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How will new TLDs affect your portfolio?

Kevin Murphy, March 3, 2011, Domain Sales

(Editor’s Note: this is a guest post by Shane Cultra, author of the popular domain investment blog DomainShane. I was interested in hearing new perspectives on new top-level domains, and Shane was good enough to provide his thoughts.)

It was inevitable. The growth of the internet and the ever increasing number of people using the web, was going to cause a shortage in domain names.

As the big three – .com, .net, and .org – reached the point that available domains were merely comprised of unpronounceable and hard-to-spell leftovers, internet users began looking for more.

Countries began to market their own ccTLDs as generics, trying to appeal to both local and international users alike. Domain name registries saw the dollar signs and began clamoring to introduce alternatives.

So now that they’re on their way, how will new TLDs affect the value of your domains? Will .web, .car, .love and all the other endless possible TLD options impact the value of your portfolio?

My answer to this question is simple: yes.

There is no doubt all the new TLDs will impact your portfolio’s value. If you own anything other than .com, I think the value of your domains will fall. I feel that .net and .org will fall the least.

The real answer comes down to how the search engines rank the new TLDs. The TLDs that hold the most value will be able to compete in both the US and the international search market.

If Google treats them well, then they will be in the upper tier. The problem is the more TLDs that Google ranks, the more choices a domain owner will have.

As we know, the more choices the lesser the value and chance of a sale. If there are only three shoes on the shelf from which to choose it bodes better for the seller than a shelf with 100 shoes.

In my opinion, the real money being made is by the companies selling these new TLDs. The new releases will leave the domain investing community and domain buyers in general “holding the bag”.

The .travel and .mobi TLDs showed early what will happen as people shy away from a TLD after a short period of time. Speculators were left with worthless domains.

In order for a new TLD to work it takes massive adoption. The local geographic community, the domain investing community, business, and the general public must be a part for it to succeed.

The new .co TLD has come as close as any in the last five years to getting over this hump; .tv, and .me, have also found their place.

A profitable endeavor for the companies managing the release , but only profitable for a handful of people that hold the best of the names.

So back to the original question, will this hurt the value of my portfolio? My second response to my “yes” answer is I think it will increase the value of your .coms.

Dot-com domains are king and will always be the king. They are scarce , wanted and all those that hold the same keyword in alternative TLDs wish they held the .com. Those that tell you different are either naïve or lying.

Domains are often compared to real estate and .com to beachfront property, and I think it’s a good analogy. Beachfront has continued to be considered the most-wanted and highest-priced real estate.

I would throw in big city real estate in this comparison too. You can still buy homes and land outside the cities and away from the beach. Homes just as nice or nicer. Areas of land that are twice as big but still don’t have the value of the beach and city.

When people think of the internet they immediately think .com. When they think of high priced real estate they think of the beach and city. Along with beach and city property, I believe people will always perceive the .com as the highest value.

This is how I am approaching my investment in newer TLDs. I am treading lightly. I continue to invest heavily in .com with a 10% investment in other TLDs. That 10% is invested in super high-quality keywords.

I have no plans to invest in lesser domains, as I think the only possible way to make a profit on my investment is development and I don’t feel comfortable developing domains outside of my field or keywords from random categories.

When I buy outside of .com, I tend to buy in my niche (the names of plants) as they are in my “comfort zone”. For example, I purchased hosta.me because hosta.com is taken and would cost me a ton of money.

I have all the photos and information to develop a site and with hosta being a very collectable plant I thought hosta.me would work. I also can target US Internet users using my webmaster tools – the audience I am trying to reach.

That same domain was a hand-register which tells me that although that has value to me, I would have very little chance of reselling that domain. In short, a bad investment for a flip. In my opinion, this will be the case with 98% percent of all the new TLDs so be very dot-careful.

99 super-short .uk domains registered

Kevin Murphy, February 8, 2011, Domain Sales

Nominet, the .uk registry, has allocated 99 one and two-letter .uk domain names to trademark holders including the Financial Times and Manchester United.

