Domain Holders Take Advantage of You and Me

Source: http://news.findlaw.com/ap/high_tech/1700//02-27-2008/20080227100502_25.html

As if it's not difficult enough to find a marketable and appealing domain name these days, some companies are now suspect of manipulating buyers by analyzing recent domain searches and using the data to inflate domain prices. This has been a growing issue as the number of domain purchases over years has skyrocketed and along with that so have the number of companies facilitating domain purchases.

To combat this issue a law suit was filed with a Los Angeles court Monday against Network Solutions, LLC, one of the many domain facilitation sites (networksolutions.com). The importance of this lawsuit is extremely prominent in protecting businesses and consumers involved in online business development. As someone who owns more than ten domains and has experienced the aforementioned problem, let me tell you, this is huge.

Here's how it works:

For the purpose of this argument, let's say I am a apparel designer in Florida who realizes the potential to grow my business through the outlet of e-commerce. I put together my online business strategy, hire a couple of designers, and begin to create what will soon be my online presence. Using a domain facilitator I search and scour through thirty possible domain names but decide to come back and purchase after I speak with a marketing consultant to get some ideas on which domains have the most marketability. During this gap of time the domain facilitator has accessed its search analytics and notices that I, as well as others, have been searching for possible domains. In turn they purchase the domains, making them unavailable to me upon my eager arrival to get up and running online. At this point I am either forced to search for another, likely less appealing domain, or purchase my first choice at a much higher price. The domain facilitator has just manipulated me to increase its profit margins.

Many companies who do this defend their actions by stating that they are helping the consumer by ensuring domains are available when their customers return to purchase. Don't be fooled. This is a cover for their blatant misuse of search data. I commend them for developing a strategy that allows for higher profits, but they've gone about it the wrong manner. There is a better solution, which I will outline below, to both increase company profits AND provide value and honest service to consumers. Now Network Solutions and others will likely deflate their profits in a vigorous class action law suit that in my opinion could have easily been avoided.

My Solution:

Surely it would be nice to have some more insurance that my domains would be available upon my return to purchase, but as the buyer I should have the option to obtain that insurance. What Network Solutions and other companies should do is develop an option to purchase domain insurance for a nominal fee that reserves the domain for a period of time. This both opens a new stream of revenue for Network Solutions and the like while also preserving the rights of the consumers.

As the competition for domains increases and more and more businesses establish themselves online it will be more and more important to have ethical standard for businesses and consumers to follow and understand. Especially when it comes to private data.

Tips for buying domains:

1. Use a reputable site - I use GoDaddy (godaddy.com) because they not only have a great reputation, but also offer a full suite of domain and hosting services.
2. Be alert of suspicious behavior - If you're domains keep disappearing before you can purchase them, consider investigation the company you're working with.
3. Report suspicious behavior - Visit RNS Domain Fraud and know how to handle potential misuse.