Today's Guest: Frank Schilling
Today's Host: Damien Allen
December 2007
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Domaining Legitimacy
Frank Schilling Transcript Page
Frank Schilling Expert PageANNOUNCER: Welcome to VTalk Radio Tech Spotlight, with your host, Damien Allen. This program is sponsored by Traverse Legal, PLC, a law firm specializing in internet law, domain disputes, and technology company representation. That's Traverse Legal, www.traverselegal.com.
DAMIEN: Good morning and welcome to the VTalk Radio's Tech Spotlight. My name is Damien Allen, and today we are in the studio via phone with Mr. Frank Schilling. Frank is one of the four largest private domain name holders in the world. Good afternoon and welcome to the program, Frank.
FRANK: Thanks Damien, thanks so much for having me on.
DAMIEN: We're very happy to have you here today. And today the issue is What is and What is not legitimate domaining. And perhaps we should start this conversation with exactly what is domaining, Frank?
FRANK: Well domaining is the investment, I guess for lack of a better way to put it, you know, the buying, holding, buying and selling, buying and development of generic domain names. Names that, you know, that you or I or anybody can sort of run out and own.
DAMIEN: So what makes domaining legitimate or illegitimate? What would be the reasons that domaining would be a legitimate thing and what makes domaining illegitimate in the eyes of the public and the law?
FRANK: That's a great question, Damien. The business of domaining, I mean, you say domain names where if you Google domain or domain registration in the news stories and Google news, you know, invariably will come up with sort of a lot of negative items. Domain names are sort of, as we know, are the foundational elements of the web. You need a domain name in order to create a website and so, you know, by virtue of the fact that anybody can go out and register a domain name for a registration price. You have the ability, you know, not that you will do it automatically, but you have the ability to have the world sort of be the path to your door. And so, what's happened is a lot of early registrants figured out that well you know a lot of people... how do I get those people come to my door. Well you can either go out and you can by generic names that have a lot of meaning and you know residence and to have it sort of hit home to a lot of people, some sort of gravity to them, like you know, generic name, like you know muffins or muffin recipes. If you go longer tail like muffin recipes, cool muffin recipes, you can go longer down the long tail, if you will. But let's...if you use muffins as an example muffins.com that's your generic name, anybody can own it, and people will come just because they're curious about muffins, but I guess what's commonly referred to as the less legitimate side or legitimate side of domaining which is cybersquatting which is going on registering, you know, I grew up in the east coast in Hamilton as we discussed earlier and you grew up in Michigan, you know, so if I go out and register Ford or misspell Ford/Ford trucks, people are going to come to that name for trucks.com because of the, yeah, they're looking for Ford trucks. They're looking for a brand that Henry Ford built and so you might be able to go out and register a typographical variant of Ford or Ford trucks or Ford pick up trucks as a dot com name and then capitalize on that traffic flow and that sort of generally be viewed as the illigetimate side of domaining, you know, the non-legitimate side.
DAMIEN: What would be the difference between legitimate domaining and cybersquatting then?
FRANK: Well legitimate domaining would be, you know, anybody can go out and register a name like muffin recipes or waterbottles.com, you know the combinations are endless. Things that you see in your life, you know, there are 100 manufacturers of door knobs, you know, maybe a 1,000 manufacturers in the world and tens of thousands of resellers of doorknobs. So if you went out and registered, you know, doorknob.com, or as I said earlier water bottles or muffin recipes or muffins, you know, any host of products or services that would be legitimate domaining. It's sort of a first come, first serve basis. Anybody can go out and register a generic name. So the difference would be that that would be generic legitimate domaining and then the illegitimate side, or obvious illegitimate side would be registering, you know, Fordtrucks.com or a variance of that where you get into this sort of contested middle ground where it's sort of a he said/she said scenario where somebody says that guy is a cybersquatter or, you know, that's legitimate form of domain ownership where the name owner says well I am not an illegitimate domain owner is where you have generic names that become part of popular vernacular, you know, like a good example would be test drive. You know, that's something...we all know what a test drive is... I went for one in the 70s with my dad when he went and tried out the new Cutlass Supreme, and I think I've gone for a test drive every two years ever since, but unfortunately a lot of people along the way have thought, you know, that would be a really cool name brand for a line of socks or video game or a, you know, accelerator pedal for my car or shift kit. And so you get this sort of a trademark holder who may have a trademark for a narrow band of products and services who says, you know this "cybersquatter" is holding my trademark name testdrive.com, but the reality is that's just not so. There's a lot of things that can mitigate, you know, that can get in the way of that individual's rights. The domain owner could pre-date the trademark holder. The trademark could be really weak so you get this contested ground, you know, where it's...and that's just sort of the nature of the beast when you're dealing with names that get profit, you know that have the ability to draw people in. That's a powerful tool, and everybody wants to rule that.
