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-   -   Domain squatting - one of the lower business practices (http://www.zophar.net/forums/showthread.php?t=2035)

Audigy 08-04-2004 01:15 PM

Domain squatting - one of the lower business practices
 
*pokes Octocrook* here you go -

This was pulled from a post I originally made in the testing forum (sorry 'bout that, but I couldn't contain myself. :x)

Anyway, my stance on domain squatting... is that it's morally undesirable to sit on a unique item (virtual or otherwise) that you have no use for, because you know you will be able to extort money from someone desperate enough to think they have to pay the higher price.

In response to

"If they don't want to pay extra for the less obfuscated domain, that's their choice. It's like getting a Kia because you don't want to pay for a Lexus."

This is a poor comparison. If domain squatters did not exist, the price on ALL (well, for each TLD) domains would be THE SAME. The squatters are what are forcing these higher prices.

The price on filet mignon is fixed at higher than that of ground round because it is a graded higher quality cut. It costs more money to prepare, and it comprises less of the cow than other standard cuts (as far as I know anyway). The first party distributors charge retailers a higher price because of the higher production costs, and then the retailers must reflect this in their store prices in order to make money.

Another standpoint that came to mind was... "well, what about people selling rare high-level items on eBay from games like Dark Age of Camelot and stuff? Isn't that just as morally wrong?" It's not. It takes usually months of playing for hours straight to get to a point in the game where these rare items are easier to produce/obtain. Domain purchasing does not take any extra effort at all; it just takes a knowledge of basic English vocabulary and a few minutes at your favorite register who happens to be offering domain registration at 2.99 per domain or whatever...

I'm having a hard time coming up with a logical real-world example that even compares to the matter at hand. I tried thinking of personalized license plates... but what word you get scrawled across one of those costs no more than any other word. The price for a personalized plate is fixed.

What do you guys think? Feel free to repost old comments before they get nuked if you want.

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Goku 08-04-2004 02:40 PM

Patents
 


Atleast from what I understand, a person can think of an idea and file a patent. The person dosnt have to do anything to develop the idea. Another person or company can think of a similar or same idea, develop it and get sued by the previous comapny for patent infringment. Or, if a company is aware of this patent, the have to pay the jackass with the undeveloped idea a licensing fee.

If i made an error in my understanding, please read the first sentence of this post before flaming me!

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Audigy 08-04-2004 02:53 PM

Re: Patents
 


In order to file a patent, don't you at least have to file some type of 'proof of concept' diagram or proof of implementation or something?

I haven't read up on this, so feel free to enlighten me. :)

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SpaceTiger 08-04-2004 03:07 PM

Re: Domain squatting - one of the lower business practices
 
Well, my first instinct is that it's the same as any other capitalist practice: investing money in a valued commodity so that you will make a profit. However, this is somewhat different from usual. Capitalism, although a great system, often encourages people to behave in a way that is wasteful of a society's resources. Domain squatting, along with things like spamming and telemarketing, is an example of such an instance.

If it were only a matter of buying domains and selling them to companies at high prices, there would be no problem, particularly if they were sold soon after purchase. Unfortunately, what usually happens is that people buy a shitload of domains and just hold them for indefinite periods. Since most of the people who want domains aren't willing to shell out large amounts of money, the result is that they remain unused, with the holder hoping for a big payoff from a rich megacorporation, and places like Zophar's Domain are left to settle for "www.z0phar.net" or something equally stupid.

All in all, though, I wouldn't say it's a major sin, but it is kinda sleazy. <img src=smilies/cwm11.gif>

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JCJones86 08-04-2004 03:38 PM

Re: Patents
 
> In order to file a patent, don't you at least have to file
> some type of 'proof of concept' diagram or proof of
> implementation or something?

I'm pretty certain you have to have some sort of documentation of your work. Whether it's a written description, a schematic or diagram, or a working prototype, I believe it's all fair ground.

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thegodofhellfire 08-04-2004 03:58 PM

Re: Patents
 
> In order to file a patent, don't you at least have to file
> some type of 'proof of concept' diagram or proof of
> implementation or something?

Yeah, patent applications need to carry a detailed specification of the invention to be granted protection, in order to prevent overly wide patents being issued. There's two reasons for this. Firstly, it facilitates competition - if Sony were granted a patent for simply a "personal stereo", and not their particular conception of one, then nobody could produce their own without breaching the patent. That's also why the specifications are made public - to allow competitors to improve on someone else's inventions, to the benefit of the public.

Also, a detailed specification prevents someone cynically filling in a patent application for, say, a jetpack or time machine on concept alone, then waiting for NASA, etc, to actually invent a working model so they can enforce the patent. That's what Gokuh was talking about, I think. That's obviously another public interest provision. Similarly, if somebody actually succeeds in a patent application, but fails to use the invention to a reasonable degree, a compulsory license may be issued so that it may be exploited to the benefit of the public.

Essentially, then, there's a balance to be struck between that of society, who stands to benefit from inventive activity, and the inventor him or herself, whose activities are incentivised both financially and by publicity from due credit. With regards to what you were talking about, though, I think compulsory sales of non-exploited domain names at acquisition price could work. There's definitely a working model of sorts in patent law, anyway.

Note: Bearing in mind that I'm talking as someone who's only qualified in UK law, though patent law worldwide is fairly compitible, at least insofar as WIPO (World Intellectual Property Organization) members are concerned.

<P ID="signature"></p><P ID="edit"><FONT class="small">Edited by thegodofhellfire on 08/04/04 02:46 PM.</FONT></P>

Ugly Joe 08-04-2004 04:32 PM

Re: Domain squatting - one of the lower business practices
 
Definately annoying, but they are paying for the domains that they're holding. I think the expiration scams are worse. For example, Register.com, among other probably, wait until domains are about to expire and then call, mail, and email the owner telling them that they have to renew. Of course, they never mention that they aren't the ones you are currently registered with or that their prices are absurd.

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Audigy 08-04-2004 07:46 PM

Re: Domain squatting - one of the lower business practices
 
and then there are the "services" that attempt to tear domains out from under the feet of registrants by charging a 59.99 non-refundable "watching fee" or some shit... I think there's one called "snap back" that I read about a while ago.

They don't even guarantee that you'll obtain the domain, they just promise that they will notify you as soon as it becomes "available"

...so anyone here who owns a personal domain that's expiring soon, it's probably in your best interest to put in your renewal before you're even asked for it if you plan on keeping the domain... else it will be snapped up instantly by someone who will then attempt to "sell it back to you" for some obscene amount. ... ¬¬

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Octocrook 08-05-2004 03:46 AM

Re: Domain squatting - one of the lower business practices
 
> Anyway, my stance on domain squatting... is that it's
> morally undesirable to sit on a unique item (virtual or
> otherwise) that you have no use for, because you know you
> will be able to extort money from someone desperate enough
> to think they have to pay the higher price.

There's a difference between what I'm doing and what you're referring to, because I'm not sitting, I'm actively trying to sell the domains, and I've been doing that with each domain the second I've gotten them (except the ones I use of course). Some domains I initially intended to use (Cyber.fm for a music site, MySite.cc for a geocities-type site, etc), but wound up not having time or money to devote to them, so wound up trying to sell them. I am not, however, simply parking the domains and waiting for years and years until they are uber-valuable. Speaking of value, I'll put part of your Testing Forum post that intrigued me:

> A domain name is worth whatever a registrar is charging to
> register it.

Well...if it were that simple, then every .com domain is worth $6/yr (at 1and1.com) and every .com domain is worth $30/yr (at Network Solutions). One of those places is the 2nd most popular registrar...care to guess which one? For the record, I would LOVE to sell 90% of my domains for $30 apiece and the rest for maybe $100 apiece (some of them like Cyber.fm actually cost $100/yr to register).

> "If they don't want to pay extra for the less obfuscated
> domain, that's their choice. It's like getting a Kia because
> you don't want to pay for a Lexus."

In a way that's true, but the difference is that there's always going to be new Lexus's made, whereas there's a limited supply of "Lexus" domain names. So a squatter would be buying the limited supply Lexus as soon as it comes out and rather than drive it, keeps it simply because they know the value will increase dramatically. The domains I am getting are hardly "Lexus"...they are like "Toyota" or "Nissan" quality, and I am getting merely a small sample of them which I think are more valuable than the registration price with the intention of reselling them right away (which thus far hasn't happened a whole lot), along with names that I'm using too.

> This is a poor comparison. If domain squatters did not
> exist, the price on ALL (well, for each TLD) domains would
> be THE SAME. The squatters are what are forcing these
> higher prices.

You don't quite get the picture on this. While squatters (which I don't consider myself being) do force the value of GOOD domains to go up, it's not a matter of people getting lesser domains because they can't afford the better domains, it's a matter of people getting the lesser domains because someone beat them to the punch on getting the better domains. It's no different than Yahoo, AOL, message board screen names or email addresses...the only difference is that domains cost money and are worth more money. I'm sure if someone had the email address god@yahoo.com or money@gmail.com, they could sell those addresses for some good money, and they got them for FREE and got them because they got there first!

Most of my names aren't even .com, and the .com names I have are absolutely SHITTY ones, even the one my sites are on (Supur.com and DomainsFeatured.com...both are worth $10 if I'm lucky). My main area of registration are .cc domains, which most of the public is unaware of because they think domains live and die by .com. In a way I am squatting on them even if I am trying to sell them immediately, because .cc is a ways off from truly taking off as an alternative to .com, and I probably will have no luck selling those. Still, I like having them anyways, since some of them are pretty slick IMO.

> The price on filet mignon is fixed at higher than that of
> ground round because it is a graded higher quality cut. It
> costs more money to prepare, and it comprises less of the
> cow than other standard cuts (as far as I know anyway).

But there's preactically unlimited supply of both. Bad analogy. The truly valuable domains ($1000+) that are INTRINSICALLY valuable (people type the name in) have been taken since before 2000. Many of the names that sell for high amounts now are either among those names, really good names among new extensions (which once again, are taken first by people who intend to resell them to make money...you can't expect to get a valuable name by sitting on your ass), or are domains that had fully developed sites that generated a lot of traffic.

