Monte Interviews DomainsBot.com

Monte: Yo, welcome to Domain Masters. I'm Monte Cahn, your host. Thanks for joining us. We have a great show lined up today. It took me forever to get Gary Kremen from Grant Media and the Sex.com domain case in discussion today. So, it should be very exciting. We're going to have him on in about half an hour or so. My first guests, who I will bring on in a minute after the commercials, are Max Rally and Daniel Razzini, two great guys that I met at the I Can meeting last year in Rome and really showed us and took us on the town. While we were there for the I Can meeting, we became pretty good friends; and they have a great company, a great site, DomainsBot.com; a great place to find domain names that are expired, domain names that you want to register. They are partnering with a bunch of registrars and have some great tools that are going to help a lot of domainers find the domains they want, and rank different companies, especially registrars, on their network. So, we're going to talk to them about how they got started. They were two friends, then decided to go into business together, and it's a great story. So, we're going to have them on in a minute. In just a second, we are going to break for a commercial; and we'll be back with the show and have Daniel and Max on. Stay tuned.

Went to commercials

Monte: Hey, folks, welcome back to the show. Again, I'm Monte Cahn, your host. My first guest is actually two folks, two guys now, Max Rally and Daniel Razzini. They are both childhood friends and started their first company together in 1999 in Rome, Italy. I happened to meet both of them at the I Can meeting about a year ago in March in Rome, and the company they started was called Local Who Is, which provided information about expiring domain names and it was their first entry into the domain world. In 2002, they acquired their main competitor, which was called DomainsBot.com and have really turned the company into something that is a great source for finding domain names on the web. Max and Daniel welcome to the show.

Daniel: Hi, Monte. It's Daniel here.

Monte: Hi, Daniel.

Daniel: How are you doing?

Monte: Good, good.

Daniel: Thank you for the show.

Monte: Oh, you're quite welcome. How are things going in Rome? You guys had a lot of visitors over the last couple weeks, I guess, because of the Pope.

Daniel: Yes, actually it's been pretty mad here because a lot of people came to visit us. Our offices are pretty near to the St. Peter Cathedral, so we followed this thing a little bit more than other people here. But, you know, it was really something extremely necessary for this thing. It has been really deserved. It was deserved for this Pope. We were kind of sad at what happened, but it was fair that all these persons come to see this great person.

Monte: Yea, he was a great Pope. Did you guys have to put anybody up in your houses, in your apartments, and stuff?

Daniel: Well, not too lots.

Monte: Well, I know the parking issues over there in Rome are something else, so it must have been really out of control when everyone…

Daniel: Yea, definitely, definitely, Parking here is one of the biggest problems.

Monte: Yea, you all drive those smart cars.

Daniel: (laughing) That's the reason we have it.

Monte: Yea, yea, definitely. So, anyway, I explained to everybody that we met about a year ago in Rome during the I Can meeting, and I really like you guys a lot, and you're doing some great things on the web.

Daniel: Thank you so much, Monte.

Monte: I wanted to find out about how you guys met and how you got into the domain name business, and then we'll talk about some of the great tools that you offer for domainers and webmasters, and see how people can use your tools to generate more business on the web. Give us the story.

Daniel: Actually, our story is very [inaudible] because Max and I, we know each other since 15 years and actually we started, as you said, our first business in 1999. It was we were 17 years old, we're extremely young, and we just met this market or the web and we wanted to start doing stuff on the Internet and domain name was a very interesting market to play on. So, we started this little web site called Local Who Is and we found this very, very interesting field, this very, very interesting market of expiring domain names because it's really important for domainers in general and people who want to play on the market. You know, passing the time we started growing up and, you know, having a lot of customers because we always wanted to keep up good work with the services, because our main concern in these years has been that there is a lot of information out there about these names but we wanted to focus on a way that we wanted to expose to our customers this kind of information. Then, in 2002 as you said, we acquired DomainsBot.com. Actually, DomainsBot.com , a local who were almost the same time, where there are just a couple of months of difference between our first day online, but then in 2002 we wanted to acquire the company. So, we kept the name DomainsBot.com; and we continued doing our good job on this field. Last year, in 2004, we adopted a very, very young and hungry software development company. They are really great guys, which are now our Technical Department; and we started this very interesting project for the new year, let's say.

Monte: Right, right. Back in 1999, well first of all, how did you guys get interested in domain names to begin with and then what was the expired name market back in 1999; because you know it's been hot over the last year or two since all the drop services have gone into play. But, back in 1999, it must have been quite interesting to be able to monitor that kind of information.

Daniel: Look, it was kind of funny. One, we were just browsing around the Internet and we just found a page with a parking page of Register. Com saying “this name is going to expire”, and some stuff like that. So, we just asked ourselves, “but what is this thing?” We just started [inaudible] this information around, and we found this park. Max and I actually, since we're really, really young, we had, let's say, this really big wish to do good business. Actually, we just found our spot; and we started working on it. For what concerned the expired market, we have noticed that a lot of things changed in the last years. What is interesting, though, is that it is very, very good to see how the market has expanded and grown up in these years. When we started, that was really a tool for just a little group of selected webmasters and experts of the market; and our mission in a certain way has been always to open up this market and to make this market and this field of domain name market that it is very, very difficult to understand, easier for the final customer.