DAMIEN: So there's a definite growing tension between trademark registrants and domainers and what are some of the other reasons you think this is occurring then?
FRANK: Well, you know, as I said, I think there's a...you get this everybody wants to rule the world situation where you've people who initially kind of laughed off domain names and trademark holders said, you know, this is not important to me, when in fact they were mistaken. It was very important to secure those generic names. And the problem is as time goes by the internet is becoming more important not less these mark holders are doing sort of a 180, but way late, going oh boy we really messed up. We should have got that domain name, and now they're trying to...like the kid in the school yard with a bully throwing the sand in the eyes of somebody who has the toy they want, they try to kick up a bit of a fuss to try to get the name. Again, you know, a lot of trademark holders are trying to unseat what are bad guys who in the industry are, you know, people who have deliberately gone out and registered their trademark or some variant of it. This isn't so much to defend that which is clearly not legitimate domaining, but I guess to what I'm speaking to specifically is that there are generic names that can also have trademarks and it's very ambiguous. A lot of it depends on dates. A lot of it depends on the band of youth, how popular the mark is. It's not an open and shut case as it relates to the trademark law or trademarks.
DAMIEN: In your opinion, do you expect this tension to continue to grow?
FRANK: Well, you know, I thought it would have been a lot worse to be honest with you. Back when I sort of got started in earnest with buying domains for domain sake, you know, this is back in mid 02 when I really hunkered down, and I remember thinking to myself at that time, boy in a couple of years this is going to get really, really bad. And that hasn't happened, you know, you sort of have some...I see some sense of balance. Like I don't get challenged as much on what are obvious generic names. I get a lot more letters in the mail that were like oh you bad guy you've got razorblades.com. Give me that name you have no right to it. Now it's sort of a coming around, if you will, where people are starting to recognize that hey, maybe I have rights here too, and so I don't get challenged on those as often. I would say, yes it will get worse in the sense that I think, you know, wholesale cybersquatting or catchall typosquatters, guys who registered large volumes of trademark domain names that are...really they have no rights to. I think mark holders are sort of stepping up and enforcing their rights more vigorously, but I think that generic names, I think there's definitely a carve out there where there is sort of an acceptance in the IP community and the trademark community that, you know, it's conceivable that another individual might have rights here too. I don't think it's sort of getting...we're going to get to the point where...I would be surprised if we get to the point where, you know, my rights to my generic names are constantly causing a questions. I think we're seeing more balance than that, but I do think it's going to get, you know, as more people come online as more people realize they need to have names, there's definitely going to be a little more tension I think, you know, more work for the attorneys.
DAMIEN: In deed. We are on the phone with Mr. Frank Schilling. We're going to take a short break for these commercial announcements. This is the VTalk Radio Tech Spotlight. We'll be right back after these messages. Please don't go anywhere.
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DAMIEN: Good afternoon and welcome back to the VTalk Radio's Tech Spotlight. I'm Damien Allen, and once again we are in the studio via phone with Frank Schilling. Frank is one of the four largest private generic domain name holders in the entire world. Good afternoon and welcome back to the program, Frank.
FRANK: Thanks. Great to be here.
DAMIEN: And we're enjoying the amount of information we're getting. This has been a very hot topic especially over the past few months. We've done quite a few interviews on this particular subject. And getting the definition of what is and what isn't domaining, what is and what isn't cybersquatting, and how it's so easy for things to get convoluted and turned around.
FRANK: Lot's of gray areas, no doubt.
DAMIEN: In deed. And having no one definition that is concise, precise, and concrete doesn't make the issue any easier.
FRANK: No.
DAMIEN: Looking at all this the trademark owners rarely get bad press, but just like the domaining community, there's bad apples in the bunch. What abuses are you seeing out there by the trademark community?
