What Is Domaining? Hopefully We Have Answered That Question!
The following entry is our answer to the what is domaining question! This Wednesday I have decided to do things a little different and give an overall summary on the domaining industry. Enjoy!
DOMAINING: AN INCREASINGLY PROSPEROUS INDUSTRY
THE CONCEPTION AND HISTORY OF DOMAINING
WHAT IS DOMAINING?
The practice of identification, registration or acquisition of internet domain names with the objective of later profiting from their sale is known as domaining or domain name speculation.
The priority in domaining is acquisition of generic domain names which are representative of the most common descriptive of any field, such as poker, business, insurance and sex. Therefore such domains are the main target for TLD (top-level domains). These tend to be highly lucrative because people searching for any aspect in, for instance, insurance would be bound to include insurance in their search keywords and a domain such as insurance.com would likely be the first result their search will provide them with.
OVERVIEW OF DOMAINING EVOLUTION
Domaining started around the same time as the domain name system. In the early 90s the internet was pretty new, and web presence and activities were used solely for business reasons. However, even in that early stage, a few heads recognized the value of generic domain names (such as sex.com or business.com) and had them registered for themselves to be sold later for huge amounts of profit. It was similar to buying real estate- you were getting a piece of cyberspace.
The “dot com bubble” era was replete with stories of domaining. Because companies were seen to have experienced huge increases in market value with just the addition of an “e” to their names or having the suffix of “.com”, businesses became ready to invest in avenues that would make their impression that of a tech-savvy, web oriented and modern organization.
The busiest areas in cyberspace would be the ones that get the most traffic and those were predictably generic domain names. And because getting people to visit your website was the numero uno must-have, these domain names were the most coveted and therefore were purchased from their owners for millions of dollars.
Most companies try to acquire domain names closest to their particular business while being the generic keyword for the entire field. Recently Toys ‘R’ Us purchased Toys.com for upwards of $5 million and the transaction is widely viewed as a bargain purchase for the company since toys.com is a website address that gets million of hits by users all over the world, everyday. With the domain Toys.com, Toys ‘R’ Us has placed itself as the definitive online store for all things toys.
While domaining was at its strongest when the “dot com bubble” was still rampant, it still is a lucrative industry as demonstrated by statistics for sales of the top TLDs. Following are the sales figures for the ten most expensive domain names (excluding the deal for the aforementioned toys.com). All of these were purchased by the domain name speculators (known as domainers) and were then resold at these huge sums.
Christopher Null of Yahoo! Tech Blog states these domains as the ten most expensive.
| DOMAIN NAME | SOLD FOR |
|
$12.5 million $9.5 million $7.5 million $7.5 million $5.5 million $5 million $5 million $3.3 million $3 million $3 million |
NEGATIVE PRACTICES IN THE DOMAINING INDUSTRY
Because of the immense value of the right domain name, the domaining industry has seen its share of bad practices. Two of the most ubiquitous are:
Cyber squatting
If someone were to register or use a domain name with the negative intention of making a profit of the goodwill of another, it is known as cyber squatting. However, because the line between domaining and cyber squatting is often very blurred, domaining has sometimes been accused of just being cyber squatting. The US legislature doesn’t provide protection for generic words. For instance, Toys R Us could not have laid claims to toys.com citing their huge business in toys as their right for ownership of that domain. But Microsoft can legally acquire or have deleted any domain that exploits the name of the software giant to benefit from type-in traffic, pay-per-click advertising or attempts to sell such a domain to the company for a huge sum. So don’t go trying to register Microsoft.edu!
Domain tasting
While domaining was mostly done with the intention of resale of the generic domain name, some domain name speculators moved in another direction and purchased high-traffic domains just to profit off PPC (pay per click) advertising and volume of traffic. Because of this, Domain tasting emerged as another paradox for the ICANN (Internet Corporation for Assigned Names and Numbers) to deal with since the healthy prospects that domaining has shown. Using the “Add Grace Period” option provided by the ICANN, individuals and businesses acquired several domains. They then evaluated the profitability of the domains with respect to the revenue they could generate from type-in traffic and pay-per-click advertising. Before the trial period ended and it was time to pay for the domains, the said individuals could delete domains that they didn’t deem as profitable.
ICANN has devised new rules to control this which don’t allow more than a certain number of websites to be deleted.
WORKS CITED
Null, Christopher. “The ten most expensive domain names ever.” Yahoo Tech Blogs/Null 16 April 2008. 02 Sept. 2009 http://tech.yahoo.com/blogs/null/89156.
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