Why Do Domain Investors Get Such a Bad Rap? | DomainInvesting.com

Why Do Domain Investors Get Such a Bad Rap?

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It irks me sometimes when I hear people refer to domain investors as cybersquatters or other nasty insults. The general impression about what we do seems to all negative, and people assume we monetize trademark domain names, sit on valuable domain names to hold them hostage, and we do other things that are blights on society.

Some of this may be true for some people, but the sad thing is that this behavior is not limited to domain investors. I think a lot of this reputation comes from regular people who happen to own domain names.

Every year during the election season, many political campaigns turn nasty. This happens at every single level of politics – from small local alderman elections to big national campaigns. Inevitably, some dumb politicians (or their lackeys) thinks it’s brilliant to register the domain name (or something similar) with an opponent’s name in it.

They may only be doing it for political gain, but somehow this cyberpirating makes domain investors look bad. Sure, many politicians have slimy reputations themselves, but it doesn’t seem fair that these people get put into the same bucket as domain investors, making us look bad in the process.

Let’s now discuss the perception that domain investors horde good domain names and hold them hostage when some other parties could be using them better. First off, this is complete and utter horse manure. Nobody with any intelligence would say this about someone with undeveloped prime real estate or beachfront property.

What irks me about this perception is that I’ve  tried to buy plenty of domain names from people who registered them 10+ years ago and still haven’t done anything with them. They aren’t domain investors, and many of them aren’t even monetizing these names.

When I make an offer I think is decent, I often get crazy price quotes in reply. Are these people holding domain names hostage? NO! They are capitalists with similar goals as me.

I do realize that there are domain investors who monetize trademark domain names, do nasty things with sensitive domain names, and do hold some domain names hostage. However, I believe that given many circumstances, almost everyone would do the exact same thing, whether they were identifying themselves as domain investors or not.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (77)

    Jeff Schneider

    Hello Elliot,

    It is no secret that a lot of people out there, live lives of quiet desperation. They have no drive goals or ambitions. The thing they do best is condemn and crticize those that know where they are going and have a purpose.

    They are tiny little Green Monsters that despise success in others. Our advice, ” Feel The Fear and Do it Anyway ”

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

    March 21st, 2011 at 1:09 pm

    Mark

    Totally agree.

    It sometimes boils down to jealousy. “I didn’t think of this first as you did, therefore, you are wrong, greedy, immoral, etc.”

    March 21st, 2011 at 1:17 pm

      Otherwake

      Wrong and arrogant. People would hardly complain about domain investors if the people didn’t have to pay an extortion to the investors to have a domain that the investor did NOT need or desire.

      I believe that domain investing is immoral. People who invest in domains are extortionists, forcing people to pay more money because they thought of a *name* first. Not to mention that it’s payment without actual work. Which is *not* an abstract moral that doesn’t mean anything; people who receive money without investing work back into the economy are technically taking money that doesn’t exist– and that leads to a very real problem that we have here in America– debt. And a lot of it.

      January 22nd, 2013 at 11:15 pm

      Elliot Silver

      Do you feel the same way about people who buy land or real estate with the intent to re-sell?

      I certainly put a lot of work into researching my acquisitions and negotiating good deals. I also don’t really have debt, and the small amount I have, I could pay off in full tomorrow if I wanted to do that.

      January 23rd, 2013 at 7:51 am

      Otherwake

      I would consider land to be different. It’s physical, and there’s a finite amount of it.

      But I still don’t think putting research into what *ideas* might be popular and forcing people to pay for the right to use the *idea* is moral. I don’t care if lots of people do it. It still has very negative effects on everyone and everything that isn’t the investor.

      If someone is getting money from something, they had better be contributing to other people. The difference between domain investing and another career is that other careers provide services and products that people need that would not be available to them without work. Without domain investing, the consumers would be *happier* and *better off*.

      January 23rd, 2013 at 5:52 pm

      Elliot Silver

      Personally, I only buy descriptive keyword domain names. Some (like DogWalker.com, DogPark.com, Burbank.com, EventManagement.com…etc) are developed and others (like ContactManagement.com, LandscapeContractors.com, and GeorgetownRealEstate.com) are investments.

      “Without domain investing, the consumers would be *happier* and *better off*.”

      The people who do work for me are happier and better off than if they weren’t doing work for me 😉 I also pay quite a bit of US and local taxes.

