Update: Reputation.com has apologized for what happened (Rob from Reputation.com posted an official apology on DomainingTips.com) and they did the right thing by editing the definition. Apology accepted!
I can’t believe that in 2011, most people still don’t understand what the difference between an investor and a cybersquatter is. According to Reputation.com, a domain squatter is a person “who purchases domain names with the intent to sell them later to individuals or companies for a profit. Domain squatters will buy an un-owned domain name hoping that a company or individual will later find it pertinent to their business or simply important to own. The domain squatter can then sell the URL for a profit.”
It’s statement like these from so-called “authoritative” sites which add up and make the general public consider all domain investors cybersquatters.
Domain Investor -> Domain Squatter -> Cyber Squatter
… at least as far as the average Joe reading a definition such as the one found on Reputation.com is concerned.
So according to these people, investing in something is all of a sudden bad? MS Domainer from NamePros (I found out about this so-called definition through a NamePros thread) hit the nail on the head through her post:
If domain investors are domain squatters, are people who invest in land “land squatters”?
Or individuals who flip houses “house squatters”, folks who flip apartments “apartment squatters”, people who invest in art “art squatters” and so on?
If anyone from Reputation.com is reading this, kindly consider changing the definition of the term “domain squatter” to:
“A person who purchases TRADEMARK INFRINGING domain names with the intent to sell them later on at a profit and/or with the intent to monetize the domain’s direct navigation traffic. Domain squatters will buy an un-owned TRADEMARK INFRINGING domain name hoping that they will generate revenue greater than the holding cost by monetizing the domain’s direct navigation traffic and/or hoping to sell it to the trademark holder later on.”
February 14th, 2011 at 4:18 pm
In the eyes of many college students, developers and small business owners who just want a domain name, someone who registers a domain with the intent of reselling it at a profit is a squatter. If you try to bring up the analogy of real estate, they will disagree. However, it is interesting how businesses will spend thousands monthly leasing office or retail space or thousands on marketing their products and services but the thought of paying more than $50 for a domain name is price gouging.
Using the real estate analogy, a golf course behind my apartment complex was sold in 2005 for $7.2 million near the height of the real estate bubble. The buyer intended to build a shopping center and residential community with high-end homes on the property. Then the real estate market collapsed. Given that South Florida real estate prices have come down close to 50% from their peak, one could imagine that the buyer would get stuck with a multi-million dollar loss upon resale. It turns out that the city was looking for land to build a park and ended up buying the property for $9.1 million in 2009. So despite a real estate market collapse, this South Florida real estate squatter negotiated perhaps a $1.5+ million pre-tax profit after financing, maintenance and property tax costs are taken into account.
February 14th, 2011 at 4:57 pm
@Leonard Britt: the general public tends to easily accept an idea without analyzing the fundamentals behind it simply because he or she read some more or less biased information on a popular website unfortunately.
A lot of folks underestimate the importance of this reality, “so they called all of us cybersquatters, who cares?” is a very dangerous passive way of thinking IMO.
February 14th, 2011 at 7:50 pm
That is a very common public perception.
The problem lies not with with the public though, but with the industry itself.
February 14th, 2011 at 8:23 pm
The problem lies with Reputation.com and their lies about domain investors.
What a lying, scumball company that is trying to trick their own customers .
February 15th, 2011 at 2:40 am
Therefore, those people who invest in properties in the real world should be called house squatters, apartment squatters, condominium squatters instead of investors. Donald Trump…mega squatter??
February 15th, 2011 at 11:00 pm
I contacted Reputation.com through their chat. It would seem that they have no interest in repairing the potential damage they are doing to further the negative myth about domain investors. I thought you might be interested in the transcript (Chris is the Reputation.com representative):
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Please wait for a site operator to respond.
You are now chatting with ‘Chris’. How may we help you?
Chris: Hello
Chris: Thank you for contacting Reputation.com
Christine: The definition of “Domain Squatter” posted on your website is erroneous.
Christine: A domain squatter is someone who buys misspellings of trademarks.
Christine: Your website is perpetuating a faulty belief.
Chris: Here is the definition of “Domain Squatter” by Wikipedia: Cybersquatting (also known as domain squatting), according to the United States federal law known as the Anticybersquatting Consumer Protection Act, is registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trademark belonging to someone else. The cybersquatter then offers to sell the domain to the person or company who owns a trademark contained within the name at an inflated price.
Chris: The term is derived from “squatting”, which is the act of occupying an abandoned or unoccupied space or building that the squatter does not own, rent or otherwise have permission to use. Cybersquatting, however, is a bit different in that the domain names that are being “squatted” are (sometimes but not always) being paid for through the registration process by the cybersquatters. Cybersquatters usually ask for prices far greater than that at which they purchased it. Some cybersquatters put up derogatory remarks about the person or company the domain is meant to represent in an effort to encourage the subject to buy the domain from them.[citation needed] Others post paid links via Google, Yahoo!, Ask.com and other paid advertising networks to the actual site that the user likely wanted, thus monetizing their squatting.
Christine: Please note the Wikipedia definition specifies “with bad faith intent to profit from the goodwill of a trademark belonging to someone else.” That is, in fact, correct. However, the definition on Reputation.com is maligning the domain investor community by insinuating that investors are the same as domain squatters/cybersquatters.
Chris: It is not saying that at all.
Christine: A domain investor does, indeed, “own, rent or otherwise have permission to use” the domain names.
Chris: It is merely stating that people that buy domain names to sell to companies that they are not using in order to profit from.
Christine: Perhaps you need to read what is in the glossary again: “The definition of domain squatter is one who purchases domain names with the intent to sell them later to individuals or companies for a profit. Domain squatters will buy an un-owned domain name hoping that a company or individual will later find it pertinent to their business or simply important to own. The domain squatter can then sell the URL for a profit.” That is a very clear slam at the domain investing community, and it is erroneous.
