Big Numbers in Downloads and Domain Names

Posted on February 26, 2010 by Dan Kelly

You may have heard the news that iTunes has hit the 10 billion (with a "b") mark in number of songs downloaded.  Sales began in 2003.  That's an average pace of more than 1.4 billion downloads a year.  Considering that a typical single song retails for $0.99 on iTunes (likely higher than average price, as many albums with more than ten songs go for $9.99), I thought, "Wow, that's about $10 billion in sales!"  Well, yes and no.  It's only $9.9 billion in sales--$100 million short of $10 billion.  I sometimes tend to think that one decimal place, one hundredth, is "close," and in a sense, $9.9 billion is close to $10 billion.  In another sense, $100 million is a lot of money standing on its own. 

This reminds me of a point made at a trademark infringement trial a few years ago.  A lawyer (not me) asked a business owner whether a production cost difference of a few pennies per piece part was a big deal--hoping to make the point that it was insubstantial.  The owner replied, "It's a big deal when I'm ordering hundreds of thousands of parts."  All of this, of course, is not new.  I recall learning about economies of scale in my 10th grade Economics class, though the lesson obviously continues to impress. 

But here is another big number to consider:  the folks over at FairWinds recently discovered a company that was losing 47 million initial web impressions to typosquatting domain names.  Josh Bourne has a recent post at the Domain Name Strategy blog discussing this and some related SEO (search engine optimization) issues, and it is worth a read. 

Pay attention to how those little things add up!

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Interesting Gift Idea, but May Be Difficult to Wrap

Posted on December 4, 2009 by Dan Kelly

If you are having any trouble with gift ideas this year, here is a novel idea:  give a domain name.  DomainRegistrar.info has published the results of a survey it conducted suggesting that there is an increased demand for domain names as gifts.  While I have some reservations about the rigor of the survey, a domain name could well be an interesting and unique gift for that someone in your life who may be a bit difficult to shop for.

The report suggests that "personalization" is the leading characteristic making a domain name a good gift.  Many unique or personalized domain names can probably still be had for less than $10 per year.  If you want to give a domain name as a gift that may give in other ways, for instance, as a potential investment vehicle, give one that is generic or a collector's item.  (See here for year-to-date top domain name sale prices.)  A domain name might even be a creative business-to-business gift, but probably best given with prior approval or as a gift card. 

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Fraud at Domain Name Auction House

Posted on November 6, 2009 by Dan Kelly

A bomb exploded in the domain name aftermarket world on Wednesday.  A well-known domain name auction house called SnapNames.com announced that one of its (now former) employees had been bidding as a shill in many online domain name auctions run by the company since 2005.  SnapNames has an FAQ page on the matter here. 

It is not difficult to decry the many abuses that have gone on in the domaining industry:  cybersquatting, typosquatting, domain name tasting, domain name kiting, pay-per-click fraud, and now shill bidding (to name a few).  As these abuses tend to make for the juciest news, it is not surprising that some (including trademark attorneys) accuse the whole domain name business (or "industry") of being dirty.  But law, being a generally slow, blunt instrument, has so far caught up with only the first two of the abuses listed above.  What is less widely reported is that, for all of its wild-westness, the DN business has policed itself (e.g. cybersquatting, domain tasting) without resort to government intervention.  This is as it should be. 

Even so, self-policing is also slow to catch up to opportunists, so caveat emptor is the rule of the day in domain name transactions, especially when bidding at an auction, especially an online auction.  I recommend reading any auction site's rules, terms and conditions carefully before engaging in a transaction.  Some of these sites will readily represent both buyer and seller, which is a situation well-known to lawyers and real estate agents as a "conflict of interest."  Caveat emptor, indeed. 

Domaining is a buy low, sell high business.  While it has warts, and while some debate whether the business of domain name reselling is at all "legitimate," I do not think that the answer, or even an answer, to any of its problems is that governments step in to regulate it.  One of the virtues of self-policing (and by this, I mean by such umbrella entities as ICANN) is that the rules and regulations developed tend to be transnational, obviating the need for an international potpourri of laws, regulations, and, ultimately, lawyers.  While it is against my self-interest to admit it, I think this is a good thing.
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Latest gTLD Applicant Guidebook Open for Comment

Posted on October 9, 2009 by Dan Kelly

I assume that most readers have heard that the universe of Internet domain names may be expanding next year.  Instead of being limited to a finite number of relatively mundane top-level domain extensions like ".com" and ".org," ICANN is planning to allow for the registration of any string of characters to the right of the dot.  These plans have been in the works for a while, and just this week, ICANN released the latest version (version 3 for those keeping score at home) of the "Draft Applicant Guidebook."  This version is publicly available here, and ICANN is taking comments on the contents of this draft through November 22, 2009.  Speak now or hold your peace (at least until the next draft comes out).

I have previously observed that the world of Internet domain names bears some semblance to the proverbial "Wild West."  I have also expressed some doubts about the prudence of opening up the gTLD space.  At the risk of being Dr. No, I see a host of potential problems for trademark owners, based principally on current abuses.  Even so, the gTLD roll out process provides at least some opportunity for taking a broader view of the possibilities, both good and bad, and stakeholders should pay attention now and weigh in before it is too late.