Most of the companies successfully applying for short .co.uk, .org.uk and .net.uk domains under Nominet’s recently closed sunrise period are household names.

Most also chose to acquire both .org.uk and .co.uk variants of their trademark. Only ten of the single-letter and two of the single-number options were claimed. Yahoo managed to get y.co.uk.

Overstock.com, which is currently branding itself as o.co, did not receive o.co.uk, despite having a trademark on the term, possibly for the reasons I outlined here.

One of the big winners appears to be a domainer. Scott Jones acquired 3.org.uk, s.co.uk, s.org.uk, pc.co.uk and pc.org.uk.

Nominet said: “A small number of contested domains will be involved in an auction phase to determine the successful registrant.”

The first sunrise was for owners of UK registered trademarks. The next round, set to kick off February 14, is for owners of “unregistered” rights.

The full list of domains registered can be downloaded here.

Noel Gallagher buys domain name with gig tickets

Kevin Murphy, January 31, 2011, Domain Sales

Former Oasis lead guitarist Noel Gallagher reportedly bought the domain name noelgallagher.com from a squatter in exchange for band memorabilia and free gig tickets.

According to British tabloid The Sun:

The former OASIS star found out recently that a cunning punter in Barcelona had snapped up the domain name noelgallagher.com ten years ago.

And The Chief’s plans to get things in order for his solo career were being held up by the Barca Bandit – because he was demanding a small fortune to hand it back.

Noel took matters into his own hands last week. He paid for the Spaniard to fly to London, put him up in a plush hotel and met him in person to thunder out a deal.

And after some serious haggling, and a few Oasis anecdotes, the chancer changed his demands from tens of thousands of pounds – to some signed memorabilia and guest list action at Noel’s next solo gigs.

I’m not sure how much success Oasis ever had outside of the UK. If you’ve never heard of them: briefly here in the 1990s they were regarded by some (mainly themselves) as the second coming of The Beatles.

I’ve never before seen a domain name story reported in The Sun, a notoriously unreliable but hugely popular Murdoch-owned daily rag, so I did a bit of fact-checking.

Whois history shows that the original registrant was from Madrid, not Barcelona, and that the domain was initially registered in 2002.

While the report claims Gallagher flew the squattter to London to negotiate the deal “last week”, the domain actually seems to have been owned by someone at Oasis’s record label since March 2010.

So either the cybersquatter got a free city break, or The Sun is — shockingly — reporting unreliable celebrity news.

The domain name does not currently resolve.

Did Twitter pay $47,000 for Twitter.co.uk?

Kevin Murphy, January 26, 2011, Domain Sales

The domain name twitter.co.uk, which was until recently listed for sale with a £30,000 ($47,000) price tag, is now owned by Twitter.

The domain now redirects visitors to twitter.com, and Whois records last updated a week ago show that it is now registered to the San Francisco-based company.

Until recently, twitter.co.uk led to a page calling itself a “thorn in the side of American imperialism” and containing a lengthy rant about the microblogging service, which The Guardian reported on in 2009.

It also, since April 2010, carried this notice:

This domain is for sale at offers over £30k. This valuation is based on the fact that I devoted 9 months of my life working on my own t.w.i.t.t.e.r. project in 2005. I have offered the domain to Twitter Inc, giving them “first refusal”, and as they turned me down I am now offering it to anyone else who may be interested. Obviously there are limits as to what you would be allowed to do with the domain and you should familiarise yourself with Nominet’s policies and, in particular, its Dispute Resolution Service (DRS)

The previous owner registered the domain in early 2005 for his own legitmate purposes, well before Twitter itself launched, so it was by no means a case of cybersquatting.

The domain would, of course, have been considered untouchable for any sensible domainer.

Nominet, the .uk registry, currently has no record of Twitter ever bringing a complaint to its DRS, so it seems likely that Twitter had to put its hand in its pocket to acquire the domain.

The change seems to have been first noticed by a Twitter user at the weekend. AcornDomains has a discussion.

