Weblogs: Spam

Domain Tasting and Trademark Scams

Monday, April 16, 2007

Niqui Merret, in her post, I want that domain, picks up on a topic I talked about in Barcamp London in February, about the domain name scams going around. This weekend I covered the issue of the Domain Appraisal Scam which is proving to be a frequent occurrence for domain name owners. In Barcamp, I talked about a technique called Domain Kiting, also known as Domain Tasting.

Domain tasting services offered

I was amazed this week so see one expired domains registrar, pool.com, actually offering a tasting service for 10 US cents per domain - which allows the buyer to hold the domain for 4 and a half days before either purchasing it or releasing it. The loophole is after 4 and a half days you release the domain name, ready to be picked up by another taster, and so the loop continues.

I just picked up an article on Computer World titled Domain Name System shows signs of stress from financial manoeuvrings, that looks into domain tasting/kiting, and the damaging effects its having on the DNS servers that hold the Internet together. This looks to be a much graver concern than when I talked about it back in February. Bob Parsons, CEO and founder of GoDaddy notes that:

35 million names registered in May [2006]. Only 8% of registrations were paid. 32 million were part of a scam. It's called "domain kiting."

Although the Computer World article focuses on trademark and copyright issues, and it quickly mentions the appetite for domain tasting, I feel the writer misses the core issue of domain tasting - its creating a churn of domain registry changes. That churn, when it reaches a certain level, will start to have an impact on the time taken to ripple across DNS servers. I've had times when a DNS change to a .co.uk domain name took over five days before the domain was usable on my webspace.

Trademarks and Domain names

The rights around domain names is starting to become clear, and its based on trademarks. But there's an important limitation - trademarks are limited to certain industries. and a trademarked term in one industry does not prevent the term from being used in another.

One example, from Niqui's comment discussion, is the domain name southafrica.com. The country itself has no legal right to the domain name (or a trademark for that matter). Anyone can purchase the domain name if they wanted, and if its bought in good faith. South Africa, as legal entity, has a mandate on domains ending in .za. The .com is managed by Network Solutions, on behalf of the US government.

Using trademarks to seize domains

The legal proceedings of seizing control over domain names held by others is starting to become a farce. Rogers Cadenhead, a blogger I respect, was dragged through an arbitration after MGM challenged him over the ownership of wargames.com. MGM own the movie rights to the 1980s movie Wargames starring Matthew Broderick, and also hold a trademark on the term Wargames, but only within the movie industry.

Thankfully, Rogers' defence held. It was on the basis that he bought the domain name in good faith, for the purposes of running an online computer game shop specialising in wargame themed games (like Command & Conquer and Age of Empires). MGM don't own the WarGames trademark in computer games, so the arbitration panel found MGM's request lacking of substance, and ruled in Rogers' favour. (It seems that one of the reasons for MGM's sudden interest in the wargames.com domain name is that there is a sequel to the original WarGames movie in the works)

Its a nasty business domain names, the more I dig around Black Hat SEO, the more interesting the stories I hear. There's a big Internet Marketing niche around building passive income streams around buying expired domain names that had pagerank/backlinks, and making money sticking typically Google Adsense adverts on the domain. Its nickels and dimes for some people, but there are people getting seriously rich over expired domains.

Disclaimer: I own about 40 domains which are parked at sedo.co.uk, and are generating a tiny passive income stream. So far in just over a week, I've accumulated a staggering 19 cents of Adsense earnings.

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