Domain names are often referred to as the real estate of the online age. A well-chosen name can in itself provide a fairly strong flow of visitors, and therefore potential customers. 

A good name is intuitively found and easy to remember. Domain value rises from year to year, and therefore the price grows too.

The .com domain can sell for millions of dollars, almost fifty million dollars were paid for the domain carinsurance.com. Interestingly, of the top twenty most expensive domains, most are .com.

Other domains have lower price tags, and at times the sale is not listed, nor the amount disclosed. Some of the most expensive domain sales in 2020 were: 

  • $ 245,232 for the it.co.uk 
  • $ 160,920 for the bier.de 
  • $122,788 for the apuestas.es
  • $ 85,500 for the download.it
  • $ 70,000 for the sleep.com.au
  • $ 68,750 for the chauffage.fr

In many countries, the domain market is not transparent, and the rules aren’t clearly defined. This makes it difficult for non-savvy domain users to enter the market. 

Sometimes, market participants are forced to get a little creative.

A phenomenon called ‘cybersquatting’ came about, which is the seizure of free domain names with the aim of reselling them at a profit. Companies responsible for the technical “domain issuance” – domain zone administrators – charge a fixed registration fee for the allocation of a name. This fee not only depends on the domain name itself (both abba.com and baab.com are registered for the same amount of money as a regular .com domain price), but the fee is small. If you secure a domain with a “tasty” name, for example, coolcars.com – a cybersquatter puts it up for sale (more precisely: hands over the right to use the domain), at a price much higher than the paid registration fee.

The public attitude towards such cybersquatters in the Internet environment is usually negative. This is based on the fact that many are faced with “stubbers” in the struggle for a domain that they considered legitimately theirs. 

Many companies found that the website they purchased was the same name as another company or that the spelling of their trademark was already occupied by someone. Subsequently, for its transfer, a huge amount is asked that is a hundred, or even a thousand times more than the cost of “official” registration. Often, domains whose registration renewals were not paid on time are also intercepted.

These demands for huge amounts of money, often makes it impossible for interesting projects to secure a good name. However, as practice shows, for a really good site, the domain name is not a determining factor: the same Google, Yelp, or Wikipedia are not dictionary words, which does not prevent them from being extremely popular and visited. 

Let us separately mention new projects related to the catchy Web 2.0 label: in most cases, they are located far from “obvious” domains: these are domains with missing letters (flikr.com), and dots in the middle of a word (del.icio.us). However, a “good”, easy-to-remember domain name is by no means a hindrance to the development of a website.

How do people directly involved in the domain hijacking business feel about their occupation?

The domain name market conventionally makes sense to compare with the stock market. If it’s expensive now, it doesn’t mean it will be more expensive tomorrow, maybe it won’t be needed by anybody in the future, or maybe it will be cheap next month. It is like shares and business investments. Just like the stock market, the domain market has its own legal environment, its own speculators, its own scammers, and brokers.

It is no coincidence that we split cybersquatting into two types. There are definitions and terminology because branded cybersquatting is one thing (buying a domain that coincides in spelling with the registered trademark of a particular company). A completely different matter is sectoral (registration of domains by type of commercial activity, by the names of goods, services, branches of the economy). If in the first case the relations between the participants go beyond the legal field, then in the second they are quite market and civilized.

Indeed, when registering domains that use common words rather than registered trademarks, it is difficult to talk about any crimes or violations of legal norms. Cybersquatters post domains on the same basis as other users.

As practice shows, all domains that are at least relatively attractive in terms of “vocabulary” turn out to be bought either by cybersquatters or competitors of your new project. So for a new site, oddly enough, cybersquatting may be a blessing – the domain can still be redeemed (a domain captured by a competitor is clearly worse in this regard). And even if the purchase will require completely “unreasonable” money, this domain will allow you to make a starting spurt, inaccessible to others.

The very fact of buying a domain can be used as a starting spurt for a project. A public domain purchase for a large sum will surely attract attention: there will be notes in the media, links on other sites – and these are visitors, and fame.