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Domain Speculation: Attack of the TechnoPinkos

I have been toying with an adage in mind for a few months, I think I may have invented it. It’s one of those “there are three kinds of people” type quips, goes something like this:

There are three types of people, libertarians, conservatives and socialists.

Libertarians think they know how to live their own lives.
Conservatives think they know how to run everybody else’s lives.
Socialists think they know how we all should live.

This morning I was forwarded a link to the Business2.0 article on domainer Kevin Ham about a half-dozen times and one sent the reddit comment thread on it (titled “This guy is a piece of s**t”) and I had to chuckle and replied “I see Techno-Pinkos are out in full force”.

Some of the comments are just classicly clueless:

“He’s just a parasite. Someone gaming the system for their own financial ends without providing a useful service to anyone, and making it worse for many.”

and

“If you don’t see anything wrong in the concept of “speculator”, I don’t think I can possibly explain it to you. It’s wrong and hurtful for so many people that it should be obvious to anyone.”

Newsflash: Speculation is any time you choose one path, good or service over another in the hopes that you will do better with it over time than you will the alternatives. Deciding to go to college and becoming an accountant instead of dropping out of high school and becoming a garbageman is speculating that over time, you will have a more secure, financially rewarding career as an accountant than as a garbageman (which may not be true)

The techno-pinkos hate it when they see the speculation of others pay off and compound their irrationality by denying that they ever partake in speculation themselves. Pretty well most productive endevours in life, including ALL investments are a form of speculation, get it over it.

Readers of my blog, especially the domainers may be surprised to find out I have no problems with Kevin Ham’s deal with the Cameroon government to wildcard .CM, and in a wider sense, no problem with domainers buying up thousands of domain names. Yes, I believe the aftermarket valuations are overheated. No, I do not believe “there ought to be a law or something” that forces domain registrants to use their own names in a manner that the technopinkos hanging out on the reddit, digg and /. comment boards find suitable.

Bringing my 3-types of people into the analogy, here is how they think things should be “run” in the naming space:

Conservatives want to see government regulation on content and to see other websites they don’t like banned. They completely miss the point when it comes to reform (like the misguided FOISA bill which did nothing to protect the personal data of domain registrants and penalized them for taking measures to protect their own privacy)

Socialists as a rule of thumb, don’t get rich on the internet or anywhere else, (unless they are socialist politicians) because to them, profits are evil. As such, they hate it when they see somebody else earning a profit or god forbid, getting rich. They think prosperity and wealth creation is a zero sum game and anybody who isn’t living paycheck to paycheck is a capitalist pig grabbing more than his “fair share”. They eschew marketing in all its forms as “spam”, they often won’t even mention a product or service they use by name because they think that’s “spammy” (see the Digg comments on Domainwarning, below). They lead strange lives of constant outrage, holding jobs, earning salaries from companies who market themselves in ways they would probably consider “spammy”.

Libertarians think socialists and conservatives spend so much time and effort on other people’s business they don’t have any energy left to take responsibility for their own lives. And that’s where libertarians start. This is more than “looking out for number 1”, this is chalking up your lot in life to yourself, not blaming others for your own shortcomings or taking credit for other people’s successes. Very few libertarians enter politics. Very few libertarians think they have the right to tell others how they should live their lives. Libertarians don’t waste excessive amounts of time complaining about how the rules should be. Libertarians pick up the hands they are dealt in life and figure out the best way to play them. Many of them are successful in business and many of them are financially independent.

Both socialists and conservatives hate libertarians. Socialists think they’re capitalist pigs and Conservatives think they’re liberal degenerates.

Over the years I have been baffled by the leftists in the tech sector. Because in my naivity, I figure techies are of above average intelligence. If you’re smarter than the average lemming, then I figure your approach to life’s trials and other things that are none of your business would come from a higher thought process than socialist mob rule.

Examples:

“Oil companies make obsene profits!”

Socialists take to the streets chanting and carrying placards calling for “More taxes on oil companies” or “Price Controls”.

Libertarians buy up oil company stocks and maybe use the dividends to buy a hybrid or put up solar panels to heat their swimming pool.

