The Man Who Owns the Internet 369
Tefen writes "CNN Money posted this story about Kevin Ham, who has made a fortune gobbling up lapsed domain names and has recently launched a lucrative business partnership with Cameroon, the country which controls the .cm TLD. Since 2000 he has quietly cobbled together a portfolio of some 300,000 domains that, combined with several other ventures, generate an estimated $70 million a year in revenue."
So the market sure is promoting innovation (Score:5, Insightful)
Having a bunch of domains == "owns the Internet"? (Score:5, Insightful)
Re:Really? (Score:3, Insightful)
Fraud? Yes. Tolerated? Well, yes. And therein lies the real problem.
Re:So the market sure is promoting innovation (Score:2, Insightful)
I have no hesitation (Score:5, Insightful)
Having been on the wrong side of 'cybersquatters' this is an issue close to my heart. I wouldn't mind if these people took a domain and did something useful with it, but instead they just plaster it with advertising and watch the cash roll in.
Am not even that bitter (it wasn't even me that lost the domain but the previous owner of my site), what makes me angry is the way these people just leech ad views without giving anything back. Scummy blighters, the lot of them!
Problem is what should be done about these people? It's not as if the government(s) of the world are competent enough to deal with problems like these (tubes anyone). ICANN is the organisation we should turn to: perhaps make a rule that the owner of a domain has to actually do something with it within a set period of time (say 6 months to a year). If all they've done in that time is plaster it in advertising (or have done nothing) it should return to the pool, perhaps with a bar disallowing the ghastly spammer from buying it again for a year.
This is pretty controversial and I suppose if someone pays for something they have a right to do what they like with it. That doesn't detract from the fact that these people are like parasites, filling the Internet with rubbish and getting in the way of those of us who just want to provide a service.
Re:Really? (Score:5, Insightful)
Re:So the market sure is promoting innovation (Score:3, Insightful)
I wish they would raise annual fees (Score:5, Insightful)
Mixed amongst these junk domains are some great names that deserve to be developed, and will be if they are available. Unfortunately, the bottom-feeders of the online world have control of this vast assortment of names, which they are essentially holding largely for ransom purposes. I think that's a scummy way to make a living. But it's possible so long as annual registration fees are less than the small amounts of revenue that can be generated through generic google adsense programs and their ilk.
I would love to see the price of annual registration hit the point where, say, the guy who owns "waterfalls.com" would have to develop it in a meaningful way or surrender it. Sitting on a domain and putting up generic ads should be a losing proposition financially, and an increased annual fee would correct this situation and work to the public good.
Re:So the market sure is promoting innovation (Score:2, Insightful)
Why is this getting modded as insightful? This man innovates nothing, and contributes nothing to society. Sarcasm is supposed to be funny.
Re:SO FULL OF HATE FOR CYBERSQUATTERS (Score:3, Insightful)
The kind of controls necessary to prevent this are exactly the kind of controls we should be scared of, and not want.
Re:Does ANYONE click on those ads? (Score:5, Insightful)
Re:Automated registration bots? (Score:3, Insightful)
Re:So the market sure is promoting innovation (Score:3, Insightful)
Read it. He doesn't make 70 mil a year. (Score:5, Insightful)
Re:So the market sure is promoting innovation (Score:3, Insightful)
The guy who bought it for $1M may have just found an ignorant seller who under-priced it. Perhaps it really did appreciate 100% in two years because of other influences in the local economy. Remember, it's an investment and it's certainly possible the guy who bought it for $1M would have trouble selling it for $500K two years later. It's all about risk and reward.
Re:So the market sure is promoting innovation (Score:5, Insightful)
Its funny how when people look at someone making $$ they always focus on the REWARD and never on the RISK
Let's say you buy a plot of land for $1M and sell it for $500K two years later. Where does that money come from? Yeah thats right the investors pocket. And thats not even including the taxes, insurance, $$ spent on improvements, interest paid on the loan the investor took out (flippers almost always use OPM in order to stay liquid), the points you get raped for by mortgage bankers on a residential deal and commercial lending is 100 times worse because there are no limits on the amount of points that can be charged.
