Is domain name hording ethical?

[MarketMan]

I've been grappling with this for a while: is it really ethical to buy domain names just to sell them to people in the future?

I don't really see how it benefits anybody...you could make the argument that you're "holding" the domain name for a "bidder" but doesn't that just take it away from someone who could be using it for a legit purpose? If that person gets a good enough offer, he can always sell it also...


I almost think they should tax domain names (like they do realestate) to prevent people from just buying and holding. I can't tell you how many times I've tried to get a name only to find that some company owned it and wanted $4,000 for it...

[jmarella]

Let me ask you this...

If you registered xxxxx.com today and I contacted you a week from now, before you began using it, and offered you $4000.00 for it, would you accept my offer? If there were a law or a tax which prevented you or discouraged you from selling the domain, would you think that was fair? If you did sell the domain to me, would that be ethical? Now if you did sell that domain to me and made a tidy $3990 profit, would you be motivated to wonder if you could search and find another domain and another and another that might be worth as much or more on the resale market? Would you start thinking less the way you do now about your individual registrations and why you register them and more in terms of domains as an investment and as a potentially lucrative business?

As frustrating as it to find every domain under the sun taken and a high percentage of those for sale on the resale market, domains have become a commodity just like traditional real estate. I don't think there is a workable or realistic solution that would prevent people from buying and holding names. If there were a specific tax beyond the already existing income tax these sales are subject to, this wouldn't stop or even deter the large companies out there who buy domains by the hundreds or even thousands. They would just factor that cost in and continue doing what they already do. They are well funded and can afford to absord an added cost like that.

A tax *might* impact the individual domain speculators out there but I suspect only in that it would motivate them to be more selective about the quality of the domains they register. And those individuals already register a lot of domains and many probably are already selective. So, what would be left would be the few names they haven't thought of and whatever subquality names they discard into the reject pile, which probably wouldn't be desirable to most of us anyway.

The problem I think is that there is no ethical way to control this practice and no ethical way to assure that by doing so, the advantage isn't given to the large domain investment firms and taken away from individual domain owners and investors.

I have to add that one benefit of a tax might be that the segment of domain speculators out there who are running themselves in serious debt chasing the "pot of golden domains", registering lousy domains, trademark domains, etc. might actually save money when they are forced to evaluate their selection criteria and their domains versus cost. Someone is making a lot of money through their registrations and it isn't them.

[Business Blogger]

They will start taxing domain names as soon as you they can be amortized. That won't be anytime soon, I'm sure. Anyhow, you do have to pay a reg fee every year, isn't that enough?

[tpr]

I agree with the lads that its a legitimate investment for the people with the foresight.
After all like Real Estate, plenty of people buy blocks of land and never develop them.

[MarketMan]

Couple of responses to the responses:

1. The argument that "there's profit to be made by doing so, therefore people will do it" doesn't strike me as a particularly convincing argument as to why it's ethical. There's profit to be made in the heroine business, assassin business, etc...it doesn't mean that it's ethical to take part in them.


2. In regards to real estate, I do think that there is some gaming of the system, but there are some significant differences. First, someone has to maintain the land if it's in a valuable area (there are usually laws and regulations). Secondly, the cost of land is so high that it's usually prohibitive for people to literally just grab everything for sale.

I suppose my question isn't "how does domain hording compare to other accepted practices" but more, "is it ethical?" I.E. what are the benefits of it other than just ransoming the domains to other people for personal profit. Most industries and businesses provide a service (even cigarette companies provide a product that people WANT to use for pleasure)...what beneficial service do domain horders offer?

[Business Blogger]

You could make an argument as to why every business is unethical if you wanted, they just wouldn't be any good. No one really likes it, that's just the way it is, so we deal with it. If you really want the domain names you need to get smarter than the domain hoarders.

Most of the big players in the domain game would have no problem doing the same with real estate. The bank accounts are much larger than you may think. The little guys that can't play usually end up letting the names drop.

If you had a chance to buy land in Manhattan years ago, and you knew the value would skyrocket, you would have done the same.

[tpr]

As a "hoarder" of both real estate and domain names I can only argue for the affirmative on both.
Is it ethical to hoard anything in life if we are not going to immediately use it, after all that second car or those extra running shoes could be used by someone else less fortunate than ourselves.
As a financial planner I am asked by clients on a regular basis to recommend ethical investments and the challenge one has is that outside the very obvious ethical filters where do you draw the line?
When discussing ethics are we going to debate altruism vs utillitarianism?
Its a good topic to get some veiw points on but at the end of the day unless someone says its illegal to do so, then investors like myself will take a risk and invest in something we think will increase in value over time.
Terry

[jilkhedhai]

i seem to remember most of us have to deal with capitalist markets. Like it or not this is reality and in capitalism the question of what is ethical or not i'm afraid becomes rather irrelevant (except for phylosophers maybe). What is relevant is only what is allowed and what isn't. What's legal basically... and sadly most laws consider hoarding (of virtually anything one way or another) quite legal

[labrocca]

Consider them rare collectable items if that helps you.

[mauiman]

It's as ethical as buying land for investment and not developing it. I think you're way off base for even thinking it's at ALL unethical.

[Fruit & Veg]

Whether it's unethical, probably not, it's business. Is it annoying? Sh!t yeah!

The amount of times I've searched for names and variations only to see crappy holding pages everywhere is frustrating. Then going to Sedo and seeing some numbskull thinking he can get $5000 for a long domain name www.word-word-word.com is almost funny.

It just inspires me to keep rethinking the name until I find one that I can get for the regular cost. There are still good names out there if you think hard enough and long enough.

There is one name I've kept checking for about 5 years, nothing has ever been added to it, the guy is just keeping it. The annoying thing is that I've emailed him a few times and I never get a response, so he isn't developing it or planning on selling it, so I don't know what his game is.

I'd like to see something like, when you renew after 2 years and a website has not been added then you cannot renew it. It's easy to place one page on a domain or even redirect it, but if someone can't even bother doing that, then I think they're being a pain in the ass. Holding up a good domain name can impact on a web business.

With land, local government can step in and force developers to develop or sell. With domains this can't happen - it's not exactly the same.

[eXweso]

Well, you can call it something like an investment!

Take property for example. You buy an apartment and its value increases after a year. You sell it!

Same thing with domains, so what if it is a digital product?

[ideaGENERATOR]

Business is business. If there is money somewhere, there are people trying to get it. It sucks that you can't get "the one domain" you really want, but it usually isn't too hard to find a decent alternative if you can be creative. Just wait until 10 more years... it will only get more difficult to get domains, and the hoarders might start to get more and higher offers.

[Rick Wilson]

Sounds like some "sour grapes" from a couple of posters that were PO'd cuz they couldn't get the domain names they wanted.

IF they got the name legally, so what? They should be able to do with it what they wanted. I see no real added value to forcing people to fork over their lawfully aquired domain names just because they aren't using them. And I see no reason to change these requirements.

AND to those suggesting taxation as an "ethical" solution to try and prevent people from holding on to domains they aren't using ...

PUHLEEZE ...

I'm sure everyone here would love more government intrusion into their lives and businesses.

I'm not gonna lose any sleep over holding onto my aquired domains as I see fit. And I'm not gonna worry about others doing the same thing.

That's life!

My anyway ...


Rick Wilson