The domain name market is highly volatile and very speculative. This guide will help
you navigate potential pitfalls in the domain name market and come out unscathed on the
other side. Each point has been rated on the following scale:
No Problem
Think Twice
Hmmm
Bad Idea
Very Very Bad Idea
NOTE: Any problems highlighted
below represent EXCEPTIONS. The vast majority of domain name transactions
are carried out without a hitch. Nevertheless, it always pays to be prepared.
Reselling domain
names This issue frequently comes under discussion. It seems to cause a lot of
controversy in that some people wonder why domain names can be bought or sold for vast
amounts when they are only "worth" $100. The simple answer: there is nothing
wrong with buying or selling domain names. As long as buyers and sellers are
willing to form a market, domain names can be traded just like any other
commodity.
Trademark
troubles
Do not register or buy domain names that infringe on trademarks. Although
there is no law against doing so, precedent in a large number of lawsuits indicates that
the majority of the time the trademark owner will win and you will lose the rights to the
domain name -- and possibly have to pay legal costs as well. Many domain name brokers and
private sellers, wittingly or unwittingly, offer trademark-busting names for sale. Check
before you buy, and you'll have no regrets later.
By the same token, do not
give in immediately if you are sent a threatening letter or other legal document making a
claim to your domain name. Some unscrupulous organizations may fabricate extremely dubious
claims in an attempt to scare you into giving them a potentially lucrative domain name.
Seek legal advice.
Domain Name
pointing
Some domain registration companies and at least one domain broker ask to be allowed to
point your domain name at their site. This means that, for as long as you do not use your
domain name [for example, name.com],
visitors who go to www.newname.com
will find themselves at the site of the respective registration company or broker. In
effect, the company is "borrowing" your name, and using it to "point"
at their site. Note that in this situation you still retain all rights to the name.
Companies often do this in order to resubmit their site to search engines again under a
different domain name, and get listed again. If you don't mind, that's fine -- but be
aware of what is going on.
Companies selling
alternate domain names
A little perspective is needed here. Since there is already a great deal of doubt
surrounding the feasibility of the proposed 7 new "official" top domains,
companies selling domain names under alternate top domains [such as .earth or .per, for
instance] are one more step removed from legitimacy. Currently, the best they can promise
is that a small percentage of web users will be able to access sites under such alternate
top domains -- and with a ruling expected on the issue of the official new top domains,
these alternate top domains are unlikely to become legitimate any time soon. Approach with
caution.
.web domain names
.web is one of the 7 new top domains that has been proposed. Currently, Image Online
Design maintains a highly organized domain registry for .web names. Although they do not
have a firm legal claim to the .web domain, they appear confident that such a claim will
be granted soon. If this is the case, then .web names registered with them will be fully
valid and accessible from anywhere on the Internet. If not, then .web names will just
remain alternate domain names.
Domain
registration companies with periodic fees Apart from the unavoidable InterNIC charges, you should never need to pay an
annual charge for a domain name you have registered. So many companies offer registrations
for a one-off fee that you should steer clear of companies that have a time limit on their
domain name reservation service.
Overpriced domain
name registration services
All domain names are created equal. It does not matter if you register with domain
registration company X or company Y. As long as they provide the necessary DNS and
registration services then the domain name will be exactly the same. Therefore, the only
way that domain name registries can justify increased prices is by providing additional
services. Email redirection services and web site pointing are two such services. $50seems a reasonable target for basic registration and DNS services. Any
more and you really should be getting additional services as well, else you are
paying over the odds.
Domain Names
that... aren't
It is important to realise that many alternatives to domain names are NOT
themselves domain names, even if this is not made clear in the issuing company's
promotional material.
For example, some companies offer names of the form:-
yourname.xyz.com
Here, yourname is a subsidiary domain
of that company's domain name, in this case xyz.com
The big giveaway is the second "dot", which is indicated in red in the examples
above. Normal domain names have a single dot in them, except for certain country domains
[such as .co.uk or .or.jp]. If you see a company offering .com or other names with two
dots in them, you know immediately that what you will be getting is just a subsidiary of
their domain name. This gives you much, much less control over the name than if you bought
a normal domain name as basically they can have full control over the name and can revoke
it or reassign it at any time.
TIP: This is a trick which you can play with any domain name. If you own xyz.com, then
you automatically own EVERY expression you could possibly think of to go
before xyz.com, such as car.xyz.com, future.xyz.com or golf123.xyz.com.
Other companies offer names of the form:-
clevername.cleverending/yourname
Here, yourname is simply the name of a directory on their clevername.cleverending site. An example might be shop.at/yourname --
such names are very easy to spot as they have a "slash" character making up part
of the name [marked in red in the examples]. This slash indicates a directory. These names
are not real domain names at all, and have no resale value as they are fully controlled by
the registering company.
The types of name detailed above can be used as
alternatives to domain names, but you need to be very confident about what you are
getting, what your rights are (if any) and how much these alternatives will cost when
stacked up against a real domain name.
Preregistering New Top
Domains
How much are you prepared to gamble? A large number of domain registrars would be
delighted to take your money in exchange for a chance to register domain names under the
seven new top domains -- despite the fact that the implementation of these new top domains
has been delayed and is now in some doubt. Even when the names arrive, there is no
guarantee that they will be priced the same as current names, or issued under the same
conditions.
So if you are willing to put your money on a long shot, then if you register
you just might get the name you've always wanted. On the other hand, you could
get nothing at all -- and no refunds are offered.
Domain registration companies
that steal names
A few cases have been reported of companies registering domain names on behalf of clients,
but with the registrar's own contact details as the Administrative Contact.
This is extremely dangerous as legally this makes the registrar the owner of that
particular domain name. Always check that you are represented as the Administrative
Contact for the domain name you registered. Don't accept any kind of song or dance about
this; demand that the domain name is fully turned over to you.
Introduction
