Acro.net - Technology Rants & Raves by Acroplex®

From behind the iron curtain of a middle Eastern nation known for its anti-American sentiment, a self-proclaimed hacker seems to be the perpetrator of a series of recent, high profile purchases of domains - using stolen credit cards.

Using proxy servers located in Iraq, he took control of a Network Solutions user account and its main domain, Get-Hosted.com. Then, using either a credit card associated with the account or other stolen credit cards, he made purchases of domains offered for sale via the Network Solutions marketplace. These domains are brokered by two major players in the domain after-market field, BuyDomains and Fabulous.

Apparently, he tried the fraud scheme first at Fabulous, as their domains are typically priced lower. After testing the waters of his process by making several small purchases, he turned his attention to the higher-priced domains offered by BuyDomains. A week or so later, his appetite was large enough that one of these purchases made it on DNJournal: DomainTools.net was sold for $4,088.

Fabulous reacted quickly, reversing between 5 and 6 purchases of about $350 each and regaining control of the domains within days of the incident. The perpetrator, having gained experience from this test run, then decided to alter his process; the roughly 6 large purchases he made from BuyDomains were immediately transfered out to the compromised Network Solutions account and WHOIS protection was added.

Having used stolen credit cards - in other words, other people’s money - it was time now for the hacker to capitalize on the value of the assets; an estimated $25,000 worth of domains. Not too shy about declaring his location (Iraq), he created two accounts at DNForum and offered the domains for a quick sale, at extremely low prices. These aged or otherwise generic names were being offered for $200 to $500 each, with a couple of others seeking offers.

The DNForum sales thread about one of these domains, xdev.com, had a short lifespan; the domain was still listed for sale at Afternic by BuyDomains with a hefty $9,700 price tag on it. And yet, the seller was eager to take any amount of money, ranging from $1,500 up to a BIN price of $5,000. After all, he never paid a penny out of pocket for these domains. The DNForum community was quick to determine that the sale was extremely suspicious and to alert the moderators about the ongoing scam.

Other domains offered for sale included Getting.net, DomainTools.net, DoTrust.com and OrbitPay.com - all of them were being offered at unreasonably low prices. Thankfully, DomainTools.com maintains historical data on domain ownership; it was easy to see that all these domains followed the same pattern: they were sold recently by BuyDomains and were instantly transferred to Network Solutions, to an account with WHOIS shield.

It’s probably the first time that several major players in the domain market were involved as the direct victims of a scam:

• BuyDomains and Fabulous were defrauded, giving up domains in exchange for stolen funds
• Network Solutions & potentially Afternic were used as a Trojan Horse to facilitate the purchases through their respective marketplaces
• Sedo was consequently used by the scammer as a point of sale for some of these domains

Additionally, Visa and Mastercard obviously had to reimburse funds and to reverse charges to the legitimate owners of these credit cards.

Currently, all of the domains appear to have been recovered in a special trust account at Network Solutions. The investigation is ongoing, with regards to the legal ramifications of this act which could amount to tens of thousands of dollars in billable time. It would not be surprising if finally the FBI and Interpol are involved in this case.

Over the course of recent years, Internet scams have proliferated into segments of the global market that were left untouched by traditional crime. It’s imperative that international politics ensure a smoother relationship and cooperation between nations, instead of leaving predatory “black holes” such as Iran, Iraq and North Korea. These criminals operating from such countries feel untouchable by the lack of law and punishment in their own countries and often engage in these acts as a “sport” or a “hobby” - gaining bragging rights among their peers.

However, when other people’s money is involved, it’s not a game anymore.

Real estate recession? Gasoline prices above $4 a gallon? Election year madness?

It can only happen in the United States of America, which is about to celebrate its two-hundred and thirty-second anniversary of independence, on July 4th.

Americans are a nation of hard-working, ingenious people that maintain one element unique around the world: united, they are able to share, create and prosper in any kind of weather, under the protective shield of the All-American Dream.

Simple ideas become entrepreneurial forces that catapult individuals and companies to the top of their industry; combined with the ingenuity possessed by people that are given the opportunity to prosper, it’s an unstoppable force.

Enter Nick Spanos, NYC real estate broker who also happens to be a 3rd generation Greek. Nick owns bAPPLE.com - short for “Big Apple” - a company that deals in premium, multi-million dollar real estate based off SoHo, NY.