      January 23rd, 2013 at 6:05 pm

      Otherwake

      I’m not talking about domain investors. I’m talking about society.
      Is everyone here extremely arrogant, as they keep throwing up new arguments instead of refuting mine? Or maybe I’m just getting that feeling because everything here is in text, and I’m wrong.

      January 24th, 2013 at 10:18 am

      Elliot Silver

      Eh, I don’t think I am arrogant, but you should keep in mind that you are being critical of domain investing on a blog visited by people who make a living investing in domain names.

      January 24th, 2013 at 10:20 am

      Otherwake

      Sounds fair.

      January 24th, 2013 at 10:48 am

      Elliot Silver

      It’s probably a topic we’d have to agree to disagree on.

      There are plenty of times when I try to buy a domain name from someone who isn’t in the industry that wants what I think is a crazy amount of money. There’s no accurate way to value a domain name precisely, and that inefficiency is what allows people to make money.

      January 24th, 2013 at 10:50 am

    Ron

    Well, you guys are the ones who pump scam extensions like dotmobi, as well as obvious frauds like .co. If you can’t understand why .co gives domainers a bad name, then obviously you won’t be able to figure out why domainers have a bad reputation.

    The fault lies in the actions of domainers. And the leading voices in domaining have allowed the scams to go unchecked.

    You dug your own grave.

    March 21st, 2011 at 1:42 pm

      Elliot Silver

      @ Ron

      Really? They were scams? Sounds more like opinion than fact.

      I haven’t “pumped” anything. In fact, I have been very clear in my opinion about .mobi and .CO. I don’t own a single mobi domain name and own less than 10 .CO domain names.

      March 21st, 2011 at 1:48 pm

    canyousaydotcm

    i think some of the early investors caused problems. Can you say .cm. Our whole industry holds the Dr. in high regard and so it should for his generic investments but the .cm redirects (although brilliant, ie. ford.cm, toyota.cm, disney.cm, etc.etc……) was like adding jet fuel onto an already hot fire. imho.

    March 21st, 2011 at 2:30 pm

      Elliot Silver

      @ CM

      I disagree… this stereotype has been around much longer than .CM, although I am sure it didn’t help.

      March 21st, 2011 at 2:31 pm

    Jeff Schneider

    @ Ron

    A little green are You ? You should have such a Cozy Grave, obviously you dont.

    And before you go sticking your foot in your mouth , we to do not support these other extensions.

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

    March 21st, 2011 at 2:30 pm

      Elliot Silver

      @ Jeff

      It’s not that I don’t support them. Quite the opposite. I do support them. I would never buy a .mobi because I don’t have a need. I would buy a .CO and do own descriptive .CO domain names, including one that I developed in my geodomain vertical.

      March 21st, 2011 at 2:32 pm

    Christopher

    I posted on reddit that I would forward my wnn(dot)co domain to world-nuclear-news(dot)org during the Japanese nuclear crisis and I was called a cybersquatter. It really irked me.

    March 21st, 2011 at 2:51 pm

    Tom Garrett

    Just add us to the long list of misunderstood & vilified entrepreneurs & sales professionals that have come before us. Throw us right in there with car salesmen, door to door encyclopedia sales, telemarketers and vacuum cleaner sales people.

    Sure, if we’re honest I think we’ll all admit that we’ve met or read stuff by domainer(s) that we did not agree with or we’ve found offensive or inaccurate. Now imagine you know nothing about domaining and therefore have no idea where to apply the grain of salt when called for. Suddenly we’re all scammers and unscrupulous opportunists.

    Whatever. It’s all water off a duck’s back to me and I pay no attention to it. It’s perfectly acceptable to stereotype car salesmen yet car sales is a very respectable and well paying life-long career for many. Door to door sales built Encyclopedia Britannica into one of the most well-known and respected encyclopedia publishers ever. Electrolux built a vacuum cleaner empire one housewife at a time. Telemarketers, though detested, are a core component to the lead generation and sales efforts of thousands of companies.

    I’m done trying to convince people that domainers are legitimate business people. When someone buys one of my domains or earns me passive income from visiting one of my developed sites, I get all the recognition I need.

    March 21st, 2011 at 3:13 pm

    RH

    .CO is not a scam and has nothing to do with domainers creating it. Every country in the world has their own country code. Colombia got .co, that was their CCtld way before there were domainers. CCtld were assigned in the mid 80’s. Because some domainers like .co does not make the extension a scam. What should Colombia do ? .cm is for Cameroon, the fact they wanted to have their extension resolve they way it did was their choice. Again not a domainers choice, Kevin Ham looked at it as a good business deal. That does not represent the industry, it represents Cameroon and Kevin Ham. Again IMO

    March 21st, 2011 at 4:29 pm

    Elliot Silver

    .CO is new but domain investor hatred is not new. It’s amazing that so many people have a one track mind that leads to negativity about .CO.

