

Ask HN: Economics of domain hoarders - iqster

I'm in the process of building a Twitter app. Taking a break from coding (hey ... it's new years day), I go over to godaddy and try to register a decent sounding domain name. As you can guess, a large fraction of domain names that include "twit" or "tweet" are taken. I expected this ... there are supposedly 300K twitter apps out there. Normally, I'd move from name-to-name quickly ... and just keep searching until I found a decent name. Today, however, I decided to check out what "lives" at these domain names. Again, no surprise ... crap, crap and more crap. So HN: what are the economics for people who hoard domain names with no intention of setting up meaningful websites?
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jasonmcalacanis
.co did something interesting by making domains $30... which is no different
than $8 if you're buying a small number of them.

However, these is a huge issue if you're buying 100 or 500 or 1,000.

Moving domains to $25 a year would probably reduce the amount of hoarding, as
it would narrow people's focus.

For Weblogs Inc. I bought 3,000 domains when we started, and for Mahalo I've
bought 2,000 or so. It's a trivial cost to buy all the possible options you
might need. If the economics were 2, 3, or 4x i would have narrowed the focus
down considerably.

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cmontgomeryb
A friend had a client who purchased 1000 domains for his site. I've never even
imagined buying this many - can you explain how you use them?

Do they all point to the same site? Is the reason simply to catch people who
may mistype your real URL ie ycominator, ycombinator, ycombinates etc?

I find this fascinating, as even with these thoughts in mind I could only get
up to about 10-20 domains for my current project! Thanks for any insight.

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gexla
Simple. Domains are so cheap that if you buy one for ~ $8 then you only need
to make that money back in one year for it to be profitable. That's less than
70 cents per month for a .com. There are a number of parking services where
making that much money isn't terribly difficult. So... the more you buy, the
more money you could possibly make. Some might just make their money back,
some might do very well. Overall, the domaineers are likely at least breaking
even. Add in the fact that they have a bit of experience doing this, then for
sure they are making money.

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iqster
Good point. 70 cents a month is likely easy to recover.

Another thought I had was hoarders attempting to grab usable names in order to
extort real companies to pony up. I believe this happened a lot in the late
90s. Wonder how common it is today?

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michaelelliot
This has become quite a fruitless endeavor. WIPO and other domain arbitrators
will swiftly hand domains over to their rightful owners if there is a
trademark or history of trading under a particular name.

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arn
I think you'll find two audiences. There are those who are looking to flip
domain names and pick up a lot of them to resell, then there are those who buy
domains more defensively to try to figure out the best domain name for their
ideas. In the end, it's just incredibly cheap to get a domain name, so it's no
barrier to entry.

If I have an idea for a site, the first thing I do is try to find a good
domain for it. Depending on how serious I am about the site idea, I will pick
up any serious contender for a name. That means for any particular idea, I
might register 1-20 domains depending on various factors like how serious of
an idea it is and how quickly I find "the" domain name. I'll even buy from
set-price brokers up to 4 figures for a domain I think I will eventually use.

My portfolio is about 350 domains at the moment, which costs me ~$3150 a year
to maintain. That is a footnote expense in almost any profitable small
business.

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sabj
The other category to consider are those domainers who hold websites which are
_not_ typically covered in ads; they might just have a notice on them saying
"contact firm X for details." In many cases, I have even written such outfits
saying, "is XYZ.com for sale?" and been told no, it isn't, or something like
that. I have seen this for some domains which are more high-end, more generic
useful words and less just pure spam.

This said, it's still a disgusting waste of internet real estate.

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iwwr
It would be interesting if domains could be bought and owned (instead of being
rented like today) by means of cryptographic certificates. This would allow
anonymous ownership as well.

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thefox
just-another-twitter-app.com maybe.

