iEstates.com

In June of last year, Google and Louis Vuitton were engaged in battle before the Cour de Cassation (France). The French court requested the opinion of the European Court o justice (ECJ) on three matters. Today, the European Advocate General issued an opinion advising the ECJ regarding its anticipated ruling. The AG opinion available here (Opinion) included the following:

“The selection by an economic operator, by means of an agreement on paid internet referencing, of a keyword which will trigger, in the event of a request using that word, the display of a link proposing connection to a site operated by that economic operator for the purposes of offering for sale goods or services, and which reproduces or imitates a trade mark registered by a third party and covering identical or similar goods, without the authorisation of the proprietor of that trade mark, does not constitute in itself an infringement of the exclusive right guaranteed to the latter under [the Directive]”

“Article 5(1)(a) and (b) of Directive 89/104 and Article 9(1)(a) and (b) of Council Regulation … 40/94 … must be interpreted as meaning that a trade mark proprietor may not prevent the provider of a paid referencing service from making available to advertisers keywords which reproduce or imitate registered trade marks or from arranging under the referencing agreement for advertising links to sites to be created and favourably displayed, on the basis of those keywords.”

“In the event that the trade marks have a reputation, the trade mark proprietor may not oppose such use under [the Directive].”

“The provider of the paid referencing service [Google] cannot be regarded as providing an information society service consisting in the storage of information provided by the recipient of the service within the meaning of Article 14 of Directive 2000/31/… in particular electronic commerce, in the internal market (‘Directive on electronic commerce’)”

What could this mean for Domainers? As we know, domain names in PPC serve as keywords for PPC results. While some PPC providers allow owners to categorize domains or add additional keywords, Google and Yahoo require that the added words bear a contextual meaning to the actual domain name. In essence, domain names used in PPC serve the same function as Google’s keywords as used in advertising. LouisVuitton.com is thus served up as “louis + vuitton”. The PPC advertisement links appear because advertisers who have paid Google/Yahoo to have their advertisements appear on pages in the domain channel when such keywords are used in a search.

We must of course wait for the official decision of the ECJ but it is nice to see when people “get it”, particularly when they are in such authoritative positions.

So, one may ask….. How is the PPC system any different from what the European Attorney General sees as infringing activities? In a real sense of course there is no real difference other than one keyword is purchased from a list and the other is in the form of a registered domain name (and of course you are you and Google is king).

It will be interesting to see how this plays out in the various sectors of the Internet. Of course, UDRPs and the like are based on a different standard. However, even the panel decisions remain subject to court decisions. Now if only we could convince domainers to pursue legitimate claims in court, we might have something that would benefit everyone.

(c) 2009 DomainNameNews.com

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Sedo just sent out the following security alert:

We have been informed that due to a security problem at one of our competitors a list of their customer data including plaintext passwords is currently circulating on the web including relevant hacker forums.

Our Security and Compliance Team has found several of our own customers matching the publicly available list. Due to the seriousness of this matter combined with the possibility that you might be using the same login data/password at more than one parking company, we strongly suggest you to change your password at Sedo.

Sedo uses cryptographically unbreakable ciphertext for password checks and does not store your password in plaintext. This, and a variety of other security measures, ensures that your Sedo account is always safe from third parties.

We generally recommend to always use different login IDs for different sites and never hand out login IDs to any third party.

Should you have any further questions or needs, your dedicated account manager is looking forward to help.

Kind regards,

Your Sedo Security and Compliance Team

They are referring to NameDrive, which, as Domain Name Wire reported yesterday, had less than 1% of their client accounts hacked recently.

Many domainers use the same passwords at different sites, including registrars, parking companies, forums and email providers. If just one of these accounts gets hacked, all your other accounts are at risk if the password is the same! This is especially true if a site stores your passwords in plaintext. However, depending on the quality of a password, hackers might be able to recover it even if it is encrypted.

Sedo has had its share of security challenges in the past, so it is very nice to see that they are alerting their customers to this common risk.

Premium domain names continue to be an outstanding investment. This is nothing new to domain investors, and despite a recent slowdown in the reseller market, the actual numbers confirm that the end user market remains strong.

Looking at DNJournal's List of Top 100 Reported Sales of 2006, 2007 and 2008, the top 100 median sales price changed from $124,000 in 2006, to $197,500 in 2007, to $175,752.50 in 2008. After 2007's massive upsurge of 59.27%, 2008 brought with it a 11% drop. However, 2008's median price is still 41.74% higher than that of 2006.

A New Age of End User Sales

As we pointed out last year, with domain values shooting up so rapidly, very few domain owners were devoting any of their resources to actually developing their domains. There was simply no point in developing a domain you just bought if you could flip it a few months later at a significant profit. Broadly declining PPC (pay per click) revenues did not affect this situation at the time, but they have now contributed to the rapidly falling liquidity among domainers.

None of these developments appeared to have any effect on end user sales, which remained very strong in 2008. This is understandable as end users do not care about PPC revenues and the small isolated world of the domainer-to-domainer marketplace.

Let's look at the 2008 numbers and compare them with those of 2007:

At the end of 2007, of the 105 highest priced domains sold in 2007, only 33 domains (31.43%) had been developed or redirected to a developed site, 3 (2.86%) were affiliate sites, and 10 (9.52%) were either abandoned or appeared to be under development. 4 (3.81%) domains didn't resolve at all and a massive 55 domains (52.58%) displayed PPC ads.

