Ethics 101 for Domain Investors

Came across a few excellent posts related to the ethical side of domaining on NamePros, some interesting questions were raised and some interesting viewpoints offered.

I’ll quote some interesting bits here, though I would recommend you read the original posts, they’re totally worth reading:

Of course, in my opinion at least, approaching/offering to secure and sell any domain that you have not already bought/won in auction is STILL a slimy practice (if not illegal, and I suppose it comes down to how it was done and the precise wording to decide that). But, aside from driving the price up against others interested in the generic domain, at least it doesn’t expose someone else to risk of losing the domain if they win. – SlimPickins

If someone contacts a range of potential end-users, stating that there is a possible opportunity to acquire a particular domain that is at auction, and depending on the auction source, also stating that you are one of a finite group of people who can now bid on it, then in this scenario, it is merely a joint venture or consulting opportunity that ethically serves both the middleman/broker and the end-user. I would not consider that unethical or illegal. – pheven

Assuming no trademark issues, the major problem with approaching endusers before acquiring domain names at auction is that it has the potential to kill everybody’s action.

Think about it this way… if there are 10 bidders vying for a name in a private auction (ie NameJet) and more than one bidder (3 for example) reach out to the same potential enduser about the domain, it makes the enduser balk — an enduser who may have been willing to pay a premium for the domain is likely to just tell the prospecting domainers to F#@k off, once the enduser realizes the sharks are circling. – fastadam

If I were an enduser wanting the domain in question, I would tell the 3 or 4 people that are emailing me, 4 different price figures. I would tell bidder (1) $1000, bidder (2) $5000, bidder (3) $10000 etc etc. This would drive the price of the domain up greatly and then when the winner came knocking on my door with this $XXXXX domain he just bought. I would simply say that I found another domain name that would work better for me, but thank you anyway. – FantasyCombine

Pheven- great post and I appreciate your alternate viewpoint! To be honest it actually WAS also my viewpoint a couple of years ago when one of the big blowups (about happened when Federer contacted a potential buyer for a domain on the drop where he was one of the “finite bidders”. At that time I was not very active in drop auctions or aware of the delicacy and lack of transparency with TM’s, in particular with our beloved LLLL’s….. at that time I stated (on DNF) similar to you that, if done correctly, it could be a deft tactic and viable strategy. However, I LEARNED (through the posts of more experienced members) about how “gray” this practice really is, and is not thinking “outside of the box” but rather a dangerous and dirty tactic…. and I really saw it differently, and do to this day. – SlimPickins