I was listening to a podcast about this, apparently he registered a ton of domains (including Corp.com) for free a long time ago and has been squatting and slowly selling them back at extortion prices. He's done this many times before and already retired because of these payouts. I'm not happy to hear he got a single cent
Eh, he identified something of value early on before anyone else did. This is literally how the stock market works. Let's re-phrase:
"Ugh, I can't believe he made money by acquiring a large pile of Apple stock for $1 each back in the 90's, squatting on it, then slowly selling it at extortionate (read: market) prices a few decades later. He's done this many times before and already retired because of these payouts. I'm not happy to hear he got a single cent."
This is a great example of why argument from analogy is a fallacy. The fact that you can buy domains and they might go up in value is almost the only similarity they have to stocks, and certainly isn't a justification for letting people trade them like stocks.
When you purchase stock at an IPO, you're providing value because you're giving a company funds which they can use to build their business. Later buyers of the stock are providing value because they're incentivizing the buyer at IPO. All further purchases of the stock flow out of that.
When you purchase a domain, you're taking a valuable, limited resource, and paying, typically, a pittance for it. You're not providing value, period, at all. Ostensibly the reason we let people do this is that they will use the domain to provide value in the form of a website that people use.
So stock buyers are providing value to the market, while domain squatters are actively removing value from the market.
> When you purchase a domain, you're taking a valuable, limited resource, and paying, typically, a pittance for it.
They're not limited, the short ones are. I'm not sure why people think they're entitled to short domain names.
> You're not providing value, period, at all.
I mean, you pay an annual maintenance fee do you not? That funds the registrar, which funds ICANN.
> So stock buyers are providing value to the market, while domain squatters are actively removing value from the market.
Maybe squatting on a domain provides them some satisfaction, who are you to judge how people choose to use their domains? If I choose to host pics of cats on "cats.com" (as the current squatter is doing) am I any less entitled to the domain than PetSmart? Just because you don't approve of what I choose to do with it?
Yes domains aren't specifically fungible, they're slightly different with regards to how memorable they are. You can still do exactly the same with each of them: host a website.
Sounds like there's more market oriented ways to resolve this issue. If you feel like short domains provide the world outsized value, why charge the same $10 annual maintenance fee as a 15-letter domain? The shorter, the higher the registration fee. Problem solved?
> Maybe squatting on a domain provides them some satisfaction, who are you to judge how people choose to use their domains? If I choose to host pics of cats on "cats.com" (as the current squatter is doing) am I any less entitled to the domain than PetSmart?
Yes.
It's not as obvious with something like cats.com how this harms society, but I've worked with nonprofits numerous times who had to pay tens of thousands of dollars for their domain names because someone squatted them.
Let's not pretend there aren't widely-agreed-upon values being trampled here. Your argument is moral relativism.
> Sounds like there's more market oriented ways to resolve this issue. If you feel like short domains provide the world outsized value, why charge the same $10 annual maintenance fee as a 15-letter domain? The shorter, the higher the registration fee. Problem solved?
Given you haven't even agreed that there is a problem, it's pretty clear you just want to propose a market-oriented solution regardless of what the problem is, or whether the market can even solve it. This is not how problems get solved.
That just ensures that over time the shorter domain names go to those with deeper pockets.
An often overlooked complication as well comes in the form of programming language package management reliant on reverseddomain names. Fail to renew your domain claim, and you may find yourself having to repackage healthy chunks of code.
I agree, and that could either be what the parent wants (i.e. let Apple have apple.com) or it could be the opposite, but if you want domain names to remain in the hands of the "little guy" providing "no value" then squatting is something you have to live with right? I've got 4 or 5 personal domain names I'm squatting on because I haven't got around to doing anything fun with them yet.
> if you want domain names to remain in the hands of the "little guy" providing "no value" then squatting is something you have to live with right?
The vast majority of squatted domains aren't squatted by "the little guy", so nothing you say starting from that incorrect assumption has any validity.
I'd say this is an apples/aircrafts type comparison here.
I'd argue that domain names are limited: there is exactly one of each domain name, the fact that there is a practically infinite number of other different domain names isn't necessarily relevant.
Stocks function as a medium of exchange for the vast majority of cases. Squatting on a dollar to make interest isn't abusing the dollar.
Web domains function in a thousand different ways, and in some cases a medium of exchange metaphor may work (e.g. people want the domain to make more money). In this case, it's more akin to hoarding hand sanitizer and toilet paper until people have to pay scalper's rates out of fear of repercussion. The only reason this is a story is because of the security risks it presents, and holding that risk hostage is pretty obviously unsociable behavior (even if it is Microsoft's dime).
> The only reason this is a story is because of the security risks it presents, and holding that risk hostage is pretty obviously unsociable behavior (even if it is Microsoft's dime).