“Evil domainer owns 1000 domains he’s not even using!”

Socialists post “he’s a piece of sh*t” comments to reddit and advocate nonsensical rules like “use it or lose it” (what and who decides what proper “use” is?)

Libertarians shrug. Good for him. Maybe he’ll buy some domains. Maybe he’ll sell some domains to the domainer.

One of the comments to my now semi-infamous Domain Aftermarket overheated post was “the guy probably has sour grapes”. I stand by everything I said in that article, but to the person who said that, you were not entirely off-base. I have expressed regrets over the years that I came very close to being an early pioneering domainer but didn’t because I failed to make the last crucial mental connection in my mind to grasp what was happening. I blogged about this on my old blog and I can’t find the post now.

Alas, I was grabbing expired domains in 2000 as a hobby and never made the connection that there was money to be made. Had I done so, I would have seriously dived in and maybe ate Frank Schilling’s lunch ;-) But alas, I didn’t, I missed the point so now Frank sits on a billion dollar domain portfolio and lives in the Caymans and I’m stuck in Toronto owning and running easyDNS.

Life sucks? I don’t think so. I still pinch myself every day to make sure I’m not dreaming (especially since I haven’t slept since my daughter was born) Rather than slag Kevin Ham, Frank Schilling, Rick Schwartz or David Chernoff, et al for figuring out that which I failed to figure out, I salute them.

Last year after listening to Joe Polish and Tim Poulson’s Barracuda Marketing seminar, I put together a one page website at DomainWarning.com “10 Things you must know before registering a domain name with anybody. Eventually, it made the front page of Digg and the comments were marked by indignation (ooooh what an awful pun). People “accused” the page of being “nothing more than easyDNS marketing” Uh, well duh. Yeah, that’s exactly what the page is. Somehow that’s a “bad thing”? Apparently telling the truth about widely used tricks in the domain industry is, especially if anybody is going to profit from it, as per the Digg comments:

“1 thing you MUST know about the linked site is, it’s an advertisement.
Whatever you do, DO NOT CLICK THE LAST LINK ON THE PAGE. The site owner will get affiliate credits if you do.
F***ing cheap a** wh*re, that uses Digg to get some quick cash.”

or

“After reading that entire page, why should I trust the link at the very bottom? How do I know the entire page wasn’t built to bring business to easydns.com ?
Question everything…”

Well now you know for sure: the entire page was built to bring business to easyDNS. The entire page explains why you should do business with easyDNS. I don’t understand how these people think it’s supposed to work. Maybe we’re just supposed to take out a Superbowl ad with scantilly clad models being hosed down like circus animals a la Digg sponsor, Godaddy, and I guess that’s ok.

There was the odd supportive comment:

“I don’t know what you’re flipping out about. The article is good, offers a lot of good tips on how to avoid being screwed with your domain name, and at the end they provide one small discrete link to a good DNS service. This is a good example of honest advertising.”

But the technopinkos beg to differ. Whether domainwarning was put up by an affiliate marketer who would make money off clicks or referrals, or by easyDNS as a marketing vehicle, they called it “spam” and it was somehow “worse” because it made the front page of Digg which I find even more ludicrous. We didn’t digg it. Their own community put it on the front page. Market forces in action == bad, spam, evil.

The one thing the socialists and conservatives do have in common is how upset they are by the things other people are doing. The technopinkos seem to have more spare time on their hands, watching the comment thread on reddit, seems to be one extremely upset technopinko responding to every thread, belaboring his point, he’s been at it all day while us libertarian types have been off doing stuff.

But these are just two examples. Go to any high profile tech board, read a story about somebody, anybody doing well in business, click into the comment forums and odds are you’ll find the threads slanting heavily to the left as the technopinkos run livid.

More stuff to do my lunch just arrived…

By Mark Jeftovic, Co-Founder, easyDNS Technlogies Inc.

