version of your corporate name is nice, it's not a must-have, unless you advertise a lot or depend on word of mouth. Then a memorable (shorter is not always better) domain is not an option. If your traffic comes from SEO the domain is less critical.
 
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The very fact that it looks like the domain seller threatened you by suggesting they would develop their domain name to take your business away from you suggests it's unethical and you could have a strong case should you file a UDRP.

I would talk to some folks here who might have some experience in law and see what they have to say!
 
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