Monte: Right, right. So, back in 1999, or when you started tracking expired names, do you have any statistics from back then compared to what's going on today in the domain market from the expired name standpoint?

Daniel: Oh, well, first of all, we see that a lot of things happened in these 6 years, but surely we have our data and every day is extremely interesting to see how things are changed; because, first of all, it's very important and it is very interesting to understand that, you know, in the beginning it was really a very little market, just because it was quite complicated to understand. I gotta be honest, it took a while for the two of us; but, then we just, you know, started working on the market. We have seen that, since those days, the market has been expanding; and it can be confirmed by, you know, older user services that are coming about, grabbing domain names, let me mention older services that have been done but some registering in the last days. Actually, that is the real reason why we started really working in those days about our services; and now we want to come up with a really, really interesting tool.

Monte: Right, right, so.…

Daniel: And technology.

Monte: And technology, correct. So, give us a little bit of an idea of what is unique about your product and service offering and how it can help domainers really trying to find the domain that they want.

Daniel: Well, our new technology first impact is something we built; because we found that there was a very big problem in the market, you know, at this time. Every good domain name is taken. It's already registered.

Monte: Right.

Daniel: So, we want to make something that can help people find a good domain name that is not registered…that is available. So, we built these new technology; and the great stuff about this technology is that it can understand what is behind domain name. A user just types domain name and this technology understand goes beyond the domain name and understands what is behind. And so it returns, you know, alternative domain names that are available; and you don't need to type in your business field or more keywords, you just type in the name you want. This technology will try to find out good alternatives. In most cases, they are even better than you typed in that are available. So, this is what we are doing now; and I think this is something that is very good for this industry at this point. This lack of available domain names, we want to make more to give more…to give users more chances to find the right domain name.

Monte: Right, right. So the technology that you have, this first impact, what other information does it collect behind the scenes about a domain name? Does it see if the domain name has been entered or previously registered? Does it track whether it is entered into the Yahoo! Search directory? Does it have link popularity tools or any kind of indication? Give us a little of the background of some of the things you track just besides that the name is expired.

Daniel: Oh, yea, sure. Down here, first of all, look the very interesting thing that we wanted to realize for this new technology is that we wanted to analyze the idea behind the domain name that the customer wants to register and try to understand, for instance, with popularity of keywords, with a lot of different aspects. This can be from grammar, logic, to semantic. There's really a lot of aspects actually, because one thing that we realized was a lack in the market is that all the approaches that had been taken before were just approaching to this problem in one way. But, what we wanted to do is to combine these parameters, these searches, and to combine the approaches to give really the best registration. Actually, we have a relevancy factory, which is very important, the popularity factory, which is very important, and we are also keeping track of domain names through the secondary market and keeping track of the popularity of domain names, we can…it's really the first place you should go when you're looking for a domain name….

Monte: Right.

Daniel Because we can give you ready-to-register alternatives to be for a domain name, to back order a domain name, or even to register a domain name….all in one place. So, suggestions that are coming from all sources.

Monte: Right, right. So, the popularity measurements…how do you measure if a domain name is more popular than the other?

Daniel: Well, actually there is the keyword factor, that is extremely important, and from the keywords we start applying a lot of different logics trying to approach this, not only let's say to “the string”, using a very technical word, the point is that we really don't want to look at domain names as strings, as groups of letters; but the important thing is to try to understand what is behind that.

Monte: Right, right.

Daniel: And in doing so, we, for instance, with the popularity factory, which is very important, we try to get the most relevant value to each keyword to let the system use and again return the best suggestions.

Monte: Okay, so, if you came into your site…you know I'm just trying to walk it through with people…and, then again, everybody should go to DomainsBot.com.

Daniel: Look, we will have released this system; and when we tell you, this is something we are announcing on this show, and I'm very pleased to do that, is that the better version of the new website with this technology and new services will be implemented, will be online for April 25.

Monte: Oh, that's great. That's great news. So, on April 25…that's about the same time we're launching our new site, by the way…So, that's…

Daniel: Oh, that's cool.

Monte: Yea. We're going on the 26th or 27th actually. So your new technology and new site is going to launch on the 25th or 26th of April\; and walk us through what's going to happen. So, somebody comes to the site, they're going to put in a domain name or just a keyword, and then what happens to the tool in the back end and how many results does it pick up, and what happens if it's registered? You know, walk us through the process so people know what they can expect.

Daniel: I will pass this answer to Max, who will describe to you very well how the new web site will work.

Monte: Okay.

