Tech Talk - Domain Names

We have got Mathew Ingram on the line here from Globe and Mail. I want to talk today about the man who owns the internet, domain name registration. Domain names like the .com's, .net's well this fellow here has got the corner on the market. Mathew maybe you can explain to our viewers just how big this guy is.

He is pretty huge I mean particularly in that field I think the business 2.0 story which I have no reason to doubt said that his business is worth about $300 million there are probably maybe one or two other guys who have a business that size, Yun Yi would be one, and there is a guy named Schilling who also used to be based in Vancouver and now he lives in the Cayman Islands.

Well that's interesting, the fellow we are talking about is Kevin Ham, and a lot of these guys seem to have come from Vancouver.

Yea its funny in a way someone told me they all knew each other in high school so it could have been something where you know it was the same way with Steve Jobs and Steve Wozniak knew each other through the computer club maybe these guys met up and all sort of discovered this thing at the same time, but it is fascinating that these guys control what is a gigantic industry effectively that not many people know about, are all sort of from Vancouver.

This whole domain name registration game is almost like real estate but in a virtual sense from my understanding of reading the article, this one fellow owns hundreds of thousands of domain names.

Yea. And it is definitely a lot like real estate you are trying effectively, you are speculating, you are trying to dominate a particular area or you are trying to snatch up things that are cheap that will later become valuable and particularly when you get to the level that Kevin Ham and Yun Yi do, you are effectively trying to corner the market with one particular type of domain which is what Kevin Ham has been trying to do with Cameroon. Since Cameroon's domain name, which is effectively given to them is .cm if you forget to type in .com and miss the 'o', Kevin Ham basically wants to direct you to one of his websites. And he has done that by signing an agreement with the Cameroon government. He doesn't actually buy the domains, he just has a redirector which pushes you to his web pages which of course are filled with ads.

It's amazing how much money he does generate from these per click ads on there, I mean it's in the millions of dollars.

Yes, it's incredible and every time I read about it, it amazes me that the type of volume comes from effectively what is an accident people accidentally get redirected somewhere then I guess they click on things or even just based on page views you can make money from those ads.

You said earlier that he technically doesn't own those .cm domains. There is a legal issue from what I am understanding here whenever Microsoft or one of these big brands like McDonalds comes across somebody who is using a variation of their name they go after them hard, they call it cyber squatting. What are the legal aspects involved with the .cm, can they come after him?

Well, I think that they probably will and that was certainly suggested in the article. Google already appears to have Google.cm control over that somehow so there is definitely some jocking for position there. I am sure if you were a big company, say Coca-Cola, even if he doesn't technically own that domain name he is still effectively redirecting people to his page instead of yours. But I think the legal issues there are still sort of poorly understood.

What I found fascinating too about this guy, and I think he is only 37 years old, in the early days when he first started he actually wrote software scripts that would go out and scour all of these domain name registration companies and would automatically get any of these domain names that lapsed when people didn't renew them.

Yea and there are actually people doing that all of the time trying to sort of claim jump if you will or grab the domain name just as it expires and he progressed from that to actually signing agreements with domain registrars so he would go to domain registrars and say if something comes up, I want it, and I will pay you extra to get it. And that is how he got a big part of the assets that he controls now. It's interesting to me that one of the things he mentioned in the story was he expects Google to effectively ruin this business because this types of sites are just hosting ads and trying to trick people into clicking on them or trick people into going there, or somehow take advantage of people who accidentally go there. Google wants to remove those from its index if it can and not allow them to run AdSense and Adwords and those types of things. So he is looking at effectively trying to create content for these sites that people accidentally go to and get around Google's control of the index that way.

Well it's certainly a fascinating story and one of the reasons that because of these kind of guys I can't get any half decent domain names when I want to register them they seem to be like 20 words long.

They are definitely controlling big parts of the market.

Well Mathew I want to thank you for joining us today.

Thanks Mike.