Domain Brokers, and Squatters and Front-Runners, Oh My!
For many, choosing a domain name is an integral part of starting a new business, even if the actual business won’t be conducted online. All sorts of companies have realized the benefit of having a web presence, and being “findable” on the internet. The problem is that the soaring popularity of the internet has created an extremely high demand for good, easily remembered domain names.
According to a recent Denver Business Journal article, there have been allegations in the past about a practice called front-running, where someone funnels tips to domain brokers when people search for domain names, allowing brokers to buy the domains and sell them back at a very inflated price. Despite concrete evidence, Network Solutions instituted a policy of placing four day hold on domain names after someone searches for them, to combat front-running. However, new allegations indicate that they may be involved in a form of profiteering by hiking the price during this holding period.
So, what can you do to protect yourself from having your domain names snatched up by a broker or squatter? First off, do your homework before going to a domain registrar. We have gotten into the habit of typing our URL ideas into a browser to see what comes up. If there isn’t a site, we keep the name on our list. Once we’ve got an idea of what domains might be available, we mull them over, and pick our top choices. When we’re ready to buy, we go to a registrar to look up our top choice, and if it’s available, we buy it right then.
If you got other ideas or strategies related to domain name registration, let our readers know by leaving a comment!
“We have gotten into the habit of typing our URL ideas into a browser to see what comes up.”
This is exactly what you *shouldn’t* do. If you type it into your browser then your ISP has a record of you entering a domain that doesn’t exist. Many ISPs sell this data.
In practice, domain registrars rarely sell or use the data themselves. You’re much more likely to experience “front running” by typing your future domain into the browser.
Hello Rob.
I would suggest you name names in this story. Where did you do the whois look up for your domain ? Who did you end up having to buy it from ? This is all important to make this story believable and it will provide me with some “evidence” to help you figure this out.
Additionally, I won’t deny you that front-running occurs, but front-running isn’t necessarily always what is happening when you come back later and find a domain name is taken. Many “domain brokers” (as you call them) are actually registering massive (1m+) lists of domains in a process called domain tasting. They buy the domains for a period of 4 days and test them for traffic, etc and then delete any that they decide are not valuable for traffic (or resale). The name you searched may have just been one of the many names they picked up.
As for NetworkSolutions front-running. NSI even admits that they are registering domains that are searched on their home page. You can see the story unfold here:
http://www.domainnamenews.com/featured/domain-registrar-network-solutions-front-running-on-whois-searches/1359
and
http://www.domainnamenews.com/registrars/network-solutions-pr-damage-control/1362
and
http://www.domainnamenews.com/registrars/network-solutions-responds-to-front-running-allegations-part-ii/1364
They aren’t charging more for these domains than they normally would but they are charging more than other registrars. So for example, you could search for whateveryouwanteddomain.com at NSI one day and they would register it and hold on to it for 4 days and you’d have to pay their fees to register with them and only them. OR you could wait 4 days, hope no one else registers the domain and that NSI indeed releases the domain name back into the available pool. Many people would tend to search at NSI and then maybe make a decision to buy elsewhere (because it’s MUCH cheaper at places like namecheap.com) and if they did the search the domain name would then be unavailable to register anywhere else. NSI is forcing people to buy from them because they showed interest in a domain.
You can probably make your judgement not on our stories but on the comments alone in the article. NSI is also being served a class action law suit over this issue.
http://www.domainnamenews.com/featured/class-action-suit-against-network-solutions-and-icann-underway/1450
Lastly and most importantly, your suggestion of typing it in the browser and seeing if a domain resolves is a HORRIBLE suggestion. This is a sure-fire way to increase the chances that the domain will be registered before you come back after mulling things over. When you type in a URL in a browser you are passing informatio on to multiple computers that you are looking for a specific domain (mainly at the ISP level and hops in between) This is all information that is logged and reported. That information (that someone typed in/searched for the URL) is what is sold to these so-called brokers you refer to. ISPs , dns providers, search box companies, spyware, adware, etc are the ones that can be potentially harvesting this data and selling the information. The best way to check availabilty on domains is to go right to the source … the registry, in the case of .com and .net that would be verisign (http://registrar.verisign-grs.com/whois/) You still would have to even put a little bit of faith in Verisign not selling off searches but that’s the direct source of the information really with no one in the middle. Here’s an article about verisign selling data to the registrars though so really there’s not many people you can really trust but for sure the way you are describing is the most common way that people know what domains are being looked up and then register them.
