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Domain Deals – New Column
Thanks to Google Reader’s tag share option, from now on I’ve added a new column called “Domain Deals”. On a regular day, I read several hundred rss items and evaluate hundreds of domain deals. All shared domain deals are considered to be attractive. The number of attractive deals has grown so much, that I’ve decided to share this list with everyone.
You can find this column of deals in the right side of my blog, and it will update every time I tag a new deal. Feel free to subscribe to the feed to read as many domain deals as you like. I hope this new column helps all those people interested in domain investing.
For all the newbs in the house, please read “Potential Domain Investment Risks” before jumping in the water.
Happy domaining!
Trademark law and Domain Names
Here’s an interesting video on a case dealing with some domain legal issues I previously covered:
Fundamentals of the Anti-Cybersquatting Piracy Act
The key to understanding the Anti-Cybersquatting Piracy Act (ACPA) is to see it as an extension to the Lanham Act section 43(d), in its quest to determine bad faith, where it states:
(d)
(1)
(A)
A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person–
(i)
has a bad faith intent to profit from that mark, including a personal name which is protected as a mark under this section; and
(ii)
registers, traffics in, or uses a domain name that–
(I)
in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark;
(II)
in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; or
(III)
is a trademark, word, or name protected by reason of section 706 of title 18, United States Code, or section 220506 of title 36, United States Code.(B)
(i)
In determining whether a person has a bad faith intent described under subparagraph (A), a court may consider factors such as, but not limited to–
They key phrase here is “bad faith“. See how in the ACPA, there are five determinants to bad faith:
- Intent to divert to a site that could harm the trademark owner’s goodwill – either for commercial gain or with intent to tarnish by creating likelihood of confusion as to source, sponsorship or affiliation, or endorsement of the site.
- Offer to sell the domain name without having used, or having an intent to use, it in the bona fide offering of goods or services, or a prior pattern of such conduct.
- Intentional provision of misleading contact information in the domain name registration application or the history of such conduct.
- Warehousing of multiple domain names known to be identical or confusingly similar to distinctive marks or dilutive of famous marks, without regard to the goods or services of the parties.
- The extent to which a mark is distinctive or famous.
To further understand the international similarities in the establishment of bad faith domain registration, the World Intellectual Property Organization (WIPO), through its Uniform Domain Name Dispute Resolution Policy (UDRP) sets the following guidelines:
- Circumstances indicating that the domain name was registered or acquired primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of the domain name registrant’s out-of-pocket costs directly related to the domain name; or
- The domain name was registered in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that the domain name registrant has engaged in a pattern of such conduct; or
- The domain name was registered primarily for the purpose of disrupting the business of a competitor; or
- By using the domain name, the domain name registrant intentionally attempted to attract for financial gain, Internet users to the registrant’s web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of the registrant’s web site or location or of a product or service on the registrant’s web site or location.
Yesterday, the well known domain investor Rick Shwartz made the following cybersquatting assumption:
So will we see the anti-cybersquatting CADNA.ORG get swept into court for violating the mark of CADNA.COM?? Did they not do any research? How SLOPPY can this new association be and how IGNORANT can the companies putting their names behind them be?
So either CADNA needs to change its domain name or it is just as guilty as the people they are pointing fingers at and calling cybersquatters.
Determining if this is a violation of the ACPA is very simple. Can you determine the verdict? CADNA.com is a for-profit corporation selling replacement automotive parts. CADNA.org is a non-profit organization for domain names. Evidently, although they share the same name, CADNA.org is:
- not benefiting from CADNA.com’s trademark
- not doing business in the same industry
- unlikely to confuse a customer seeking automotive parts
- not operating for commercial gain
Thus, CADNA.org is not cybersquatting.
In summary, the ACPA is one of many mechanisms available to try and eliminate the practice of registering domain names for the purpose of hurting, taking advantage of, or profiting from an established mark. It’s that simple! Furthermore, the Lanham Act goes on to protect registrants by saying, “Bad faith intent described under subparagraph (A) shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.”
