Austin360 blogs > Digital Savant > Archives > 2007 > October > 10 > Entry
The ethics of domain name selling
A few months ago, when my wife was still pregnant, I registered the domain name “Babycation.com.”
I had been making jokes with a friend about how my time off from work for paternity leave was going to be one big vacation where I’d get to catch up on lots of book reading and TV. (Not surprisingly, I was wrong on that.) I took to calling my paternity leave my “Babycation” and while we were discussing this, I checked and saw the domain name was available.
I bought it for about $10. And forgot all about it.
A few days ago, I got an e-mail from someone who wanted to buy the domain. The man said he and his wife were starting a baby-related business and wanted to use babycation.com.
I wasn’t sure how to respond. In the e-mail, the guy didn’t say he wanted to purchase the domain itself, just that he wanted to use it for his business. Did he want to rent it? Was I going to become some sort of virtual slumlord? What if I sold the domain name and he went off and created the next google.com? What if babycation.com became a billion-dollar business? Should I ask for a cut of the business instead of selling the domain outright?
I wrote back asking for more details. The guy replied that he and his wife had just had a baby and wanted to start a small business. He was interested in buying the domain name, which would be a pretty easy process on my domain registrar, godaddy.com.
I asked a friend of mine who works in the Internet business what he’d do. He’s sold several domains over the years, some of them for established sites that had lots of traffic. He suggested I offer it for sale for $1,000, a pretty crazy profit margin, but not unusual for a domain that somebody wants to buy.
I wrote the guy back and told him I would sell him babycation.com for $1,000. I told him in the e-mail that I was open to negotiation and would very likely accept a lower offer. (Check out my hardball tactics.)
He wrote back and he and his wife just had an idea for a small business and that there was no way they could pay that kind of money. He didn’t make a counter-offer. He gave up.
And now I feel terrible. I feel greedy. I feel like I should write the guy back and offer to give him the domain on the cheap and help him and his wife out.
Then again, all I’m going by is a few very short e-mails from a guy I don’t even know. How do I know that this newborn even exists and that I wasn’t being approached by a domain hoarder?
A few years ago, I lost a domain name for my personal site when I forgot to pay for its renewal. It was snapped up quickly by a domain hoarder based in Colorado. I wrote him a letter and made phone calls asking for the opportunity to buy it back. The guy tried to sell it back to me at a price I couldn’t afford. I told him that the only reason that domain name got traffic was because of all the work I’d put into establishing the site. He told me to write him a letter via certified mail listing the reasons that the site belonged to me. He made me jump through a bunch of hoops to get my domain back. Then he told me I couldn’t have it. I really hated that guy.
I ended up purchasing a similar domain and putting my site back up at that address. In the end, it was the content of the Web site, not the domain name itself that was important. My readers followed and within a year, traffic to the old domain dried up.
If this guy were to register a similar domain name, would anyone care if it’s called babycation.com or babycation.net? Or even baby-cation.com?
I’m not sure exactly what to do now, but it’s made me think about the value of a name and how hard it is to know what a simple idea is worth.
What do you think? What should I do?
Permalink | Comments (8) | Post your comment Categories: Internet
Comments
By DomainerPro.com
October 11, 2007 11:51 PM | Link to this
I suggest that you offer him a lease. Domain leasing is a growing business and there are even companies that will manage the process, so it's all automatic and you don't have to worry about collecting a check every month. Lease it for $20 a month, with a one year contract renewable at the end of the year. This way it's making you money (even if only a little), and it's not a burden on the business fellow.
By the way, you refer to "domain hoarders" in what is clearly a derisive tone. But here you are, sitting on a domain that you paid $10 for and that someone else wants to use to start a business, and you won't sell it for less than an exorbitant markup. I wonder what that makes you?
Omar replies: When I refer to the domain hoarder, I'm talking about a specific person who took advantage of an existing property when it expired and siphoned off traffic that had been built over several years of hard work. He refused all reasonable requests to sell the site back to the original owner and threatened legal action when I posted the facts of the situation on a new site. There are plenty of legitimate domain traders/sellers. This guy wasn't one of them.
As to the "exorbitant markup," I told the guy in the e-mail that I'd be willing to negotiate for a lower price and he didn't even make a counter offer. I'd have taken a lot less if he'd asked.
Domain leasing does sound like a good idea, though -- when I replied to original e-mail, I asked if he wanted to rent the domain or buy it outright and he said he wanted to buy it.
By Primo
October 11, 2007 11:07 PM | Link to this
Babycation? Just goes to show the bogus domains people will pay for. My portfolio must be worth mega $ with people willing to buy anything these days.
