How to Buy a Domain Name, Not a Scam

When going after personal domains, beware of E-mails from strangers.

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About a year ago, I decided it would be nice to own my own domain name, www.kimberlypalmer.com. So I visited www.GoDaddy.com, a popular domain name and web hosting company, and checked on its availability. (When I went to the site itself, it was blank.) The GoDaddy search function told me that someone already owned the site, but I could place a backorder on it for $18.99, which would give me the chance to own the domain name when it came up for auction a year later. So I went ahead and paid the $18.99.

A few days ago, shortly before the domain name was scheduled to come up for auction, I received an email from someone in Australia. (E-mails from international addresses automatically trigger my scam sensors, so I was suspicious.) It was from a man from an Australian technology company (at least that's what he was claiming to be) offering to sell me www.kimberlypalmer.com for $250 -- far above what I would ever consider paying. The E-mail came with a pitch:

KimberlyPalmer.com is a powerful domain name that needs no explanation of spelling or pronunciation. Owning such a domain name will tell your current and future clients, partners and/or investors that you are THE player in this space.

Since we are proactively seeking a buyer for this domain we do not expect it to be available for long. Once KimberlyPalmer.com is sold to an industry player we don't expect that this great domain name will EVER be for sale again. If you have ANY interest in purchasing this quality domain then please contact me to discuss this opportunity.

The high price -- $250 -- and overblown language was enough to convince me that I wanted nothing to do with this company, so I ignored the E-mail. But then, just a few hours later, I received an E-mail from GoDaddy. "You've been outbid for KimberlyPalmer.com," it told me, and urged me to place a higher bid immediately.

Now I really felt like I'd been scammed. First of all, I wasn't even aware that I was participating in a bidding war, and second of all, if another company was already valuing the site around $250, then hadn't I just wasted my money by placing a backorder for a mere $18.99?

I called GoDaddy.com for an explanation. Adam Dicker, vice president of the aftermarket for domain names, said that by placing a backorder, I automatically placed the first bid of $10 when the domain became available. But then, once someone else outbid me, it was up to me to raise my offer. When I didn't, the other party won the domain name.

The most depressing fact: My name went for $15. That means if I had understood enough of what was going on, I could have owned my domain for less than the price of the backorder -- and if I really thought about, I probably would have decided the cost was worth it.

But, as Dicker explained, there was no way for me to know how much the domain name would sell for in advance. And if I had raised my bid to $20, the other party could have continued to outbid me. If that Australian company really is the owner of the domain, then they may have E-mailed as many different Kimberly Palmers as they could find, hoping w would all get into a bidding war. Dicker says some companies buy up the domains of people's names in the hopes that just such a bidding war will take place -- and that they'll walk away with a windfall.

There is one thing I did correctly, however, and that was to not respond to the Australian E-mail. There was no way for me to know if that company really did own the domain name, or if it was just a scam. I could have paid $250 and never seen that money, or the domain name, again. (The owners of domain names are often kept secret through privacy measures.) If I really wanted the domain name, my best bet would be to go through the auction process with a well-known domain registrar, such as GoDaddy.

Dicker has some final words of advice to other people trying to purchase domain names: First, understand the process. Then, you won't make my mistake of abstaining from the bidding process altogether. You can also avoid the bidding process in some cases by approaching the current owner and making a deal. While the domain owners are often hidden from view, you can use the Whois directory to send a message to the owner. If that doesn't work, then place a backorder on the name through a domain registrar and watch as the auction approaches, and then decide what you're willing to bid. Finally, if you're outbid, consider a different but similar domain name. In my case, Dicker suggested that I might want to check out www.kimberlypalmer.me.