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Comments

Adam Strong  –  May 24, 2007 7:32 PM

The Techno-Pinkos , sounds like a band name. Anyway, I think there are plenty of them around; not just the trolls of the forums and sites you mentioned, but also in decision making positions within the domain space.  I think you might want to point out some of these examples in your next piece :)  If you need help start by looking at the recent ALAC comments.

btw it’s Garry Chernoff.

Suresh Ramasubramanian  –  May 25, 2007 5:30 AM

The problem I have with the kind of domaining you describe is just the same as John Levine has with it.  There’s a previous post on circleid where he compared this with setting up a condiments business by grabbing the free ketchup and mustard packets from restaurant tables.

Domains (usable domains anyway) are a finite resource.  And any business model that’s built on salami profits created using a single loophole (add grace) really isnt sustainable.

Billion dollar “portfolios” would vanish - and the next T.R.A.F.F.I.C conference would probably be held at the Days Inn in Peoria rather than at a beach resort in Vegas.

Would I lose sleep over it?  Quite likely not.

s/d
John Q Technopinko

Suresh Ramasubramanian  –  May 25, 2007 5:33 AM

Darn, where’d that last line go?  T.R.A.F.F.I.C would have to move to the peoria days inn (oh, and food from the Wendy’s next door) if icann abolished add grace.

Levine’s http://www.circleid.com/posts/domain_in_bad_taste/ is well worth reading.

John Berryhill  –  May 25, 2007 5:24 PM

Suresh,

Please explain the mechanism by which portfolios of registered and paid for domain names would “vanish” if the add grace provision were eliminated.  I wouldn’t lose any sleep over that either, but I’m trying to figure out what you believe to be the connection between add grace, and domain collections that people have held for years.

IMHO domain tasting probably has a fairly marginal return at best, but do you seriously believe there are hundreds of people who have anything to do with the activity?

Suresh Ramasubramanian  –  May 25, 2007 5:35 PM

Building up a portfolio of carefully selected domains over years .. you have naturally dropped the domains you dont need and actually paid for the rest.  And most of the random typosquats / randomly named domains go right away.  That’s different.

I’m talking about an entirely different market, one that grabs thousands of domains indiscriminately, for a cent or two of PPC revenue, and based on the add grace period to avoid paying all that much (yes, I am aware of the escrowed money held with the registrar, and the profits there, given the revenue model, leads to a fraction of a cent per domain..).  Those, and the kiters, catch, drop and catch a domain again, ad nauseam.  Without paying for it.

For that segment, all it takes is one of two or three things:

1. Add grace to go away
2. Yahoo Overture / Google Ads suddenly gets tough on this

the bottom will drop out of the market. 

What’s going on there is not speculation .. it is hoarding / cornering the market.  And that is a strategy that can very easily backfire, besides not being the most brilliant thing to allow when usable domain names are a scarce resource.

John Berryhill  –  May 26, 2007 7:02 PM

That’s different.

I agree with you.  It is different. I’m just curious about your comment above which suggests that the majority of domain conference attendees were domain tasters.  I really had no idea that many people were doing it.

How many people or organizations do you suppose are doing domain tasting?

Those, and the kiters, catch, drop and catch a domain again, ad nauseam.  Without paying for it.

I’d like to know who one of these kiters is, and see an example of this in action.  Can you identify one domain that this is being done with, so I can see this being done?

But, my main question is, how do “billion dollar portfolios vanish” if domain tasting is eliminated, as you said above?

Suresh Ramasubramanian  –  May 27, 2007 2:36 AM

But, my main question is, how do “billion dollar portfolios vanish” if domain tasting is eliminated, as you said above?

You mean a billion dollars worth of domains at $10 a pop?  Or a bunch of fewer domains with a highly inflated notional value of a billion?  Dont tell me you get a billion dollars worth of PPC revenue out of parked pages.

If the bottom drops out of the domaining industry thanks to the widespread interest in kiting that governments / law enforcement are starting to take, believe me, legitimate domainers are going to be affected just as badly or worse, because the actual kiters have little or no actual money in the process, while you do have substantial money invested (though certainly not worth a billion)

Do read up on the tulip craze / the south sea bubble while you’re at it

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