FRANK: Well, that's interesting. You know, so far we haven't seen it as often. Earlier this year, there was a case where the Pirelli tire manufacturer...rubber manufacturer went after the owner of Zero.us. Clearly any right minded person could tell you that the word zero is a generic word and that anybody can own and use for different purposes, unfortunately for the owner of Zero.us, that name is the trademark of Pirelli the tire manufacturer as it relates to a line of tires, and they went after the owner of Zero.us, and the owner happened to be an attorney who fought back vigorously and won. But that's the type of thing you see where you've got sort of covetous late comers who really missed the boat. You know they should have been there and got the generic names early or paid to acquire them when they were less expensive, because anybody can buy a generic name. But at any rate, they didn't for whatever reason or they talked themselves out of the importance or their marketing department said we don't need this domain name and what happens is these people, you know, just sort of take a shot at roulette saying well we'll try to take them to UDRP or we'll try to take them to the courts to challenge their registration hoping that they'll shake the name lose, you know. That Pirelli example is clearly shameful that a large manufacturer would resort to that level trying to unseat, you know, a registrant who has rights in themselves in that registration, but that's what we saw. We could see more of that as the years peel on, but I think you're going to see some push back. I know that that particular registrant made overture to try to recover his costs and, you know, there's definitely a push back. You know, you can't just sort of...in many...I've heard it articulate I should say that in many respects these individuals are like these companies that try to do this are like the convenience store robber that walks in with a pistol and trying to stick you up for what's in your till. They have convinced themselves that they have a right to what you have, and they want what you have and they'll do what they can to take it. It's an unfortunate aspect, but it is the flip side, and it doesn't get a lot of press you're right.
DAMIEN: This has become, and I brought this up in other interviews as well, this is basically the new land speculation deals...where should we have been first? What do we grab? What do we need? And a lot of people weren't technologically savvy enough to catch up with the wave that was the internet and it's like oh I didn't think about this, what do we do now. Because somebody was bright enough to go, you know, I need muffins.com, because people want to know about muffins. So I'm going to buy it; I'm going to put some information on it, and people will come here and we can get ads, you know.
FRANK: Right. I mean the unfortunate side is yeah, sometimes that registrant who owns muffins.com might get challenged by Quaker. I mean, this hasn't happened, but Quaker Oats may say, we're launching a new line of muffins we're going to call muffins or we're launching a new line of bakeware we're going to call muffins, you know, and we want to secure the rights to that generic word so we're going to do whatever we can to shake, cajole, get that domain name away from it's registrant. I mean, it's unfortunate, because what we're talking about is, you know, millions of dollars of intellectual property rights that are on the table. Collectively, you know, it's billions of dollars. Marchex bought Name Development, Ltd.'s portfolio for I think it was $160 million back in 04. I mean, today that portfolio has got to be worth $400 million, you know, the media portfolios that's got to be I predict a billion dollar company. You know that name portfolio is worth, you know, half a billion dollars. We're talking about real money here. And a lot of these names anybody can own them. Anybody has rights to them. It's not that it's this name only is the property of one individual, anybody can own a name like lawnchairs.com or, you know, generic words and phrases that add a lot of meaning to a lot of people. So when you have companies that try to go out of their way to unseat registrants by bully tactics, I mean, it's bad for those registrants. For the companies it's nothing to take $50,000 or $100,000 for a large publicly traded company, but to a lot of these registrants, this is a life savings. And a lot of times the registrants only have one or two names. There's definitely got to be some equity there. We're watching to see what happens. The community keeps an eye on these types of issues as they come out. They speak to them, you know, it becomes the fodder for blogs and it's hard to keep this type of thing secret.
DAMIEN: Well as domain names continue to grow in value and the market continues to evolve, where is the domain monitorization market going next? What is going to be the next wave on this?
FRANK: Well, sites are getting built. Domaining has started out as you had inactive pages and names were sold. The early domainers made money by buying and selling and trading domain names. This happened pre-2002 in that window. In 2001, you had first generation affiliate programs and PPC where domainers figured out that some of these names get traffic for no other reason than the key word weight or the gravity of the name itself. If I put up a lander page with some links about shopping, somebody will click on those links, and then I'll be able to sell the leads on the paper click basis, and that's matured...Yahoo bought the overture key word marketplace which was the first offer of paid listings. Google has rolled out it's own key word marketplace to great success. I think from here text links will always be with us, but I think domainers, and I've blogged abou this on my blog, you have domainers taking really high quality names and building more advanced, full web 2.0 sites with Ajax and Ruby on Rails, but slightly more advanced that look more like fully developed websites with limited content and information, but still the ultimate goal is that the site is created as a lead ya in mechanism to generate a sales lead that's merchantable that can be sold to somebody who can turn around and resell the lead or sell the visitor product or service. It's commerce at it's finest really. It's capitalism; it's great to watch, you know. Years ago you have to consider when I started typing a lot of these names in, they were just network solutions stickmen. You know, men with a shovel. Under construction, coming never, and then gradually now you have relevant content and information adverstising content, you know, the most tech savvy of us are turned off much like search listings and we see these sites much like an ad executive would walk out of the room when a commercial comes on because they're like oh, the last thing I want to do is watch a Pampers commercial when I work in that industry, but at the comsumer man on the street level, you know, paid search advertising works because users like it. I think that's going to be with us for a long time to come.
