Biz model for domain names to change

The home page of the photo-sharing website Flickr.


Kai Ryssdal: Ever wonder why the address for the photo-sharing website Flickr doesn't have an E in it? It's because -- and this is a true story -- the founder liked the name "flicker" -- E, R -- but couldn't negotiate the rights to it. The guy who had it wouldn't sell. So, she improvised and came up with the next best thing. Cyber-squatting, as it's known, has led to a whole spate of oddly-spelled company names and web addresses.

But Cash Peters found out the practice of hoarding available domain names may soon become a broken business model.

Cash Peters: Choosing a domain name is such a drag. No matter what name you think of, it's already taken.

David Sarno's the tech reporter for the L.A. Times.

David Sarno: If you wanted to go start a beer company, say, forget trying to get Beer.com. Somebody probably got that 20 years ago. And then you'd try every combination of "beer" that you can think of and all those combinations are taken, too. So what you're left with is people trying to figure out a nonsense word that nobody has the rights to, and naming their company after that.

Precisely. I hope you're listening, Grrrrrrrrrr.com. A lot of times the domain isn't even in use. Some greedy opportunist is just sitting on it, waiting for you to buy it from him at an inflated price. It's sneaky and outrageous. Or, to put it another way, capitalism. Because a good domain name is vital part of your brand, though, this is a real problem.

As it happens, I keep branding expert John Tantillo right here on speed dial.

John Tantillo: It's gotta be easy to pronounce, it should be distinctive, it should be able to be translated into a different language. And it should be trademark-able.

He's right -- like IKEA.com or AOL.com. Don't go calling yourself something nobody can spell, like Wachovia for instance, or Husqvarna. Also, if you can't get your first choice, John says, be prepared to compromise.

Tantillo: You might not get the dot-com name, but you might get the dot-biz name.

Peters: Yeah, but it's so uncool. Nobody wants something dot-biz.

Tantillo: Coolness is relative and it's temporal. You can't worry about coolness, what you've got to worry about is marketing!

Actually, in his case, I'd be more worried about having a stroke. So OK, I have an idea: Why doesn't someone got off their backside and fix this? Ya know, just thinking out loud. Well, thankfully they're about to. Seems there are two ways to do it. Number one, replace this elaborate code we call a domain name with a simple search, like speed dial. David Sarno.

Sarno: I don't know any of my best friends' phone numbers. That era is gone where you had to remember phone numbers. Now, you just pick out your phone and click on their name. So, it should be a similar thing with businesses and entities of all kinds, where all I have to do is remember your name, and I've searched for your name online and it takes me to your website.

But there's a second way to fix this mess: Extend the number of top level domain names -- from your basic dot-coms and dot-orgs -- by adding tons more.

Doug Brent is COO of ICANN, the Internet... Corporation of... Anyway, they oversee domain names.

Doug Brent: In the physical world, when you have beach-front real estate, there just is that limit. There's going to be competition for the beach. It doesn't have to be that way in domain names.

Over the next year -- perhaps longer, but maybe in that time frame -- basically, anyone could apply for a top-level domain name. So instead of dot-com, it can be dot-my-brand or dot-my-community, like the dot-Inuit community. Or perhaps dot-Facebook. The feeling that all the good names are taken doesn't have to be true anymore.

Great. But uh-oh, wait. If you add these new names, what happens to all those greedy opportunists who basically registered the entire thesaurus to make a fast buck? I do hope they'll be OK and don't lose all their money.

Tantillo and Peters laughing

I don't know why that's funny, it just is. But really, they're in for a shock.

Sarno: You're going to have a whole lot of people who have paid a whole lot of money for codes that don't mean anything anymore. And it's going to be replaced, and everybody that paid money for a piece of that system is going to be out of luck.

Oh, darn. In short, the whole system's about to become freer and simpler. In the meantime, though, I guess you grab any name you can. Shame that Grrrrrrrrr.com is taken, really.

Tantillo: As Frank Sinatra used to say, "That's life."

In LAcity.org, I'm CashPeters.com for Marketplace.org.

Log in to post45 Comments


Weak sauce.

This article is opportunistically written search engine bait to drive up readers. You have written this from the point of view of an uniformed misanthrope driving yet more derision towards people who work and make a living from the high tech field. I’m honestly surprised there wasn’t a ‘call to action for all those out of work Union auto workers….’ which by your standards have been driven into poverty because someone registered the domain name. No logical sense or bridge.

I’m annoyed by this article because it is so misinformed and seriously comes across as ‘oh damn…article deadline approaching…throw dart…score! Let’s beat on the domain industry. That’s an easy target.’ Furthermore, it’s interesting that you didn’t call any national advertising agencies and ask their opinion. If you did, it should be included. Perhaps we can take a stroll down the USPTO web site and talk about Trademarks. Costly, time consuming and the subject of much litigation, trademarks and domains regularly interact. Expand your field of vision.

Why not make this a worthwhile piece and actually look into the effect a good domain/brand/trademark can have on a Small/Medium business? Show a success story. Show something upbeat in an economy currently driven by negativity.

Finally, apparently you or someone with your name is very cognizant of the value of a name and brand:

You can do better than this article. Deep fry this turkey, turn it into a series and actually find something positive to discuss.