I met Nick at TRAFFIC / Orlando in May; he’s the type of guy that looks at you in the eyes and can tell whether you are a bullshitter or not. In the late 70’s, Nick had a prolific encounter with Steve Jobs at the Homebrew Computer Club. Apparently, Apple eventually used one of Nick’s sinus plotting functions in their range of computers; Nick’s affection of geometry led him to create his own computer board. Later on, in the 90’s, Nick began investing in virtual real estate - domain names - and his current 10,000-strong portfolio contains both generics and traffic names, which Nick monetizes using software that he created.

But Nick Spanos is a strong player in the non-virtual real estate field as well. Nick’s ambitious expansion from his Union Square offices to the bAPPLE, Inc. headquarters in SoHo - the premium location in the heart of Manhattan next to world-famous luxury stores - is only an illustration of his commitment to meet the demands of his extensive clientèle, which includes real estate brokerage in Florida, Panama and Greece.

While the US remains in recession, Nick turned his focus to the market that presents increased opportunities: European buyers. With the Euro currently trading at $1.57, cash-laden investors that visit the US and its metropolitan center, New York City, are able to get more premium real estate for their money. In fact, most of bAPPLE’s buyers pay hard cash, something unheard of for the mortgage-driven Americans. And that’s great news for Nick Spanos, who was invited by CNBC to present his successful story this morning, to viewers around the globe.

Click here to view Nick Spanos on CNBC

So what is it going to be, real estate or virtual real estate? Land that we can walk onto and live on, or domain names that we cannot touch but we can equally develop, monetize and resell? In today’s economy, diversification is the key, and Nick seems to have discovered the best combination, successfully delving in both!

As kids, we used to play that game called “broken telephone“. Other names for this game included, “operator“, “grapevine” or “pass it down“. It involved a chain of kids that would relay a short but quickly spoken phrase, rather silently. By the time the phrase reached the last kid, the phrase would be completely distorted and in many ways funnier than the original one.

The following is excerpted from the movie Johnny Dangerously:

Lil: Get this to Johnny on the grapevine: Vermin is going to kill Johnny’s brother at the Savoy Theater tomorrow night. Got it?

Polly: Got it.

Polly: Vermin is going to kill Johnny’s brother at the savoy theater pass it on.

Prisoner: Vermin is going to kill Johnny’s brother at the Savoy Theater tonight. Pass it on.

Prisoner: Vermin is going to kill Johnny’s mother at the Savoy Theater tonight. Pass it on.

Prisoner: Vermin’s mother is going to kill Johnny tonight at the Savoy Theater. Pass it on.

Prisoner: [gibberish]

Prisoner: There’s a message on the grapevine, Johnny.

Johnny: Yeah, what is it?

Prisoner: Johnny and the Mothers are playin’ “Stompin’ At The Savoy” in Vermont tonight.

Johnny: Vermin’s going to kill my brother at the Savoy Theater tonight?

Prisoner: I didn’t say that.

Johnny: No, but I know this grapevine.

This morning, the news in the domain grapevine had it that a domain name, Israel.com, had sold for $5.88 million via Moniker’s auction platform. Before noon was over, blog after blog and forum after forum had passed along the information, adding their own little twist to the story. Some said the buyer was an Israeli tycoon, others said it was a Jewish woman investor from a large corporation in New York City. Others, preferred to ponder how much Israel.mobi would sell for.

It turns out that the domain was not sold after all. So much for the rich Jewish lady from NYC; if you know her, I’d like to get her number.

The point is, today’s media possess powers that by far exceed those of the traditional media. In the old days of centralized points of information, the newspaper with the false piece of news would frantically retract all the issues and the poorly-paid paperboys would deliver a fresh edition of the news. On the radio or the tv, an announcement would be made, correcting the mistake - obvious or not - and everything would be put in place, more or less.

After news of the alleged sale broke out, the Moniker people scrambled to issue frantic statements that no such sale had taken place; but by that time, the cat was out of the bag: blogs relay news in a non-linear fashion, they beam out information to all directions, that is picked up from other info processing points on the web; some are rather influential in the way that such information is passed along. All of a sudden, a non-sale became a sale.

So bloggers, amateur or semi-pro, be careful out there: the grapevine game has consequences. Double-check your sources, or better still, differentiate from the rest of the media and provide content, criticism and analysis on your blogs, instead of plain xeroxing of random press releases.

