Domain names are too cheap.

The lack of good domain names is one of the worst things about Web 2.0: All these companies with spellcheck-busting names as a by-product of the fact that so many good domain names are being squatted.

I was looking for domain names recently for this and my other blog. I even offered to buy some names from people who were squatting them. No-one even bothered to reply with a price. Seems that many domain squatters have even forgotten what they are squatting – or the click-through ad revenue is more than the cost of registration.

Some of these names aren’t even being used to generate ad-click revenue. They are registered but don’t even have IP addresses assigned.

The EU tried to come up with a way to prevent squatting when they released the .EU tld. If someone is squatting a name that you have better rights to then you can go through a dispute resolution process. I think it costs about €3000. So all this has done is set a price for squatters to sell their domain names.

At least the .ASIA people were smart enough to use auctions to set market prices (and generate more revenues for the registrars).

Once again the old cliche that regulation leads to unintended consequences and distorts the market holds true.

Which leads me to wonder whether there is a market solution for existing names. What would happen if registrars started increasing registration fees for renewals of names?


One response to “Domain names are too cheap.”

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