With the number of domains being registered by domainers, domain tasters and various domain monetization companies, the cybersquatting debate continues to increase in intensity. In the interview with Professor Eric Goldman, the phenomena of domaining is explored. Are all domainers cybersquatters? What is the impact of domain tasting on the domain industry? Where is the domain monetization industry headed next? Explore these issues and more with Dr. Goldman in this vTalk radio interview.
ANNOUNCER: Welcome to vTalk Radio Tech Spotlight with your host, Damien Allen.
DAMIEN: Good afternoon, welcome to vTalk Radio Tech Spotlight. My name is Damien Allen, I'm in for the vacationing John Bentley and today we have with us via phone, Professor Eric Goldman of the Santa Clara University School of Law. He is the assistant professor/director of the school's high tech law institute. Before that he was the assistant professor at Marquette University Law School in Wisconsin, and his specialties are cyberlaw, cyberspace, intellectual properties and copyright. Welcome to the program, Eric, how are you doing today?
ERIC: Very well, thank you.
DAMIEN: Well today we're talking about domainers and domaining. It's a pretty hot subject with everything that's going on on the internet right now. Eric, what exactly is a domainer?
ERIC: Well, I think we're still working on an exact definition ...
but a typical domainer has some of the following attributes: They register a lot of domain names and in some cases they register them on an automated basis. Typically they create a very light content site onto that domain name. They will typically have some sort of ad platform that will generate revenue from that particular page. So the typical domainer has a large portfolio of domain names with content attached to their websites that's mostly ads.
DAMIEN: What would make a domainer different from a cybersquatter then?
ERIC: Well, that's one of the issues that we're wrestling with in the field is whether domainers are cybersquatters and there's been a strong split of opinion about that topic. In the late 1990's and even earlier than that, we had a very strong and relatively clear definition of cybersquatters. These are people who would acquire a domain name for the profitable resale of that domain name. Typically they would identify a trademark owner or a well known person register the domain name before that person could register it or that company could register it and then play a hold up game. Tell the company or person that if they wanted the domain name back, they would have to pay an extravagent amount of money and that is that and it's gotten so out of control that a couple of different types of regulations were introduced to squelch it which they've done pretty well. However, domain name isn't quite that. Often times the domainers are not particularly interested in profitable resale and, in fact, in my experience many times when domainers get complaints about domains, they'll just hand the domain name back, no questions asked and no money charged. They're not looking to make money from the resale of the domain names, they're looking to make money from the traffic that flows from the visitors who come to those particular domains and the sites that has them. So, we're not entirely sure if domainers are really just new and slightly different variation of cybersquatters or if they are really a new class of activity that wasn't contemplated by the problems we saw in the late 1990's.
DAMIEN: So, by listening to the psuedo definition of it is it can't really be nailed down at this point. It's more like a land speculation deal where you think this person may go up so you buy into it now?
ERIC: Well yeah, I think you're on the right track. In other words, think about when a city or a county builds a new stadium and because of that there is gonna be all these people who are gonna be driving to that stadium and from that stadium as part of going to a game or fair or some festival. So all the real estate along that route are gonna be suddently more valuable as there is more traffic coming to and from the stadium. Certainly domainers take advantage of the fact that people are trying to get to a particular place and they're using the technology of domain names to try and get where they are going and along the way domainers hope to make some money from these people on their journey.
DAMIEN: With typo squatting, which would be the missed-typing of something you are looking for that would direct you to a domain name that was set up by somebody who thinks that while somebody is automatically gonna drop a G when the type this, is this such a huge business as there is such a flow of this that this has become the new, how do I put it, has this become the new Starbucks, this is the new franchise business of the world, this is the next business opportunity for everybody... is that what's causing such a huge issue that anybody can go out there and register a bunch of domain names and generate traffic to them and then possibly either generate revenue or hold somebodies name or trademark hostage for blackmail. You give me this much money, you can have your name back? This has become the new franchise business then?
ERIC: It's become a very large business and it's in some ways has low barriers to entry. You don't need a whole lot of equipment or plan to build a business like this. On the other hand, the barriers to entry have gone up significantly because there has been a general rise in domain name valuations due to all the speculative activity of people trying to find juicy domain names that will have significant traffic. I think the broader question you are hinting at is, where are these people coming from? And how much of this is driven by people with fat fingers who miss-type domain names or can't spell and miss-spell that domain names. Or how much of this is caused yet something else? I think that's one of the magic questions we don't really understand when it comes to the domain name business. The working theory is that there are a lot of people with fat fingers or bad spelling, and therefore, domainers know they don't intentionally register domains that are typographical errors of some famous trademark. Nevertheless, the'll do that as part of their automated registration processes. So they'll pick up all these things that in effect are the equivalent of a typo squatted domain name. So in the past, back in the glory days of cybersquatting.... now these people do that deliberately. Here it's intentional, but still it has the same effect. But I'm still wondering, and I still have an open investigation into how many people are really coming to these sites, not because of their fat fingers or their bad typing skills, but because of the fact that these sites are also indexed in the search engines. I'm still trying to figure out how many people are getting to these sites because of good search engine placement as opposed to typing in the domain names into their address bars. There's a couple of reasons why I'm suspect about the long term viability of people typing in domain names into address bars. First of all, so many people got starred doing that because if they mistyped things back in the old days, they would get pop ups and porn. And so a lot of people I think learned not to type in domain names into the address bar. The other thing is that . . . . many people use search engines as the first step in their navigation process. So, they will actually type in domain names into the search engine as a way of getting where they're going. So, instead of using the address bar in their browser, they will use a search tool bar or they will use the field at a search engine to type in the exact same text. So, I'm not entirely clear where these people are coming from, but to be a clear understanding is that this is a multi-billion dollar industry today, so it is now an integral part of the internet economy.
