The Perception.com 12 Rules of Acquisition
We at Perception.com suggest that you employ a qualified domain broker to work on your behalf, but if you decide to approach a domain owner yourself in order to buy a domain asset, then you may want to keep these ideas in mind. We are freely offering some straight-forward information, learned over many years of experience, and we hope you find it in some way helpful. The writing tends to be direct, and the intention is to inform and to help prevent difficulties for everyone, and not to offend. Speaking only in abstractions may not be very helpful, and could be a waste of time.
The internet and domain names comprise the single greatest opportunity, thus far, ever devised by mankind, for the branding, marketing, and sales of goods and services, and for people helping people. Domains, therefore, have great value, especially superior domains. However, the quantity of superior dot com and dot org domains is forever quite small, and the competition for them is ever-increasing as the world continues to wake-up to their great power. Many more years are required, in this age of the still-emerging internet, for the large majority of people to understand the opportunity and value presented by higher-quality domains. Great domains are a digital asset that have inherent value, due to their tremendous benefits to companies, organizations, and individuals. The more that the value of better-quality domains becomes recognized by the masses, the higher will be the market prices for them. We expect that trend to continue for many years. The prices for superior domains today, will seem small in twenty years. The high value of great domains already exists, but prices have yet to become commensurate with value. The value and the price of a given asset, are often very different matters, and can change greatly over time. If you want a superior domain for your business or organization, or for your personal use, then you may find it to be a good idea to buy it as soon as possible. Domains are increasingly bought and sold every day, and the public at-large has little idea about the ongoing and accelerating market for great domains. Once a domain is sold to a company or organization, it would most like be extremely difficult, to say the least, to acquire it from the new owner.
1. The value and price of a domain name do not depend on how the domain is, or is not, currently being used. The value of a home does not depend on whether someone is living in the house, or how the home is furnished. The same is true for domain names.
The value of a domain also does not depend on whether the owner is making the "best use" of the domain. The current domain owner is using, or not using, his property as he wishes, which may differ from your ideas for the domain. It is his property to do with as he pleases, which may include nothing, and your determination of "best use" is probably not relevant to him. His use, or lack of use, of the domain, does not determine whether he should sell it, and does not affect the price. And, the domain is not "going to waste" if the owner is using it, or not using it, as he sees fit. I may have other ideas for the domain, but his use of it is none of my business.
The value and price of a domain name are determined mainly by the domain owner and, if he wants to sell soon, current market forces are also a factor.
2. The value and price of a domain name are not based on the yearly renewal fee. Some better domains can currently sell for as little as $10,000, and others up to $5,000,000, or somewhere in between, while a smaller number can go for $10,000,000 or more. Yet, the yearly renewal fee is the same $10, regardless of the selling price on the open market. Prices for quality domains continue to rise, as the demand for them continues to increase. We expect that trend to continue for many years to come, as more existing companies discover the value of owning and branding to a great domain name, and as more new companies come on-line.
The value and price of your home are not determined by the property taxes that you are forced to pay every year. Hypothetically: If you paid $250,000 to buy your home, and your yearly property taxes are $2,500, then the value and price of your home are not the cost of property taxes, but are determined largely by you and by market forces. A similar principle is true for domains: the yearly renewal fee is not the value or market price of a better-quality domain name.
Again: The value and price of a domain name are determined mainly by the domain owner and, if he wants to sell soon, current market forces are also a factor.
3. The value and price of a domain are not determined by how much the current owner paid for the domain. If a person bought his home decades ago, and paid a relatively small price for the property, the price for the house would likely be significantly higher today. The value and asking price today would be determined primarily by the owner of the real estate, and he may well consider current market forces in his calculation. But, ultimately, the value and price are decided by the owner of the property, and he can choose to adjust that figure as he sees fit. If the real estate market disagrees, the home will not sell at his current asking price. However, unlike real estate, the domain market has yet to reach its full maturity, therefore the market may not currently recognize the real value of a given great domain, and a domain owner may choose to wait until the market realizes the value and opportunity of a superior domain.