Now, did you hear the one about the upcoming sale of a two-word, hyphenated IDN .mobi for over seven figures?

As an independent participant of TRAFFIC / Orlando, I’d like to announce the “Acro Awards” for that event! To be taken with a grain of salt, these virtual trophies represent the event’s character and depict the impact it had on a newcomer such as me. They are not an endorsement of services or otherwise, just my personal likes through observation and interaction with the exhibitors and the other participants!

Best-looking Booth Award: Market Leverage
Runner-ups: Skenzo, DomainSponsor

Most Friendly Booth staff Award: DomainSponsor
Runner-ups: Parked.com, TrafficZ

Most Dynamic Exhibitor Logo: Skenzo
Runner-ups: Market Leverage, Fabulous

Most Recognizable Logo Award: Moniker

Most Recognizable Person Award: Ron Jackson of DNJournal (& his new SONY camera)
Runner-ups: Rick Schwartz, Howard Nue

Sharpest Dresser Award: Rob McClinton - DomainSponsor
Runner-ups: Ammar Kubba - TrafficZ, Sean Stafford of DNZoom & the two blonde ladies that were with him

Friendly Smile Award: Jen Fluker & Debby Banning - Market Leverage
Runner-ups: the TrafficZ booth ladies, Sahar Sarid

Tallest Exhibitor staff Award: Matt Bentley - Sedo
Runner-ups: Jen Fluker - Market Leverage

Heart & Soul of Afterhours Parties Award: Nick Spanos - Bapple.com

Best Hawaiian Shirt Award: Rick Schwartz
Runner-ups: Ron Jackson, Theo Develegas

Most Likely to appear in a photo at TRAFFIC Award: Kina Merdinian - Domains 4 Business

Most Promising Young Entrepreneur: Steven Kennedy (scrsteven at DNForum)
Runner-up: Sean Stafford - DNZoom

Most Noticeable Absentee: John Berryhill
Runner-ups: Adam Dicker, Greg Ricks

Oddest place to exchange business cards: At the men’s bathroom (yet, it happened).

The food was of top quality, nutritious, tasty and of large variety and quantity. Indeed, we were treated like kings! Congratulations to all the organizers of the TRAFFIC / Orlando conference and greetings to all of you that participated one way or another.

Here are some more pictures from the event!

When I signed up for TRAFFIC / Orlando, my expectations from attending the conference were cut very dry and specific. I envisioned selling domains at the auction, meeting with other professionals dressed in suits and sharing ideas with the very core people of the domain industry. I’m able to say that I achieved my goals one-hundredfold in a much broader manner which I had not anticipated, because simply being part of the TRAFFIC event is an achievement of its own.

TRAFFIC is not your average type of conference. It’s a gateway to a multitude of opportunities, an entry point, an initiation to what’s behind the conference name and its mythology. The biggest challenge is shedding the attitude of a strict business person while acknowledging the contribution and success of hundreds of other professionals. As an entrepreneur and a person who believes in communication with other individuals, I entered TRAFFIC prepared to not only talk but to also listen carefully to what others had to say. It was an opportunity to sharpen my social skills, display my work, my assets and also repair damage done by my well-known online persona at various forums.

The people attending TRAFFIC are professionals that all maintain their own distinct personality. They are men and women of various ethnic and social backgrounds, races and ages. They are there to not only benefit their business but to also contribute to the very industry that generates their wealth. It’s an approach and attitude that differs from the cut-throat world of broader technology and it’s a method designed to know and appreciate the person behind the business and the brand.

At TRAFFIC, I was able to learn from the speakers and exhibitors about the directions our domain industry is currently heading to. Every single day, I learned from the subjects presented, the questions that were asked and I gained more confidence for myself and my future ventures. TRAFFIC was at times intense, other times fast-paced and at other times relaxed and entertaining.

Walking up to talk to people that I had never met before in my life was surprisingly easy. Some stood out because they are famous; talking to Rick Schwartz while he’s munching on a tasty canapés was definitely a far cry from simply reading his blog. Sharing a table at lunch or dinner with Donny, Mike, Monte and Christian from Parked.com was an opportunity to enjoy food and talk about things in a manner that no number of trouble tickets or emails can take care of. Brainstorming with Matt Bentley and the others from Sedo was easy, all while going back to greet the personnel at the TrafficZ booth and DomainSponsor or Skenzo.

