DomainTools Blog

The Editor Ron Jackson of DNJournal had an interesting point,

“As many have been predicting for months now, the typosquatting issue has moved to center stage in the domain business. Typosquatting is the practice of registering domain names that are misspellings of popular brand names. Those names are then used to generate pay per click revenue from web surfers who accidentally mistype a domain name and end up on an advertising page owned by the typosquatter. Practitioners of this black art have made a lot of money over the years, but in 2007 holding infringing names may well earn you an expensive day in court rather than a fat PPC check.”

But my question to Ron is, how will the little guy defend themselves against the squatters? Verizon can hire expensive lawyers and it may cost squatters that pick on those domains. But most companies will not fight back. Most will just sit there and passively take it. They may not even be aware it is even happening to themselves. They don’t have time to pick the flees off their back. Squatting on non TM domains is a problem that will not go away quickly. As an example of this point, even DN Journal has fleas on its back.

The one conference that shouldn’t be missed is back. This year’s show is going to be an exceptional meeting for a number of reasons. The content and sessions that we have planned will provide information that is catered towards the seasoned domain professional. We have some back to basic seasons as well to cover the foundation a new domainers should know if they are going to succeed. We have talked with a lot of domainers that know how to find good domains. But what is the best way to monetize those domains? Well, parking as we know it is changing, staying ahead of the curve is the answer to making the most money.

Domainers have figured out how to make full-time livings off of domains, many people who attend our conferences work for themselves and now are hiring people. There is no easier way to build personal wealth then investing in quality domain names. I personally have been a part time domain collector over the last few years and have figured out how to make thousands of dollars a month from buying domain names. With the right understanding of how the industry works it is possible for anyone to do the same.

Networking with others is a critical function of these events, we decided to make this one of the key building blocks of the meeting. Attendees may come for the sessions but networking after hours will be critical to an attendee getting the most value out of the conference. The parties and social events we have planned will amaze you. We are keeping the size of the conference limited so that it is easier for networking.

Expect a huge Live Domain Auction this year as well, which will include rebates for bidders. Why pay to go to a Domain conference if you are shelling out big bucks at the domain auction? We will cover your costs. The auction day is going to be free for everyone to attend as well. We are not restricting bidders to just those attending, will be reaching out to other industries to join in the bidding. The live auction system is going to be very impressive, anyone on the Internet will be allowed to bid in real-time at the auction.

We are inviting industry experts from several industries to speak. Sign ups for the Roundtable are closed at this time but will be opening soon, expect about a week. Subscribing to the RSS feed or email list at DomainRoundtable.com and be one of the first to be notified. We have a limited number of spots due do to the soon to be announced networking tools that we will be providing to each participate. We don’t want to give away too much at this time, but expect a conference like no other.

Read the review from last year.

I was just asked a question by a friend. The questions was not your simple question, it was out of the ordinary for him. You see he does not know much about the Internet. So it was a shock to hear the words come out of his mouth. He asked about these “mysterious domain names” that only show ads. He knows my job is running DomainTools and Name Intelligence so I am sure that is why he asked. It was like asking a comic book collector about superman issue #1. He could not have come to a better person to explain the basics about domain names. I have been watching this industry for 10+ years and I dumped some knowledge on it.

It is pretty basic, I explained, people type domain names into browser expecting to find something. “uh yeah”, he agreed. Well, people buy domain names so they can make websites. It is about being found. If the domain buyer places ads on the site and the site naturally starts makes money and in that case the buyer has struck Internet Gold. Nothing was done except buying a domain name. No search engine optimization, no in bound link building, no marketing, nothing. The thing just makes money. His eyes shot open. “You mean they make money forever and no work is required?” It was like waking a sleeping giant.

My friend works as a repair person for a cell phone company and doesn’t have any easy life. This revelation that anyone can find Internet Gold was amazing. To this day I am shocked that people do not understand the basics of the Internet. He asked a second question, “How does someone get started?”. Ugg, what a loaded question for me to answer. I hate anwsering this question for a few reasons. It takes a level of determination to find a good domain and a commitment to learning about domains. I decided to give him the quick answer, “register names that people type in”. A quick follow up proceeded, “What names do people type in?”. Well I guess there are two types, 1) Sites people already know about and 2) Sites that people think should exist but do not. If they already know about the Seattle Mariners for example then they type in Seattle Mariners.com. However sometimes they try shortcuts like Mariners.com instead. (Actually that shortcut will not work but that doesn’t stop people from trying.)