Max: On April 25, when you go to DomainsBot.com, you will see the new web site. The new web site will be very easy to navigate. You will just have to type in a keyword, it will be completely free, and you just type in a keyword, and the system will return a list of domain names that match, that are available suggestions to that name, to that keyword. So, you will be very…you know, you will go to the new web site, type in domain name, and the technology will run [inaudible] behind it, and we return a list of domain names. So, …

Monte: Now are those domain names already registered, are they available to register, is it coming from both sources?

Max: Yes, well, we will return a lot of results, like domain names that are rented and we will include in our list of domain names returned domain names that are available for registration, domain names that are for sale, and domain names that are expiring.

Monte: Oh, okay.

Max: So, you will see a list of these names, you will be able to exclude for-sale domain names or to show just available domain names. So you will be able to go through these results to find the domain name that works for your web site.

Monte: Okay, now the domain names that are listed for sale, where are you getting that data from? Who's feeding you their for-sale domain names or their list of domain names that are going to be popping up in this tool?

Max: Well, we have different deals with the major companies that list domain names for sale. One of these is, one I can say is AfterNick…

Monte: Right.

Max: And we have made deals with them, they are great guys, and we will show their names. We have also other sources for these domain names.

Monte: Right, well you're going to have a source from us, obviously. So, you have AfterNick, you're going to have us…

Max: Of course.

Monte: You're going to have us. So you have other sources that those domain names are coming in. So, when they see a domain name that is already registered and it's at Moniker and it's for sale, then they would be directed to our web site and place a bid on that domain name at that point or have a “for sale” price that they can buy right on the spot, and they've accomplished their task?

Max: Yea. Our aim is to find the right domain name for our customers, for our users.

Monte: Right.

Max: So, once the user finds that name, we will direct the user to the place where he can acquire that name. If a name is available, we will show him a list of registrars where he can register this name.

Monte: Oh, okay. So, if the name is available and it can be registered, you're going to show a list of partner registrars, of which we'll be one of them, and then the customers can choose which registrar they want to use to register the domain name?

Max: Exactly. We will have a selection of accredited registrars, and we will allow the customers to choose them. The very important thing is that we will allow our customers to review these registrars; so, we will ask our customers, of course, if they want, to write a review on the registrar that they use so other customers can see what other users think about those registrars and choose the one that they prefer.

Monte: Oh, okay. So, you're going to have partner registrars. How many partner registrars are going to be part of the offering?

Max: Well, …

Monte: How many registrars are participating?

Max: Uh, around 100 registrars.

Monte: Abut 100 registrars?

Max: Yea.

Monte: Oh, wow. So, there's a lot of registrars that are participating.

Max: You will be one of them, of course.

Monte: Of course. The first one on the list, won't I? (laughing)

Max: We'll work out something.

Monte: Of course (still laughing). But, okay, so, and then you're going to have your customers being able to rank registrars. So, giving reviews, so “Hey, I had a good experience with this registrar. We highly recommend this one.” So, the ones that perform the best will most likely get more registrations as a result of being part of the community and having good customer interaction and providing good value and good pricing. Is that kind of the bottle?

Max: Yea, exactly. Actually, what we really want to do is give the people the possibility to find a really good domain name and to also find a good place to register then. It is very important that they have the possibility to give their experience and to share this kind of information with the other customers. And this is a very interesting thing, also, because we will give the possibility to registrars to show up and to have a really good review of their services. For instance, the customers will be able to rate a registrar for ease, price, service, and offerings.

Monte: Oh, great, great. Well, listen guys, hold on one second. We're going to break for a quick commercial break. I'll come back on with you, and we'll hear more about the offering.

Max: Okay.

Monte: Okay, hold on for a couple of minutes.

Went to commercials

Monte: Hi, it's Monte, back to the show of Domain Masters. We had to take a little commercial break there. Back on with Daniel and Max from DomainsBot.com. So, Daniel, the ranking system of the registrars we were just discussing sounds very interesting as a community and so people would get to find the names that they really want to register, and then be able to select from a list of registrars on the domains that best meet their needs, right?

Daniel: It gives the possibility to the customers to read the reviews, write some reviews, tell about their experience with each registrar, and they will have the possibility also from then just to go to the registrar web site and keep the names that they want.

Monte: Great.

Daniel: And, by the way, I just wanted for a moment to mention to you another very interesting feature that will be implemented in this new web site. That is the portfolio feature. Actually, we wanted to build a little system where people can add their own domain names and they can keep track of them so their domain portfolio all together from a unified platform and you don't have to worry who the registrar is you are using, you will have the information about their expiration dates, the registrar that you have, and you can update them.

Monte: Oh, okay. So you'll have like a global domain manager which will interface with a number of different registrars; so that if somebody has their names in multiple placed, they'll be able to come to one place to see when their domain names are expiring, and be able to keep track of them, correct?

Daniel: Exactly. Exactly. Because we have seen that this is a very interesting tool for the [inaudible] customers, because if they keep registering domain names, they also need a place to keep all this information together.

Monte: Right. Now how are you going to get the feeds from all the different registrars for that, through the…I mean I guess all the ones that are members of the site, for sure. But what about the ones that don't join your program? How will you be able to get that information about their domains?

