Domain Investors vs. CyberSquatters

It’s two terms that should never be used together in the same sentence but all too frequently are “Domain Investors” (or “Domainers”) and “CyberSquatters.” The funny thing is, many cybersquatters have never heard of Domaining and don’t even know there is a domain industry, yet all Domainers know about CyberSquatters. These kind of generalizations are what make the entire industry look bad when so many people are doing amazing and creative things.

So I thought it was time to provide a top three list of differences between Domain Investors who legitimately buy and sell domains, and cybersquatters who ruin it for the rest of us. Reporters, take heed and make sure you know the difference. Just like an investor that owns 100 homes but only lives in one isn’t a home-squatter, neither is a domain investor who does the same. It’s digital real estate and just like most home investors don’t steal homes from other people and sit on them, neither do Domain Investors.

  1. CyberSquatters buy known Trademarks Domain Investors do not. CyberSquatters seek out new companies and then buy as many domains as they can with that company name in it. They also squat on well-known brands and sometimes even try to sell these to the brands themselves. Squatters may also own typos of major brands, they aren’t thinking creatively, instead, focus on what can make them money right now. Domain Investors buy generic domains that are meaningful words or phrases that can be the foundation of an online business.
  2. CyberSquatting is not an industry, Domain Investing is. People don’t build CyberSquatting businesses and attend CyberSquatting conferences. People do build Domain Investing businesses and attend Domain Investing conferences like TRAFFIC and DOMAINfest. Domain Investing is a real, viable investment strategy that people all of the world have used to build very successful online businesses. CyberSquatting is a way that people make a quick buck online, just like your average scammer, CyberSquatters don’t have a consistent way to make money so hop around from one thing to another. Domain Investors build and scale real businesses providing jobs for people in the US and abroad and pay taxes just like the rest of us!
  3. Domain Investors are proud of what they do, CyberSquatters hide what they do. My friends and family all know I invest in domain names and I love sharing my updates with all of them. You won’t find a CyberSquatter out there who will have family or friends excited to hear that they just bought some company’s domain and are holding it for ransom. Domain Investors all over the world are running successful and growing online businesses, they are proud of what they do just like any other investor would be. CyberSquatters are rarely honest about what they do and will often hide where they really make their money.
I’ll be the first to say, “I can’t stand CyberSquatters!” They make us all look bad. The best thing you can do as a reporter is help people understand the difference and as Domainers just keep building creative and innovative businesses and show the world what a great asset class domain names are. For years investors have made money buying gold, stocks, bond, houses, it’s 2012 and domain names are a real asset class and Domain Investors pioneers chiseling out there space in a new investment world.

{ 21 comments… add one }

  • Jay December 10, 2012, 4:28 pm

    I am with you, but… You may buy domain name that matches a trademark you are not aware of. Are you then CyberSquatter? I would correct your definition a little bit.

    Reply
  • Jen December 10, 2012, 5:07 pm

    Does buying personal surnames that maybe somewhat well known in certain circles constitute cybersquatting?

    For example, I bought first and last name surnames that dropped and expired recently.

    2 of those are professional executives it seems in the general music industry. One within a music association organization the other it appears a well known blogger.

    The 3rd first and last name surname is held by a writer of Forbes.com

    I’m new to domainning but was initially drawn to these names because they all sounded like they’d belong to a fairly good number of corporate types and looks like my hunch was right.

    Just curious though if this is considered cyber squatting?

    Thanks.

    Reply
  • Jim December 10, 2012, 5:50 pm

    Queena Investment Co, Ltd specialized company registered domain name and trademark others.

    Reply
  • Paul December 10, 2012, 11:04 pm

    @ Jay

    It takes 5 minutes to check the IP rights of any name so there’s no excuse.

    Reply
  • Joe December 11, 2012, 3:19 am

    Morgan, the most important one: Domainers are everyday people who run a legit business while cybersquatters are criminals who deserve to go to jail.

    Yesterday, DNW published an article dealing with CNN not actively protecting their brands. Andrew also mentioned a couple of available domain names that CNN should have secured and guess what? The usual criminal set in and the 2 TM domains were gone in minutes.

    No sympathy for these lowlives, they are the cancer of domaining.

    Reply
  • Joe Par December 11, 2012, 6:42 am

    Good points, but the problem is that if you own a valuable domain name and a big company wants it all they have to do is file a UDRP complaint and have a great chance of getting it, we have all seen some of the ridiculous decisions handed down by wipo and naf, and then have the domain owner classified as a cyber squatter.
    On the other side of the coin you have some of top people in the industry do what could be called cyber squatting and no one says a thing, example: after the BP oil spill in the Gulf of Mexico, one of the top guys in the industry(the king) registered many domains related to it, and from what I remember he was talked about how smart he was for doing it.

    I think that is why reporters consider investors and cyber squatters equal.

    Reply
  • Jen December 11, 2012, 7:42 am

    Does buying personal surnames that maybe somewhat well known in certain circles constitute cybersquatting?

    For example, I bought first and last name surnames that dropped and expired recently.

    2 of those are professional executives it seems in the general music industry. One within a music association organization the other it appears a well known blogger.

    The 3rd first and last name surname is held by a writer of Forbes.com

    I’m new to domainning but was initially drawn to these names because they all sounded like they’d belong to a fairly good number of corporate types and looks like my hunch was right.

    Just curious though if this is considered cyber squatting?

    Thanks.

    Reply
  • john harrison December 11, 2012, 8:06 am

    @Joe

    I read the same article you mention. It is terrible that these names went. Maybe someone from the company read the same article and took heed 🙂 Unlikely…

    Reply
  • Morgan December 11, 2012, 12:18 pm

    @Joe – well said and I completely agree!