A domain name like google, yahoo, bing etc... is called a brandable domain as it means nothing at face value but the company has millions of dollars to throw at it in advertising to make it a household word. A domain like searchengine is a generic domain where at first glance you can tell exactly what you will find before you even type it in. Generic domains are a better buy for businesses that don't have millions of dollars to throw at some made up brandable term to make it known. The advantage of a generic .com domain is that although it will have a higher acquisition cost than a brandable it will continue to keep on giving each month with type in traffic also known as (direct navigation). Owning the generic terms of the products/services you sell in .com is a huge advantage not only from type in traffic month after month of targeted buyers but also when you develop on a descriptive generic .com it gives you a slight advantage in search engine rankings as well. The release of other extensions is simply a money grab by ICANN as .com is king as it has been branded with billions of dollars in print, tv, radio, etc... since the beginning and is the first extension anyone will try if they don't know the extension which leads to type in (direct navigation) traffic. You fail to mention the cost of the non refundable application fee for one of these new extensions as well, when you find that then you will see that only the big dogs will be able to afford them anyway so .com will remain as the leader. You can throw thousands of dollars at advertising a crappy domain or you can buy keyword .com domains that describe your products and services and be able to cut back your advertising costs as the keyword .coms will bring traffic month after month and make climbing the search engines easier. I have sold and developed domains for 9+ years and 99.9% of my buyers always go for the .com. If you think ICANN is proposing new extensions to help the small business get a good domain look at the price tag and realize they could care less if new extensions fail or succeed as they are motivated by the $. Owning domain names as investments is no different than owning real estate, baseball cards, gold, etc... as the goal is to sell higher than you paid and all this article does is show a whiner mentality from people that didn't have the foresight to realize domain names would be a good investment down the road. I would suggest educating yourself before publishing 1 sided garbage in the future and pretending ICANN are in this for the benefit of businesses. Consult with people that have sold domains to businesses for years and your story would be more accurate.

Domainers will not register these names at 50k, it doesnt fit into our business model of buying low and selling high, and making money of off parking income.There may be a few bought by the elite portfolio holders but with that kind of investment with almost no guarentee of a return on there investment, the majority of domainers wouldnt even consider something so foolish

This is a weak report with little investigation ans misuse of the word CyberSquater". The comparison the reporter makes is similar to someone being upset that an investor bought a house that they really wanted. There is nothing illegal about an investor buying a house and not living in it, so why does the reporter think investing in a Website address should be illegal. Domains are assets - just ask the IRS. In addition the reporter must be living under a rock as there has been huge growth in domain names and domain names selling into the millions on a fairly consistent basis. Slots.com just sold for 5.5 Million US Go to DNJournal.com for actual facts about the domain industry as opposed to fairy land at NPR

This story is horrible. I feel sorry for people reading this who are now totally misinformed. The "biz" is not changing lol. I hope all of your other stories aren't this far off base. - NPR Fan (normally)

That was the most incredible piece of uninformed reporting I've ever heard/seen, and I'm a fan of NPR!

If you can't get "FLICKER.COM", it's because someone else bought it before you. What they're doing with it is none of your business unless you want to estimate it's value to you and offer to buy it from the current holder of the domain.

If you can't afford what the owner wants for his internet property, then you look for another domain name that fits your budget, and in FLICKR's case, spend the same amount of money trying to BRAND that domain than what you would have had already if you just paid the owner of FLICKER.COM his asking price.

It's well-known in New Media Marketing circles about "generic descriptive" domains. If you didn't buy the "generic descriptive" domains for your company's products/services, and somebody else did, then you can either invest your money in traditional advertising, where $100,000 gets you a few little spots on the radio and some quickly forgotten display ads in a magazine or newspaper. In 30 days, your $100k in advertising your brand is gone.

If you would have spent $100k on a generic descriptive domain for your company, or its products/services, that domain would not only be receiving "typein" traffic, but it would be remembered, recognized, and also positioned as an "appreciable marketing asset". In other words, your $100k domain will grow in value the longer you use it. I dare any marketing director at any company to jump in right here and say "wait, our $500,000 TV commercials really worked well for us for 60 days". And I'd ask them... "so what is your $500k doing for you AFTER the 60 days?"

Most domain investors use the premier domain bought by a large corporation to explain why domain names, mostly of the .com variety, are incredible investments that WORK for the company nonstop, and gain value: BABY.COM --- type it in, see who owns it.

There are tens of thousands of domains like this purchased for hundreds of dollars to millions of dollars, and there are probably less than 10 buyers of these domains who "lost money" or regretted buying "Pizza.com".

Owning a generic domain does NOT make you a "cybersquatter" or some "greedy" person. It makes you an investor who took the time to investigate the domain name's value and then buy it.

As an example of how whiny and uneducated this story by NPR plays out, here's an analogy:

What someone does with an empty lot they own on a cliff near Malibu doesn't get "questioned" by NPR, does it? Does "Cash Peters" (who incidentally robbed all other people named "Cash Peters" by buying that domain) say "Dang, I could have bought that beach lot for $3000 back in 1912, but some other person did... and they won't sell it to me for $3000! What a drag."

Nobody in this interview has any idea of what the owners of the domains they wish they owned are doing, planning, or benefitting from having the domain.

It's a open world in the domain industry, readers. Anyone can search up a generic phrase for a new technology, buy that domain and then sit on it, develop it, rent it out, point it to another site, whatever... it doesn't make them a 'criminal', and if you own a good .com domain, that domain will be valuable for at least another ten years or longer.

Do your research before you fill your readers/listeners heads with false and harmful information regarding their online marketing opportunities with domains.

Stephen Douglas

I think the new extensions will likely be hoarded just like .com has been. The cost of buying up these names is small relative to what buyers will pay for the perfect url. I think anyone using his business model is doing so legally, but I see it as an annoyance to anyone looking for a good url.


With Generous Support From...