Daniel: Look, we will try to update our information from all the public sources. So, you know, even if you are not a partner of us and everybody has a name registered on the registrars, we will just use the public information available and we will try to keep track of them so that the registrant will have the possibility to monitor and see what happens all to that domain name. Like registration information, for instance.

Monte: Right, with what registrant information changes, any kind of changes in the Who Is record, that kind of stuff?

Daniel: Well, not the registrant information, it is just the Who Is.

Monte: Just the Who Is stuff. So, Who Is-type information but not if there is changes in Who Is necessarily, but the expiration dates will be inside one manager.

Daniel: Yes. The expiration date, the creation date, and the registrar

Monte: That sounds very interesting. Now, your current company has…I mean the current site, how many members do you currently serve right now, how many customers?

Daniel: We have more than 1,500 customers from all around the world.

Monte: Okay, so about 1,500 customers. And right now, do you charge a membership fee for your current customers to join your program.

Daniel: Well, the new web site will be totally free.

Monte: Totally Free.

Daniel: It will really be the first place that you go to find a good domain name; and for what concerns the advanced tools that we will actually offer to our customers, we will switch the service to ExpiredDomains.com. You can read about it on HYPERLINK "http://www.domainsbot.com/switch" http://www.domainsbot.com/switch.

Monte: Oh, okay. So, the new cite is going to be at DomainsBot.com or it's going to be at a different….

Daniel: Yes, it will be on DomainsBot.com.

Monte: Okay, it will be on DomainsBot.com. Okay, okay, great. And what's in your future after this launch, what's going on with DomainsBot.com in the near future? What other technology are you guys working on and will you be implementing it over the next 6 months or so, or 12 months?

Daniel: Well, first of all, we'll every day improve our technology; because one thing that is very important to know about our system is that this is also a self-learning system that will get better from the user's experience. So, using statistical information from our customers using a lot of different data sources for that, every day our system will get better.

Monte: Right. So the more….

Daniel: So, we'll do that; and in our labs we are actually working other projects which will be, first of all, a stats sections where we keep track of very interesting information about….I can't talk too much about it, but, you know, just to mention it.

Monte: Well, give us a little hint now. Don't lead us on. Give us a little hint. What kind of information would you be tracking…you don't tell us the whole story, but give us one interesting piece of information that you would be tracking that maybe someone else in the market would not be.

Daniel: Let's do it like that. Actually we use…base it on public information like the Zone File, for instance, we will keep track of important concepts and statistical data that is contained there that it will not be just a simple name server count, which is good but our technology [inaudible] it in a completely different thing. So the popularity of the keyword, if the keyword is hot or not, and these kinds of concepts. It will be really, really an interesting thing that we are finalizing to put together, but is really something that will be interesting for all domainers.

Monte: Right, great. And tell us a little bit before we end up…tell us a little bit about the company, what kind of… how…what do you do about customer service, how many people are part of the organization, and how is that being handled currently?

Daniel: Yes. Look. First of all there is Max and I. We are the CEOs of the company. We have a very important guy in the business that is working with us, which is Anthony Van Couvering. Actually the whole project started when we teamed up with this software development company, and they are actually our CTO; Lucas Matsumoro, VP offers research and development; and Francesco, that is our Product Manager. They are half of our Technical Department, and in this year they have been doing a really wonderful job. Believe me, you will be amazed when you will the results of our web site.

Monte: Yea, well, I believe you; because one thing you guys do a lot is drink a lot of Lemon Cello over there, and that makes you smart. (laughing)

Daniel: (laughing) Next time that we will meet, you know we'll see if you have practiced it a little bit.

Monte: Yea, I had a lot of practice with you guys drinking Lemon Cello, that's for sure.

Daniel: Yea, but last time I won.

Monte: Yea, yea, you did. Well, hey, I want to thank you both, you and Max, for being on the show and I'm really glad we had a chance to talk about your company and how you guys got started. It's a great story, because, you know, two friends getting together thinking about some ideas and then turning thoughts into actions and actions into a whole business. You guys have been very successful and a lot more domainers are starting to use your products and use your services to find domain names. I know that when we hook up our engines to your system, it will be even better. So, I look forward to working with you.

Daniel: For sure. But, let me thank you for inviting us to the show. It's been a really big pleasure to talk to you again, first of all, because it's wonderful to talk with friends again, and, in general, we're really happy how things are going and we really look forward to keep working with you at Moniker, and even more to release finally this web site which is…it will be really something interesting.

Monte: Yea, it sounds exciting; and I know how it is getting a new web site ready. We're going through it, too. So, thanks again Max and Daniel; and we'll be back in touch with you. For all those listening, go to DomainsBot.com and go check out their current service; and on the 25th of April, they are launching the new site with all kinds of great tools and domain grabbing tool technology. We're going to break for a commercial and be back on with Gary Kremen. Stay tuned.