Your comment wreaks of someone who never looks at the entire picture and probably watched some stupid "reality tv" show about flippers. Real estate investments are risky (ask the all the people in Fla. who are losing millions at this very moment) thus the high reward instead of complaining about flippers pick up a few books, grow a set of balls and invest yourself.
Full disclosure: In addition to being an S.E. I have been a Real Estate Agent for 8 years and a Real Estate Broker for 4 years.
Re:I have no hesitation (Score:3, Insightful)
That's sorta the catch-22 here. If one person has a right to decide what the other person can and cannot do with a domain name then we're all screwed.
That way there be dragons.
Re:I wish they would raise annual fees (Score:4, Insightful)
The 20th century called. They want their pricing back.
When the NSF directed netsol to begin charging it was $100 for 2 years and $50/yr for renewal. There was widesperead consensus this was WAY too much.
Re:So the market sure is promoting innovation (Score:5, Insightful)
Web squatters buy up huge swathes of land, then sit on them. They earn ad revenue from other people's mistypes, then a huge chunk of change when they finally decide to flip it. And during this time they've done NOTHING of net good for anyone. They've simply prevented anyone else from using the site name, usually for a long period of time, which causes an overall net loss.
The profit margins are atrocious. The site name that sold for 400,000 dollars? Yeah, they registered that for 20 bucks. The behaviors of squatters is equally atrocious. They frequently register typo domain names (slshdot.com, for example) to try to drive clicks. They automatically swoop in to register domain names that people forget to renew, then sell it back to them at extortive prices.
The domain name resolution service is a series of agreements amongst a group of dedicated nerds in an attempt to facilitate easy information distribution on the internet. By gaming the system, squatters are profiting while creating nothing, at the expense of people with real jobs and real work to do. It's taking a good-faith agreement and exploiting every loophole it can find. It's like spamming... it's legal, and it works, but it is a PITA for basically everyone. Unlike spamming, domain squatting and parking could be stopped, but nobody has moved to outlaw the practice yet.
Re:So the market sure is promoting innovation (Score:5, Insightful)
Domain names online are more like registered trademarks in real life. The difference being that you can't defend a trademark against a newcomer if all you've done with it is sit on it like an egg, which is what these "domainers" do.
I'm in the business of web business, and there is nothing that irritates me more than having an "AHA" moment, and finding out my great fun domain name is already taken by a squatter. They bring NOTHING to the table, and they're stopping me from doing something actually useful with the name rather than throw up a sleazy parking page with its own ad search engine.
I've often negotiated domain names away from their owners, mostly because they were normal people who simply bought a cool domain and lost interest. I've never paid the astronomical prices these squatters try to extort, the most I've paid for a name was $100 and that way mostly because the guy had registered it for 7 years, 2 years in he still just had the registrar's parking page on there. He was happy to recover his investment plus enough for a case of beer, and I was happy to get the name I wanted for a friend's blog.
Hey here's an idea: domain hoarding is like a patent holding company. They cheaply appropriate low-value virtual properties, sit on them forever until some enterprising young fellow with a bright idea comes along, and then pounce on him when the money's good. Now there's a fitting analogy, and we all hate IP warehouses now don't we ?
Comment removed (Score:3, Insightful)
Re:So the market sure is promoting innovation (Score:2, Insightful)
Re:So the market sure is promoting innovation (Score:5, Insightful)
A real investor puts their money into something productive, which could be anything from a movie studio to a car company, that produces wealth. It's not a zero sum game, since the process results in wealth creation.
Squatting on limited natural resources, like beach-front property, produces nothing, so it is a zero-sum game. That's OK for gamblers, but it's annoying when speculators are driving up prices for those of us who actually need housing to, you know, live in. Now if you are talking about somebody who buys a plot of land and builds a hotel on it (or other valuable improvements), that's different - they've actually put some work into creating value.
Waste of life (Score:3, Insightful)
The people who used to sell used cars or deal drugs have all moved onto the Internet.