Potential Domain Investment Risks
All of us buying domain names for several years now can share a few stories on the satisfactory return on investment that we’ve had. Nevertheless, when considering investing in more domains (or simply holding to the ones you already own) there are some factors to evaluate on the durability and appreciation of those assets. The following are potential domain investing scenarios where the asset could depreciate in value:
- Internet market consolidation – In a mature Internet market consolidated into a few dominant leaders, there is a possibility of encapsulating the user (think of AOL) into a user experience controlled by the roles set out by those leaders. In this scenario, users could be led to a new form of browsing dominated mostly by “proprietary” keywords owned by influential players.
- Excess domain supply – Opposite to an Internet market consolidation, in the event of an open Internet with relaxed domain extension creation protocols (read ICANN) the market could become saturated with domain extensions. In this scenario domain supply goes ad infinitum. When users have the availability and Internet knowledge to browse through .whatever, then whatever.com could lose value.
- Increased user knowledge – Many of the wealthiest domain investors rely on type-in traffic at generic domain names as its major source of revenue. The current user, unaware of the existence or nonexistence of a website is wrongly trained to type in the topic they are searching for and add the “.com”. Thus, owners of generic term domain names are currently earning millions of dollars from this practice. These domain names are usually resold based on yearly earnings multiples ranging in average of 8 to 15 times. However, as users grow more tech savvy, there’s a possibility that the type-in water well dries up.
- Widgets and applications – Similar to the first point, as Internet widgets and applications proliferate user browsing behavior could change. A user that interacts with the Internet through a collection of widgets and applications could reduce its dependence on traditional domain browsing (think Facebook apps).
- Evolution of television – currently, there are powerful companies pushing for the creation of an interactive television experience, studies show that users are ready. Depending on the extent to which televisions supply the tools for browsing the Internet, users might find themselves interacting in a whole new way detached from the need of domains.
- Liquidity – Domain names have very low liquidity. As a result, investors facing an urgent need to sell their domains will most likely see a huge decline in the selling price from the actual domain worth. This by itself reduces greatly the amount of investors and investment money available by traditional and wealthier investors.
The constantly evolving Internet technology poses many more risks in the way a user interacts in cyberspace. A recent example of how a domain extension’s viability was seriously questioned is the .mobi extension in response to the launch of the iPhone and the way the cellphone allowed for regular browsing, rather than limited mobile browsing.
When deciding to purchase a domain name as an investment, the investor should consider the above factors and understand that domain investing is a high risk investment with a strong chance of having a relatively low durability.
New Top Level Domain process
http://www.icann.org/announcements/announcement-10aug07.htm
Studies on Television Interactivity
http://www.bsu.edu/news/article/0,1370,-1019-41365,00.html
http://lib.tkk.fi/Diss/2004/isbn9512273225/article7.pdf
Post on domain liquidity
http://www.conceptualist.com/?p=405
.mobi problems with the iPhone
https://blog.rafaelsosa.com/2007/06/08/apple-iphone-could-hurt-the-mobi-extension/
sex.info is on the rise at $155,000
With 10 days and 20 hours to go for bidding, sex.info continues to rise at the Sedo auction with 11 bids. The numbers are a bit higher than last week’s travel.info purchase for $116,000. I’ve always believed .info to be a good alternative to .com for premium generics.
Sex.com sold for $12 million
Sex.net for $415,000
Business.com sells for $350 million
The internet market is hot. Business.com, one of the most valuable domain names in the planet, and all of its business has been acquired by R.H. Donnelley Corp. Bidders included Dow Jones Corp. and NY Times.
I am surprised that no major internet company was mentioned as a bidder of such a valuable internet asset. Yahoo! would’ve been an ideal owner and they have $2.4 billion in cash sitting in their vault. Even Murdoch could’ve used such a great domain to fuel his Internet vision.
The sale of $350 million seems to be a bargain when you consider that Facebook has received and refused much higher offers, despite Facebook’s major asset being memberships, which historically have proven to be fickle.
Congratulations to R.H. Donnelley and to all involved in the sale.
Domain Name Story on Fox News and CNN
The woman was certainly not a domain expert, but it goes to show that domain names are getting some attention in the general population.