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Dotcom or Dotcm? Top-Level Typos Now Available

Posted on July 17, 2009 by Dan Kelly

Back in April, I explained a little bit about how typosquatters can capitalize on direct navigation Internet traffic.  I offered an example of the "omitted letter" typo:  www.kellggs.com.  Well, one omitted letter typo variant of .com is becoming widely available:  .cm. 

The TLD ".cm" is the country code top-level domain ("ccTLD") for the country of Cameroon.  It appears that in November of 2008, a company called Netcom.cm Sarl launched a registry for com.cm, co.cm, and net.cm domain names.  The company has since contracted with NameJet for the landrush of all other second-level registrations in the .cm domain space.  The landrush started July 15 and runs through July 31, at which point second-level .cm registrations will be accepted on a first-come, first-served basis.  Unlike some other domain landrushes, there appears to be no premium for registration during the landrush period, but a two-year registration is required.  If multiple parties seek the same second-level domains during the landrush, such domains will be auctioned beginning August 4.  NameJet has a FAQ page here and does not hide the fact that .cm registrations are "just one letter and keystroke away from a few of the most highly recognizable domains."  Really?  I'm not sure that it is wise to encourage domainers in this direction. 

By the way, of the other two omitted-letter .com typos, ".co" belongs to Colombia, and it does not appear that widespread commericalizaiton is in the works.  The ccTLD ".om" belongs to Oman, and also appears to be territorially limited for now.  Interestingly, the .om space could also be used in transposed-letter typos, like www.youtubec.om.  I suspect that it will be just a matter of time before entrepreneurs in these countries see the possibilities, and second-level domains start opening up in these spaces. 

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Driving Your Internet Traffic: the Hazards of Direct Navigation

Posted on April 17, 2009 by Dan Kelly

How did you get here?  Seriously, how did you navigate to this web page?  Is DuetsBlog.com in your bookmarks?  (Do you have an Internet "loop"?)  Perhaps you navigated directly by going to the little box at the top of the page and typing in "www.duetsblog.com."  If you did this last step, and did it without mistyping, congratulations.  You directly navigated to this page.  Those that mistyped might have gone here or here or here.  (Hopefully those people will join us soon.)

Many domainers capitalize on the mistakes Internet users make when directly navigating to web pages, and policing this activity can be tiresome because there are so many ways to make mistakes, like these:

A business or organization that relies on heavy Internet traffic, like amazon.com, should own a wide variety of typographical variants of its domain name(s).  Amazon.com, Inc. owns thousands of domain names, and most of them are variants of amazon.com.  In fact, it is pretty difficult to find a typographical variant of amazon.com that does not take you to amazon.com.  (And if you've read this far, you've killed enough time already that you might as well try it.)

The upshot is that a business or organization can either let domainers typosquat on its domain names, or it can capture its own typo traffic. 

Untrill nxet weeek . . .

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Domaining: 21st Century Real Estate Speculation?

Posted on April 10, 2009 by Dan Kelly

One of the shortcomings to living in the 21st century is that all of the land rushes are over.  What an amazing way that was to get some land:  just run right out there and put a stake in the ground.  No messing with title insurance and mortgage bankers, and no need to inspect the property prior to purchase.  Caveat emptor, indeed. 

Oklahoma Land Rush

A loose analog to the old-time land rushes exists today, and that is the practice of domain name warehousing, or "domaining."  Unlike trademarks (at least in the U.S.), it is permissible (so far) to buy, sell, and store Internet domain names without using them.  Not surprisingly, people do this.  They are called "domainers," and some of them make lots of money.  The trick to making money off of a domain name portfolio is not just to buy low and sell high, although as you can see from my post last week, that may be lucrative enough.

The real trick is to make money while holding the domain names.  This is called "monetizing" domain names.  The most common way for a domainer to monetize a domain name is to place an array of pay-per-click ("PPC") advertising links on a web page and hope to make more money on the revenue generated by those clicks than the domainer spends in maintaining the domain name and site.  Even if this is only a few dollars a year on any given domain, a portfolio of thousands or hundreds of thousands of domain names (not uncommon) can start to generate a noticeable revenue stream.

Like land rushes of old, the Internet is still a bit of the wild west in our midst, and some domaining is legitimate, but much of it is not.  Next week, I will touch on some of the abuses in this area, including cybersquatting and typosquatting.

Now, if you want to see a sample of what real domaining geeks talk about, look after the jump . . .

Antiques.  Rarities.  Yes, even in the domaining world.  For instance all "LLLL" domains in the .COM top-level domain (TLD) space are taken -- that is, owned.  There are only 456,976 of them.  It may be possible to buy them from current owners, but none are hanging out in the Internet ether any longer.  This post discusses some of the interesting aspects of LLLL domains.  The author handicaps values based upon letter content, in a fashion somewhat inversely proportional to Scrabble® letter values. 

So why buy gobbledygook combinations of random domains?  For instance, why buy, say, VHEM.COM?  Well, because someday, some nutjob may come along and want that domain, and some happy domainer may be able to sell it at a premium.  Strange days indeed. 

Incidentally, there are only 676 LL.COM domain names, and 17,576 LLL.COM domain names.  True collector's items, those.  LLLLL.COM domains?  There are almost 12 million of them.  Save your money.
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