The second type of domain is the one you want to try and register. If for example you type Visit Places.com I am not sure what people are looking for, but I would suspect they want to find a place they can visit on a trip. I registered this domain a few years ago because I wanted to build a travel site. Never got around to doing it, so I parked it until I do. I opened up my laptop and loaded the control panel that showed my income on the name, as an example this domain made $1.28 this month just sitting there. It only had 16 visitors the whole month. It costs me about $8 a year to own a domain name, so I make about $15 a year in revenue or $7 in profit. If a person is able to buy enough domains like this they make a good passive income stream.

I want to stress that it is not that easy to just find good domains. You just don’t pull them out of a hat. But if you watch the news and stay informed about new developments you can register what you think will be good names for the future. The traditional professional domain collectors does not speculate on future names very much, they like names that are instant hits. Local domain names are getting more and more popular. People type in things like Seattle Plumbers.com and expect to find Seattle Plumbers. So if you can find names like these that would be the place to start. I do not expect anyone to make a full time occupational change overnight, it takes years of work to figure out what names are good and what names to delete our of a portfolio.

I have domains in my portfolio that do not make any money at all. But I would never delete them. I own Official Value.com and it gets zero type-ins a month, makes zero money, and costs me money every year. The reason I keep it is for the bigger picture. I name can be sold in twenty years from now for huge amounts of money. That $200 that is cost me to own the name for 20 years should net several thousand dollars in the future. If I sold land in downtown Seattle for $500. Would you buy some? “Well of course”, he said staring at me like an idiot. Well that is exactly what I have done, I have bought land in downtown Seattle in 1889. I expect land/domain to increase in value. Two words strung together that possible mean something is tomorrows Gold. A few years ago we had 5 million .COMs now we have 65 million. In a few more years we will be above 100 million names. If you think it looks good, then hold it. Just because a domain name doesn’t generate money now doesn’t mean the domain is worthless.

The trap to avoid is falling in love with bad names. Don’t get crazy and start registering sentences or bizarre sounding names with numbers in them. Keep it generic and keep it in .COM.

It was a lot for him to absorbed, but he really wants to try it. I am sure I just created a monster.

In Nature there is always a balance.  If we take a island as an example we will find it is a relatively contained ecosystem. On the island we put three things - a few packs of wolves, a few hundred bunny rabbits, and lots of vegetation. The bunnies breed fast and it is easy for the wolves to catch them. The bunnies have plenty to eat, the wolves have plenty of bunnies to eat, and everything on the island is in balance.

Well let’s throw a wrench in the works. We discover that the wolves are eating the bunnies too fast. This means that the wolf population starts growing. The balance of bunnies to wolves becomes unhealthy. There are now more wolves on the island than bunnies and in the weeks to come the wolves start to die because of a lack of food. The few bunnies that remain, they hide very well and only come out at night and eat the vegetation next to the rabbit hole. The bunnies will survive the increase in wolves, but only a few bunnies. Now that all the wolves start to starve, we see that 95% of them die. Only a few wolves survive the bunny depression. Once the equilibrium gets established again the bunnies are free to repopulate the island and the wolves are free to eat the growing bunny population again.

Let’s take another look at this island, let’s say the bunnies breed faster then they can be eaten. Now we find that the vegetation is at risk. The bunnies eat everything they can find and the island is swarming with rabbits. The few remaining plants are growing in cracks and in places the bunnies can’t reach. Now the bunnies start to die because of a lack of food. Once 98% of the bunnies die off the remaining 2% find it easier to eat. The grass grows back and the equilibrium of vegetation to bunnies is restored.

Sergey Brin was asked about Click Fraud in 2005 and whether of not it was a problem. Here is his response.

Sergey Brin:

“Sorry to disappoint you but echo meets comments, it’s something we have to work on certainly, and we spend a lot of effort detecting click fraud, eliminating it and so forth, but there is already a long list of protections from Click Fraud.

First, obviously we [Google] do have sort of Fraud Teams just like credit card companies they have there fraud detections things like that, occasionally people get a fraudulent charge but actually it’s quite, quite rare.

Secondly, a lot of our advertisers, in fact most, even though in theory they are bidding per click or things like that, that’s not actually what they care at all about. In fact they care about getting the conversions, making the sales. They have their own internal measurements which are very very precise and they know the exact ROI that they are getting. To them if there were a case of Click Fraud, it would be no different than just sort of disinterested but not Fraudulent Clicks, they care about making the sales happen. And they know they happen, they measure them with ROI tools, most advertisers either use the one we provide or other third party ROI measurement tool.

The other issue you should understand is that the ad system is fairly complex. Aside from all the fraud prevention measures, it’s not necessarily so simple to negatively impact account based on Click Fraud, if you wanted to click on someone else ad site, we did notice that a few times, you would get a few more clicks but also increase there click through rate which would actually lose them the auction.

So there are some fairly complex effects there, that by no means completely protect people, and you’re right, there are motivations especially by the syndication of partners and things like that.