Went to commercials

Monte: Hi everyone. Welcome back to the show. I want to thank Max and Daniel again from DomainsBot.com for being on the show and look forward to working with them. My next guest has quite a bit of experience on the web and has become quite famous from a couple transactions. One was the loss of probably one of the most valuable domain names called Sex.com which has been in the news over the last probably 7, 8 years now regarding it. We're going to hear right from the horse's mouth on the whole story, which is Gary Kremen. And Gary actually founded Match.com, which of course is one of the most famous online dating services for people trying to meet other people and had a very successful transaction there. We want to talk a little bit about his experience in the Internet business and a lot about this Sex.com case. Gary, welcome to the show.

Gary: Hey, thanks a lot.

Monte: Hey, I really appreciate your time. I know it was really hectic trying to get you scheduled today, and you have conference calls, and looking at real estate, and all kinds of stuff. So, I really appreciate your time.

Gary: I appreciate to be able to share whatever little I know with your audience.

Monte: (laughing) Well, I'm sure it's not so little. So….

Gary: It's like the size of a pea what I know compared to some of them.

Monte: Yea, yea. (laughing) Well, listen, I know one of the things people want to hear about is, first of all, how you got started in the Internet industry. You've been doing it for a long time and some of the successful ventures you've had. And then I would like to hear really from you, from your side, about the Sex.com domain case; because everything we're reading in the papers is always kind of shaded and filtered. I'd really….I'm sure that the guests and the listeners would like to really hear the story and what's going on, because it is very, very interesting.

Gary: Sure, why don't I give a two-minute summary. I don't want to take up too much of your time. I've been on the Internet since 1985, when there was only 150 hosts, where all the domain names of the world were stored in one file, DNS didn't exist at the time. You used it back then when everything was 56 KB lines connecting, that's the quickest, all the way to started registering domain names in 1993.

Monte: Wow.

Gary: And started Match.com in 1994. Since then, I have invested in a couple companies, some pretty successful in the Internet space, mostly in the infrastructure, and just the registration of Sex.com just happened to be one of those larks in the day.

Monte: Yea, definitely. So, Match.com….

Gary: I really didn't think nothing would come of it.

Monte Really?

Gary: Who'd have known.

Monte: Really. Yea, so, the Sex.com case. Why don't you walk us through what happened with the domain name. You had it registered at Network Solutions and, of course, there's been so many names stolen from NSI. But tell us a little bit about this specific case; because it was very, very interesting on how the documents got into the hands of NSI and the name was then released, and then you just couldn't get it back for 4 years.

Gary: Yea, actually it was more like 5-1/2 years.

Monte: 5-1/2 years. Yea, I'm sorry.

Gary: As you know, security wasn't very good in the beginning at Network Solutions. You know, to give them credit, it was probably a hectic time for them. Their story is they didn't have enough staff to handle, word domain names were free, they started charging for them in late 1995, and that was before they started charging for them. And, these things…and basically, control slipped away from them. I found out about it pretty quickly and I asked for it back; and they told me they wouldn't give it back to me.

Monte: So, how was it stolen. What I've read in the paper so far, and actually the last story about this domain name appeared in USA Today on April 1, while I was out of town. It was so ironic to pick it up knowing that I wanted to have you on the show anyway to talk about this case. It sounds like there were fraudulent documents faxed in to NSI with Stephen Cohen's information or with your information, I guess.

Gary: Well, that's basically the full story of what happened. I see people can't talk about it all, but I think people can read behind the lines. If I complain two weeks later, they don't return it back to me, and I was the first registrant of it, the earliest document we're able to find from them was a fax about 2 months after the transfer.

Monte: Oh, really. So, something happened prior to the fraudulent documentation story.

Gary: Yea, we believe that was back spill to cover up whatever happened, which we never got to the bottom of.

Monte: Oh, okay. Oh, that's interesting. So, once you discovered the name was gone, which I guess you would have discovered….at the time, did you have the domain name monetizing in any way at all, or how…

Gary: No, at the time when I was doing Match.com, I registered a bunch of names that had to do with the classifieds: Jobs.com, Autos.com, Housing.com, Families.com, properties, housing, whatever. Notices, legal…because what my idea was just not to do dating on line, but to do classifieds on line.

Monte: Oh, I see.

Gary: And Sex.com was just an afterthought.

Monte: Okay, so you had it sitting stagnant, didn't really have anything up on it, and then discovered it wasn't in your name anymore. Then what was the sequence of events on trying to get it back and various battles you had to fight with NSI?

Gary: Well, the sequence of events was, first of all, I didn't realize how valuable adult names were. I mean maybe call me an idiot. I was an idiot. I was focusing on compilating businesses as opposed to generating money from type-in traffic. Now I see how valuable that is. The sequence of events was I had a lawyer write a letter and then basically told me to pound sand. It's too late, which is suspicious in itself. I mean if you go and complain to the Registry of Properties that someone forged a deed, they would investigate and turn it back over to you. They wouldn't tell you it's too late.

Monte: Right, right.

Gary: There is no such thing as too late.

