Jay's Blog: Domainers Are Not Cybersquatters

I like this post on Jay's blog because it succinctly speaks to a moment in time. I didn't launch into this post with self serving motivations.  I'm just surprised that in mid 2007, wise men like Jay still need to illustrate the obvious:  Domainers are not Cyber-squatters.

In the early days of what is now generally known as domaining, all registrants of more than one domain name, were effectively dumped into the same bucket as "Cyber-squatters". There was an understanding, dating from the dawn of the commercial Internet that taking more than one registration was verboten as poor netiquette.  While there was no written law or rule against the practice [Johnny has commented with other info], there was simply no compelling reason to take more than one registration - so very few folks did.

In the early 2000's the Internet let us all know it was here to stay. People were still getting their news from old-media and old-media was rightly scared of the Internet. Cyber-squatters neatly filled the vacuum and provided a convenient foil for all that was dark and murky about the web. Generic name Domainers of the day (and there were hundreds and hundreds of them) went out of their way to avoid trademarks and the spot-light because they gained a strategic advantage during a time when generic expiring domain names could be had at wholesale prices. Would you stand up on your rooftop telling the world that you're registering generic domains for $20 that are almost instantly worth $20,000?

I once did an interview with a TV crew at the behest of Snapnames.com, do you know what happened?  The reporter, the camera-man AND the sound guy wrapped the story and started trying to register generic domain names themselves !!  Send a reporter to cover the story of a guy picking up hundred dollar bills raining from the sky and watch how quick those guys drop the camera to start stuffing bills in their pockets.

So the generic name Domainers kept their heads down and made money on the Internet. Their acquaintances and neighbors would see the new cars in the driveway. Eyebrows would raise and people would whisper. Some Domainers would say strange things like: "you mean you have to take your shoes off in the airport now?" People aren't dumb and if somebody is doing something secretive on the Internet and making a lot of money, "it must be illegal". I live on a small island.  I can't tell you how many soccer moms (and dads) in the grocery store parking lot thought I must be the devil himself. We had local acquaintances say prying things like: "I would 'love' to come to your house and just watch what you do". Good friends over-hearing this would launch to our defense: "Can't you just leave him alone?! " ..  That would only serve to reinforce the whispers that we were mysterious dark hearted ne'er-do-wells.

So the years peeled on and generic name Domainers kept on taking generic names, buying them at auction once the expired generics at registration price dried up. They used leverage to capitalize on opportunities and bought whole portfolios of names from third parties.  The misunderstanding relating to such a secretive sub-culture continued to manifest itself.

Then Paul Sloan of Time/Warner's Business 2.0 magazine came to the TRAFFIC East convention in 2005..  folks who had lived in a fog of militant secrecy for years, began to let their guard down and Paul wrote about their stories for his publication.  That's when all hell broke loose. Thousands of outsiders said..  WOW.. I wanna do that!!!  Relevant insiders (finding their status much less 'relevant' or 'inside' than before the story) cried:  "Now Cyber-squatters are calling themselves Domainers" .. and generic domainers quietly went back to doing what they do.

A few years have gone by and it's 2007 ..  Today Jay posted that "Domainers are not Cybersquatters".  Jay is right of course..  He knows this.  I know this.  Even regular folks are starting to come to terms with this. So why does he have to write such a thing in mid 2007?  Why is this not common knowledge yet?  Well.. as with other things, it's complicated.

Even today there are still political and technical wonks in the ICANN/domain industry subculture that would love nothing more than to McFly the Delorean back to 1994. DNS is so technical that the last strong-hold of anti-commercial, purist wonks have seemingly found a safehaven there; and Domainers threaten that fragile existence to some degree.  Then you have smarmy IP counselors aching to wheedle their way in and exact a pound of flesh from these naive entrepreneurs.  You have "businesses" who make their living selling maps to the Cybersquatter's homes. Like their Beverly Hills star map contemporaries, it is in these folks best interest to perpetuate the Cybersquatter = Domainer boogeyman story for all who care to listen. The more cybersquatters on the map, the greater the bread in their baskets.

Who cares to listen? :  Old-world media which is now feverishly bailing their holey boat and trying to launch complex businesses that emulate the characteristics of domain portfoilios.

To be fair.. there are Bad Domainers. (Cyber-squatters in Domainer clothing)..  These folks are like counterfeiters debasing a currency. They say they are Domainers, but secretly keep an overt or large stable of non-accidental trademark typos.  Information travels fast on the web, and white-hat operators are often quick to expose the black and gray on the best domain forums.

