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Not All Domainers are Scammers

I’ve been a competitive web publisher (and SEO consultant) for many years, and I’ve been participating in domain development for the past few years, working with domain portfolios and people generally classified as domain investors or “domainers“. Lately we’re seeing news articles about scams and rip-offs, and some of those are on big premium domains known to have been developed by domainers (with development partners, of course). Most claims of “scammyness” focus on the monetization angles pursued by the sites.

Question: Are all domainers scammers? No, not all of them.

Proper domain development is an expensive and detailed process.  The most important aspect of successful domain development is web marketing strategy, or publishing strategy - the “why” that should be driving the development process. For those of us experienced in search optimization (SEO), this is the core fundamental aspect of our work. Without a strong set of publishing goals and an associated web strategy, any optimization efforts will succeed only at the whim of search engines. When they are sloppy, and when they leave profits on the table, you can take them. But when they pay attention, you get very little. And when search engines focus attention on actually taking the profits out of your market, you get nothing.

Google has been doing this in more and more markets lately. Any SEO who didn’t pursue a sound publishing strategy a year or more ago is feeling the heat of poor performance right now. How they respond to that heat probably reveals a lot about how they approach domain development in general.

Many domainers  choose only to develop when they find a development partner willing to go after fast money opportunities, which promise a lot of money for little work, risk or investment. Absent that, they are willing to wait. That process acts as a filter, eliminating most opportunities and creating opportunity for scams.

You take your own look at the “free credit reports” marketplace. Does this web site look legitimate? Does it look like a safe and wise choice for getting your government-mandated free credit report? What about this web site. Here’s a hint — the ugly one, with poor optimization, poor user interface and very little character, is the official and safe one the FTC expects you to pick. The others?  The FTC says they are scams… because they actually sign you up for automated monthly rebilling for various kinds of credit monitoring services. Check out the left side of that site, and the full paragraph of information that starts with “Important Information” and says it is not the official free site, does charge a fee, and even links out to the ugly site. Apparently that’s not enough for the FTC (PDF) or at least one congressman.
Scammers exploit opportunity as fast as possible, as aggressively as possible, without regard to consequences, which are often viewed as someone else’s problem (SEP). Standard Operating Procedure (SOP) is make money as fast as possible, SEP is what’s left behind. Sometimes, the investors inherit the problems.  Sometimes the economy does. Usually we are all left with more cautious, more conservative, more heavily regulated environments, while the scammers move on to the next opportunity for exploitation.

Contrary to scammers, more traditional businesses seek to secure a mind share position within a marketplace, maneuver into a position of control and influence, and then exert that influence in ways which manage the marketplace, keeping it profitable (for them) while erecting barriers to entry for competitors. SOP for them is a long term play, even when fueled by revenues gained from fast acting, short term exploitation of transient opportunities (such as those that may exist after innovation and disruption, when such companies build their “war chests”).While scammers take the money and run, real businesses take the money and secure dominant positions in the marketplace.

Strategic SEO/web development is based on sound strategy. The FTC and the entity it designated to set up that ugly, not-very-trustworthy-looking free credit report website had no such web strategy. And it shows.

You’ll find a large number of free credit report websites monetizing on those subtle rebilling programs the FTC despises, and the most successful ones are on premium domains like FreeCreditReport.com, AnnualCredit Report, etc. Premium domains. Are they owned and operated by domainers? Wholly? Partly?

The domain investment industry grew out of nowhere to very high value over the years that the web grew from an idea to the central commerce and information network it is today.  A portion of the domainer community succeeded by stepping into the market, taking risk, making wise moves and/or getting lucky. A portion stepped in and worked hard and/or smartly, again taking risk and investing. And a portion elbowed their way in by breaking rules and conventions, taking advantage of others, and exploiting the commons. We are all free to assign character traits to individuals as we might like, but this is not unlike other industries such as banking, railroads, IT or even SEO.

In the late 1980’s and early 1990’s when domain registrations were free and most generic dot com domains were unregistered, at a time when it was understood that the Internet was non-profit and domains were for companies or individuals (one domain per entity), a Unix system administrator at a University may have registered dozens of names for himself anyway (perhaps working on company time, which may have been funded by grants from the US government). An administrator somewhere else may have reserved names in the system as if they were requested by others, only to take them back for himself years later when they were worth millions. There are many such success stories. It’s not too different from the way “robber barons” operated during the industrial revolution. But there are many others who earned their stripes in more honorable ways as well. in short, it’s business, American style.

So now some domainers are looking to develop their domains into revenue generating businesses, by working with development partners. Some are selling their domains to others, hoping for big prices from those looking to generate revenues on those domains. Along the way, business people driving development are choosing the highest profit opportunities, which often involve consumer scams. When that happens, who are the scammers?

If you enter “free credit report” into Google, what comes up? It’s always more than one site. Anything else would be un-American.

I think it’s pretty obvious to everyone who takes a closer look. No matter what necessary illusions get published in the mean time, those knowingly ripping off others assume the responsibility for the fraud. The rest are doing business.. meeting market needs, creating opportunities.

Not all SEOs are scammers. Not all domainers are scammers. You don’t need to cheat and steal to make money on the Internet. And your government doesn’t actually have to do a good job with your tax money, does it?

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