Monte: Right. And at the time, because this gets very, very, interesting, because at the time domain names were not considered property in a sense and your case has helped actually establish that across in a legal court that domain names are, in fact, a form of real estate and a form of property.

Gary: Right. Before that, they were just , in the Network Solutions position was they were contracts and they had no property nature to them at all. And I actually lost that argument in front of the trial court and they said they were contracts. But, when I appealed that to the Ninth Circuit, they said, “Look, you can buy them, you can sell them, you can monetize them, you can borrow against them….” In fact there was an earlier case called Umbrella; a very interesting case. I don't know if you are familiar with that; are you familiar with that case?

Monte: No. No, I'm not.

Gary: It was a case in Virginia. Umbrella, I guess, makes them sort of soccer T-shirts and some guy…and it's a big company in Europe. Someone registered Umbrella.com, they got a judgment against them, they tried to go collect on the judgment by ceasing the domain name, and the Virginia Supreme Court you can't cease a domain name because it's not property.

Monte: Right, right.

Gary: And, of course, that was Network Solutions' home state, and you know maybe their courts sound a little bit more friendly to them.

Monte: Right. So, they were trying to use that as a precedence case against what you establish as, in fact, that it is property.

Gary: That's right, and what we showed is basically the elements of property, the ability to exclude someone from using; so, if you're using a domain name, no one else can use it. You'd agree with that, right? For the most part.

Monte: Yea, yea.

Gary: So you can slice it up into sub domains, you can say, “hey, you get traffic from this IP address, you get traffic from that IP address,” but basically the power to exclude is the power to own. Would you agree?

Monte: Yes. I would.

Gary: And that's kind of how the appeals court saw it…was here's something valued so it has to be property; and once you talk about property, the person who gives it away…like gives your own personal property away, does so at your own risk.

Monte: Right.

Gary: And that's very old law that says, someone finds something on the ground, then they give it away, and it had your name on it, they're responsible for it. And basically the court said, “Network Solutions gave it away; they're responsible.”

Monte: Right.

Gary: And the interesting thing about that is you don't have to say you were negligent or not. It doesn't matter.

Monte: Yea, it doesn't matter that they gave it away, whether it was negligence or not, it makes them responsible and liable for whatever the value of the domain name is.

Gary: Right, you are strictly liable. It's kind of like transporting dynamite. The boat issues what are known as strict liability issues. Doesn't matter it wasn't your fault the dynamite exploded, someone threw something at it, you're responsible. It's the same thing with giving away someone's property. They don't have to be negligent; they could have done all the checking in the world, but they didn't.

Monte: Right, right. So, this whole case now has basically been decided in the court. So now the big challenge is, well I guess you've one two types of settlements here. One, which is publicly know, which is the $65,000,000 against Stephen Cohen for stealing the domain name, which you've won in a court of law. The second part is what you basically got from VeriSign and Network Solutions for allowing the domain name to even be taken.

Gary: That's correct. That's correct, The interesting thing about Mr. Cohen is he's a fugitive now, and there is really a whole bunch of interesting cases that are flowing from this case involving domain names and IP addresses. I think your listeners will find this one interesting. I'm in the process of getting ready to sue Arin.net; are you familiar with Arin.net.

Monte: Yes I am.

Gary: No one has ever looked at them for IP numbers as property. I have a judgment to turn over Mr. Cohen's IP numbers to me, and they're not turning them because, even though there is a Court Order, they're saying they're property.

Monte: Really?

Gary: They're not property.

Monte: Really?

Gary: Isn't that interesting?

Monte: It's very interesting.

Gary: But, you're the first to hear about this.

Monte: Yes, yes. Definitely.

Gary: So, their belief is that they can take away your IP addresses…by the way, that's the same argument Network Solutions said. They can take way, they said, so under penalty of perjury [inaudible] any time they want for no consideration. They actually made that argument. Isn't that interesting?

Monte: Yes, that is interesting.

Gary: And Arin.net (The American Register of Internet Numbers) says we can take away your IP addresses if you don't use them, actually for any reason we want, because we're having a bad hair day. But they're not property anyhow, so it really doesn't matter.

Monte: So, you're trying, of course, to locate Cohen, so this is one way of trying to find out where he's dialing in from.

Gary: It's one way of shutting….He's actually running a business in Mexico. So, he's buying [inaudible] activity, he's got a business in Mexico. I figured your listeners would find this interesting. So, how do you shut someone off in another country?

Monte: You go to Arin.net.

Gary: That's right, because he's using U.S. IP addresses. Well, they won't do it. Even though I've got a Court Order saying they have to.

Monte: Really?

Gary: Yea. No, it's very interesting.

Monte: Yea, it is interesting. So, you're going to sue them and establish another important precedence here?

Gary: That's correct, unless they want to settle.

Monte: (laughing)

Gary: Which I think they would be well advised to do that.

Monte: Actually, I think there would be many people that would want you to continue the case regardless of what the settlement fee would be.