Whether a domain owner registered his great domain name decades ago for $100 or less, or whether he paid $1,000,000 for it only three years ago, the owner is still the main factor in setting the value and price.
4. The value and price of a domain are not determined by your budget. The new car you want is listed at $75,000. You walk into the auto showroom, and tell the salesman that "I very much want that new car over there, but all I can afford is $5,000." The salesman may politely suggest that you can either change your budget, or look for another means of transportation. Or, he may simply direct you to the bicycle shop next door.
If you want a great domain, then do not expect the owner to adjust the price to meet your small budget. Look for another domain that you are willing to buy at the best-price being offered by the owner, or simply register a new domain for $10. But, you may find a way to increase your budget for the domain you truly want, and you may not regret it after seeing the benefits of owning a higher-quality name.
5. Determine the value of the domain to you. First, determine the maximum value to you of the domain asset, before approaching the domain owner. That number may change over time, but it is a good idea to have a maximum figure in mind when you approach the owner.
The value of a domain to you could be related to how much it could benefit the growth or reputation of your business, or could be the worth that the asset would have to you in some other way. The value and price to you, are strictly for you to decide. If the home you want for you and your family is not worth the price to you, then do not buy it. If the price of a given domain is likewise more than the domain would be worth to you, then look elsewhere.
All the great domain names were registered years ago. It is not likely that you will be able to register a new domain today, and realistically expect it to be currently worth much more, on the open market, than the $10 renewal fee. However, some companies, organizations, and individuals have been able to find an adequate domain that is indeed open for new registration, even though the domain is far from ideal. If you value a domain name only as a place for your website, and you do not see how buying a better and more-costly domain will benefit you or your business, then most any domain will suffice. You may be able to find pieces of real estate for cheap, but not in Manhattan.
6. Be courteous and clear in your discussions with a domain owner. Do not waste your time or that of the domain owner, by merely "kicking the tires." Have your best price in mind for the domain, and make that best-offer at some point soon in the discussions. When that time comes, be clear that the price you are now offering is your best offer. We recommend that you do not be dishonest in negotiations, for both moral and pragmatic reasons. Be honest, courteous, professional, straight, clear, and firm in your words. Of course, you can do with this advice as you wish, but we have found it to be a much better way to live and conduct business.
Include a solid offer for the domain in your first contact with the domain owner. If it is declined, then soon follow with your best offer, and clearly state that fact. You will save much time and trouble with this approach, and you may just get the domain. Time is all we have, and it has value.
Do not write the standard "tire kicking" e-mail, which states to the effect: "Are you interested in selling your domain? If so, how much?" Also, do not claim that you are a "poor student," or run a "small business," or have a "small budget," or that you want the name as a donation for you or your "non-profit." Owners of valuable domains frequently get these types of e-mail, and you will most likely not receive a reply. Most enquiries to domain owners are written from the same template of fear: the fear of paying "too much." Be different.
You may indeed be a "non-profit," but the domain owner is not. Also, you may be legally-designated a non-profit, but if anyone at your organization is taking a salary, then some people would not view your institution as a pure non-profit regardless of legal status. Finally, your organization pays for all other expenses, so why would you expect the domain owner to give you any special consideration? Do you see the domain as virtually worthless? Or, do you want the tremendous benefits of a great domain, but without paying for it? If the domain owner wanted to donate to your organization, it may not be in the form of a high-value domain, and he probably would have already donated without your request. We would advise that you not solicit donations from strangers via e-mail, whether for cash or domains.
You may be able to save a little money by playing games or being dishonest, and only you can decide if that is the road you want to take, and if it is worth it to you.
Do not berate the domain owner to lower the price, no more than you would knock on the door of your dream home and harass the home owner. You could simply make your best offer for a given domain, and your price will either be accepted or declined. If it is declined, let it go, and look elsewhere. Life is short. However, you just might get the great domain you really want.