(Hat tip: @MathewCoUk)

Is Microsoft buying Kinect.com?

Kevin Murphy, December 30, 2010, Domain Sales

Did Microsoft just file a UDRP complaint on a typo of a domain name it doesn’t even own?

When Microsoft announced its new Kinect games console earlier this year, it did so without owning the domain kinect.com, as I blogged at the time.

But this week somebody – I’m guessing Microsoft – has filed UDRP on the typo wwwkinect.com, which was registered about the same time as the console launched and is currently parked.

The complainant’s name doesn’t seem to be available yet, but the case was filed the same day as several other Kinect-related UDRP cases that almost certainly are Microsoft’s work, such as microsoftkinect.com.

Kinect.com currently belongs to an advertising agency called CAHG. The domain isn’t resolving (for me) at the moment, which makes me wonder if it’s in the process of changing hands.

It would certainly be unusual for the company to own a typo of somebody else’s domain, although I don’t think there’s anything in the UDRP rules that would prevent it winning the case.

UDRP, after all, only compares contested domains against owned trademarks, not domain portfolios.

While Microsoft would not have a leg to stand on if it filed UDRP against the non-typo domain, I expect a good case could be made that the large majority of people typing “kinect.com” into their browsers are looking for Microsoft’s console.

Alexa is showing that kinect.com has experienced a 350% increase in traffic over the last three months, and has increased its Alexa rank by almost two million places.

UPDATE 2011/01/01: Microsoft now owns the domain.

Will a Russian domain sell for more than Sex.com?

Kevin Murphy, November 25, 2010, Domain Sales

The scandal-hit Russian domain name market may yet produce some of the most expensive domain name sales of all time. Premium .рф generics are already attracting eight-figure bids.

Bids of $10 million have apparently been placed on at least two domains, квартиры.рф and бетон.рф (apartments.rf and concrete.rf), in the controversial quasi-landrush auction managed by RU-Center, the largest Russian registrar.

IDNblog.com is reporting the apartments.rf asking price, and a reader was kind enough to send me a screenshot of the concrete.rf auction.

If these bids are for real, and these auctions were to close, they would immediately occupy the number two and three slots on the league table of all-time biggest-ticket domain sales

Before sex.com sold for $13 million, DNJournal’s top twenty list had fund.com in the top spot, at $9,999,950, followed by porn.com at $9,500,000 and diamond.com at $7,500,000.

The RU-Center auctions may not close, however.

As I reported yesterday, the registrar and five others are being investigated on antitrust grounds by Russian competition authorities, after allegedly registering tens of thousands of domains to themselves.

The auctions are currently frozen and the .рф registry, Coordination Center for ccTLD, has made noises about applying “sanctions” to the registrars that could include de-accreditation.

RU-Center, which confusingly does business at nic.ru, has defended its position in at least two articles here and here (in Russian, naturally).

As far as I can tell, none of these auctions will close until the registrar and the registry resolve their differences and/or the Russian government probe concludes.

However, it’s pretty obvious that the demand for Cyrillic generic IDNs is enormous in Russia, and could easily challenge .com on the big-sale league tables.

Overstock to bid for o.co.uk next month?

Kevin Murphy, November 23, 2010, Domain Sales

Overstock.com, which seems to have made registering single-letter domain names a key part of its branding strategy, likely has o.co.uk next in its sights.

The company drew headlines recently when it paid $350,000 for o.co and subsequently used it in its TV ads, and again yesterday when it picked up o.co.za for $9,000.

While it’s well known that o.com is the ultimate prize, Overstock has also been laying the groundwork for buying o.co.uk for over three years.

Nominet, the .uk registry, is set to open up the first of two sunrise periods on double and single-character .co.uk domains on December 1, and I expect Overstock already has its application ready to go.

It might not be an entirely straightforward bid, however.

Under the Nominet sunrise rules, holders of UK trademarks in use before January 1, 2008 are eligible to apply for their short domains.

Overstock, it turns out, has had a registered trademark on o.co.uk since August 2008.