One more thing, what you describe is not necessarily squatting either
I’ll grant you that track what people do and registering the domains before them is devious but it’s a loophole that you should know is not illegal. It should be a loophole that is closed . . . and the best bet is to tell ICANN (www.icann.org) Call them up and complain about front-running. Cybersquatting though is defined quite well here : http://en.wikipedia.org/wiki/Cybersquatting . Unless you have a trademark on a term, the other guy is just using “insider information” to beat you to the punch.
My advice : Fight back . . . Don’t wait to register a domain. It’s first come first served and you’ll get lose more than you’ll win if you wait. Mull over your ideas on paper. Pick a few or 10 or 20. Domains are cheap (especially at places like namecheap) so just register it if you think of the idea.. . .it’s less than $10 . If you have 10 ideas register all 10. If you don’t use one sell it off at a place like sedo or afternic or just call it a loss. Otherwise you snooze you loose and it can cost you much more.
Anyway was my comment longer than your post ? Hope it helps. Adam
So the price for Network Solutions domains aren’t hiked up regardless of whether or not they reserve them in this process. The prices are what they are. I don’t know why this allegation keeps flying around on the Internet. Yes they are more expensive than cheap companies like GoDaddy. Why? Because they actually provide support which GoDaddy does not do very well. I’m actually glad that NetSol provides a hold on these domains. Why? Because if I have an idea but need to tell a client and get their approval, I know it won’t be snatched up for up to four days. It sometimes takes that long to get a client to tell me whether or not they approve, I’m just glad they offer it for free.
Also other registrars like GoDaddy have been accused of this same practice. Honestly which company would I trust more? One that airs SuperBowl ads exploiting women and can’t even go public because they can’t turn a profit (Godaddy) or one that has been around forever and is quite profitable and more importantly STABLE (Network Solutions)? I pass along the cost to my clients who are more than happy to pay for peace of mind and a decent brand name behind them.
It’s annoying how badly this issue is being distorted in the media.
In short, I’d have to disagree. The domains we lost were ones we typed into two different registrars. We haven’t seen similar action with our new methods.
To respond in more detail, I am aware of the differences between squatting, domain brokers, etc. The link provided to the Denver Business Journal goes into more detail about all of these topics, as well as tasting. This wasn’t meant to be an all inclusive report on domain scandals, but rather a discussion of my recent experiences and how they related to the DBJ article.
I never mentioned GoDaddy, nor have I ever done business with them. I don’t think you should assume anything about what registrars we were using just because these domains got snatched up. The reason I don’t think this was all a random coincidence is related to the timing between my search and when the domains got purchased each time. Network Solutions cannot be the only viable place to register domains, and it isn’t always possible to register a domain immediately for a variety of reasons, including the uncontrollable, like an internet outage.
Working out your domain name choices on paper doesn’t get you anywhere if every option you like ends up being taken already, which happens quite frequently.
Unfortunately, the DBJ article is very inaccurate.
Hi Rob,
I work at Network Solutions. We know how important this issue is for everyone, and not only did we listen, we’re acting.
On June 26, 2008 ICANN can vote an important issue to resolve to resolve front running for once and for all. Network Solutions is advocating that ICANN acts now, and we have published an official statement on our web site to that end.
Please excuse this URL, but given the seriousness of this issue, it was appropriate to provide a link: http://tinyurl.com/63yaox
Shashi
Front Running is only a small part of the problem.
Registrar assisted squatting is just as bad as holding a site for ransom. The fact that putting a “Search page” behind the domain name makes it JUST legitimate enough to keep you out of court doesn’t make it right.
Pick any two words that wouldn’t be a standard “saught after” name combos (I grabbed these at random)
“Camera and stand” “closet and hanger” “yard and grass”
yardgrass.com, camerastand.com and closethanger.com are obviously sites engineered to get you to try to buy the domain name. The “search links” are all re-directs from a major engines that re-direct to hundreds of these “acceptable squatting” sites.
The “advertise on this site” is a front and just used as an excuse to hold the site hostage from the person who needs/will eventually need it.
All the major registrars engage in similar behavior and it’s a very devious business practice. (the third one on here even proudly proclaims “Buy this domain now $1449 Network Solutions”
Being a “Guiding force” in the battle against front running while you allow this kind of activity is like patting yourself for putting a gate on a yard with no fence.
Internet marketing has helped me attract not only visitors but also new clients. One part of the credit goes to Jeff Paul’s products which helped me enhance my knowledge.