Playing the domain name game

The buying and selling of domain names is fraught with potential disasters. Here's our guide to avoiding the pitfalls.

, Personal Computer World 05 Apr 2001

If buying and selling domain names were done in a pub, it would resemble the famous bar in Star Wars ... all manner of persons and species doing business with all manner of motives, and with a lot more going on than meets the eye.

Industry insiders readily admit that it is not for the faint hearted. One described it as a black art, and another lamented that the business has more cowboys than a cattle drive.

The problems stem from difficulties in understanding how the market works, the wide range of prices, the lack of clarity over terms and conditions, and a lack of will within the industry to do anything about it.

Domain names can be bought from specialist companies - your internet service provider (ISP), your web design company and, in some cases, your law firm or consultant.

An upper tier of registrar companies typically charge higher prices, partly because they have paid a $100,000 bond for the right to buy domain names in bulk. If you want a .com address in the UK your choices are limited because only a few registrars can sell them here. Many more are registered to sell .co.uk names through Nominet, the .uk national registry.

Below these registrars lies a tangled web of resellers. These can be as reputable as registrars but because they are building their own brands and businesses it is rarely clear which registrar they partner with. Some also sell on to other resellers. There is some evidence that the lower down the food chain you go, the more likely you are to run into 'hidden' costs, although this is not always the case.

After-sales service

Phil Callan, managing director for Europe at Network Solutions (NSI), the world's largest registrar, warned of the dangers. "The problem is the cheaper they are selling the names the less chance you have of getting much after-sales service. You need to be clear on what you are getting," he said.

One trick of what he calls the "cowboys" is to make themselves the "registrant" so that you don't actually have legal ownership of the name. Callan was unable to say how often this happens, only that "you need to watch out".

A more common problem arises when moving a domain name, typically when you have found a better web hosting deal. Callan says some firms charge up to £60 to 'repoint' your domain. Clearly it is important to find out such costs in advance. NSI makes no charge for this but Callan admits that things are less easy when NSI or one of its partners is dealing with a firm it is not familiar with.

Russell King, systems manager at Cyberspace Corp, a web firm specialising in online recruitment, found this out the hard way. "We even used to sell domain names ourselves but when we wanted to move a dotcom address we were dealing with we couldn't get through on the phone and it took six weeks to organise. NSI will expedite the change if you pay a charge, however," he explained.

David Pincott, managing director of Pirate Communications, had a similar problem with another US-based registrar. "Moving our name was a frustrating experience. We couldn't get the name released. We couldn't get hold of anyone to sort it out. It seems a complex issue," he said.

Callan advises firms to check the NSI website to see who its partners are in the UK - they include most leading ISPs. Dealing with these suppliers reduces the chances of such problems. "We all know each other so it's understood that we transfer customers to each other," he said.

This seems to be the essence of the problem. Rather like mobile phone operators who do everything they can to ensure that you stay with their service, the domain-name industry has allowed a pyramid structure of resale to develop, but operates a system that discourages ease of movement unless it is between preferred partners.

So is anything being done to improve the situation? There is a glimmer of hope with the announcement from Nominet that it is setting up an independent body to establish a code of practice or 'kitemark' scheme. For some it couldn't come soon enough, but whether the new code makes the tangled web of domain name buying any simpler remains to be seen.

HOW NOT TO GET CAUGHT OUT

Try to learn as much as you can about the firm selling the name and the nature of the agreement. Ask the following questions: