Metafluence

The domain name mafia

The first section of this post is the background story, if you’re not interested in it, just skip to the next headline.

My domain name loss and then reclaim experience

So, a little over a year ago my former business partner registered my name as a domain, JustinKistner.com. Before I had the chance to transfer it from his registrar to mine, it expired. Having already lost one domain, I knew that I was likely going to lose it to a spammer or some dropped domain name speculator. Sure enough, before I could reregister my name, someone bought it. I was so infuriated, but unsure about what I could do.

The first thing I tried was to check the whois info on the domain name for the contact person. I then wrote that person to request my name back and offered to pay the registration fee for the one year they registered it. After a few weeks they wrote back and said, “No problem, you’ll just need to pay the $900 administration fee.”

WHAT?!?!?!?!?! What the hell could possibly cost $900 to transfer a domain? I’ve done it several times and I happen to know that it is easy.

It really pissed me off and sparked a memory of something Jon Dodson from OpenSourcery mentioned, which was that I might have legal recourse to reclaim it. I decided to call my registrar, Moniker, to ask them if they knew where I could turn. They directed me to their “Partners” page and at the top of the list was John Berryhill, Ph.d., Esq., a domain name lawyer.

When I explained my story to him, John was confused because according to the whois he just ran, the domain was available. Dumbfounded myself, I looked it up. It was available, so I bought it immediately. Now it was I who was confused because I didn’t know how a domain could have been registered for a year and then suddenly be available again. John let me know that there was a provision established that a domain could be returned within five days, which was originally to help protect people who accidentally registered a misspelling. What dropped domain name speculators do is register a domain, then run a traffic test for five days, and if the domain doesn’t receive sufficient traffic, they return it. They do this so they can examine expired domains risk free. He also let me know that some registrars are established strictly to take advantage of this loophole. They will watch search term trends and then buy thousands of variations on rising queries to run 5 day traffic tests. Think about that—everyday hundreds of thousands of domains are automatically checked for viability and the squatted if they show any potential. No wonder it feels like all of the good domains are gone. But, I digress.

During our conversation, John had rattled off something about the process dropped domains go through and I asked him how much it would cost for me to pick his brain about it (it’s very useful info to me don’t ya know). And over the next 15 minutes he dumped an invaluable amount of information on me about the domain name mafia.

The history of the expired domain name business

Once the Web really started taking off, domain name speculation also took off. People began buying domains with the hope of selling them later for more money. After people got wind of this trend domain name sales shot through the roof, particularly after ICAAN dropped the price of domains from $50 a year with a two year minimum to $6 a year and opened the market to competition, which was previously monopolized by Network Solutions.

Once domain name speculators started buying up all of the “good” domains, people began watching them for expiration. Back in the day when a domain name expired, registrars would delete them five days after the expiration date at 2pm EST.

One of the first registrars to put together the value of expired domains, SnapNames (out of Portland, yeah!), formed a consortium of registrars to pool dropped domains and resell them. Then a competitor arose, Pool, and they started an auction-style selling model. Then along came eNom, who formed a differing kind of consortium. They put together that it costs about $10K to become an accredited ICAAN registrar, and so they established about 300, which drove the number of registrars up from about 50ish to almost 400. eNom also formed partnerships with GoDaddy and Dotster to be their exclusive dropped domain reseller.

Not to be out done, SnapNames formed an alliance with Network Solutions as they are the largest domain name holder from having had the monopoly for so long and during the great domain name landrush, which brings us to some helpful information.

How to buy expired domains

If you are interested in buying expired domains to cash in on someone else’s misfortune, here’s what you need to know.

At this point, the top registrars have alliances with other registrars that specialize in selling expired domains. If you have your eye on a domain, the first thing you want to do is find out who it is currently registered with. That registrar will then reregister the domain name after the 5 day grace period has elapsed. At which point they’ll hand it off to their expired domain partner. Most expired domains are sold auction style where you pay a fee to join the auction and those who have paid to enter by the time the name expires start a bidding war. As is the nature of business, the alliances will shift over time. The best thing to do is to visit the site of the registrar that manages the about to expire name and see who they recommend for buying dropped domains. That will be their partner and your best chance for getting the domain. Here’s a starter list:

What to do if your domain name expires and someone else nabs it

If someone takes your name, my recommendation is to do as I did. First contact the person listed in the whois for the domain and see if you can settle it yourself. If that doesn’t work, contact a lawyer, like John Berryhill. John told me there are only about 6 or 7 domain name lawyers in the U.S., so if you have a good case then it’s likely easy to work out because the person who bought it out from under you is most likely his client, or one of the other 5 or 6 lawyers and they’ll just tell them to give it back. However, that all depends on details surrounding the domain. It is possible for you to be SOL, so your best defense is to not let the domain expire.

This post is dedicated to Antonio of domaindropsa.com who tried to snatch my name and then sell it back to me for $900. It’s also dedicated to John Berryhill, Ph.d., Esq., the domain name lawyer that helped me not pay Antonio $900.