At the end of 2008, of the 101 highest priced domains sold in 2008, 56 domains (55.45%) had been developed or redirected to a developed site, 2 (1.98%) were affiliate sites, and 15 (14.85%) were either abandoned or appeared to be under development. 2 domains (1.98%) didn't resolve at all and 26 domains (26.74%) displayed PPC ads.

The most notable change is that the percentage of developed domains increased from 31.43% in 2007 to 55.45% in 2008.

Accordingly, the percentage of domains displaying PPC ads decreased from 52.58% in 2007 to 26.74% in 2008.

Much of the increase of developed domains can be accounted for by existing businesses (end users) purchasing these domains and using them for their websites. This is a very good sign for owners of premium domain names.

At the same time, actual development on part of domainers has remained virtually non-existent. Combined with shrinking PPC revenues, the future seems bleak for domainers who do not own premium domains and are unwilling to adapt themselves from an environment conducive to PPC parking and domain flipping, to one where the wholesale market has dried up, development is king, and opportunities abound for the small number of domainers who are, by accident or design, still flush with cash.

(Now the only thing that's missing is for those geniuses who brought us the 2007 bubble to start talking down premium domains and tell us that the sky is falling so they can scoop up our assets for pennies on the dollar. Then the cycle will be complete and we'll be back in 2001, as predicted here.)

2008 was a very unique year in the domaining industry. The popularity of domaining continued to rise even as prices dropped. Increasing numbers of end users noticed the value of domains as well and there were quite a few astonishing sales reported throughout the year. At the same time, domain parking came to a virtual stand still and there were some rollercoaster-like price developments in the LLLL and LLL market segments. As the economic crisis picked up steam, end user sales have remained relatively strong, but an unprecedented domainer bubble, which was caused by easy credit and irrational exuberance, came to a slow but certain end.

Domain Registration Growth Continues

Despite all economic troubles, the number of registered domains kept growing during 2008. However, growth has slowed down quite a bit. Over the course of 2008, the growth rate of registered domains dropped from a 30% growth rate to a 15% growth rate. gTLD domains (like .com, .net, .org) went from over a 30% growth rate in 2006 to under a 10% growth rate in 2008. ccTLDs (country code domains) noticed a similar decline as their growth rate fell from 37% to a 26% growth rate. The majority of the newly registered ccTLDs can be attributed to specific TLDs like those for Russia and China.

Of course, it's important to emphasize that even a lower growth rate means that the number of registered domains is still on the rise! And much of the drop in gTLDs can probably be attributed to the introduction of new rules affecting the domain tasting industry.

The End of Domain Parking

Domain parking in the traditional sense is dying a slow but certain death. Earnings from parking revenue dropped significantly over the course of 2008; as both search engines and parking companies tried to maintain their profits during the economic downturn, domain owners found themselves at the short end of the stick. Alternative monetization solutions like mini-development or auto-development have sprung up for those who own dozens, hundreds or even thousands of domains and don't want to concern themselves with actual development.

The LLLL Craze Is Over

On November 2nd, 2007 the last available four letter dot com domain was registered. This was the start of what was going to be an unbelievable reseller bubble; many people argued whether this bubble would ever pop or not. In early 2008, some domainers started selling their lower quality LLLL .coms for $15 to $20 each. There were quite a few larger investors as well and they were hanging on to their domains in the hope of further price increases.

In the spring of 2008, things really picked up and at one point, the lowest quality LLLL .coms were fetching $35 to $45 per domain. Higher quality domains were regularly seeing end user sales.

Over the subsequent months, things slowed down. Lower quality LLLL .coms became very difficult to sell for more than $10 and we're almost back where we started. Still, it's only a question of time until things pick up again; it is possible that by 2010 or 2011 we'll see a second, more mature and sustainable price increase for LLLL domains.

LLL Domains Cool Down

At the start of 2008, low quality LLL .com domains regularly sold at $6,400 per domain. Within a few months, this minimum had increased to around $7,000 per domain. Then everything started to quiet down and the value of most LLL domains slowly decreased. At the end of 2008, low quality LLL .com domains were selling in the range of $4,500. That's still pretty good, but nothing like the predictions we heard from top domain experts in early 2008 that even the worst LLL domains would sell for more than $10,000 by the end of the year.

End User Sales Remain Strong

When the market was at its strongest in 2008, Fund.com sold for about ten million dollars in the most expensive reported domain sale of the year. DataRecovery.com also sold for a fair amount (over $1.6 million) in March, when the industry was at its peak. As if to demonstrate that the domain industry will tough out the hard economy, Kredit.de and Invest.com both sold for over a million dollars later on in the year when the economic crisis was already in full swing.

More recent transactions like FinancialAid.com selling for $480,000, SC.com for $300,000 and YP.com for a very nice $3,850,000 demonstrate that the domaining game will continue on even through harsh times.

2008 – A Year To Remember

It is likely that 2008 will go down in history as the year that the wholesale sector of the domaining industry hit an all time high and went on to drop very rapidly in the same year. At the same time, retail sales remained strong.

It is unknown what the future holds, but it seems that the worst is over and that the domainer-to-domainer market will slowly start to rebuild itself. The primary lesson for all domainers is that we should depend neither on other domainers, nor on parking companies for our monthly income.