Re:So the market sure is promoting innovation (Score:4, Insightful)
Speculators (real estate, stocks, commodities, etc.) may not necessarily *produce* anything, but they are a necessary part of any free market. If prices fluctuate, there will be people trying to buy low and sell high. That's just the way things work. The reward is directly related to the risk, however, so a very small amount of people have the money, intelligence, and desire to engage in pure speculation. You're more likely to lose your shirt than make a good profit if all you're doing is day trading or flipping real estate..
I guess you could say that speculators ensure an efficient market. I'm not much of an economist, I'm sure there are much more eloquent ways to describe it than that.
Re:So the market sure is promoting innovation (Score:5, Insightful)
How are squatters scumbags? AFAIK, they're earning honest money. You can't even say they're unethical just because people were careless enough to leave their building windows unbarred. It's their responsibility. He's just making a profit off of other people's carelessness, which basically happens right across the board in the street culture.
How were the pioneers of the American West scumbags? AFAIK, they were earning honest money. You can't even say they're unethical just because Native Americans were careless enough to leave their property un-deeded. It's their responsibility. They were just making a profit off of other people's carelessness, which basically happens right across the board in the frontier culture.
How are Nigerian 419 scammers scumbags? AFAIK, they're earning honest money. You can't even say it's unethical just because people were careless enough to allow their due diligence in researching moneymaking opportunities to fail. They're just making a profit off of other people's carelessness, which basically happens right across the board in internet culture.
If you put it that way, you can explain away anything. The only reason I'm not continuing to more heinous things is that doing so would break certain laws. Though it would not be unethical, and I would only profit from the carelessness you showed in crafting your argument (which is your responsibility), I choose not to break Godwin's Law because it's the right thing to do. And natural hair wigs were too expensive right across the board in 1940, even for curly hair.
Re:So the market sure is promoting innovation (Score:3, Insightful)
Cheers.
Re:So the market sure is promoting innovation (Score:5, Insightful)
It's funny then, that every time I type google.com, or slashdot.org into my browser window I end up at the same page. I would say that domain names are not worthless.
It always was. Search.com is not Google. Chopper.com is not Harley Davidson. Yahoo.com is not about happy people. Amazon.com is not about tall and powerful women.
Why should they? It's not like a con-man couldn't afford to buy a domain name, and rent some space on a server. This rule is as silly as insisting that "you're only a professional if you wear a tie".
Yet for some unexplained reason, the Coca Cola Company decided that they wouldn't represent their company through the jfkojiovjojw2.com domain name, but decided to go for a meaningful one instead.
Re:So the market sure is promoting innovation (Score:2, Insightful)
Re:So the market sure is promoting innovation (Score:2, Insightful)
The problem is, if you own MobileC.com, you cannot simply register MobileC.cm. If he has decided he wants to reap the benefits of the traffic that could be skimmed from your site, you are no longer in any position to register said name in Cambodia. If you want to go after anyone for trademark/copyright infringement, the owner of the domain is the government-owned Cambodian registrar. Good luck with that endeavor!
Re:So the market sure is promoting innovation (Score:3, Insightful)
Now if peiople aren't willing to pay high prices, then the market dives and the speculators get their fingers burned.
Bottom Feeder (Score:2, Insightful)
Re:So the market sure is promoting innovation (Score:3, Insightful)
The futures markets will be excited to hear about this (since they are, literally, a zero sum game)! The participants are not "real investors". Seriously, though, if you invest in anything but the "market" portfolio, what are you saying when you do so? If you buy a share of IBM stock at X price, you are saying that you think that share will become more valuable in the future (assuming risk aversion). But, if it does, the person who sold it to you has effectively "lost" that appreciation.
People have vastly different beliefs about the efficiency of our markets, but I believe that any sort of "wealth creation" would have already been price into the asset that you are purchasing. Thus, if you invest in a movie studio or a car company, the only way you create wealth is if the person who sold you the investment (even the IPO, if necessary) "loses" out by missing the appreciation.