Where's The Skepticism About High Priced Domain Names?

from the wonder-where-that-article-came-from... dept

Mon, Apr 17th 2006 1:44am — Mike Masnick

Over the weekend, some tech blogs were buzzing about a USA Today article from late Friday evening, discussing the return of high prices for domain names. Considering the recent obsession with the online advertising market, the fact that domain names are selling for more money isn't all that new or surprising. In fact, we've some similar stories lately. However, it's interesting to note that the article doesn't bother to find anyone even remotely skeptical about buying up expensive domains with plans to resell them at a higher price down the road. The reporter apparently didn't bother to search out anyone who got burned the last time around, when domain names were regularly selling for thousands... and then you suddenly couldn't give them away. Instead, they quote someone who's clearly biased (he's a domain name broker) insisting "a patient speculator can buy a name for $30,000 and, a few years later, sell it for a windfall." Do people really have that much difficulty understanding these things can be cyclical? Especially in an age of "search," where people often discover sites based on where their search engines point them, rather than by simply guessing random domain names -- it would seem like specific URLs might not have as much value. In fact, the whole article feels "placed" by a PR agency -- perhaps for domain name registrar GoDaddy, whose president has a couple of choice quotes in the article talking up the importance of buying domain names. Good timing for a company that may soon announce plans to go public.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

9 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Michael Long, 17 Apr 2006 @ 3:08am

Domains
Who says they buy them for thousands? It appears that the vast majority of names are simply snapped up for a couple of bucks when the original owners go out of business or simply let them expire, and then parked with ads until the time rolls around that someone else might be willing to pay for them.

As far as I'm concerned, meaningful domain names are a finite resource, and should return to the public domain. Buying them solely with the intention of resale should be illegal.
[ link to this | view in thread ]
emigos, 17 Apr 2006 @ 3:56am

Domain Names
You don't buy a domain name for tons of money for the sake of driving up search traffic as this techdirt post implies. You buy them because its part of a branding effort.

To that extent, it's not unthinkable that a large company or one with deep pockets would shell out some serious cash to lock in a domain name.

How much does Taco Bell pay to have a college stadium named after them?

Think About It
[ link to this | view in thread ]
Ken, 17 Apr 2006 @ 4:41am

Shady characters...
Domain squatting is right up there with frivolous lawsuits and too-obvious-to-patent patents, it's the system being abused and the Web paying the consequences. If only these "domaineers" registered and parked them for ad revenue. BUT no, they create fake content websites to poison search engines and dupe you into going there only to be hit with garbage ads.
[ link to this | view in thread ]
SippinWhisky, 17 Apr 2006 @ 5:16am

Re: Domains
Oh, just like an real estate worth anything (i.e., meaningful) should also be "returned" to be public domain? And just like buying low and selling high any stocks, bonds, housing, baseball cards, or truffles, each of which is also a "finite resource" should be controlled by something other than free markets and enterprising minds?

It appears someone either never attended college, or forgot to get that liberal arts education that included basic economics. Or if they did, are not bright enough to think before they write. Go back to Econ 101 and retake the class. There is much someone seems to have missed.

Every time I see someone say this I know they are not exactly in touch with either reality or basic economics. Or, they paid no attention as everyone else was making a few bucks, and now have only sour grapes.

Oh, and just how would they be used in the public domain? You mean as state parks, national treasures, political trump cards, or their use/worth determined by lobbyist? Please, just think before you write--and after that Econ 101 refresher.
[ link to this | view in thread ]
dani, 17 Apr 2006 @ 5:42am

Re: Domains
"As far as I'm concerned, meaningful domain names are a finite resource, and should return to the public domain. Buying them solely with the intention of resale should be illegal."

In that case, fuel should never be bought with the intent to resale...everyone should go straight to the rigs & get their own.

The "business" side of tech issues often seems to be over-slighted here...if there's any possible way to make money from it, it will be done.

Domain name popularity is no more cyclical than stocks...
[ link to this | view in thread ]
discojohnson, 17 Apr 2006 @ 5:52am

already answered your own question
Good timing for a company that may soon announce plans to go public.

PR101
[ link to this | view in thread ]
lar3ry, 17 Apr 2006 @ 6:41am

Domain Squatting
Spending $30,000 on a domain name is inexcusable and is the Internet equivalent of walking around with a sign on your back saying "KICK ME!"
If you need a unique domain name, find one that isn't taken. They are only $5-10 each, and there are many available. Even though all the three-letter and most of the four-character domains are already taken, you should still be able to find something that fits your business.
If somebody has a name that you CLEARLY have a right to own (such as a DOT-COM domain that uniquely describes something that you are the clear owner), then you have the right to dispute any third party's ownership.
Of course, domain disputes are a touchy morass (I recall the "guinessbeerreallysucks.com" fiasco from a few years back), but the basic intent is still sound.
Now, I'm not suggesting that you base your entire business on domains on the cheap. Far from it! I suggest you spend the money wisely:
- Register your domain name ($5-20)
- Find a reputable name server that will provide DNS for your domain. This can be your ISP or one of the places that specialize in doing this
- Get a static IP address
- Put REAL content on your web site—information about the company, and advertising for your product. Make it worth visiting, and people will find you.
- Once all the above is in place, submit your web site to the major search engines. Don't play around with keywords or other fraudulent ideas to try to get your site artificially ranked higher than it deserves. You'll only end up pissing off potential customers and search engine maintainers, and you don't want to piss those people off!
[ link to this | view in thread ]
lisa, 17 May 2006 @ 10:36am

Re: Re: Domains
When a business person buys a business for $30,000 they will want to see how much money this business will make before making a decision if this is worth it's value. I don't think domain squatters are business minded at all. They think domains are like the lotto.
[ link to this | view in thread ]
lisa, 17 May 2006 @ 10:37am

Re: Re: Domains
When a business person buys a business for $30,000 they will want to see how much money this business will make before making a decision if this is worth it's value. I don't think domain squatters are business minded at all. They think domains are like the lotto.
[ link to this | view in thread ]