Gary: Well, I'd love to get a discussion going about the nature of IP addresses, because I don't think people really focus on how important those are…people can shut you off by just turning off your IP address from remote. They can rearrange the routing tables right around you. And these guys claim they can do that, legal right. Imagine it, the government can take away another country's IP addresses just because they're having a bad hair day.

Monte: Wow.

Gary: Have you ever thought about that? It's really the interesting part related to domain names.

Monte: It certainly is, especially with all the important businesses that are running online and having that risk in the background.

Gary: Well, they're saying…let's say you use…you email too much from your IP addresses. We can turn you off. I'm not talking about a block list, we can just turn you off and you can't get back.

Monte: Right.

Gary: Imagine that power of censorship.

Monte: Yea, that's pretty interesting and something that I'm sure a lot of people don't think about, because they are really concerned on the front end about their domain name and if their host is reliable and if they're going to be able to be up for 24 hours, 7 days a week, and behind the scenes is a whole other infrastructure that people rarely even think about.

Gary: Yes. So, that's kind of where this is going. The new stuff is, hey, names have value, so does the address space have value.

Monte: Right, right. Because the name is on the front end but everybody knows that the name is actually a number in the background, it is an address on this network, and the name is just what people type in to get there. They can also type in that IP address to get to you as well.

Gary: They can. In fact, those numbers are valuable, as you probably know. When you get spidered, so it is said that, the more IP numbers your content appears on, the higher your rating is because it is not on the same web site.

Monte: Right, right. So, the big….one of the other parts of this story is that, so there's been this case, it's been decided, Stephen Cohen is off somewhere either in Mexico, some stories have him in Moscow, in Russia, all kinds of places. How do you find this guy? Who's searching for him? How are you going to get your $65,000,000?

Gary: Well, first of all, I'd love someone to find him. I believe he's probably some place in Europe, sometimes goes to Mexico, sometimes he doesn't, but he's a fugitive. The [inaudible] governments looking for him, but it's not the biggest priority in the world. I think [inaudible] what I'm working on is seizing whatever online property I can. You know, going register, register, seeing what property he has and trying to grab hold. And before this case, you could not seize…you could not take away someone's name because it wasn't property. That there was nothing to attach to to grab.

Monte: Right. And what do you know that he currently operates today? Does he have online presence today somewhere?

Gary: He runs a….maybe some of your users can search for something called OStation5. And what OStation5 is….listen to this brilliance. This man, while he's a criminal, is pretty smart. He goes to the occupied West Bank on sitings where there is no law.

Monte: Yea

Gary: He sets up a P to P [inaudible] kind of like a [inaudible] or shamen (sic). And he puts up a whole bunch of music, and downloads and stuff like that, and makes it into a haven where no law can touch him.

Monte: Really?

Gary: Yea. You put child pornography up but no one can shut you down, because you're offshore, or you're really offshore beyond what any government can do anything about.

Monte: Except Arin.Net.

Gary: That's right, or [inaudible] or the Asia/Pacific one which is called AsiaPacific.net.

Monte: Right, right.

Gary: And these are some big boards (sic) with a lot of power, and it's kind of interesting how they selectively use what they'll do and what they won't.

Monte: Right. Now, I read something interesting in this article in USA Today that, as you were trying to find him one time, I guess you sent him a letter with a check in it to see if he would cash the check; and he turned around the check from wherever he was or didn't accept the check or wrote a note in it, or something.

Gary: That's true. Well you can imagine…actually where this came from…I used to live in L.A. and I had a dispute with my landlord, okay. And I went to court, and the court gave me this money. Okay? And the landlord wouldn't tell me where his money is; so I just took the cashed check and found out what his bank account information on the back is. And I had the sheriff seize his bank account. Does that make sense?

Monte: Yea, yea, definitely.

Gary: It's very simple. So I tried to do the same thing with him, but he's much smarter. He used that and sent me back a [inaudible].

Monte: He sent you what?

Gary: A blow-up sex doll.

Monte: (laughing) A blow-up sex doll. That's right. So, did you blow it up?

Gary: It's still sitting at my house. If anyone wants one, just send me an email.

Monte: (laughing) You ought to blow it up and write his name on it.

Gary: Hey, it's a pretty creative guy who can think that out. You know what I'm saying?

Monte: Right.

Gary: Whatever you say, this is a smart guy who really knows the Internet really well. I mean, he's…if you go look on SpamHouse, he's one of the biggest spammers. He doesn't stop, you know. Offshore data havens where you can do whatever you want, spam, factories,…crazy.

Monte: Yea, it sounds crazy. Now, did you know Stephen before this whole incident happened? What was your relationship with him?

Gary: No relationship at all. Didn't know him for anything.

Monte: So, he….you didn't know him, so he thought of this whole scheme of trying to get this domain name or actually it was probably let go, or somehow ended up in his hands, and then he just took advantage of it and raked in all the money for 5-1/2 years on the domain. How much money was that estimated to be worth?

Gary: Um, $40,000,000. He had months where forensic accounting showed he was making $1,000,000 a month.

