Supernatural Agency: Online business tales

(long post but I have an important point to make…)
A few days ago they held a vanity license plate auction in Hong Kong and over 11 million HK ($1.4 million) was spent on license plates. Single word dot com domains (URLs or web addresses) are selling for millions. What do these two things have in common? They represent a unique right like a trademark. Once you own them, no one else can, an increasingly scarce situation when it comes to anything in a commoditized world.
I own MartinEdic.com and have for some time. There’s nothing there and I doubt anyone else would want it (there are no other Martin Edics out there that I know of) but it is unique and may become my exclusive online address some day, a neighborhood only I may occupy and one where my friends and business acquaintances can always find me, regardless of where I am on the planet.
The license plates are a different story. In a crowded world where individuality often gets overwhelmed by the sheer numbers of humans on the planet, acquiring a plate that says ‘I love U’ and putting it on your otherwise generic car makes a statement: I am here and I am unique!. My guess is that the owner of the ‘I love U’ plate in Hong Kong will become a celebrity of a kind, with a public persona that will last as long as he or she owns the plate. Is that worth $57000 and change?
In this world of unending stuff, no amount of money can buy you a unique house, a unique car or a unique reputation. There are simply too many extremely wealthy ($100m+) folks out there. But an eight dollar domain registration can get you a genuine, one-of-a-kind web destination that no one else may usurp.
The existence of domain names has been taken for granted for the last 15 years. Until recently they were just a part of developing a presence on the web. You got one for your business or organization and hopefully it was a simple dot com that contained your unique brand. If you couldn’t get your brand, you settled for something similar, maybe a dot net or something with a hypen or a funny spelling. It was just a website after all.
Fast forward to the present. The web is ubiquitous which means it is everywhere. Those seeking something, be it a service, a companion, a lover or a product, are using a search engine to find that item. They know what they want (intent). They are impatient and most of us are very poor searchers- we don’t recognize the difference between joesplumbing.com, joes-plumbing.com and joesplumbing.net. We just want to find Joe’s Plumbing.
Here’s where things changed. A lot of people are going to enter joesplumbing.com into their browser, expecting to get to Joe’s site. If Joe has a hypen, some other Joe’s Plumbing gets the business. If he has a dot net, he misses the 98% of people who will automatically enter dot com for everything. He needs to own joesplumbing.com. He might also want misspellings like joesplumming.com just to catch the typos and bad spelers who still want his services.

For Joe, this won’t be a dealbreaking thing if he can’t get the prime real estate, aka joesplumbing.com. Or will it? If you use the Internet I’m guessing that you don’t pick up the local Yellow Pages book as often as you used to, if at all. Even if you do, eventually you’re going to use the web when your basement floods- its just easier, you can get a map, book an appointment via email, etc.

Now Yellow pages ads cost a lot, even for a small business. That’s because, up until a few years ago, they were essential to many businesses’ livelihoods. You ever wonder why plumbing companies buy full page ads and call themselves AAAAAPlumbing so they get the first listing? The ads make or break their business. And even in smaller markets one of the full pages ads can cost tens of thousands per month. No one I know likes paying for them but if you skip a year you lose your place, the phone stops ringing and you are out of business.

Enter the domain name issue. JoesPlumbing.com may cost Joe a lot of money but once he has it it’s his forever (as long as he renews it). How much will it be worth a few years from now when the Yellow Pages are gone and trees everywhere breath a sigh of relief? Probably more than his entire business, especially to a competitor. You see where I’m going with this?

So what is more valuable: a unique business name, a trademark or a unique domain (dot com, no hypens, no goofy spelling)? If you already own a trademark and the dot com (or any other version) isn’t registered yet then the courts will award you your domain if someone else tries to grab it. They will also protect you from cybersquatting which is registering domains with trademarks in them like kodaksucks.com. Kodak is going to get that domain name ASAP.

But what if you haven’t registered your trademark yet? Better buy that domain before you register a trademark or name a company, otherwise you don’t have precedence. And, from a marketing POV, you have a big problem: Someone else owns your storefront, address and headquarters on the web. So which piece of intellectual property is more valuable?

What this situation does is upend the viability of trademarks, to some degree. If I register a domain for a unique name before anyone trademarks that name , for all intents and purposes I supercede that trademark on the Internet.

Conclusion: Domains are going to explode in value because they have become the de facto global trademark system, a system that is self-policing and far more solid than the IP laws of individual countries.