The part of Jay's post I like the best is this: 'As the futuristic novel 1984 by George Orwell taught us, if you re-define words on your opponent you can defeat them. Be vigilant against people that try and distort Domainers as an evil term.'

What I believe Jay sees here (what I / others see as well) is that hard-working folks who tried to steer clear of trademarks and register generic names for profit or future development have their place. The human instinct for jealousy is constantly trying to re-label good as bad, white as black.  It is incumbent on those who participate in this industry to try to take the high road -- to shape this space in a way that makes the industry healthy and whole for others to follow in their steps. It is incumbent on us to explain our 'intent' and our position in this industry so that no third party can label or define it in a manner that is unbecoming, or inequitable, or which serves to unfairly malign or shape you into something which you are not.

Comments

[DP]

A comment someone made on a forum a few months ago really stuck with me. I don't remember which it was, but:

"You know you're successful on the internet when all your neighbours think you're a drug dealer".

My neighbours still speak to me, so I guess I have some work to do :)

***FS*** Nice :)

[Johhny B. Good]

Hello Frank,

Just a Note:

You said, "There was an understanding, dating from the dawn of the commercial Internet that taking more than one registration was verboten as poor netiquette. While there was no written law or rule against the practice, there was simply no compelling reason to take more than one registration - so very few folks did."

In August 1995 when some friends and I were just starting to load up on generics, we had to set up separate companies because NetSol had a "One domain per company rule in effect". They enforced this at the beginning. So, we set up separate companies for each domain. I had about 150 companies set up in 1995 and continued to set up hundreds more in 1996. NetSol eventually realized they did not want to "police" anything on the Net and then took a hands-off approach.

Believe it or not, my friend tried to register a .org religious domain and NetSol required some kind a form (I can't remember exactly what form) that you must apply for from a church entity that shows you are a religious organization. Well, he then inisted that the form had been applied for by his company, threateed to sue them, and only then did they give him the .org religious domain he was after.

I believe it was 1998 when my associates and I believed it was now safe to consolodate all the companies into one company.

This "one domain per company" rule effectively stopped many folks from registering more than one domain. Also, $100 per domain, for a two year reg. term, was a lot for most folks to bear. That is a big reason not many high quality portfolios were assembled back then.

On a side note: Did you ever see the guy that had hundreds of plumbing domains? He went nuts on plumbing!!! He was around in 1996 and I don't know what happened to him?
Maybe he let them all drop :)

***FS*** Wow!! Thank you sooo much for adding this color. A lot of folks (myself obviously included) have incomplete information about domaining in those very early days.

[Tia Wood]

I like the spirit of this post. That's why I'm considering joining the ICA, which you should do a post about. ;)

[Nick M]

Some of the cybersquatter include what you term as "whitehats" and are some of the biggest companies in the domain space.

These include :

Marchex
iREIT
Buy Domains
Dotster and many more

All these companies have several such domains which violate TMs of famous companies.

Many people say, oh they just got them when acquiring portfolios. If this is true then why do they go around trying to sell these domains rather than just deleting them from their portfolio when discovered that these are violating TMs.

Quite a few of the big domainers around have been squatters. They used the cash flow to buy generic domains and now they pretend to be clean.

***FS*** I think your comment is fair.. There are split portfolio houses that segregate their portfolios of generic/clean and TM .. But on the other side, a great many domainers have not been squatters. I know folks who have been challenged repeatedly in the courts and have never lost because while they own great names they are doing 'nothing wrong'.

I give these folks you mention the benefit of the doubt. These are big US based concerns.. While I have no visibility inside the co's I want to believe their intent is to purge problems that they acquired. Nobody is perfect, but I think people are trying .. comes down to intent I suppose.. And one man's squatting is another's defensible generic. Not everything is black and white.

If .0001 percent of your portfolio is questionable or problematic and you can show that you are trying to seek and destroy the problems and you acquired them from third parties or automatically, does that make these co's squatters?

Compare that to this: http://www.dailydomainer.com/200784-microsoft-quietly-making-untold-millions.html

... do you know how much 'generic name' traffic we all loose to microsoft and google when people type .con, .xom etc etc.. Two wrongs don't make a right but the companies you are calling-out are not the worst offenders out there. I think those guys intent is ultimately to build a business. Incidentally I could see a class action starting to recoup that browser error traffic.