Monte: Wow.

Gary: [inaudible] traffic.

Monte: And that was before people were really online sometimes. I mean….

Gary: That's right, although part of that was back in the day where people [inaudible] industry would take your credit card and run it through 10 times and make a lot more money. Today, you don't see that much.

Monte: Right, right. And how much traffic did Sex.com get when you first knew any kind of traffic stats and what is it doing today?

Gary: It's doing about $100,000 a day, and what we've done that's pretty interesting is… when I got it back, there was [inaudible] and I think your listeners would say how do you monetize something like that? Well, everyone said, “Why don't you make an adult page site out of it or sign up for peoples' affiliate programs?” I decided not to do that. And I decided to turn it into a search engine back in 2000, a pay-per-click search engine.

Monte: Right.

Gary: So, what that gave us is…and a lot of the traffic is international based. We do GOIP sort on it. So we sell off the French traffic on a per click basis, people bid on it, or the American traffic, etc. And what we got is about 5,400 adult advertisers who purchased on a per click basis.

Monte: Wow.

Gary: And then we started distributing the other search engine through [inaudible]. And then we started distributing other search engines results to third-party search engines, and that's where most of our business comes from today. Nothing to do with the adult business.

Monte: Wow, that's interesting. So, and what did he do with it when he had it? Was it just a plain sex site.

Gary: [inaudible] that he couldn't' get out of.

Monte: Oh, so it was one of those sites you click into and then all of a sudden it bashes your computer. You can never click out unless you….

Gary: [inaudible] Plus you have the downloads in the background at the same time.

Monte: And you have to reboot your computer to get out of it.

Gary: Well, you probably have to reformat it.

Monte: (laughing)

Gary: He's one of those guys that would force a download on you and you wouldn't even know about it because of holes in the operating system.

Monte: Wow.

Gary: I mean I think we probably see people probably doing that today too still.

Monte: Now can you share what did you actually get from Network Solutions and their signing your settlement.

Gary: I didn't even say I got anything. That's one thing I can't talk about. What happened.

Monte: Okay, so you can't talk about the settlement there, but….

Gary: A lot of people have done speculation on it.

Monte: Right, right. Yea, definitely.

Gary: …you cell phone in the back.

Monte: What's that?

Gary: I thought I heard a cell phone in the back.

Monte: Oh, no, not on this side. We're in the studio. All cell phones are off or else I get shot.

Gary: In any case, things worked out okay.

Monte: Well, that's good.

Gary: And we have a real business today. And it's the distribution of search results.

Monte: Right.

Gary: Through [inaudible: SNL Feed]. That's our business.

Monte: Right, and that sounds like so you finally have the name back and you can build your business around it and, maybe with a little luck, you'll be able to find Mr. Cohen and collect on the rest of your money.

Gary: [inaudible] I mean I've been involved in a couple of domain names, UltaVista.com…I was involved in the sale of that, and Jet.com recently, and I'm working on a couple of others. Learned a lot.

Monte: Well, that's great. If there's any help I can give you on that end, please let me know.

Gary: Well, I'm moving over domain names to your service, or am I supposed to talk about that?

Monte: No, you can certainly talk about it. That's good promotion for us. (laughing)

Gary: Well, to the listeners, we've learned a lot of good things, you know, you can do some Googling and read some other good comments on what Monte does.

Monte: Yea, definitely. Well, Gary, I really appreciate your time again. I know it was a busy day for you and I caught you in between meetings and stuff. And I…

Gary: I feel honored to talk with your guests or the people you have.

Monte: Yes, well thank you very much, and thank you for your time. I know it was busy, and I look forward to working with you and our registrar.

Gary: Great, can't wait.

Monte: Okay, thanks again, Gary. I'll talk to you soon.

Gary: Bye.

Monte: Bye bye. Well, there you have it. A little bit more information about the Sex.com domain name. Well, probably the most famous court and domain theft case ever in history. Obviously we found out a little bit more information that, in fact, it's probably not…it probably wasn't a fraudulent transfer in terms of documentation; but something happened before then. From first-hand experience, there's been a lot of domain thefts and a lot of mistakes made by Network Solutions in the past. You know, that's one of the big eggs that got out of the basket, that's for sure. So hopefully Gary can find Mr. Cohen and get his money. The rumors are that he did pretty good with the settlement with Gary signing Network Solution as well. I'm sure he's doing great and, of course, Sex.com is doing pretty good these days. So anyway that's our show for this week. Next week I'm going to be on the road on my vacation, but I'm still going to do a live show, even on my vacation. My wife's not too happy, but I want to keep some good content coming to everyone. So, if anyone has any questions or feedback or comments, please email me at HYPERLINK "mailto:Monte@Moniker.com" Monte@Moniker.com or hit me up in the chat room right now in the Lounge at Webmaster Radio. All the archives are up on our site at WebmasterRadio.fm. Come and get them. I know that you guys have been waiting forever to get them. We'll see you next week, same time, same place. Take care.

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