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Domain name trading

Posted on october 20, 2021 by ASK-Solutions in discussion

Domain name trading

SIDN, Foundation for Internet Domain Registration Netherlands, is hosting a panel about the practices and experiences people and companies have with the trading of .nl domain names.

We've quite a bit to talk about on this topic. Both from the perspective of a foundation with it's mission to promote the sharing of knowledge and cooperation. As well as from the business perspective of dealing with domain name registrations, registrars and legislation from the 1990s.

Registering a domain name

In the ideal world when a business wants to have a corporate or product specific website, one can register a domain name for that purpose. A small fee is paid for the costs involved. But in the real world this is far more complicated; domain names are finite; this already poses regional problems. It's really common for a single city, province or country to have multiple companies with a similar business name. An example of this would be 7 bakeries in a single country owned by a Mr. or Mrs. Jones. Three have chosen Jones Baking Company, two Jones Baked Goods, one has chosen Bread by Jones and the last one has chosen Bread and Cookies. However, it's only possible to register one jones-baking-company.com or breadbyjones.com. One can add or leave out dashes, but that will not increase the clearness of the domain and will most probably lead to people visiting the wrong website. One can deviate to a different countries top level domain, but that often creates even bigger problems that need to be solved. This is particularly true for the .com top level domain. Once it was meant for United Stated commercial websites, but soon it became the worlds most wanted top level domain. To mitigate these problems, a lot of extra top level domains were created. However, adaption of these new domains has been poor. Some even have a bad reputation of mostly being used by shady websites.

Purchasing a domain

One solution is to purchase a domain name that is already taken. For example: Jones Baking Company, a successful business in New York City, can contact Jones Baking Company in Memphis and offer 15,000 USD to purchase the domain jones-bread.com. We find this a proposal with good intentions. The owner of the Memphis based bakery can say yes or no, or can make a counter proposal. After negotiating back and forth, the New York City company has the domain name they desire and the Memphis company has the means to renovate their store. Or, when negotiations fail, the Memphis company still has it's domain name and the New York City's company can start looking for a different domain name. However this is often not how things tend to go.

Domain name theft

Luckily almost a thing of the past, but a very prominent problem in the past. Especially in the 1990s this was a big problem. In the early days of the internet there where little technical measures to prevent domain theft; EPP codes and domain transfer locks where introduced to prevent theft. Another problem were dodgy unethical domain registrars. Nowadays, most of the domains names that are stolen are due to the domain holder falling victim to a scammer, insufficient technical knowledge, or due to forgetting to pay the annual renewal fee in time and then not acting quick enough while the domain name is held in quarantine.

Domain hoarding

This has been and still is a huge problem. Both individuals and companies try to register as much good domain names as they can think of and can afford. Some hold hundreds of thousands of domain names. Some have build automated systems that monitor millions of domain names to claim them within minutes when released.

These hoarders are in for it for the money; their behavior and motives are similar to ransomware attackers. If they are able to obtain jones-bread.com, they won't be selling it to the Jones Baking Company in Memphis with only one location. They will be (indefinitely) waiting for the Jones Baking Company in New York City, who has 30 stores and can possibly afford USD 1,000,000.00. Or better yet: they will wait out for a potential future national or international baking company who could afford 100,000,000.00. This leads to a magnitude of domain names to be unusable by anybody for decades.

Legitimate agencies

Of course there are legitimate agencies involved in domain trading. If you currently own a domain name you nowadays have less use for, you can use an agency to help you out. Such agencies can advise on the selling or purchasing price, help out with advertising the sale of the domain name, negotiate the purchase price, and help with drafting a contract to protect both buyer and seller. For example an agency can be asked to try to sell the jones-bread.com domain name. The agency can deploy multiple tactics to find a buyer. It can place the domain name on a trading platform or it can try to actively search for an interested local business.

Our services

We offer multiple domain services. Unlike a registrar, we help with choosing and acquiring a domain name and take care of the complete technical management. In addition, we can help with re-obtaining ownership of a lost domain, help with the transfer of domains and with all technicalities necessary to get them online. We also offer education about and aid in the advancement of the internet through advocating for technical, social and political changes.

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