    March 21st, 2011 at 4:32 pm

    M

    @Elliot

    “I haven’t “pumped” anything. In fact, I have been very clear in my opinion about .mobi and .CO. I don’t own a single mobi domain name and own less than 10 .CO domain names.”

    True, but you do have plenty of .CO affiliate banners plastered all over your site …. for months and months now ….. like a banner on every post page, and 5-6 + on the homepage ….. Given the .CO domain sales I’ve seen (or lackthereof), those banners are probably making you more than buying/selling .CO names ever will.

    March 21st, 2011 at 4:49 pm

      Elliot Silver

      “True, but you do have plenty of .CO affiliate banners plastered all over your site …. for months and months now ….. like a banner on every post page, and 5-6 + on the homepage ….. Given the .CO domain sales I’ve seen (or lackthereof), those banners are probably making you more than buying/selling .CO names ever will.”

      @ M

      I’ve said this MANY times, but I will repeat myself again. The banners on my site are NOT affiliate banners. I do NOT get paid a dime more or less if people buy .CO domain names. The same thing goes with the other banners on my site. I previously had ThemeForest affiliate banners, but I took those down.

      In addition, I have always made significantly more money selling domain names than I’ve made from blog advertising. I am a domain investor first and foremost, and then I am a domain blogger. I only permit advertising because it would be pretty stupid spending 40 hours+/- a week doing work that is unpaid. I don’t have the luxury of doing that.

      March 21st, 2011 at 4:51 pm

    Chris

    Because you (and if not you plenty of others) ask $10k for something you’d only pay $100 for. What other industry gets away with such pricing.

    March 21st, 2011 at 7:31 pm

    David J Castello

    It’s always one of two reasons – jealousy or ignorance.

    I was at a party in FL talking to a group of people when some guy walked up and said, “Hey, aren’t you a cybersquatter?” I glanced over at him and said, “No” and went right back to my conversation. He stood there looking like an idiot before he finally walked away.

    March 21st, 2011 at 7:52 pm

    Jeff Schneider

    @ David

    Jealousy and ignorance are close cousins, they sleep in the same bed of negativity.

    Most of our detractors are just pissed off that 15 years ago they had no clue. Its not our problem its theirs.

    March 21st, 2011 at 9:26 pm

    LS Morgan

    There is definitely a twinge of jealousy there, but unlike beach property or apartment buildings or stocks or commodities that are fungible investment vehicles, the transmission of information is something quite different and domain names are supposed to represent that. When John Q Domainer owns CancerResearch.com, there’s something innately obnoxious there. This same sentiment translates to any domain name that is owned for ‘speculation’ rather than being owned by someone who intends to put it to productive use.

    Had Postel known that the internet was going to become what it has, I’d bet the process involved with acquiring domain names would have been different, but such is the system we have.

    People love the massive benefits that arise from the free market, capitalist engine but then whine and cry about everything that goes into the process itself. Speculation is part of that process, love it or hate it. Most people hate it.

    Everyone respects the farmer who grows the crop, but who respects the guys in yellow vests at CBOT who do nothing but sit around all day and speculate on his crops? No one… but do you think those guys go home and lament over what people think of them? No, but if they ever do, they’ll have plenty of money to wipe away their tears.

    March 21st, 2011 at 11:16 pm

    Ian Andrew

    A lot of the above is very true.

    Public opinion is public opinion and a lot of stuff needs to happen over time to change it.
    We can examine why there is some negative sentiment and several of the reasons are above.

    Going forward…
    What we find that works – ie helps make sales – is to a add the word “descriptive” to the phrase “domain names”. In this way, it distances the message from any negative sentiment, as it says “clean/clear”.

    You can also use the term “generic” of course, but we find the that non domainers “get it” quicker when we use “descriptive”.

    Ian.