DAMIEN: We are in the studio today via telephone with Professor Eric Goldman of Santa Clara University School of Law. This is VTalk Radio's Tech Spotlight. We're going to take a short break for these commercial announcements. We'll be right back.
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DAMIEN: Good afternoon. Welcome back to the VTalk Radio Tech Spotlight. I am Damien Allen, in for John Bentley. We are joined via phone in the studio by Professor Eric Goldman of Santa Clara University School of Law; specialty in high-tech law disputes, cyberspace law, intellectual properties. And today, we are discussing the domainer issue. We have been talking about what a domainer is and, before the break, we were talking about how people will use search engines as the way to get to where they are going and what they are looking for by typing in an entire domain name. And, Eric, my question to you is, when we go to these sites, say I'm looking for damienallen.com and I go there and somebody owns that domain name, I see a lot of Google ad bars on there. Everyone's up in arms about the domainers taking all these sites up, buying these sites up, but Google, which is probably the number one search engine in the world at this point, tends to do an awful lot of business through these guys, so are we looking at the search engines being in cahoots with domainers or cybersquatters? How does this work?
ERIC: Well, there is no question that a domain name is inextricably tied with advertising, and in particular the self-service advertising programs that have been offered by people like Google. So, if you look at when a domain name has really taken off, it's not an accident that it's about the time that Google made it so easy for people to put ads onto their websites. And, there's no question, I think, also, that the search engines generally, and Google in particular, derive significant economic value from their role in domain names. And, so, if we think about the drivers of the domain name industry, we could literally starve the business, cut the wind out of its sails, if the advertising was cut off from business. In other words, if Google turned tail and said we don't want to participate in the domain name business, then that would likely put a huge crimp in the business, if not shut it down entirely. Google's role in the domain name business has not been ignored. In the middle of this year, they got sued by a company called Vulcan Golf for their role in the domain name process. Google has a program for what they call domain name parking. Basically, a business that has registered a domain name can simply hand off the domain name to Google and then Google will build the web page containing its ads from there, so the web business doesn't really have to do any more than register its own domains and toss them over the wall to Google, and Google runs from there. And, a plaintiff in a lawsuit obviously says that Google is really in the domain name business; it's not the people registering the domain names, because Google is the one handling all of the work after the domain name registration.
DAMIEN: So, at this point, they are renting the space from the original domainer and they're both making money off of it, is that my understanding?
ERIC: Yeah, I mean, basically, the idea is the domain name owner has an asset, but they hand that asset over to Google, and Google then exploits the asset and they share the revenue from it. That's the argument that the plaintiff has made, and certainly the facts could tell that story.
DAMIEN: In your opinion, how many domainers are there out there right now? Of course, as we have been discussing, this has been a booming business. I've seen ads, articles, blogs, Pacific rim, Europe,Germany; everybody's getting into this now. Where do they come from? Why are they coming? What's the legitimacy of this? What makes this a legitimate thing?
ERIC: Well, lets break those questions down for a moment. So, with respect to the number of domainers out there, I don't actually have a good sense about the number. There are a few large and well-known domainers. My guess is that they have the lion's share of the market, but I don't have a good sense about how many others are in this industry; it could be that there are dozens or hundreds of participants, but my guess is, like many other industries, it's fairly concentrated and there's a few big players and they're really the drivers of the industry. But, maybe we could talk a little bit about the legitimacy of domaining, because this is definitely the crux of the matter from a litigation standpoint, and I think it's also the crux of the matter from thinking about how we want to build an information architecture for the internet generally. I can tell two stories with respect to domain name legitimacy. Let's look at it from the trademark owner's perspective. The trademark owner says if someone is typing in my trademark into their address bar, they are looking for me, and if somebody interposes between the consumer and me, and offers that user the ability to go somewhere else; for example, to my competitors; that person is stealing business from me. And viewed that way, domaining is an illegitimate business. All it's doing is taking people who want to make a match, the user trying to find the trademark owner and the trademark owner who wants to find its customer, and having those people diverted away, sent off to a place that they really may not want to go. But, there's another way of viewing domaining that I think takes a much more consumer-centric view; which is, from a consumer . . . assume for a moment that you mistype a domain name into the address bar, what is the best user experience you can have at that point? Well, we know some things that you don't want to have happen. Typically, users don't want pop-ups and porn with a mistyped domain name. But what should happen then? In the old days, it used to be that we would get 404 pages. If you mistyped a domain name, you would get a 404, saying you are at the wrong place; figure out what you did wrong and try and go somewhere else. And, in theory, domainers are saying we know that you may have typed in something and we are going to try and help you figure out what you are looking for. We'll give you a range of options that might be responsive to your needs. That way, perhaps domainers are actually helping consumers get from where they try to go to their ultimate destination. So, we have two very different stories about the legitimacy of the domaining business. The trademark owner view is that it's just stealing their customers. The consumer . . . view is maybe domainers are helping me get where I want to go faster than a 404 page would.
DAMIEN: It is the information superhighway, and this will be an issue that will be hot for quite a while, I'm quite certain. We have been speaking with Professor Eric Goldman of Santa Clara University School of Law. You can visit Eric's website at www.ericgoldman.org for more information on Eric in this issue, as well as articles on other aspects of internet and cyberspace. Thank you very much for joining us today, Eric. A lot of good information.
ERIC: It's a pleasure talking to you.
DAMIEN: You have been listening to the VTalk Radio Tech Spotlight. This is Damien Allen. Thank you for listening. Have a great afternoon.
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