Not really, right, Microsoft could go back and fix this another way. They could release patches to all the major OS versions that had this bug, and push their customers to upgrade or face security issues at their own peril. I'd have to imagine all the customers with this problem have long-term support contracts, and if they don't, well, I don't know what to tell you.
What he's providing Microsoft is a dramatically cheaper, easier way out of a problem they made for themselves with poor/buggy domain resolution. He didn't create the bug. He's selling them a patch that costs a fraction of a fraction of what they'd have to pay to get themselves out of their own mess.
Think of it more as someone who acquired a tow truck as an inheritance, and sees an armored car in the ditch. The armored car could get themselves out, they could remove their gold bricks one piece at a time, then pull the car out and load the bricks back on. Or, they could give a brick to this guy and call it a day.
He didn't push them in, he's offering them a much more cost effective way out.
The issue is that squatters like him hold onto domains for years, even decades, with prohibitively expensive prices where they only need a small portion of the domains to sell to be profitable, meaning that the rest of the unsold domains remain unused and wasted for no reason other than to have a very small chance of being profitable to the squatter in the future. He is not generating value, but instead hindering the use of most domains for selfish reasons.
No it's not. Buying a bunch of Apple stock for $1 apiece doesn't prevent anyone else from buying Apple stock too. Buying and squatting on domains prevents people from using the domains. It's strictly rent-seeking behavior and is not productive in the least.
Stock is fungible. Domain names aren't. If I buy stock, as long as there continues to be sellers (and there will be for any functioning stock) you can buy stock too and the only effect my purchase can possibly have is, if I bought enough, it might affect the price you pay. If I buy a domain name, you cannot buy that same domain name too.
Domains are really more like land than stock. And while you can do something similar with land - buy undeveloped in places where you expect development in the future, then sell for a lot more - you have to pay property taxes while you hold it.
The difference is that in your example, they helped the company raise capital that they went on to use to build something valuable. Squatting domain names at best helps companies raise capital to go sell some more domain names.
I don't really see how this is related to stocks. First, he got these all for free, while you have to buy stocks. There's a risk that they might be worthless down the line and you lose all the money you spent
Second, when you invest you are offering financial value. He just contacted someone, said "hey can I have these domains please?" and did nothing with them for 25+ years, until he was finally able to demand a payout. again.
are all the people who tried to sell their hoarded toilet paper people who "identified something of value early on before anyone else did"?
It's disingenuous to say the domains were free. There was no purchase price prior to the mid 90s, but from then on, there were annual fees starting at $50 and later dropping to $35. They didn't drop below that for a while, and bottomed out around $10-15. Sitting on a domain for 25 years cost nearly $1000. That's great if you can sell the domain later for 5-6 figures, but if you have a large squatting portfolio, there are substantial costs. You
might not like domain squatting, but there's no denying that it was an investment, and there were risks. This guy just saw the market early and it paid off.
The key difference is that almost all the value of the domain comes from the fact that you have a monopoly over it, whereas that is not the case with stock: I can buy an equivalent Apple stock from someone else if I don't like your price.
The other aspect is thinking about which activity is actually economically productive. In the case on investing in Apple, you're producing value, since Apple wouldn't otherwise been able to exist without the capital. In the case of domains, me buying a domain in 1990 is completely unproductive (the domain is still "there" regardless if I buy it or not). I don't see the value to society in rewarding people for rent-seeking on monopoly goods, while the value in encouraging capital investment is clear.
Capitalism doesn't require this sort of rent-seeking, and Adam Smith (as well as other thinkers) identified (and formulated solutions) this problem in the case of land, which is similar.
Microsoft didn't NEED to buy the domain, they could have patched their code to handle the issue. Clearly, they did a cost benefit and decided it was worth it to buy the domain to plug a hole they created.
Another poster used the stocks analogy but I think the real estate one is more appropriate. Someone who bought land a long time ago that is now desirable to another party can has no obligation to sell at all (let's not bring eminent domain into this). Let's say instead of corp.com this was land next to Microsoft Campus in Redmond. Why shouldn't someone ask for as much as they can get for their land?
If they patch their code, they still have to get people to update. I know companies still running Windows XP. If you think people outside of the tech industry update their systems regularly, you're in for a rude awakening. My uncle's company still runs a DOS app written in 1984.
Corp.com for example, belonged to whom exactly, 26 years ago? It's not squatting, its smart. Who did he extort? Can you buy a Manhattan lot at 1860 prices? Nope. If you want it pay the price or go build in NJ or PA.
This is why I support higher annual fees for domains. If you owned unused land in Manhattan, you'd still be paying a fortune in property taxes that would motivate you to put it to use. For squatters it's the exact opposite, they can let domains remain unused for decades at almost no cost, which benefits no one.
You want all domains including something like thisgeekyishwebsiteisminethanks.com? I haven’t thought it through. But just to make something like thecar.com to cost high $XX per year (not sure if you meant that price pt or $100+), that random useless to anyone else domain above should also have to cost that much?