    March 22nd, 2011 at 10:58 am

    Rodney J

    While there are plenty of folks out there that are legitimate domain name investors who buy and sell generics or develop websites, my direct experience over many years is by far most pure play domainers have bad attitudes, bad intentions and are in fact squatters. Beyond this what may hurt the industry the most is those that are looked to as the pioneers and top of the industry are clearly squatters. For example Rick Schwartz and Frank Schilling. Additionally big companies such as Demand Media, Marchex and others. Things have changed a lot lately with parking and valuations and Karma is finally catching up the a many of the small time squatters. This is not jealousy or ignorance as someone above suggests. These are simply the cold hard facts.

    March 22nd, 2011 at 11:43 am

    RH

    What are the facts anonymous Rodney ? How is Frank and Rick a squatter instead of an investor ? How are they not legitimate ? How many domains do you own ? What have you developed ?

    March 22nd, 2011 at 12:04 pm

    BFitz

    Elliot,

    I agree domain investors get a bad rap. But, as a TM holder in the brick world who has experienced half a dozen typo registrations and one exact match with a “the” put on the front from those attempting to profit from my 20 years of labor, I do get it. Also, often someone gets an idea beyond a generic dot com, goes to Godaddy expecting to pay $10 and then finds themselves having a $X,XXX discussion with the investor. Fine with me, but expecting the average small business owner or mid-level-manager to get it is not a real expectation. Further education is the answer and the registrars should carry that as the domain investors have carried them for 10 years. With a 30% commision on premium listings, Godaddy has an incentive.

    Secondly, the only business with a lower barrier to entry than restaurants is domain investing. People ask me why restaurants fail and I tell them it is because anyone can open one. Anyone cannot just go be a Doctor or Lawyer. So you get people with a grill in their back yard playing restaurant because their neighbors praise their cooking. Those schmucks drive up my insurance, lending and other costs with their poor business practices. Same with domains, “I own a computer and can type dot com.” Take $10 and you are an investor reading about Frank and Rick and telling yourself they are your peers. But, they hurt the professionals like you with their TM infringements.

    March 22nd, 2011 at 12:05 pm

    Cybersquatter-not

    I have been a legit dealer in a product long before the manufacturer reconized the net as a sales source.

    They were able to sell 100k plus on my site yearly. As my revenue went up so did their interest.

    Then they found an idiot who would cry cybersquatter at me. My attorney sent them away with nothing.

    They copuld buy the name and business for a healthy 6 figues sum. Something they can afford as a Fortune 100 company. Their guys says if they pay him instead and keep harassing me they can get it for nothing. (excluding the 100k they pay the idiot)

    TM people need to man up and buy the folks out who led the way.

    March 22nd, 2011 at 12:39 pm

    BFitz

    @Cybersquatter-not

    So I spend 20 years learning a skill, risk a bunch of money on starting a business (including registering a trademark for it) and the day we open, spending thousands on local advertising, some dude registers my TM dot com with a “the” in front of it and I should pay him?

    A TM is a TM, there is no statute of limitations for me to protect my TM. If I had it first, it’s mine-keep your grubby fingers off it. Just like if you register a generic domain you can ask any price you want and follow Rick’s “F-You” strategy.

    Using someone else’s brand and TM is hardly leading the way. When neon came out, was the first person who built a neon sign the one with the rights to the name on it? A domain is a digital bill-board.

    March 22nd, 2011 at 1:07 pm

    randomo

    I have some sympathy for people who hold domainers in low esteem. How many of us have filled the “information superhighway” with billboards (parking ads) shilling for products or services that we have no connection to and that could be scams?

    If you own generic domains as an investment, or if you profit from trustworthy ads or affiliate links on websites that offer some value to readers, great. If you trade in TMs, or hold onto domains such as the CancerResearch.com example referred to above, or lure people to click on ads that may be ripoffs, then you’re helping to lower everyone’s opinion of domainers.

    March 22nd, 2011 at 1:09 pm

    Mark

    Ahem – I assume the site name you used contained the product / trade name of the company you refer to?

    If it was purely descriptive then okay – if not then…

    Morally at least you are trading off the back of anothers intellectual property…

    Is that right?

    March 22nd, 2011 at 1:11 pm

    Cybersquatter-not, part 2

    Ahem back at you.

    Morally? This is business. I use ethics as a guideline and have very high ethics and am active in domaining.

    UDRPs say you have to be harming them. That failed for them. Exact trademrak? No. but very good one with the TM in it.

    They sell the product; I buy it wholesale from legit distrubutors. Been a dealer for 14 years.

    Opinion: If you want to call people cybersquatters without knowing the details you are doing their reputation harm. Is that “morally” correct?

