Wrapping Up with Monte Cahn of Moniker.com

Last thoughts on domain names. Find out what cyber-squatting is and what happens to blacklisted domains.

Brooke:  Your listening to the e-marketing talk show today with Cindy Turrietta, Todd Sarouhan and Monte Cahn and we’re talking about domain names.  We’re going to go pay some bills but we’ll be back in a few seconds, so don’t move that mouse.
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Todd:     Welcome back to the E-marketing Talk Show. This is Todd Sarouhan with Cindy Turrietta and we are talking with Monte Cahn at Moniker and we are in Segment [inaudible] very quick break; see everyone, I didn’t lie [laughs]. So we’re going to be just wrapping up with Monte and talking a little bit about Moniker. But today Moniker is one of the 5 fastest growing registrars on the ICANN approved list of 575 companies and they did survive the dot bomb in early 2000 and what I like to call the restructuring of the Internet – that’s a little more friendly term, I think.  So welcome back to the show, Monte.

Monte:    Oh, thank you.

Todd:     So, tell us a little bit about cyber-squatting.

Cindy:    I’ve heard this term. What is it?

Todd:     Yeah, I’ve actually never heard it before, so . . .

Monte:    Cyber-squatting is a claim on a complainants side, somebody that owns a trademark and says that, basically, accuses somebody that owns that domain name, the trademark name, of what’s called cyber-squatting, which means that you’re squatting on their brand and identity through the domain name address. And there’s a big controversy and there has been a big argument on this whole trademark versus domain name and because you own a trademark you automatically own the right to the domain name and the answer is absolutely not. If that was the case, every single trademark holder and every single brand that was trademarked would never have to register one domain name because they would automatically have rights to it.

Cindy:    Right. Yeah, that’s crazy.

Monte:    So, what happens with cyber-squatting is that complainants have the right to go after their domain names or their brands in several different ways – and there are cyber-squatters that go out and cyber-squat on brands and take advantage of famous brands and identities on the Web. However, there are very much so legitimate players that own key brands and identities and they use it for a different use that’s legitimate on the Web that may also have a trademark with somebody else’s company. And so in order to prove a cyber-squatting case through the UDRP or WIPO process (which is the World Intellectual Property Organization, which works with ICANN to help companies and organizations protect their brands on the Web) you have to prove all three of the following:  you have to prove that 1) that domain name registration of that particular domain name was malicious in nature; in other words, it was meant to keep the other company that had the trademark from having it and then holding it hostage or trying to sell it to them; 2) that its causing customer confusion because the market’s so similar to the famous mark that’s on the Web or in their trademark; and 3) that the current registrar has no right to own it.  And you have to prove all three things or you don’t win the case of cyber-squatting.  So, if somebody is out there and they can’t justify their right to use the domain name and they’re squatting on somebody’s brand and they’re trying to hold it hostage or trying to sell it back to the company, it’s a big no-no.  But if you have a legitimate business that has a different meaning and you’re not causing customer confusion or you run a search engine or an online PPC company and you make and generate your revenue by helping customers that type in those domain names get to their ultimate destination somehow, in lots of times and lots of cases you win those arguments.

Cindy:    Wow.

Todd:     That’s all through going through court and that whole bit, too. Right?

Monte:    Well, its not really a court of law.  It is, again, its doing arbitration form where there are legal personnel assigned to a case as a panel, and a panel decides the case and they have to really prove those three things, the complainant has to prove those three things – and all three of those things – in order to win their name in that particular, you know, argument.  Now, some large companies that want to claim brands can go right to a Federal trademark case and try to win it that way. That requires a couple more things that they have to prove but that also is a lot more expensive process and lots of times the domain name owner doesn’t fight those types of cases because they can’t afford to.

Cindy:    Right. Now, all those people that were smart and bought up domain names when, you know, back in the early days when you could get all the different ones, so they’re kind of penalized now for having done that?

Monte:    Well, they’re not penalized if they’re not using it in a wrong way. Just as an example, if Coca-Cola, for instance, forgot to renew their domain name, you or I could register that name legitimately. They don’t have the right to just get that name back because they dropped the ball and left and just let it expire.

Cindy:    Right.

Monte:    Now, if you’re a Coca-Cola distributor and you can prove that you have the right to own that domain name and you’re not, you know, steering customers in the wrong direction, you might actually win a case against Coca-Cola the corporation.

Cindy:    Gotcha.

Monte:    But if you’re selling Pepsi products or defacing Coca-Cola in some and  . . . or holding it hostage, saying, hey, I picked up your name, do you want to buy back, that’s when you can get in big trouble. And its not really in that big of trouble but you can lose the domain name.

Cindy:    Right.

Todd:     Interesting. So, I know we talked a little bit about blacklisted domains, I think in this last segment. Is there a list of any .  . . say you’re going to buy a domain . . .

Cindy:    How do you know?

Todd:     Yeah, how do you know its blacklisted?

Monte:    Well, unfortunately, there’s not an open list of blacklisted domain names that I know about. What you need to do is you probably need to do some tests on the domain before you buy. See if it does have some link popularity. A good way to do that is to get the name appraised right off the bat because we can actually determine where the links are, if its ranked in Google, page, you know, if it has page rank, if it has link popularity, if it’s in the zone file, if it has any previous problems. So through appraisal you can actually try to find that out because we have all kinds of links and feeds into our system that give us some of that information. But, like we . . .  here we are experienced domainers and we bought a brand name for our business and didn’t even realize it was blacklisted for an entire year, you know. We know better now not to do that again but you know back in 2002 we didn’t know.

Cindy:    Well . . . yeah, you know what to look for now and how to research that better probably then back then.