CNN Story:
http://www.cnn.com/2007/TECH/biztech/07/23/domain.name.dealing.ap/index.html
.info on demand
.info, the extension for informational websites has scored a major sale with travel.info for $116,000. The sale took place in Sedo and marks the biggest .info sale ever. Another rumor is surfacing on a $70,000 .info sold.
The .info extension is a logical choice for companies looking to make a distinction between the crowded commercial (.com) space and the purely informational website. I expect .info sales, especially one word .infos, to continue their strong growth in value.
Travel.com would have a prohibitive price tag of several million dollars if you are lucky to convince the owner to sell. The same goes for most high quality generics. On the other hand, high quality .info generics are available in the market for about $10,000 to $40,000.
Being Master of your Domain, no longer enough
As the ICANN meeting ended, I’ve gotten several people asking how they can form their own domain extension! Discussions on the policies to submit new gTLD requests were a hot topic at the ICANN meeting. The most felt interest was from organizations looking to create gTLDs for cities, a la .paris, .nyc, et al. The major concern from the people at the room was the freedom of expression and the liberties ICANN granted on the creation of those new extensions. Those ahead of the curve are all lined up to register the rights for all the “.whatever” you can think of.
Now here was my main concern:
How can you talk about freedom of expression and liberties in a system that by default will grant exclusive rights to a single entity to manage and establish registration rights for the new gTLD?
Take .church for example. In this gTLD that has so much individual and collective meaning, the assignment of the gTLD to a single entity would suppose that only that entity would decide who gets to register a domainname.church and under what conditions. The same would go for any other gTLD, .love, .i, or .black.
French government representative Bernard brought the example of allowing the registration of an offensive gTLD like .nigger or .negro, to which ICANN responded they wouldn’t allow, because of their offensive nature. However, because Negro is an offensive word in America, that means that I cannot request that gTLD despite it’s inoffensive Spanish meaning “Black”? Is the American social context of a word the bar for whether a gTLD can be registered?
Another reason for ICANNs delay in the creation of new gTLD policies is that they want to ensure the economic “stability and viability” of the applicant. Are there any finance or economics professionals in that board? .travel is nearly bankrupt at this point, and I can guarantee that many more will. The nature of business and achieving efficiencies in the market require that some businesses fail.
A whole book can be written about all the cultural, ideological, and financial ironies from the current approach of ICANN for the assignment of new gTLDs.
To make this short, let me present the most important shift in thinking that I propose for ICANN: Forget about assigning a new gTLD to a “good representative” of that gTLD. You are oversimplifying the meaning of words, and as a result – complicating the process of assigning the new gTLD. Do you seriously think that there is a single ideal entity to represent the gTLD .god?
The simplest, most economically stable, unbiased and socially respectful way of launching new gTLDs is by assigning them to the world wide web.
Lets make this simple: Registrar and Registrant.
A registrar’s concern is technical. Registrar’s provide the infrastructure to register a domain name. They make money for that service. This is what they should continue to do.
A registrant’s concern is buying a domain name. Registrant’s are the ones that find a purpose for the domain and develop it accordingly. They are the ones interested in the meaning.
In this simple scenario, ALL registrars would offer the new gTLDs – .god, .you, .love, .xxx, et al. The registrant would then determine the name they want to buy and for what reasons.
Will there be conflicts? The answer can be answered with two questions – Are there conflicts now? Were there conflicts before domains existed?
ICANN is not responsible for creating a utopian Internet. People will register many of these names and conflicts will rise as a result. Governments, international and national laws are responsible for resolving these conflicts – and they are. BMW just launched a case against the registration of BMW.cat by a different entity. Why? That’s not ICANN’s question to answer. That’s WIPO’s area of jurisdiction. There are other organizations more qualified and with the proper authority to resolve the conflicts that will inevitably rise from the interaction of billions of different interests expressing themselves in cyberspace.
Solution:
Keep the process lite.
Assign the new gTLDs to the entire web, sold indiscriminately to all.
Let the proper organizations deal with the socioeconomic conflicts that will inevitably rise.
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