    March 22nd, 2011 at 1:40 pm

    Cybersquatter-not, part 3

    @BFit – IMHO You do not appear to know much about TMs. You have a very narrow view. It valid as a narrow part i of the issue.

    Your TM may only need you. Other TM holders need competent dealers and allow anyone to buy wholesale and use the TM in that manner..

    Taking someone’s property and business because you “suddenly want to put them out of business so you an own their business is harmful, unethical and down right mean. It will hurt the reputation of anyone that does it.

    A cybersquatter is someone using your trademark AND causing your brand harm. Not6 someone buying through legitimate wholesalers and reselling like every other dealer.

    March 22nd, 2011 at 1:48 pm

    BFitz

    @Cybersquatter-not

    I suspect we both have narrow views based on our individual circumstance.

    March 22nd, 2011 at 3:04 pm

    James Wester

    Great take E. Our tiny spec of a market here makes some traction and then you have a “professional journalist” that reads a bit of fluff through Google search or talks to another journo in the industry that has no clue what domain name investing and/or developing actually is, yet they can write about it. Then you also have a journalist like the one that has written an article about the .au reaching a 2M registration milestone and you have a professional and well respected person in the Australian business community that has been on Sky Business Channel in an interview with 2 top companies in web/software/it industry that add credibility to this person’s testimony of “cybersquatters”. smartcompany.com.au/information-technology/20110308-australia-registers-two-millionth-domain-name-as-prices-for-established-sites-take-off.html < My reply was under Pacific Octane

    Thanks for such great posts and especially the timing of this one. I am spearheading an association here in Australia to begin a campaign on lifting the profile of the .au as well as educating people via web presence and standard marketing. I believe that our small market here can be damaged a lot more quickly than say a US market or European market. Thanks again- keep writing. :)

    JW

    March 22nd, 2011 at 3:14 pm

    Cybersquatter-not, part 3

    @BFitz

    Agreed. :)

    March 22nd, 2011 at 3:18 pm

    cybersquatter-not

    Our discussion got off track but illustrated some problems about domainer’s image. David Castello gave an good example of the man on the street’s view.

    Many people don’t know what a cybersquatter is and think it might be something cool to do.

    Inside our industry it is akin to being called a crook.

    Let’s just quit using that term. OK?

    March 23rd, 2011 at 10:29 am

    Chris

    Cybersquatters take advantage of other people’s trademarks. Domainers take advantage of other people’s ideas (particularly at prices far beyond market value).

    Much of business these days is about taking advantage of people in one way or another. But it’s odd that domainers should abhor cybersquatters given the similarities.

    March 23rd, 2011 at 12:26 pm

    dotcm

    Amazing opinions in thread. I personally like David C’s approach. Look at detractors of generic investors like they are idiots and move on. Even if you haven’t developed a generic name but hold on to it for investment value you are a investor. Comparing generic investors to trademark cybersquatters is a joke. Trademark investors are thieves.

    @ Chris – taking others peoples ideas?? Most of the sheeple didn’t even know what a domain name was when the internet opened up. So the investors that took advantage of that ignorance are bad??? I say they are pioneers and very brave for putting their money and time on the line for generic names. If you want a good name to build a real business on today then pay for it or move on. period. imho

    March 23rd, 2011 at 4:55 pm

    Chris

    One reason that a buyer may be willing to pay far more for a domain than anyone else is that his idea or business is uniquely suited to it. If he is required to pay a price far above market (ie. auction) value, then his idea is being exploited.

    March 23rd, 2011 at 5:20 pm

    dotcm

    @Chris,
    So the speculator that purchased the vacant oceanfront land 20 years ago and is still waiting for the right price is a squatter?? Just because you want to develop that land today and don’t want to pay the sellers asking price for it doesn’t mean they are squatting. It means you need to put up more $$ or move to another more affordable property that suits your budget.

    It’s the way the world has worked since the dawn of time.

    March 23rd, 2011 at 9:04 pm

    LS Morgan

    Stop comparing domain names to “beachfront property”. Just stop it. It’s a stupid, stupid comparison and only believed by domainers.

    Hint: Whenever the only people to believe something are those who belong to a small, insular group and chant that thing amongst themselves as a mantra, there’s a good chance it isn’t exactly a “valid” position.

    If that guy doesn’t want to sell me his beach lot, I have any number of functionally identical beach lots to choose from. The same cannot be said for domain names.

    There are innumerable reasons why domain names ARE NOT like real estate.

