Who is the Primary Owner of All the Domain Names?

Why are domain registrars allowed to use bots to buy domain names?

• About over a year ago a domain name of a soccer club forum expired. Within seconds after the domain was released, a registrar got the domain. Enom, I think. A year later, it expired again. But again, seconds after the domain being released, another domain registrar - DomainNameSales - got the domain. In both cases, nobody could get the domain because registrars used bots to get it as soon as it was available. They are holding good names with no intention to develop any site, and they are doing that using tools that make it unfair and impossible for anyone to buy the domain. Why are they allowed to do so? I was a member of that forum and I know why the domain name expired. The owner ran out of money and motivation to maintain the forum, and over the years he said many times he was going to let it expire. When I realized the forum was gone, I thought that I could buy the domain and, as a fan of that club, develop a blog or even bring back the forum. But it was too late. Registrars got the domain, put a poor parked template and have being sitting there with no site for almost two years. Update: Oct 2014. Nobody has bought the domain name and it was recently renewed for another year, until 2015. It is still parking waiting for a buyer. The price is now $250.

• Answer:

  Your description of what happened when this domain name expired is not a fully accurate portrayal of how that process actually works. It is a complicated process with lots of steps, but not so nefarious and unfair as you suggest. I will try to summarize the main steps below. There is actually a very well developed and reasonably democratic process through which potential buyers of an expiring domain name (there may be one or many) are able to compete to own the name. This is done by individuals placing 'backorders' for a given domain name with one or several companies that specialize in 'catching' domain names when they 'drop' (are released back into the general pool of available domain names). Like buying stocks on the stock market, this dropcatching process is automated using bots managed by the backordering services as well as other large domain name investors who are big enough to have their own dropcatching services. The largest ones are Snapnames and Namejet, but there are others, too. This process seems appropriate to me and I'm not sure what alternative method you would might think is more fair. In any event, most dropping domain names are caught by a backordering service and then either given to the person who placed the backorder in the case of only one individual placing an order with a given backordering service or it is put up to auction with 2 or more people who all put in backorders. In some cases, dropping domains are caught by larger domain investors for their own accounts. I don't know the specific percentage this happens with, but I'd guess less than 10%. I would say that most good domain names have a large number of people who have placed backorders for them - 30 or 50 or even 200 backorders is not uncommon - and they end up being sold via auction where anyone with a backorder is allowed to bid on it. If there is an auction, the person who bids the most for the name wins and becomes the owner. If there is not an auction, then the one person who placed a backorder wins the name for the price of the backorder (typically $50 - $60 or so). Once a new owner is determined that person is free to do whatever they want with the domain name, including parking it.