But on the whole the combination of all these things and as I said the inherent all the click fraud fighting and the large team of people we have dedicated to it, I think it keeps it a very low level and the negative advertiser impact due to it is actually quite small.”

Sergey Brin may be smarter than most people - he understands the Biological Equilibrium Theorem.  If the click price of bids fall, it is because advertisers value the traffic less. Advertisers measure their ROI on ads, and if the ROI is not high enough they lower their bids to a point were ROI is yielding a good return. (Visual: Think about bunnies hiding in their holes.) Once the Advertisers sees their ROI increasing they are able to bid more, to stay ahead of other bidders. Advertisers that bid too much either go out of business or have better ROIs than other advertisers. In a marketplace with multiple bidders, we find that depressions are rather rare unless something happens to globally effect the marketplace. In the case of the Advertisers, they bid too close to the ROI. Advertisers should constantly be pressured either by other Advertisers or by falling ROI. In the case of advertising, if you lead the pack and your company is always on top you may be paying too much. If your ROI says it is worth it, then by all means bid it like you got it.

Click Fraud is a problem, but it is one that fixes itself. An advertiser always wants to maximize their profit, so they argue they are paying for fraudulent clicks. However the click prices already take into account fraud or disinterested parties. The balance must be there or other advertisers would be paying more for the spot. The advertiser should give up the notion that they will convert 100% of the leads. It simply doesn’t happen in the real world and will never be possible in the virtual world. The only possible semi-solution is Cost Per Action (CPA) advertising. I will not go into the subject much in this post, but there are faults in every system.  For example in CPA, sometimes no action can be established on the site, like in the case of an information site which wants to spread its views or an advertiser that prompts customers call to call their 1-800 number to place an order instead of using their web form.

In what seems impossible, a Spanish citizen named Pablo Bello García just defended himself in a European Arbitration Dispute Resolution case (ADR) against Google, Inc for the domain name Googles.eu. It seems crazy or insane that the European Panel responsible for deciding this case would allow the Spanish man to keep the domain. The Panel denied Google’s claim because they said Google lacked evidence that they were entitled to the name. Uh, What? *Shaking my head in disbelief* Did this panel live under a rock? How backwards is Europe? Had Google provided something like license or some other documentation they may have won the case. The case seemed so simple, I am sure the Google Lawyers must have been caught off guard. Google will need to dot their Is and cross their Ts before they do battle again in Europe. Just looking at the guy’s site, anyone in their right mind can see they are violating Google’s Trademark. Pablo even stole Google’s logo and adapted it. Absolutely nuts. Google is sure to appeal the case.

George Kirikos points out that the WIPO case regarding British Museum.org was decided based on a default judgment because the respondent didn’t reply. All looks fair until one looks closer at the facts. They list the defendant as, “British Museum Resources, Limited, West Bay, George Town, Kentucky, United States of America”. One problem, the Defendant lives in KY the Country not KY the US State. I doubt due process was observed in this case if the notification went to the wrong address. This would make the ruling null and void.

Registrant Organization:British Museum Resources, Ltd.
Registrant Street1:P.O. Box 115
Registrant Street2:
Registrant Street3:
Registrant City:West Bay
Registrant State/Province:George Town
Registrant Postal Code:WB
Registrant Country:KY

WIPO should try the case again and revoke its current decision. I have sent a note to WIPO panelist Brigitte Joppich that decided the case. I will give an update on what she does.

Mike Zupke, the Registrar Liaison Manager of ICANN, published his short list of problems he finds with domain resellers.

1. Because resellers often have relatively close relationships with their customers, their business operations sometimes suffer from what I’d call “trust me syndrome” (TMS).
   TMS can manifest itself in the form of inadequate or nonexistent registration agreements, use of whois privacy services without disclosure to the customer (or without disclosure of the implications of using a privacy service), and internal transfer-out policies that are inconsistent with the Inter-Registrar Transfer Policy.
2. Sometimes small resellers (e.g. where the customer service rep is also the president, CEO, treasurer, bookkeeper, janitor, etc.) take the business a little too personally.
   In the past, this has caused customers difficulty when they try to terminate the services of the reseller. We’ve seen situations where this allegedly caused transfers to be NACK’d without explanation and whois data to be altered without the customer’s consent. (While this is also a potential risk with registrars, it is less likely when the registrar actually values its continued accreditation. A small-time reseller can easily find a new host-registrar for whom it may resell names, so it may not place as much importance on the agreement it holds with its current host-registrar.)
3. While every registrar’s reseller model is different, there are some models that delegate substantial responsibility to resellers, but not all resellers take their responsbilities as seriously as they should.
   By way of example, we saw an enormous uptick in complaints about resellers following VeriSign’s migration to EPP in late 2006. In particular, customers complained that resellers wouldn’t or couldn’t provide auth-info codes for .com/.net names and that requests to the sponoring registrar were met with deflection of the matter to the unresponsive reseller. In some cases, even ICANN’s attempts at intervention were similarly deflected.

The full article is on the seperate ICANN RegBits blog - a blog that was setup to communicate better with Registrars.

A new domain media company seems to have emerged out of Vancouver Canada. They just launched their website and their is a lot of interesting information on it. After reading through the website, it is clear that this new media company has been in stealth mode for a while and that they are on the same scale as other Industry Giants. They own some killer domain names like Attorney.com, Cheap Travel.com, Laptop.com, Digital Camera.com, Hot Springs.com, HD TV.com, Cellular Phones.com, Religion.com, Beat.com, and Venture.com. The company does not list all their domain names they own, but we assume they have other great names as well.

On their management page they list two co-founders (Kevin Ham, Colin Yu), and as you would expect from a Media company in the Direct Navigation space, they both own their own their .COM personal names. The two co-founders were high school friends and then later both attended the University of British Columbia. Later, after college, they started this company together.

Reinvent’s mission statement page is littered with awesome domain names that act as the title of each section, Mission Plan.com, Vision Statements.com, The History.com, Great Corp.com, Innovations.com, Team Building Exercises.com, Enjoying.com, Community Outlook.com

Reinvent Technology, Inc. was formally named Host Start, but the Host Start domain still does not redirect to Reinvent yet. Some background information was provided about their stealth mode operations on one of their pages:

Our humble beginnings, in 1999, started much like many internet startups, in the living room, as opposed to the garage. Founded by a family doctor who wanted to base his medical practice on his patients and not on time or money, he started an internet business during his residency in order to build a passive income. By the time his residency was completed, the business was doing so well that he decided to run the business for another year and then go back to medicine. That has yet to happen, seven years after the fact.

He was joined in late 2000 by his long-time high school friend, who had a background in banking. The company continues to grow and all their waking hours were spent building the business, all with specific goals in mind.

With the quantity and quality of domains in their portfolio this has to be considerable and formidable company to Name Media, Demand Media, Marchex, Name Administration Media, and Internet REIT.

Yahoo Panama launched in January and now the first quarter results are being reported. There were a lot of expectations around the Panama project. Yahoo was trying to create an Ad platform that would catch up to Google system. Yahoo even came up with their great code name Panama. Now that the first quarter’s numbers are in, Wallstreet was expecting earnings of 11 cents a share but they were only 10 cents a share. That is a difference of $300 Million Dollars. Yahoo CEO Terry Semel jumped in on the conference call and said that the new Panama ad system will begin contributing financial results in the second quarter. Let’s see if he was covering his butt or it actually happens next quarter.

Interesting Facts from the Report were:

• 477 million unique users.
• 238 million active registered users.
• 4.64 billion Page views.
• 16,500 fee paying customers, up 24 percent from a year ago.
• 11,700 employees at the end of the first quarter, up 16 percent from a year ago.
• 88 cents Revenue per average unique user per month, down from 95 cents a year ago.
• $92.8 million from US Consumers, down from $137 million a year ago.
• $76.2 million from International Consumers, up from $64.3 million a year ago.

Many Americans are rushing to mail in their tax returns since today is the US Tax deadline. Meanwhile, the House of Representatives is scheduled to vote on legislation that clarifies the law barring for-profit companies from using names that sound like official government agencies. They want to outlaw domain names in generic top level domains that have the same name as Government agencies.

The Internal Revenue Service commissioner, Mark W. Everson, has broadcast his concerns twice in the last three weeks about confusion over the official Web site of his agency and commercial firms playing off that confusion. Intersearch.com, the firm that owns the IRS.com Web site, says that it is fully complying with the current law and that it sees no reason to inform shareholders of the pending legislation, said Jennifer Faye Drimmer, its legal counsel.

However, we noticed that IRS.com has drastically changed its homepage after the pending legislation surfaced. Check out the two logos, one from today and other from a screenshot we took on March 18th. Sorry for the low resolution logo - we pulled it out of our Name Intelligence Thumbnail archive service.

The domain was purchased for $12.9 million on September 2005. Oops.

I bet Bush would sign the law - he wants WhiteHouse.com. But it would be wrong for the law to be created, since it would just bar the use of the domain be a for-profit company. The Government should purchase the domains at fare market value instead of targeting a company that bought the domains and broke no laws at the time. I think there is a law already on the books called imminent domain. If the Government wants your property, they just take it and give you money for it. We have never seen anything like this for domain names, but the Internet is young. If the federal goverment did this, could we soon see City Governments pulling out the same trick and trying to get Local City domains?

April 17th, 2007	March 18th, 2007