    Reply
  • Morgan December 11, 2012, 12:20 pm

    @Jen – unless you plan to develop it or sell it to a friend who’s name it matches I’m not sure why you’d want someone else’s name. Look for real investments which are typically well-known generic words, that’s your best bet at building a valuable portfolio.

    Holding-onto someone’s name and asking for a small fortune for it really isn’t a great way to build a real business.

    Just think, is this something you’d be proud to tell your friends and family about? I’d much rather tell my friends and family that I sold something like “NewHomes.com” than “BillSmith.com”, wouldn’t you agree?

    Reply
  • Wayne December 11, 2012, 4:19 pm

    Morgan,
    I completely agree with your disdain for cybersquatters. They are the liars, cheaters and identity thieves of domaining. In any industry, there are those who want to “get rich quick,” by breaking the rules if they believe they can get away with it – by any and all means imaginable.
    Conversely, the rewards in this industry are great if you are willing to do the work – consistently. This being said, it becomes incumbent upon those of us who are willing to work honestly and legitimately to set the needed example and provide the appropriate education.
    The best any of us can do is advocate for integrity in our industry and “walk our talk.”
    And you are one of the best at doing this – thanks again for all you do.

    Reply
  • Jen December 11, 2012, 5:14 pm

    @ Morgan

    Point taken. I recall viewing a video on The Art of The Name blog I think where the domainer referenced having someone’s name they sold. I also recall seeing that Toby Clements buys surnames in his newsletter I received a month or so ago. Again, I’m new to this side of the equation and am possibly getting this all wrong.

    No problem. I only spent $1 on each domain name anyway with several of the domain coupons floating around. I’ll just let them expire when the time comes.

    Reply
  • Jen December 12, 2012, 11:07 am

    Hey Morgan,

    No sooner than yesterday when I thought I’d hang up my boots on keeping personal names that I recently bought that had simply expired, along comes this sale of kevingilligan.com for $2595. It seems like the original owner, whose first name was Paul last name Gilligan from the UK had the domain from 2007 up thru April, 2011 when he let it expire.

    According to domaintools, the name completely dropped from 1and1.com’s register in April of 2011 and was picked up in May by nametell.com and parked as domain for sale from May 2011 up until last month, November.

    According to today’s domainnamewire.com End User domain sales list, http://domainnamewire.com/2012/12/12/31-end-user-domain-sales/ kevingilligan.com was purchased by Capella Education Company for their CEO Kevin Gilligan.

    Interesting. Just curious whether Nametell who had the foresight to buy this domain be considered cybersquatters in this instance?

    Reply
    • Namer March 12, 2020, 2:13 pm

      Registering people’s names is a sheisty thing to do and takes zero skill. I always encourage people to take their own name online because of people out there who engage in such activities. You’ll most likely tick someone off and honestly, they’ll just wait till you drop it. It’s a lose lose situation because you cannot put anything on there under their name or they can file a law suit against you (I would) and it’s lose lose again because you’re paying to keep their domain which they won’t buy! Then you let those drop, they buy it and guess who ends up looking like a loser. Nobody respects that sort of a domainer and after reading Toby’s fiasco, I wouldn’t consider him a role model. The irony is that he doesn’t own his last name.

      Reply
  • Joe Par December 16, 2012, 6:49 am

    Is kayaking.com not cyber squatting on kayak.com?

    Reply
  • jake January 15, 2013, 3:44 pm

    If you do not have a legitimate business, product or service associated with the domain name you purchased, and instead are just hoping that someone down the road will pay you for that domain. You are cybersquatting or should be considered as such!

    Reply
  • Bob H March 21, 2013, 11:32 am

    Dress it up however you like. “Domain investors” is a silly term and they’re just as bad as cybersquatters. They’re people who are registering a domain in bad faith, NOT using it for a legitimate business of that name, but keeping it in the hopes of selling it at an unfair rate to someone who does wish to use said name in official business.

    Anyone who purchases a domain for the sole purpose of reselling it to someone is a scumbag.

    Reply
    • Miss Out March 12, 2020, 2:31 pm

      Sounds like somebody missed out.

      A generic term is open for anybody to use. Consider that a free market. What you propose is essentially more red tape preventing a free market. Keep in mind that the domains are not given for free. There is a carrying cost associated with it. There’s no shortage of domain names. With 100s of .whatever extensions and cctld extensions, you can find something. A catchy domain name is a digital asset. If there were a requirement for a business, those that want the domain would create a mickey mouse “business” to secure the name and then say “oops, it’s not profitable”. The fact that domains were worth more than the companies that owned them doing real business shows there is a demand for domain names. The term “unfair rate” is referred to as the market price. If you don’t agree with it, you don’t have to purchase it. Nobody is forcing you to buy the domain name.

      Reply
  • Sebastian March 31, 2013, 10:56 pm

    Bob H, that is completely false where ethical domain investors are concerned. An ethical domain investor buys domains containing generic phrases and develops a useful web site offering knowledge and/or entertainment. If they sell it later for a profit then they are morally and legally entitled to because of the effort spent on developing the domain. It is no different to real estate investors who buy, develop and sell a home for a profit to recover expenditure, time spent developing the home and then hopefully making a bit of profit from it. Say they add solar power and a few window blinds at the minimum to achieve the associated benefits in that home. Is there anything morally or legally wrong with that? No, just as in ethical domain investing.

    Reply
  • Marcelo November 18, 2013, 11:51 pm

    Reply
  • Karl B. Hensel March 9, 2017, 4:04 pm

    Thanks for clearly differentiating squatting from investing. One of my domains has been trademarked and put into usage and now my concern is they may attempt a reverse hijacking. Why cant a domain owner counter sue for legal expenses when defending or can they?

    Reply

Leave a Comment