Acro.net – Technology Rants & Raves by Acroplex®

The owner of Bodis.com – the domain monetization company that acquired the domain forum NamePros – gave an excellent speech today; albeit in the form of a unity post.

It’s not a secret that both DNForum and NamePros each have their own “gang” of supporters, fans and sworn “servants”. It’s what makes cliques fun and what makes fans active contributors of any given forum.

I hopped onto DNForum in 2002, after its launch was announced on Web Hosting Talk – a technology forum I frequented at that time.

NamePros was launched in early 2003 by Ron James, a DNForum regular, after the DNForum moderators of that time attempted to launch a coup d’etat by buying DNForum from its founder, Dan – a 17 year old student at that time. The same moderators opted out, after a Texan domain investor, Greg Ricks, stepped in and snapped the domain from under their noses; the formation of DomainState became their lair.

For the record, at the same time I launched DomainGator – not to be confused with DNGator, the now sold domain news aggregator – which didn’t fare well for one reason: I tried to run the show all by myself.

When owning a large community forum, it’s prudent to delegate tasks by either hiring a crew or by giving incentives to volunteers. Power is one such incentive, and both DNForum and NamePros at some point fell victims to moderator power abuse. Usually, things work out when there is a change of guard or when problematic moderators are ‘fired’.

Many lessons were learned during that period 2002-2004, especially when Adam Dicker acquired DNForum, reputedly for $50,000. Ron James of NamePros held out for almost a decade, before selling NamePros to Bodis for a deal between $200k and $300k.

What matters today is that there are two very active domain name forums and the need for unity and co-operation is necessary, in order to maximize the benefits and the potential of its members. Both owners are smart, business-savvy individuals with long records of success. Both forums can continue to perform using their distinct personality and best elements by joining forces and forging alliances.

I’ve bought and sold some great domains on both forums and established some long-lasting business relationships during the past ten years that I frequent them. Both forums deserve the best; and why not, let’s make them three, given the fact that DomainState is part of the old school domain forum game.

It’s good to hear when people become successful overnight; that’s the type of satisfaction that can be shared.

Financial success through domaining is yet another way to display one’s entrepreneurial achievements and the recent sale of Social.com for $2.6 million is one such case.

Five years ago, Social.com was stolen from its owner and was offered for sale on Sedo. As I’ve done on numerous other occasions, the notification of its legitimate owner and of the selling platforms were both shared on DNForum.com

Although the original thread is gone, you can read some interesting reactions or lack thereof about my report of the domain’s listing at Sedo, back then.

While things have changed a lot in how Sedo communicates nowadays, it’s an interesting window into the past.

Congratulations to the seller of Social.com and I’m glad they weren’t tricked out of their property back in 2006. It’s important to note how much DNForum has contributed to preserving the state of alert over stolen domains as well.

There is something that I detest losing more than money, and that’s time.

Time comes in the form of dedication of energy, creativity and personal essence, to pursue or achieve something, or assist someone.

The amount of time dedicated to assist a person is tied even more to a number of personal events.

When these events get disqualified all of a sudden, due to an unlikely behavior that sprouts out of nowhere, then that’s when I get upset.

When trust gets broken.

Over the weekend, a legendary thread at DNForum.com unveiled that a person posing as a hard-working entrepreneur and domain broker, has been scamming people in the past, the present and – unless stopped, the future.

The tip of the iceberg broke through when someone did a lot of digging into that person’s past, which involved dealings with the law, broken promises and funds that were never returned to their rightful owners. The thread continued on with the contribution of at least a dozen people who unveiled what hid behind the smiling face of the person who has defrauded a large number of individuals at least since 2006 and who has 10 appearances at court over the past 10 years.

When trust gets broken, two things happen: the initial denial becomes anger, and the amount of trust available for the next person in line gets diminished. It’s like personal relationships that involve cheating; you don’t get to trust easily after that.

Ever since I started registering domains with the intention to develop or resell (the option to monetize was added much later) I decided to stick to the same basic principle: if it’s in the dictionary, it’s something I can use. If I can use it, others can. If others can, then I have established the motive to register or purchase it.

I can honestly say that the selling potential of dictionary .com, .net, .org domains – the original TLD triad – is a sure winner. As long as I don’t need a dictionary to establish what the word means! Of course, there are dubious spellings or common typos, but the bottom line is that a positive dictionary word serves its purpose well, in real life and in the online commerce world.

I recall buying Gravity.org for a mere $105 on DNForum, at a time when everyone else was looking to buy domains with type-in traffic or typos. I’ve stuck to my guns of picking up dictionary domains as often as I can and this principle has paid off in the long run, more times than I can recall. Four years ago, Gravity.org was sold to a nice guy, who has since then developed it into a beautiful web site depicting his literary work.

Later on, I discovered a great source of such dictionary domains in the form of a well-known parking guru who decided to do what was best at that time, having had thousands of domains that generated little parking income and had renewal fees to be paid. I managed to pick up a lot of these domains in private transactions or via forums; others I bought on eBay and via direct communication with their owners.

There were so many dictionary domains in these days between 2002-2005 that could be had for as little as $20 to just over $100 – I became more organized when such sales would occur, by keeping Notepad open to paste into it the entire list and then I’d delete quickly the names I did not want. I found that to be faster than pasting over the ones that I might want.

It’s shocking even to me, that one such domain that I picked for $50 at a “feeding frenzy” sale on DNForum three years ago, was just sold for a whopping $6,000 via Sedo. Then again, I’ve had other such large sales of dictionary domains in the past – but none resulted in such a high return on investment. I will have to thank my traffic guru seller for this. By the way, it’s an .ORG!

It’s often frustrating trying to sell dictionary domains with inherent potential at reseller forums; the expected responses immediately inquire about traffic stats. When the brand is built around a domain that cannot be misspelled or mistyped, the traffic shall come. What won’t come again, is an abundance of dictionary words in the original three TLDs.

Frank Schilling, in his last blog post in months made this monumental statement:

A few years back I was approached by a company and encouraged to place my domain names for sale through their marketplace. I was given a host of reasons why this was a good idea. “These names don’t make any money”.. “ Selling the names will actually improve my overall portfolio’s value”.. “Selective pruning is just prudent”. Shortly thereafter, a second domain marketplace called. They suggested I sell my names through ‘them’ and that I should cap my purchase prices at $5,000 because that was the limit of automated credit card processors in their scenario.. They even sent me a list of names that I should sell.. tens of thousands of them that don’t make enough to cover their renewals.. and If I could get $2,000-$5,000 each wouldn’t that be Fabulous?! The problem as I looked through my list was that many of the names they suggested I sell were pretty good. I’d pay more than 2-5k for many of these names if they were dropping at auction. I politely declined their offer.

One should employ additional means of measuring the potential value of a domain, other than its visitor figures, and dictionary domains maintain a strong reselling potential regardless of the existing traffic. An experienced domainer will soon acquire a “gut feeling”, an “on-the-fly” evaluation ability that only comes after several successful transactions – and a few monumental failures.

At the same time, one should ensure that a solid business plan is in place; for which I recommend the services of a qualified Certified Public Accountant (CPA) so that every dollar earned or expended is accounted for. I know that I will paying a whole lot more in taxes next year.

What is the domain that resulted in an 120-fold ROI ? You’ll have to keep your eyes peeled on Sedo‘s sales for that, in the next few days

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.