Media company that uses .co domain got a “steal” on the matching .com,
404 Media, a popular technology news site, started in 2023 with a very low budget. Each of the founders chipped in $1,000, and the only domain they could afford was 404media.co. Another company was using the matching .com.
But this year, after 404 Media had grown in popularity, an opportunity presented itself: 404media.com expired and was being auctioned on GoDaddy.
The company pounced and won the auction for only $1,207.
In a blog post today, one of the founders recounts the story of bidding on the domain:
But an auction is a very different experience to just buying the domain outright. We would be trying to beat other people or bots. We thought that might include those kindly trying to buy the domain on our behalf, or others trying to take it from underneath us. And we had no idea how high the price might go.
Indeed, there was a lot at play. I’m sure some people considered buying the domain as a gift for 404 Media. But the publication could ask people not to bid on its behalf; you don’t know who the other bidders are, and the publication certainly didn’t want to publicize the auction.
Ultimately, they called the final purchase price a bargain and a steal. I agree. Buying an expired domain as an end user is usually a bargain, since most people in the auction are buying it for resale and need to build in a healthy margin.
Even though 404 Media just forwards the .com to its existing .co, the company explained the importance of owning the .com:
The first is that we’re proud to say 404 Media is a well known publication at this point, and we don’t want anyone else parking and abusing the .com domain that many people may end up at by mistake. The second is that, understandably, many people mistakenly email us at the @404media.com domain rather than the @404media.co domain, so now we’ll be able to catch those lost emails and save us all a lot of heartache.
I was waiting for this blog post. I was the other bidder that pushed the price up. I’m a reader of their site, and when the domain appeared in the GoDaddy inventory, I thought all my christmases had come early and I could make bank off of it. I had previously tried to sell 404 media a different domain but they had not been interested (and I had told them that their .co domain was a terrible choice as an alternative to .com. I will never understand businesses that choose .co, it’s almost guaranteeing mistyping, misunderstanding.)
Prior to bidding, I determined that I could sell the domain to them for $5k guaranteed and a high chance of upwards of $10k. I wasn’t sure if I was bidding against them or some other devious domainer and I didn’t want to get stuck with a lemon: I figured for $5k guaranteed return, or $10k+ possible return, that ~$1200 was a fair amount to risk. I thought that the unverified bidding limit was $1k so I assumed once it crossed $1k that I was more likely to be competing against another domainer. I would typically aim for 100x returns on an expired auction domain, 5x or 10x is a poor use of capital. I’m glad they were the other bidder, as it means I did not lose to a domainer with a better strategy / assessment.
This would make you a cybersquatter.
As are you, and every other domainer.
A domainer is either a cybersquatter who knows they’re a cybersquatter or a cybersquatter who lies to themselves about being a cybersquatter. There is no functional difference between picking up 404media.com at auction because you believe that 404media.co are willing to pay for it, than picking up “EasyBooking.com” at auction ($6k at DropCatch currently) because you believe one of the dozens of companies called some variation of “easy booking” will be willing to pay for it. Yet, because “easy booking” is generic, it is not cybersquatting? The difference is academic, a lie we tell ourselves to make our business more palatable, but alas, the UDRP rules are not a moral barometer.
I won a dictionary word at auction a few months ago for a few dollars and sold it last month for a few thousand dollars. The company that bought it launched after I won the domain at auction, I had no prior knowledge of the company because it did not exist yet. Yet, my thousands of dollars profit off of that domain is morally no different than if I had won and sold 404media.com.
Purchasing domains because you think someone else will pay you more for them at some point in the future is, for all intents and purposes, cybersquatting, whether the domain is generic or not is irrelevant. The only people who believe there is a distinction between cybersquatting and domaining are the domainers profiting off of domains.
I disagree. You said you were bidding knowing of 404 Media’s mark, specifically targeting them with the hopes of selling it to them. That makes a key difference from a legal standpoint.
The law isn’t a moral barometer, and it isn’t the measure used by the general public. The widely understood definition of cybersquatting by normal people is buying domains to resell for profit. Targeting is legal minutiae, it is a distinction without a difference. Purchasing “EasyBooking.com” at auction to sell to one of the companies that offer “easy booking” because they don’t know the domain is at auction is indistinguishable from buying “404media.com” to sell to 404 media in the eyes of everyone except domainers.
The fact that the law(s) around cybersquatting include a requirement for “targeting” is a boon to domainers that we should be thankful for. Every single domainer who participates in expired domain name auctions is, whether they acknowledge it or not, cybersquatting by the definition used by every non-domainer.
I focus on expired dictionary word .com domains and made the majority of my money from them this year (because that is where the money is) so whether I engage in “targeting” or not would not impact my business, that said, it is self-serving of domainers to pretend that what we do is any different whether we “target” or not. To the people paying us thousands, tens of thousands or hundreds of thousands of dollars for domain names, we are cybersquatters, whether it is an untrademarked dictionary word .com or an invented and trademarked .com.
The FAFO gods will probably be paying 402 media a visit someday, maybe sooner than later after these comments!