> Another standpoint that came to mind was... "well, what
> about people selling rare high-level items on eBay from
> games like Dark Age of Camelot and stuff? Isn't that just
> as morally wrong?" It's not. It takes usually months of
> playing for hours straight to get to a point in the game
where these rare items are easier to produce/obtain.

Ok. Want an analogy to this involving domains? Undoubtedly my most valuable domain is SexVideo.tv. It's valuable enough IMO that I've been listing it at $1000+ on listing sites, and it's generated the most traffic by far among my listings. I just got that domain after doing this for about 3 or 4 months, albeit through luck, but also through extensive searching for names that I think are valuable over the last 3 or 4 months. The difference between selling high level rare items in games is that those are FREE, and often times people can HACK the game. Otherwise, it's still rare items being sold to people that don't want to take the amount of time necessary to find those rare items themselves. EVERYONE can find the domains that I buy, but people would rather either be given a rare domain for nothing through no effort on their part (the people that whine about all the good .com domains being gone and not wanting to pay WHAT THEIR VALUE IS to get them), or simply buy one. It takes EFFORT to find good names before someone else gets them, unless you were around when the internet was starting and were smart enough to realize the potential in domain names.

If you really want to find a dead-on comparison to domain names, try Magic cards. In Magic, there are the commons that are so plentiful they're like water, there are less uncommons and rares that are worth more and have more use, then among them are the old rares and uncommons that are from sets 6-10 years old and are worth a decent lot of money because they are very useful and can be put into decks that make it easier to win tournaments, and then of course cards like Alpha Black Lotus, of which there are only about 1,000, which are worth like $600+, which can be equated to domains like business.com and time.com that have been owned ever since domains came about and have gone up in value whether or not they were being used.

People still will buy Black Lotuses for $500 a pop because that's how much they are worth and they would rather fork up the money to buy the best than to buy or try to find a much less valuable 2nd-tier rare. Other people will buy a lot of packs from a new set and get a really good rare from a new set and play with that instead (pretty much what I do...search extensively for names I think are good from the non-.com TLDs, most of which have never been taken, some of which had registration lapse), and then other people will buy some packs and use the cards they get to make something of them (i.e. people making new words up like travelocity.com or people buying JoesHardwareStore.com because that's the name of their business, and their business doing well makes it valuable).

> Domain
> purchasing does not take any extra effort at all; it just
> takes a knowledge of basic English vocabulary and a few
> minutes at your favorite register who happens to be offering
> domain registration at 2.99 per domain or whatever...

Hah, right. You forget that almost all of the names with any kind of value are taken already, because people beat me to the punch. I don't spend "a few minutes" at my favorite register. If I did that, I would only find domains worth the value of registration or less.

One day, I searched all domains in the format of (letter)tech.(extension) and tech(letter).(extension), so like ftech.biz and xtech.cc. Putting the names in my availability checking program and hitting check all takes no time at all. Analyzing what comes up takes a LOT of time, especially when you consider this is just 1 example of probably over 1,000 such searches that I do. Figure in the format I just explained, there's 52 combinations, and with about 20 extensions that my program checks, I have to analyze 1040 results. In that search, the only one I took was cTech.org, because the results were as such:

com, net, info, biz, us, ws, cc, de, at, co.uk, org.uk, se, bz, cn, at, jp, nu taken. org, am, ag, la not taken.

am, ag, and la are horribly valued extensions. Every other valuable extension was taken, and a whole lot more of not-so-valuable extensions were taken, and even some horribly valued extensions were taken (nu, bz, se, etc.). So I got that name, checked all the other results (which can take maybe 10 minutes), and then move on to more. Not a lot of time, right? Consider that I've been spending anywhere from 15 minutes to 3 hours a day doing this over the last 4 or so months, and I only have about 70 names. If it was as easy as spending 2 minutes at my favorite register, I could have gotten them all in 1 day. Oh yea, and what do I have to show for it so far? About $500 spent, only 1 domain sold for a whopping $10. Yea, I'm a big bad squatter.

> I'm having a hard time coming up with a logical real-world
> example that even compares to the matter at hand. I tried
> thinking of personalized license plates... but what word you
> get scrawled across one of those costs no more than any
> other word. The price for a personalized plate is fixed.

Actually, that's another analogy that hits the nail on the head. First name personalized license plates (Steve, Heather, Michael, etc) have been taken since cavemen were around. Due to a high demand for such names, they would be worth a LOT more than the price they are registered for, and those people could probably sell them and make a lot of money. There are still names left however that people might want, though not many (I have been considering getting one myself). But that's actually about as good of an analogy as I can think of, except other things can affect a domains value, like lots of traffic, high search engine placement, high amount of type-ins, etc.

I hope that sums my position up well enough for you.




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Kuikorosu 08-05-2004 08:17 AM

Re: Domain squatting - one of the lower business practices
 
Domain names are for pussies. Real men just type in the IP address of the server with port 80 at the end. <img src=smilies/cwm11.gif>

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