    I’m a capitalist devil and don’t make any apologies for speculating on things, but domainers really need to stop trying to legitimize themselves as being anything other than scalpers. That’s what we do when we buy domains in advance of someone else needing it, anticipating being able to sell it for a much higher price to them.

    March 24th, 2011 at 2:55 am

    dotcm

    @ls
    I guess I will have to respectfully disagree with you.
    “no 2 pieces of property are identical, anywhere”
    There will always be differences in real estate, guaranteed.
    The real estate analogy just seems to be the simplest way to help closed minded individuals to see the similarities. imho

    March 24th, 2011 at 11:49 am

    Sean Tate

    Much of business these days is about taking advantage of people in one way or another- alot of the above is true.

    October 31st, 2011 at 6:44 am

    Cybersquatter-not

    Good thread. I like to see people discussing POV and trying to understand each other’s POV.

    Howerer, the idea that other people are holding domains to steal their ideas is not totally true. Ideas are plentiful. But if the site is noty scheduled to development you have to ask about motive. The other side is parking a domain is a legit source of income unless a TM is involved.

    (not exact quote) MLK said do not judge a man by the color of his skin. Look at his character and decide there.

    Same with domainers. change “color of their skin” to “their domain portfolio”

    Just sayin… Now i must go back to work.. 😉

    October 31st, 2011 at 10:47 am

    crowe

    The real estate speculator does not mark up his wares to prices 10 or 100 times what he’d be willing to pay himself.

    January 23rd, 2013 at 4:37 pm

      Steve

      I’m on holiday in Mexico and I work with a local agent providing sales and rental leads. We just had a discussion yesterday about a lot that the adjoining neighbour could have purchased for $4k about 10 years or so ago. The lot sold last year for $100+k to the current owner who put up a $300k+ home. The lot next door is $330k.
      Fair mark-up is what the market will pay. If an investor has to wait why should they sell their asset to anyone at a price they think is too low. Welcome to free market economics.

      January 23rd, 2013 at 5:28 pm

      Elliot Silver

      He would if he could.

      So it’s the ROI that bothers you? That is called capitalism.

      January 23rd, 2013 at 5:47 pm

      Otherwake

      The problem with this is that if you give someone too much freedom, they will take away the freedom of others. Just because you *can* do this does not mean it is helpful or productive to society as a whole– and therefore it does not mean that it is moral.

      Freedom is only good with limitations. Otherwise, the powerful have the most freedom and they use it to take advantage of other people. That’s what I call “domain investing”. It may be profitable, but it’s not helpful.

      January 23rd, 2013 at 5:56 pm

      crowe

      Most speculators would indeed mark up prices to whatever they could get away with. But often markets where sellers hold monopoly powers of sorts are regulated.

      I don’t object to speculation but it is not an efficient market where a buyer can be required by seller to pay a price far in excess of what anyone else would pay.

      January 23rd, 2013 at 6:29 pm

      Elliot Silver

      Required? If you want to buy EventManagement.com from me but don’t want to pay $100,000, you can certainly go out and try to buy EventManagement.biz for less or create something like TheEventManagementCompany.com or something else. Just because you don’t think the price is reasonable or can’t afford it, doesn’t mean the owner is doing something wrong.

      January 23rd, 2013 at 6:34 pm

      crowe

      I’m not looking to criticize the domainer, just saying that saying that the market is not efficiently keeping his understandable behaviour in check.

      I don’t have a problem with eventmanagement.com at $100k. It’s for example the scenario where mr smith has built up his $1m business with the name Smiths Events, then realises that he ought to build a website and is asked to hand over $100k for smithsevents.com, that seems bothersome (ok you could say he had it coming but that’s not the point).
      Or one could look at the apple type situation where it can be screwed every time it wants to launch a new product beginning with i. The possibilities for domain sellers to exploit buyers are most unusual. Of course I realise there are many cases where the word exploit is not appropriate.

      January 23rd, 2013 at 7:14 pm

    Steve

    Ridiculous.

    If I invest in widgets and my widgets are the best and most unique in the world I should be able to charge what the market will pay. If you want inferior widgets than you can buy those.
    Just because domain investors were able to see value in names where others didn’t doesn’t make them evil. People should be thankful they had the foresight to purchase the name and make it available for sale. Don’t angry just because you can’t afford it.
    Location, location, location.
    Didn’t Manhattan sell $24?? Get real.