Monte:    Yes.

Cindy:    So . . . so Monte, you survived the dot com crash.  What do you attribute your success to?

Monte:    Uhm, staying very focused, being tenacious and luckily, we were in a segment of the market that actually helped all the companies that went out of business monetize their very last remaining asset, which was their domain name that they made famous through their bust, believe it or not.

Cindy:    Good point.

Todd:     Yeah, well, that’s good.

Monte:    . . . some of the famous companies like e-Toys and Garden.com and Mortgage.com; all those companies went down in the bust because they, you know, obviously spent too much money on the marketing side and not really on the business side of things. We were actually chosen to liquidate those assets and sell those domain names and appraise them for value for the liquidating and bankruptcy trusts at the time, and those funds flowed into us and we got commission for selling those domain names and we stayed in business, ironically, in a business was all around the selling of domain names that were going out of business.

Cindy:    Isn’t that amazing?  Well, talk about being in the right place at the right time.

Monte:    Yeah. And its not like we thrived during that time; we definitely downsized, we stayed focused, we believed in our business. We believed, truly believed, that domain names were assets, like I did back in 1996 when I invested in my first domain name. And now, its becoming so apparent. We’ve held three live domain auctions and sold millions of dollars worth of domain names in a public and both private forums.  We do stealth acquisitions for companies, like Major League Baseball and Yahoo! and Line Feed Entertainment and they help . . . they come to us to go get their brands for them so that no one knows who they are on the other side, to do that so the prices aren’t inflated. And now it’s a big investment opportunity. It’s the next real estate boom.

Todd:     Well, you know, its been about 2 years since I’ve actually heard of Moniker and maybe because its because I’m involved in the search industry, I don’t know, but it seems to be like you guys are getting popular and you guys are the fifth most popular one now, right?

Monte:    We’re actually the 10th largest registrar; we manage 1.5 million domain names under management right now. When we started back in 2002, we had 1700 names in our registrar, so we’ve grown quite a bit. Our focus is on a domain portfolio holder. We’re not a GoDaddy type company where you’re after the individual domainer who has one or two domains and wants to build a website. We’re actually after the other entities and individuals that feel that their domain names are assets. They invested invested into them early, they have portfolios of more than 1 name; usually 50, 60.  Our average customer actually has about 100 names each. And they monetize those domain names; they sell them; they buy them; they’re building out websites and identities and making lots of money off of those domain names. So we’re a domain asset management company, is what we are. So, we’re like the Fidelity of the domain name industry.

Todd:     And I have to say, actually, just recently, a month ago, I started switching all my domains to Moniker, and I really like the My Account section; you can see everything together and it works really well from what I’ve seen, at least.

Monte:    Yeah. Well, we built it for the large domain portfolio holder and in a couple months, actually in about one month we’re launching a brand new marketplace for the buying and selling and auctioning of domain names and its going to be all integrated into you’re My Account interface.

Cindy:    Kind of like eBay but proprietary to Moniker?

Monte:    Well, its going to have kind of a marketplace look and feel with a live auction exclusivity section, because we now are going to be doing four live auctions, four to five live auctions of domain names around the world over the next 12 months and then doing it again next year, the year after that. And we’re going to be bringing markets together in a room and buying and selling domain names and offering them for auction with a live auctioneer, so its going to be very exciting.

Cindy:    Wow.

Monte:    That system is actually going to all tie in to the whole marketplace and bringing it to life immediately and its going to be the only time that the market is coming together to decide values of domain names and investing in them and buying domain names that will be, you know, future investments for their children and their children’s children.

Cindy:    So this is an online or an actual live . . . ?

Monte:    It’s going to be an online marketplace but then it’ll have a spin-off to a live auction where its going to be a live sit-down, thousand people in a room with a live auctioneer and those names that are exclusive and selected so those live acutions will be able to be available for sale and purchase.

Cindy:    Wow. How often do you anticipate doing this?

Monte:    Four to five times a year over the next 2 years.  And our first auction, when we invented this strategy and this concept, we sold $450,000 about a year ago at the TRAFFIC East convention, which was in Delray, Florida; and then just recently in Vegas in May, we sold $2.1 million worth of domain names in 3 hours, doing the same thing.  Our next auction is going to be at the TRAFFIC East Conference again in Hollywood, Florida, at the Diplomat Hotel in October and we’re predicted to sell between $5 million and $10 million worth of domain names.

Cindy:    Wow, very cool. Nice, nice pay for a few hours worth of work, huh?  [laughs]

Monte:    Oh, yeah, yeah. Definitely. We get a little commission on that deal but we’ve actually structured and brought the market together in one room and created the whole concept so we think we deserve every penny we’re getting [laughs].

Cindy:    Absolutely. Hey, Monte, we’re actually at the end of the show. It goes by so fast. And we want to thank you so much for joining us today.  I want to thank you so much for taking time out of your schedule to do that, and we really appreciate it.

Monte:    My pleasure and having run a radio show, which is Domain Masters, I think its valuable information for everybody to get as much content and as much information as possible about how to be successful with their domain names on the Web as possible.

Cindy:    Absolutely. That’s Domain Masters at WebmasterRadio.fm.

Todd:     Thank you so much, Monte.

Cindy:    Thanks Monte. And we’ll . . .

Monte:    Thanks, I enjoyed being on the show.

Cindy:    I’ll see you next week in San Jose.

Monte:    Yes! We’ll be there at SES with bells on.

Cindy:    Alright, it sounds good. Thanks Monte. You’ve been listening to the E-Marketing Talk Show on August 4, 2006 and come back and listen again next week. We’ll be here with another great guest.