Christine: So should we start calling real estate investors “real estate squatters?”
Chris: No it is not.
Christine: Ask domainers if they agree with Reputation.com’s definition. I am absolutely certain that whoever wrote that definition does not have a clue what they are talking about.
Chris: We are stating that Domain squatters will buy an un-owned domain name hoping that a company or individual will later find it pertinent to their business or simply important to own. The domain squatter can then sell the URL for a profit.”
Chris: Which is people who buy a domain name in hope that someone will need it so they can profit. The same that is listed on Wikipedia.
Christine: No, there is a major difference. That is NOT a “domain squatter.” I have been in the industry for 11 years.
Christine: I am not “squatting” on anything, except maybe on Reputation.com’s faulty definition of the term “domain squatter.”
Chris: It is not a faulty definition.
Chris: Thank you for contacting us and if you have any questions about our services, I will be happy to assist you further.
Christine: The domaining industry has been fighting against this type of false information for years. Reputation.com is doing a grave disservice to the domain investing industry.
Chris: I’m sorry that you feel that way.
Christine: Again, I am part of that community and have been for 11 years. The person(s) who wrote your definition are clearly clueless. I ask that the definition be changed to reflect the truth, not some myth.
Chris: Great! Send us an email with your email address and contact number and we can address your questions in a timely manner.
Christine: You must admit that people within the industry could advise Reputation.com how better to provide a clear and accurate definition. By refusing to consider revising your definition, Reputation.com is giving itself a very bad reputation.
Chris: You can contact us at helpdesk@reputation.com
Christine: Are you saying that you can’t address this concern?
Chris: We have a wonderful reputation. Our customers and ratings on our services are very high in regards to what we do.
Christine: As are the vast majority of people involved in the domaining industry.
Christine: It’s a shame that you are apparently so averse to giving us the same respect.
Chris: You can look at our site and see who our Board Members and Managers are.
Christine: Yes, thank you for your time. I will do that.
Chris: You will see that we have a long history within the Internet Industry and companies involved.
Chris: Thank you as well. Have a lovely evening.
Christine: But probably very limited experience in domaining.
Chris: You do not know that Christine.
Chris: Thank you once again and have a great night.
Chat session has been terminated by the site operator.
—
I was in the process of typing when Chris decided to terminate the chat session. Nice touch.
February 16th, 2011 at 2:52 am
reputation.com is cool site with perfect idea…
February 17th, 2011 at 4:56 am
@Christine: congratulations for taking the time to confront them, I wish more people were as proactive as you have proven to be. I have dedicated an entire blog post to what just happened, thanks again! Here it is:
http://domainingtips.com/reputation-com-fail.html
February 17th, 2011 at 1:36 pm
Just took a power nap at babes, gonna go home and watch the grammys and sleep!
February 17th, 2011 at 10:49 pm
Hello,
My name is Rob Frappier and I’m the Community Manager for Reputation.com. I just wanted to say thank you for your critical eye. We recognize the difference between legitimate domain investors and domain squatters and we have corrected our definition to reflect the correct interpretation of the word.
In our original entry, the “bad faith” portion of the “domain squatter” definition was implicit. However, upon further review, we realize that that distinction should have been explicit in the definition so as not to cast a negative shadow on the many ethical domain investors out there (including the many domain investors who frequent this site).
Thank you for your understanding.
Best regards,
Rob Frappier
Community Manager
Reputation.com
February 18th, 2011 at 6:04 am
@Rob: apology accepted, I have edited both blog posts and am pleased to see that you guys finally did the right thing.
February 18th, 2011 at 11:21 am
Well, I would say they are part way there.
February 18th, 2011 at 7:38 pm
@Christine,
It’s only “right” Chris cut the chat right there. Pushing it any further might’ve turned it ugly.
Similarly, Chris could’ve probably said s/he will forward it for review. Not sure if his/her bosses advised him/her of such an event like this, though.
At any rate, it’s good to see the issue’s resolved.
June 15th, 2011 at 12:32 pm
Hey man I only wanted to write and say I really like reading your blog!
August 27th, 2011 at 11:47 am
Reputation.com has many challenges besides just how they are labeling things. Are they going to work with obvious scammers and “bad guys”? There are some “bad guys” that are so bad I don’t think that any reputation management service can save them. Google scammers Tim Darnell and Jack Weinzierl and their nemesis, me Soapboxmom, and see what I mean! Welcome to the age of the internet!
November 21st, 2011 at 2:05 pm
I recall using the term “cyber-squatter” as a kind of in-industry slang back in the mid 1990’s…
The general feeling back then was that it was as wanted as unsolicited electronic mail messages, or spam for short.
Eventually the slang-term spam became so mainstream that it became the defining word for unwanted emails.
I guess what I’m saying is, no-one likes spammers or squatters, and if you’ve decided to become a domain-investor… then get used to “cyber-squatter”. This is because over the last 15 years or so the cyber-squatters have a bad rep. They don’t respond to most attempts to contact them, their contact info is often outdated or missing. When they can be contacted, pricing is often unreasonable/unrealistic, often there’s no negotiating the price. Plus there’s been a few people who love to create vexatious litigation and attempt to blackmail or outright steal domains, yes this is called “namejacking” but the old broadcast news journalists don’t know the difference and just call it “cybersquatting”…
Regardless, the wrong people seem to get the media attention and this is in-part were the general public had long since gotten it’s idea of what a “cyber-squatter” is…
I don’t know anyone who uses, has used, or knows of the website “reputation.com”, and makes me doubt they have any impact on the meaning, and I see that Google has roughly 1.2 million websites using the term “Cybersquatting” with roughly the same definition.
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