Domainers

When a new Top Level Domain (TLD) is launched many speculators rush in to register popular keywords, only to wait for the market to grow and sell them. Highly sought after domain names such as sex.com and business.com were sold for millions of US dollars. Typically speculators, also referred to as Domainers, will register generic sounding domain names, e.g. propertysales, rentaccomodation or buydomains with the hope that at a later stage these can be sold off to businesses.

Cybersquatting

Most domainers tend to stay away from registering trademark names as this is considered ,according to US federal law, a form of cybersquatting. It is considered unethical to register a domain name that features the brand name of someone or a company that has spent years on building up a good image. The cybersquatter takes advantage of the work done by others as the domain name will receive traffic without the person who registered the domain having to put any effort into it. Typically the cybersquatter will offer to sell the domain name to the company or person who owns the trademark.

In order to resolve domain name disputes the Internet Corporation for Assigned Names and Number (ICANN) introduced the, rather cumbersome sounding, Uniform Domain-Name Dispute-Resolution Policy (UDRP). Companies and persons who feel their intellectual property rights are being infringed can call upon ICANN to arbitrate in matters of cybersquatting.

As a consequence a grey area has opened up in the form of typosquatting, the practice of registering purposely misspelled domain names with the aim of receiving internet traffic from people mistyping the URL of the website they wish to visit. As usual ways are found to get round restrictions imposed on the internet and undoubtedly other inventive methods will surface once the practice of typosquatting is addressed.

The secondary market

And then there is the market for previously registered domain names. This is essentially a clean market not overshadowed by various types of cybersquatting. Purchasing an already used domain can be very lucrative because that domain could still have a lot of backlinks driving traffic to it due to high profile websites that are associated with them. In that sense buying an already generated domain name is the opposite of buying a used car.  An old product can actually be of higher quality than a new product. In a sense previously registered domain names are the vintage wines of the internet.

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