Omar replies: Thanks! I think...
By Andrew
October 11, 2007 5:33 PM | Link to this
Here's the answer to your question about baby-cation.com and babycation.net, from a recent event in Austin:
http://domainnamewire.com/2007/08/28/domain-names-for-boostrappers/
By Miles
October 11, 2007 4:39 PM | Link to this
As a chemical engineer, it took me awhile to figure out that the intended pronunciation of Babycation is for it to rhyme with vacation.
I saw it as baby-CAT-ion, and could not figure out why anyone would want a baby with a surplus of protons :-)
By JP
October 11, 2007 12:40 PM | Link to this
Why did you register the domain name to begin with? Obviously you felt like you had something special and wanted to make it officially your own. Personally, I think you were right and don't blame you for not selling.
If the people trying to start their own business can't afford $1,000 for a domain, or worse yet, can't come up with something original themselves, they have worse problems than domain names.
I think they were domain shopping and tried to low-ball you. It's not like they thought of the name as well, and you just registered it first. After all, they as entepreneurs are capitlists too, and are probably just trying to acquire intellectual property at the cheapest price possible.
Omar replies: You guys are making me feel a lot better about my decision. Thanks for all the feedback.
By Domainer's Gazette
October 11, 2007 6:24 AM | Link to this
Great article Omar..
seems you've stumbled into my world of domaining (ie. buying, building, developing (and sometimes selling) domain names). Neat to see it through someone else's eyes.
In regards to babycation.com, there are a few companies that exist to help users sell domain names - those being Sedo.com, BuyDomains.com, and TDNAM.com. If you'd like to see rough asking prices of domains on the market, check those sites out..
Also, there's a big domain name conference occuring right now, named Targeted Traffic (www.targetedtraffic.com) that's planning on auctioning some valuable domain names this Friday. A few examples are MiniatureGolf.com, BathingSuit.com, and MaineLobsters.com. They usually broadcast the auction if you'd like to listen in..
hope this helps..
(I also write a domaining blog at domainersgazette.com if you'd like to read more about the industry..)
-peter
By Scott Alliy
October 11, 2007 5:51 AM | Link to this
The gest of this article can be best summed up in the final paragraph ...
"but it's made me think about the value of a name and how hard it is to know what a simple idea is worth."
The value is relative. I have personally taken a brandable name and turned it into a multi million dollar business.
Intelectual property value is hard to define unless you look at it in terms of the end.
lets take a visual commodity Gasoline for example.
It's true worth is in the fact that it will move your vehicle to the store doctor work or to family gatherings vacation and more.
If you don't need to go anywhere gas is wrth nothing to you.
then again while gas will help start fires using it in this manner (aka arson) is not good.
In the end like a fine piece of art the true value is in the eyes or in the case of domain names in the mind of the beholder.
There is only one domain name like it and there is only one best buyer for it.
Do not feel sad guilty or otherwise negative since you were given a gift of insight and the ability to act upon that. Think of yourself of curator of the property, tasked with holding it for the new rightful owner and when they arrive you will know.
Great article IMO
SA
Omar replies: Millions of dollars? Maybe you should buy babycation.com!
By Adam Fairbanks (Tidy Internet)
October 11, 2007 12:52 AM | Link to this
There's no reason why you couldn't send another email back to the guy and ask him what he was envisioning paying. Maybe a few hundred bucks would be agreeable to both of you.
Anything less than that is probably not worth your time and effort selling it.
A lot of the "good" names nowadays (especially for existing/extablished markets like "baby") are usually taken by "Premium Domain" companies like BuyDomains.com, whose top "baby" name (BabySurplus.com) is priced at $88,400 (yes, *88 thousand* dollars). So a business should not be surprised to pay a few hundred dollars, if not a thousand dollars or more for a really good name.
BabySurplus.com is priced so high because it is a highly popular keyword phrase and it is memorable, so it could potentially make well over $88k if marketed well, because generating traffic to the website would be relatively easy. (In fact, the price is probably so high because the domain *already* generates significant traffic.)
Virtually no one types "baby cation" into a search engine or "direct navigates" to babycation.com, so marketing would be an uphill battle done all on your own.
Having a cute/clever/unique name like "Babycation" still has some value, though. A more serious business could easily pay $1000 for the domain, if they were set on the name. But to a mom and pop shop like the one you're dealing with, the domain may be worth only a few hundred bucks.
(Btw, most new businesses don't understand how to pick an effective domain name, or how to use multiple domain names to generate traffic and sales.)