It applied for the UK trademark in January 2008, the same month that Nominet’s policy-setting committees first started discussing the release of single-letter domains.

As far as I can tell, the trademark is considered valid from August 1, 2007, the same time Overstock was granted its US trademark on o.co.uk.

But can the company prove it was “using” the trademark prior to January 1, 2008, given that the domain was reserved? It does not appear to have a UK trademark on the letter O by itself.

One way or the other, I expect Overstock to eventually win the domain. Under Nominet’s rules, contested domains will go to auction, and Overstock has already proved it has deep pockets.

The company also has US trademarks on other O domains that it does not and cannot currently own, including o.info, o.com, and o.eu. It successfully registered and uses o.biz.

It also has a US trademark on o.de, but that domain appears to be currently registered to a German domain investor.

Black Friday domain fetches $90,000

Kevin Murphy, November 19, 2010, Domain Sales

Sedo is reporting that the the domain name blackfridaysales.com has sold for $90,000.

It appears to be have been registered to Frank Schilling’s Name Administration for the last couple of days.

Black Friday is the name given to the day after Thanksgiving in the US, when pre-Christmas sales traditionally kick off. This year, it falls on November 26.

The operator of the domain blackfriday.com, which was a 2001 $10 hand registration, says it received over 18 million unique visitors last year, and that 70% of them were direct type-in visits.

Oddly, blackfriday.info seems to rank better in Google for the search [black friday], for me at least.

Other five figure sales Sedo is currently reporting include valuable.com ($28,500), webengine.com ($50,000), adhoc.com (65,000 euros), rodon.com (20,000 euros), uganda.de (20,000 euros) and littleangels.com ($50,000).

ICM buys dotxxx.com for $25,000 and unveils new slogan

Kevin Murphy, November 4, 2010, Domain Sales

ICM Registry, the would-be .xxx registry operator, has acquired the domain name dotxxx.com from a Korean domainer for $25,000, to support an upcoming marketing campaign.

The company is also expected to unveil a punny new slogan, “Let’s be adult about it”, following its recent hiring of international ad agency M&C Saatchi.

The dotxxx.com domain currently redirects to icmregistry.com, the company’s main site. The private sale used Sedo for escrow.

Given the amount of cash ICM has spent attempting to get .xxx approved over the last ten years, $25,000 is a drop in the ocean.

ICANN recently decided to refer its application to the Governmental Advisory Committee for a consultation, before it makes a final call on whether to approve it or not.

SnapNames settles shill-bidder class action

Kevin Murphy, October 26, 2010, Domain Sales

Domain name auctioneer SnapNames said that it has settled the class action lawsuit filed against it by disgruntled domainers after one of its employees was found to be a shill bidder.

It seems to have had a bit of a result, too. Class members will receive exactly the same amount they would have had they accepted its rebate offer, according to a statement released by the company today.

The case was filed almost a year ago, after it emerged that Nelson Brady, a SnapNames employee, had been posing as a bidder in domain name auctions in order to bump up the final sale price.

Posing as “Hank Alvarez” or “halverez”, Brady stood to gain bonuses based on performance targets as a result of SnapNames’ acquisition by Oversee.net, its current owner.

After the abuse was discovered, SnapNames offered affected customers a rebate equivalent to the money they would have saved on a winning bid had “halvarez” not outbid them.

SnapNames said today:

Class members (which are United States residents who were extended the rebate offer but have not yet accepted) have been or shortly will be notified of the settlement terms and amounts (which are identical to the amounts affected bidders were offered in the rebate offer we extended last November).

This seems to mean that anybody who was holding out for a bigger settlement is out of luck.

The deadline for accepting the rebate expires November 4, but the deadline to become part of the class action is not until December 17.

SnapNames will have paid out $2 million to customers in total.

(I wonder how much the class action attorneys are to receive).

More info can be found at snapsettlement.com.

SnapNames has also settled its lawsuit against Brady for an undisclosed amount. The company sued him for $33 million in May.

Oversee said it “believes the financial penalty is appropriate considering the seriousness of the improper activity”.