DAMIEN: Let me give you one final question here. In your opinion, why do domainers, legitimate and illegitimate alike so easily get swept up into the cybersquatting label?
FRANK: You know that is a really great question. Several collegues of mine and I have sort of chatted about that over the years, you know, I think that when you have...there are probably two answers here. One is that there are a lot of folks out there who register names that don't belong to them and that makes good press. GE finds hits go to various landing page or Microsoft or Dell find trademark domains go to, you know, cybersquatters take advantage of Dell trademarks. This makes great press, you know, it's the kind of thing that sells, you know, because everybody owns shares of Dell and everybody owns shares of Microsoft, but not too many people own domain names. So it's interesting to see what could move the stock price. It just makes good press. So you've got that dynamic in play. You've got the sort of the underbelly of, you know, as it relates to domain names that's out there, and you know, those individuals that engage in that activity, you know, whole sale cybersquatting are really, I kind of view them as the mules in the drug trade. They do all the dirty work; they go out there and cybersquat on all these marks, but really the people that make the most money are the key word marketplaces which is Goolge or Yahoo or Microsoft themselves who run the key word marketplaces and do redistribution arrangements. So they do all the work for a slice of the pie, and they take all of the risk, you know. So that isn't a healthy dynamic. That's out there, and I think it's gradually going away. You've got new lawsuits that are coming that deal with that. You've got...and they won't be the last. There are going to be more rounds of legal action by large companies that get that, but along that long at the same time, you've got, I think, an underlying...how can I put this...desire to control the internet. Domain names sort of are this...I view it as sort of only basgin where anybody can go out and register domain names. You can do it, I can do it, and theoretically with the right amount of work with the right pieces in place, you can go out and you could ultimately create a media enterprise to rival the greatest media enterprises ever. You could become the next Forbes. You could become the next Fox really. It's all possible because the web is such a level playing field. When you have individuals who own a lot of domain names, you kind of have that dynamic. You become a bit of a media company when you can deliver 30, 60, 90 million unique visitors a month with a bucket of domain names. That's a very powerful thing. And so there's a vested interest I think in the part of, you know, not to go off on a conspiracy tangent, but there's a vested interest to sort of, you know, paint this wild cat kind of industrythat doesn't have a lot of the centralized command and control, you know, as a sort of a place where not a lot of good stuff goes on. And that's unfortunate, because really what makes the web great is that ultimately we go to Google or we go to Yahoo and we search for something, and we wind up in a site that we've never been at before where somebody is doing something really cool and they're always doing it on a domain name. And most domain registrants who have one or two registrations will ultimately build sites like those. And even the large holders like myself ultimately develop most of my domains out through automated fashion and will become a large media concern with a lot of reach and a lot of depth. I think there's sort of to answer your question more directly, I think there's, you know, bad stories make good press and...stories about bad guys I should say... make good press, and there are definitely bad operators in the domain industry, but at the same time there's a power struggle where you know the large teleco's and the search engines would like nothing more than to have a five channel world that we all kind of go into and that's where we get our information and then when you have, you know, individuals out there who have a lot of domain names, you know, it's distuptive force, and I think there's some...it's good to flag that, you know, if it suits your ends.
DAMIEN: You mentioned your blog earlier, would you like to share a web site with the listeners?
FRANK: Absolutely, you can visit www.sevenmile.com it's mainly domain related small niche blog, or my name FrankSchilling.com, you know, will get either as well. Oh and Seven Mile, you can either do the number 7 and mile.com or spelled out seven mile. Not so much a play on Eminem's 8 mile as it is the name of my beach.
DAMIEN: Good deal. Thank you very much for joining us today and givin us all this great information, Frank, we really enjoyed having you on today.
FRANK: Hey my pleasure, Damien. Thanks for having me.
DAMIEN: You're very welcome sir. And thank you for listening folks. This has been listening to the VTalk Radio Tech Spotlight. My name is Damien Allen. Have a great afternoon.
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