    January 23rd, 2013 at 8:53 pm

      Otherwake

      That is a huge difference. If you are producing a product that has the ability to compete with others’ products, and yours are superior, for one, you still have limitations. Your competition promotes quality and innovation, which makes your product superior. But competition also lowers prices, which is good for people in general.

      And people should *not* be thankful that someone purchased a domain name and made it available for sale. The domain name would have been available for sale already. I know because I have purchased domain names for use. We don’t need extra people re-buying the domains and then selling them higher so they can make a profit. I’ve seen many domains sold upwards of $1000.

      Then there’s the big issue. Unlike your “widgets”, a domain name is just an idea. It is not a product or a service. You put little to no real work into claiming an idea, and it doesn’t benefit society for you to sell it. It only benefits yourself. But like I said before– selling an idea rather than a product or a service leads to you accepting money in return for, economically, nothing. That kind of marketing is a big reason why the economy is in debt. Just because you *can* market something does not mean it is helpful to others or to the economy.

      The big problem with domain marketing is that the marketers do not care about their impact on the economy or on society. They just want a new way to make a profit.

      January 24th, 2013 at 10:10 am

      Otherwake

      Also, you seem extremely arrogant, so you are making me very angry. None of your points are logically sound. Instead, it looks like you are throwing your emotions into your argument.

      January 24th, 2013 at 10:12 am

      Steve

      If you are unable to afford the domain you desire then go buy a .whatever.
      Have a great day!

      January 24th, 2013 at 10:25 am

      crowe

      If a Manhattan owner asks a silly price for his plot of land, the buyer will find another.
      But dudu had no good option but to buy the matching .com.

      It’s not investing per se that’s the problem. It’s that some investors won’t release domains to the highest bidder, unless their bid happens to meet that investors ‘won’t get out of bed for less’ level (which in the case of one investor has been rumoured as $30k)

      Many investors won’t sell for good/fair offers, they want great ones, even if it means leaving many of their domains on the shelf.

      January 24th, 2013 at 10:40 am

      Elliot Silver

      Why didn’t they secure the domain name before they spent millions of dollars building their brand on an alternative domain name? Frankly, their efforts in marketing likely increased the value due to the added traffic.

      If a Manhattan business spends millions of dollars in advertising and lists the wrong address on their marketing materials, they are pretty screwed and better hope they aren’t sending customers to a competitor’s place of business. In the case of a domain name, they were able to purchase it at least.

      Regarding good/fair offers, who is the judge of what’s good and fair? One of the best things about the domain industry from an investor’s POV is that there’s no “market value.” To one person, a domain name is worth $100 but to someone else it’s worth $20,000. I sent out sales emails for one of my domain names and received an offer of $100 and later sold the name for over $20,000. Should I have taken the $100 offer simply because someone else thought it was fair?

      January 24th, 2013 at 10:48 am

      Otherwake

      It has nothing to do with what you can or cannot afford. But you’re not paying attention to a single thing I say.

      I hate you. I hate you, I hate you, I hate you so much. You are arrogant. Your logic is horrible. You don’t care about anyone else but yourself and the money you can rake in. You constantly quip with snarky logical fallacies, instead of having anything of substance to say to refute any of my claims. You constantly form rebuttles to my arguments with statements and ideas that have nothing to do with my claims, showing that you can’t claim that they are wrong, all to support your arrogance and your inability to defend your selfish opinion. I hope I never meet you, because I would probably punch you in the face.

      If I were wise, I would stop replying to you. We’ll see if I’m capable of doing that…

      January 24th, 2013 at 10:53 am

      Otherwake

      Who is liking this guy? How is this guy likable? He obviously doesn’t care about any of you!

      January 24th, 2013 at 10:56 am

      Elliot Silver

      I think I need to have my developer change things a bit so I can see who a reply is in reply to. Nesting comments any further would cause confusion, but perhaps I can change it so it says “In reply to…”

      January 24th, 2013 at 11:04 am

      Otherwake

      I’m not just arguing for the convenience of the buyer. Even if all domains were ten cents, that still doesn’t make domain investing anything of substance in the economy. The economy does well when people provide a necessary or desirable service or product to society in return for another necessary or desirable service or product. A domain doesn’t count because it is just an idea– it doesn’t need to be prepared or marketed in order to be owned. A domain investor is taking money for something that people could just take themselves on their own. Basically, domain investing is the process of taking money and offering no valuable service back. That kind of thing, in large quantities, destroys the economy. A domain, as well as any other idea, can take care of itself. It does not need work from a domain investor to become usable by the public.

