How Domain Registrar Companies Are Squeezing Web Developers

Web developers who are also business developers are often surprised by exorbitant prices charged by domain registration providers, particularly when a new top level domain makes its debut. In many cases, there seems to be no rhyme or reason for the pricing schemes; instead, there appears to be an undercurrent of pure coordinated greed.

Domain registrar companies that band together and contract intermediaries to sell their products are getting ridiculous with their pricing and auction practices, which are downright predatory when they involve common phrases, familiar terms and dictionary words that suddenly become premium domains sold at expensive prices. This issue is more noticeable when certain news topics result in fresh buzzwords or when domain searches are conducted for trendy terms; it seems as if an automated pricing system takes over, thereby rising prices on those domains.

With regard to homonym terms and sound-alike words, domain registration companies are running their operations as cartels or military regimes, and they do so under the guise of providing anti-squatting protection for established brands. Any domain name that makes an unlikely allusion to sports apparel giant Nike, for example, is bound to sell for thousands of dollars even if the reference is vague and coincidental.

If you ever wondered why major tech startups such as Flickr and Grindr took the unusual step of intentionally misspelling their brands, you should know that the high cost of domain registration likely played a part in their decisions.

Another highly questionable practice involves bulk purchases of released domains, which registration companies often carry out thanks to their vast cash reserves obtained from sales of expensive domains, not to mention hosting fees. These companies are also known to offers negotiation services that mostly serve as a barometer for them to get a feel for the market and jack up domain prices accordingly.

In the end, domain registration companies have a lot to gain and little to lose by continuing to operate as internet cartels. Until legislation and regulations are enacted to prevent this kind of anti-competitive business climate, prospective domain buyers will have limited recourse, and misspelling their desired domain names will no longer work as a viable option. For more information click here

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