Finally, write your e-mails as if you were sitting in your living room or at your dining table with the domain owner. Some people will make statements in an e-mail that they would never say if they were sitting face-to-face with the person to whom they are sending the message. Electronic communication is extremely convenient and saves much time, but it allows many people to forget their own humanity and that of others. You are communicating with a real, living, breathing person, not merely typing words into your computer.
7. Market prices may continue to rise. You might consider the asking price of a given domain asset to be quite high, but it is also very likely that, in the years to come, today's price for the domain may seem very low. Not only could a great domain benefit your business or organization today, but, if you ever decide to sell the domain in the future, it may be worth much more on the open market. Therefore, great domains are not only an asset, but can also be considered an investment, even today, much like real estate in a prime location.
We, of course, have no proof about the future, but we anticipate that domain prices have a long distance to go, possibly twenty years or more, before they reach their apex and any degree of stability in the domain market and in the general economy. Many people still do not even know that there exists a thriving market for quality domain names.
A great domain can be of extreme benefit now, and perhaps as an investment for the years to come.
8. The owner of a domain name is not a "squatter." If you decide to approach a domain owner yourself, do not refer to him as a "squatter." He owns a piece of internet real estate which you may want, just like a person may own a home in the real world that you would like to have. Neither one is a squatter.
In the real world, a squatter is a person who moves into a vacant home or onto a piece of land, and who does not have either legal title to the home or land, or the stated permission from the owner. Referring to a domain owner as a squatter is factually not true, and is quite an insult, and will likely end your discussions with him rather quickly. If you owned a home or any form of real estate, would you want to be referenced as a squatter? No, of course not. Are those who buy homes and real estate for any reason, whether for living or as investments, correctly called squatters? Again, no.
A domain owner may have bought a domain years ago in order to develop it into a website, or he may have bought it as an investment, or to use for e-mail, or for some other purpose. He is not a squatter.
If you were able to buy, or even register today, the domain that you very much want for your business or personal use, would you then suddenly become a squatter? No, merely owning a domain does not make you a squatter.
Domains have been open for registration since 1985, which is decades ago. Do not allow your frustration at not having the domain you want today, to cause you to become irrational, angry, and aggressive toward a domain owner. He is not a squatter, no more than you are a squatter.
Would you become irrational, angry, and aggressive because the real-world home you want, is already owned by another family?
If you could go back a few decades in time to 1985, while knowing what you know now, and register many great domain names worth millions and millions of dollars, including the one that you very much want today, would you do it? Yes, of course you would. Would that make you a squatter? An emphatic "No" is the answer.
The people who have acquired great domains simply had the foresight to see their value before most others, or had the good fortune to be at the right place at the right time, or both. They are not squatters.
9. A true cyber-squatter is relatively rare. The overwhelming majority of domain owners and domain investors are not cyber-squatters, but are, quite to the contrary, very careful to avoid well-known trade names when registering or buying domain assets. You can find a few "bad apples" in any industry or walk of life, and the same is true with domain names.
Some people may disagree with the exact verbiage we chose to define the term, but, in our view, and in practice, a cyber-squatter is someone who engages in all four of these behaviors:
A. knowingly and intentionally targets a trademark holder, and
B. registers a domain that is identical or confusingly similar to the trademark, and
C. registers the domain after the trademark has been granted, and
D. uses the domain to in some way profit from the brand and activities of the trademark holder.
Hypothetically: If, today, you were to register the domain GoogleSearch.com, or GoogleSearchEngine.com, you would be knowingly and intentionally targeting Google's brand and trademark. But, if you had registered GoogleSearch.com in 1991, years before even the existence of Google, you would not be in violation simply for registering the domain.