      A person who invests in domains for a living is basically a person who does no necessary work in return for money. The only reason why they even have to do research is because they have to compete with other domain investors. It’s not that it’s immoral to gain money without work that is my point– it’s that it’s not helpful to the economy to sell *ideas*. It doesn’t make the economy work.

      January 24th, 2013 at 11:04 am

      Otherwake

      In reply to Elliot Silver, about nested comments and replies:

      Yeah, I’d agree. I noticed that. Anywho, I’m trying not to lose my head here, and to not sound like a zealot of some kind. I suppose I should just take a break. I think people understand my point.

      I’m not criticizing people. Well, maybe I’m angry at Steve. I’m just bringing about my objective opinion on economics. I’m not much of one to judge peoples’ actual careers. I do apologize if I’ve been obnoxious.

      January 24th, 2013 at 11:15 am

    crowe

    Many startups cannot afford $50k for a domain name.
    The monopoly power of domain sellers is such that you cannot develop dudu.net and then try to buy the .com if successful. The .com owner will just use your success to his advantage and demand an ever higher price.

    fair price I’ll define as the higher of: auction price, or cost to replace with a domain of similar quality, + a small profit margin.
    It’s hard to see any justification for demanding eg. $100k for ccc.com if bbb.com and ddd.com are available for $10k.
    It’s hard to imagine a real estate seller asking ten times the price of the similar property next door, yet with domains this happens all the time.

    January 24th, 2013 at 11:10 am

      Elliot Silver

      I own SHS.com. It’s my brother’s initials, so I am letting him use it. If a multi billion dollar company called Some Home Sales is using SHS.net and wants to buy SHS.com for $50,000, should I be forced to take it because that’s a “fair” price? Or, should I be allowed to keep letting my brother use it because I have the right to do that?

      January 24th, 2013 at 11:13 am

      crowe

      Seems reasonable to make an exception for shs.com if you might have a personal use for it.

      January 24th, 2013 at 11:16 am

    Steve

    @wakeup
    go get some therapy.

    @elliot, maybe it’s time to nuke the troll?

    January 24th, 2013 at 11:27 am

      Otherwake

      @Steve

      Dude, what have I said that has been a direct attack at a person or has not had some foundation in logic? Everything I’ve said has been to encourage people to think.

      If I didn’t know better, I’d say that *you* were a troll. You’re the one with all the snarky comments and personal attacks.

      January 24th, 2013 at 12:11 pm

    Kerb

    I feel that it is terrible to invest in domains because it costs $9 to register one yet it seems like to buy these names off a third party well into the $1,000s.. Domain names would be more fair if people didn’t try to profit from being thd first person to register a name. But that’s just me. Keep up the hard work I wish you all the best

    March 28th, 2013 at 9:44 am

      Elliot Silver

      I wish I could buy oceanfront property in Palm Beach for the same price that it cost 50 years ago. :)

      March 28th, 2013 at 10:25 am

    crowe

    But, offer the owner of one of those beachfront properties a quarter more for the property than he’d pay for it himself. Especially if it’s for sale, you’ll probably have yourself a deal.

    Now try that with a domain name.

    March 28th, 2013 at 6:34 pm

      Elliot Silver

      Perhaps, but domain name values are dynamic and there’s no MLS to help determine the “real” value, which is dissimilar to property.

      Additionally, the annual holding cost for a domai name is $9, and not only is the cost low, but on a high value domain name, that’s a tiny fraction of its worth. The holding cost (tax) for a piece of property is exponentially higher and would also be a higher percentage of the value. There are also maintenance costs for property, such as insurance, landscaping, weather damage repairs…etc. An owner of an unused property might have more incentive to sell, especially on a good offer, whereas the domain owner has nothing much to lose if he thinks a better offer is out there.

      March 28th, 2013 at 6:41 pm

    Kerb

    Hi Elliot, I’ve been reading about some of the work you do with domains and branding I have to say its quite impressive. I have learnt a fair amount about starting an online presence through this website but I still don’t think a domain name should cost so much especially if the initial price is so small

    March 28th, 2013 at 8:56 pm

      Elliot Silver

      Thanks.

      You have to consider that just because it costs $9 to renew doesn’t mean the owner paid that. None of the domain names I have listed on my company’s website were originally registered by me. Most cost significant sums of money and I have plans for many.

      March 28th, 2013 at 9:45 pm

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