The Lies That Are Strangling The Domain Name Industry

by Edwin on July 24, 2009

The domain name industry is maturing. From a slow start in the mid-to-late 1990s, it’s become a recognised investment category in its own right, with plentiful mainstream coverage, two paper magazines and several well-established online news sites, live auctions galore and of course going on for a dozen global tradeshows a year.

So why are we as an industry allowing the same old lies to keep on hurting us, again and again?

Regfee Domains: The Myth That Refuses To Die

If you spend more than a few minutes on any of the domain forums, I’m sure you’ve come across a variant of “this domain is worth regfee” posted to an appraisal thread. There’s no such thing as a “regfee” domain!

Either a domain name is worth in excess of its registration fee, or it’s worth NOTHING. Period.

I guess part of the problem is down to human nature – we don’t want to hurt the feelings of somebody who may just be starting in the industry, or at least who may not be seeing the same level of domain success as we are. Maybe we remember our own mistakes as newbies – goodness knows, I made more than a few in my day!

But every time we lie to them about their worthless domains, we’re actually complicitly helping them throw away their money. It’s already obvious that many, many newcomers see the domain name industry as an express elevator to riches, and for a significant minority it seems to quickly become an addiction. And every time we cross our fingers behind our backs and praise their junk names, we’re enabling that addiction.

On the other hand, the quicker their illusions are shattered, the less money they’ll end up losing and the quicker they can start to register names that might – perhaps – one day – actually be worth… something!

I can already hear the howls of protest. It’s unfair to be that harsh – we weren’t treated that roughly when we were starting out, especially in the early days!

It comes back to where I started this post: the industry HAS matured. We’re no longer dealing with a wild west frontier, but with an established industry with thousands of significant players. There’s more information and tools out there than ever before, and more help for those with the gumption and patience to seek it out. There’s really no good excuse why ANYONE should still be wasting their money on worthless, not-even-regfee domains.

So do everyone a favour. The next time somebody posts a list of 20 junk names that you know, just KNOW will never ever get a single visitor, or as much as a sideways glance or a flicker of interest from any company, TELL THEM.

They may not thank you then, but they’ll thank you down the road if they decide to stay the course and learn the difference between no-hoper domains and domains that have some hope of a future.

Cybersquatting: The Rope That Mainstream Media Uses to Hang All Domainers

I see it all the time. Weasel words bending and twisting the meaning of a domain name that everyone in on the discussion knows has no right to be registered, until it kinda sorta could perhaps fit in a sorta kinda way into a legitimate use.

Nonsense. There’s a simple acid test that cybersquatted domain names have failed and will continue to fail forever: would the idea for the domain name have occurred to a completely impartial observer had the company whose product/service/tradename/whatever is being infringed on never existed? Really? Cross your heart? If this test fails, the domain owner is cybersquatting.

This is another painful evolutionary lesson that the industry is working its way through. Practices that were commonplace a decade ago and frowned upon 5 years ago are beyond the pale today for any serious, professional domain investor with an interest in remaining in the industry long-term.

Of course, just like in any business, it’s possible to make money – even good money – from cybersquatting, if you don’t care about the scorched earth you leave behind in doing so.

Sadly, too many people still seem to forget a simple enough rule…

The amount of money that a given business practice makes has never been a valid metric by which to measure the acceptability of that business practice.

As an industry, we need to do everything we can to distance ourselves from cybersquatting whenever we come across it on forums, or in the wider media. It doesn’t matter if the cybersquatting is being perpetrated by a newbie, or by somebody with a decade’s experience in the industry, by somebody with a handful of so-so names, or a large organisation with a portfolio of half a million domains. It’s still a problem.

It’s bad enough that the mainstream press commonly paints all domain owners as cybersquatters, without us conspiring to hand them a few more coils of rope with which to hang us!

Brandable Domains, The Lottery Tickets Of The Domain World

So-called brandable domains, those coined web 2.0 sounding expressions, or near-random juxtapositions of adjectives and nouns, are nothing more than a lottery. And in a lottery, on average, you’ll emerge a loser.

Sure, it’s possible to point to huge sales of “brandable” domains, but most of these have a deeper element of thoughtlessness behind them in that the domains were sold to companies that went ahead and branded a product or service without bothering to find out anything about the domain name that would go along with them. The sales of domains such as Altavista.com and iReport.com are perfect examples of this collective corporate blindness.

Equally, brandables sell at lower levels as well – the problem is that they don’t sell consistently enough to constitute anything more than a lottery for any particular brandable domain owner. It’s fine if your overall domain investment strategy can support a few “lottery ticket” domains, but “buy lottery tickets, win lottery” has never been a sustainable business plan!

A Bonus Little Lie: If It’s In The Dictionary, It Must Be Valuable

There are an estimated 1,000,000 words in the English language. But the fact that a domain name happens to incorporate one of them doesn’t magically give it value. Is there a commercial use for that word, that domain name? If not, its presence in some obscure corner of the dictionary won’t save it.

Time To Tell The Truth

The domain industry is growing up. It’s time that our attitudes start to do the same! Don’t pull the wool over anyone else’s eyes – and don’t allow them to pull the wool over yours. Tell the truth, and you’ve just helped everyone in the domain business – including, not insignificantly, yourself…

{ 3 comments… read them below or add one }

Tommy Butler July 24, 2009 at 10:49 pm

So true Edwin

your comments are spot on.

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Kannan July 25, 2009 at 5:45 pm

Nice to see you busting some myths. Love the part about dictionary words.
And I would like to mention the influx of info domains with its low reg fee IMHO devalues the top tlds.

Reply

Ray August 9, 2009 at 6:29 pm

Good points, well made. Its time the industry grew up. I do think domaining forum owners and moderators also need to take these points on board . I also wonder if domain appraisals should be more mature. I suggest they should include some sort of estimate of the chance of a sale. Difficult I know. However, the reality of this business is that even though domains with relatively low demand may still be ‘worth something’, they could be waiting years and years before they find a buyer.

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