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Cybersquatters register so many domains and sit on them for so long that the renewal fees alone would bankrupt anyone.

Do they have some kind of special status that lets them pay very low renewal fees? How do they obtain this?

I asked because about a year ago I did a "whois" on an obscure name I was pretty sure no one would have registered and, indeed, no one had registered it. However I didn't really need it and decided not to register it. Then I just did a 'whois' on it again and it turns out a domain squatter grabbed it soon after I did the 'whois' last year. Apparently these guys are getting info from the whois queries and acting on them -- but it seems they'd be put out of business by all the obscure names.

Any technique that enables cybersquatting is a security concern for those wanting to secure domain names.

closed as off-topic by TildalWave, Philipp, Eric G, Xander, Iszi May 5 '14 at 13:06

This question appears to be off-topic. The users who voted to close gave this specific reason:

  • "This question does not appear to be about Information security within the scope defined in the help center." – TildalWave, Philipp, Eric G, Xander, Iszi
If this question can be reworded to fit the rules in the help center, please edit the question.

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    This is off topic because it's not about security. But it might be on-topic on webmasters.stackexchange.com – Philipp May 4 '14 at 21:55
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    I asked it at webmasters.stackexchange.com and it was rejected as offtopic. – James Bowery May 4 '14 at 23:48
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    Then I wouldn't know where it would be on-topic, but certainly not on information security. – Philipp May 5 '14 at 6:54
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Well, generally buying bulk domain you get a discounted price and it's only £5-10 per year anyways. So, it's really not that much.

100 domains at £5 per a year is £41.60 a month with a total of £500 per year.

If you manage to a sell a good domain could make you unknown figure depends on how desperate they want that domain.

https://uk.auctions.godaddy.com/?ci=55869

First page on GoDaddy bidding on domains is a classicrockauctions.com at £6,103 which well covers cost of having 100 domains per year but it's all a gamble.

  • There are 12 months in a year, not 10 ;) – user43488 May 5 '14 at 7:23
  • £5 * 100 = £500 and £500 / 12 = £41.666666666666666666666666666667. So, what do you mean not 10 months in a year? – Paul May 5 '14 at 14:03
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Most domain squatters use the domains they register as ad farms with lots of ads but no actual content. Thanks to services like google AdSense which automatically picks relevant ads this doesn't require any actual effort to set up. When the domain is generic enough to generate a lot of traffic just because of the name itself or when it used to be a popular website which went out of business but still got many inbound links, it might cover its cost just by that.

For example, sex dot com was first registered in 1995 and set multiple records for the highest price someone ever paid for a domain. But it took until 2012 until someone made something serious with it. All of the previous owners just used it as an ad farm without any actual content. This seemed to generate enough revenue to justify the investment.

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The is another thing to think about. At the wholesale level, you can "buy" a domain and then not have to pay for it for 5 days (sort of like the 3 day stock settlement rule). Some squatters register lots of domains and setup ad farms on them. Then at the 5 day mark, don't pay for any domain that has not generated enough traffic to pay for itself.

There has a been a request by some of the domain registrars to stop this sort of activity.

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