Going around the exhibits when sessions were not active, one would meet people he or she interacted with at a previous time of the event and also meet others, who’d introduce even more to the circle of communication; just like a social chain reaction of ideas. In fact, the four hours I spent after my registration on the first day until the event officially started, were extremely beneficial; a relaxed prelude that built anticipation about the event itself.

The first thing one has to consider is whether they want to be an island, surrounded by waters and isolated from the rest of the world - or a cloud, free-flowing and able to meet other clouds that also roam in search of opportunities to interact. These clouds can sometimes clash with each other, thus producing thunder and lightning; but the resulting rain invigorates the land and feeds the lakes and the oceans, which in turn create more clouds and more free-flowing enterprises are born.

I think that I’d rather be a cloud and at TRAFFIC I discovered just that.

Unfortunately, due to other obligations I will not be attending Day 3 of TRAFFIC but I will be present at the party at 8pm. I will leave it to the very competent hands of Ron Jackson to cover this day at DNJournal.

Needless to say that in the evening of a very active day we had the chance to unwind, drink and socialize at the Irish pub at Pleasure Island. Some of us stayed until the wee hours of the night, dancing or… pissing the night away.

I’ll continue my unofficial reporting of TRAFFIC tomorrow, with Day 4 of the conference.

Here are some pictures from Day 2!

The day started with my usual cup of coffee and a surprisingly smooth commute on Interstate 4. This time around I found my way inside the Disney resorts without getting lost. I managed to arrive about 15 minutes before the sessions would begin. I ran into Donny from Parked.com who gave me a brief intro about what his 11am speech was going to be about.

Rick Schwartz kicked off Day 2 of the TRAFFIC conference with his keynote speech. He mentioned that while it’s time to slow down and assess the opportunities offered, we also need to be aware of the dangers that are rising in today’s economy. In the financial crash of 2000-2001, everyone seemed to run away from the online ventures, abandoning their assets. In 2008, everyone seems to be running towards the venues available on the Internet. Even though we are living in thriving industry times, it’s time to also be proactive during the equally challenging financial times.

Rick closed mentioning the Snowe bill and how it is a time for the domain industry that the fittest will survive, as the industry shifts and changes its focus.

Howard Neu then took the stand, unfolding the opportunities that all the TRAFFIC attendants have with the range of exhibitors, stressing how this is not a trade show but rather, a get-together of the best and foremost-thinking members of the domain industry. While forums and chatrooms bring domain owners together, in a real life event such as TRAFFIC people have the opportunity to facilitate deals and establish relationships at a personal level.

Michael Collins, executive director of ICA then talked about the challenges that the industry is facing with the introduction of the Snowe bill that stirred the domaining calm waters and created a lot of tension. As a result of ICA’s efforts with raising awareness, ICA membership doubled since February 2008. He stressed the importance of domainers being represented in an organized form, lobbying at Washington DC, ICANN and the media.

Phil Corwin, legal councel for ICA, then described in detail the legal aspect of the Snowe bill, that is being promoted aggressively against domain owners from a group of major trademark holders. Wrapped up as an anti-phishing bill, it attempts to hold domain owners liable for millions of dollars in damages, without limitations. He mentioned that the politicians must be educated about the dangers of this bill, while defending the domain industry by building stronger alliances. Finally, Yahoo, Google and Microsoft maintaining their separate existence serve a positive purpose to online advertising, as the industry needs transparency and competition, instead of monopolies.

Michael Gilmour spoke about the future of domain parking, stating that currently only 20% of the world’s population is using the Internet. The percentage is increasing in Asia, in such countries as China and India. In fact, the growth in Asia is quite explosive. In India, the market is highly educated; there are also more millionaires in India than in the US. He concluded that domain owners need to develop up to three domains as businesses and utilize the rest of their portfolio as a revenue generator from parking.

Donny from Parked.com gave us all a history lesson, citing data of PPC for a domains over the course of 4 years, showing in effect that advertisers currently don’t care about top placement in search engines like Google and seem content with second or third places which are more affordable. He also mentioned that parking pages in the future need to be more visually appealing and look more like “real” web pages.

This concluded part one of Day 2. We had a great lunch that helped everyone unwind and yet network even more. I met with members of Domainsponsor and TrafficZ that seemed to like eachother a lot, despite both being Los Angeles based companies.

The dessert was delicious, the coffee invigorating and …I will continue Part 2 of Day 2 once my laptop batteries get recharged.