Another example: If you could today buy the domain Apple.org, and if you were selling some delicious organic apples, and not computers, you would not be infringing on Apple's trademark. Also, people may be typing Apple.org into a browser to get to the computer company, but would that be a violation of trademark law? We strongly suspect not. The grower and seller of juicy red apples is not responsible for the misunderstanding and browsing habits of other people, and is not trying to infringe on the Apple mark; he just wants to sell apples for a low price, under the brand of a great dot org domain.
Again, do not allow your frustration at not having the domain you want today, to cause you to become irrational, angry, and aggressive toward a domain owner, and do not refer to him as a "squatter" simply for owning a domain that you want.
Very, very few people who walk into a bank are intending to rob the place or do wrong, but merely want to conduct honest business, so it is not correct to refer to every bank customer as a thief. Dropping the term "squatter" from your references to a domain owner, is likewise a good idea.
10. Your idea does not entitle you to a domain name. You may be surprised at the number of people who think that their idea for a company name, brand, product, or service, somehow entitles them to a specific domain name, even when the name was registered many years before their idea was born. If an aggressive individual pursues some form of legal action to steal a domain name under these circumstances, he will probably lose, and will then be forever known as a "Domain Hijacker." More specifically, his legal designation would be a "Reverse Domain Name Hijacker," or RDNH. He could also face steep fines and other major penalties.
Do not be that person, since not only is attempted theft immoral, but you will be forever linked to that title on the internet. Your record of RDNH would never go away.
If you cannot buy the domain you currently want, move on and think of another name. Domains are property. Do not be a thief.
I think I should have a certain house on the beach in Malibu, and force should be used to steal it from the owner on my behalf.
11. Generic, dictionary, and other commonly-used words, terms, phrases, or descriptions, or acronyms, can be used for many different purposes. A company can be granted a trademark on one of the above-mentioned types of marks, but that does not mean that this company can legally be the only one to use such a term or acronym. The ABC television network has a mark on "ABC," but that would not prevent a company from, for example, acquiring the domain ABC.org, and legally selling school supplies. If you receive a trademark, do not harass a domain owner based solely on the above types of marks. Also, never berate a domain owner if your trademark post-dates the registration of the domain. Again, do not be a thief.
Moreover, acquiring and holding such a domain name purely as an investment, without any intention to build a website on it, is both legal and moral. Domain investing is neither a crime nor immoral, similar to investing in real estate or any other valuable asset.
12. "I want my domain name back." You fail to pay your property taxes, and government enforcers eventually come to your door and violently evict you. You no longer own the home. You do not pay rent on your apartment, and, likewise, you will eventually no longer live there. Neither the home nor the apartment are any longer "yours." You forfeited ownership by not paying. Someone else buys your home or rents your apartment. Would you be angry at the new occupants for your neglect?
Domains are also considered property. You failed to renew your domain name, and now you are angry that someone else now has "your" domain. Correction: Someone else now owns the domain name, but it is no longer your domain. If you want to move back into the domain, you will need to talk with the new owner, and we would suggest in a civil manner. Otherwise, find another web address.
The new owner of the domain assumed that you no longer want the domain name, and that you intentionally allowed it to expire. Do not blame the new owner for your mistake or neglect. He did not "steal" the domain from you or anyone else. Do not allow your frustration with your mistake or neglect, and the negative outcome, to determine how you communicate with the new owner. He is not the cause of your problems.
We strongly advise that you maintain the renewal on your domain names, and, moreover, it is even better to add 5 or 10 years to your important domain registrations. Make a note in your calendar or reminder to renew the domains well before expiration. Also, maintain control of your e-mail address that is listed in the WhoIs record for the domain, since that is how your registrar will likely remind you to renew your names. Avoid using free e-mail services such as GMail or Yahoo for your WhoIs records.
*** If you have experience buying and selling domain names, or if you are an IP attorney, and if you have an idea that you think could contribute to our Rules of Acquisition, send us a note and we will give it due consideration. Thank you much. You can e-mail us here: Suggestions@PerceptionMail.com
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