3 ms·

Economically, this is called rent-seeking behaviour. While perfectly legal, this feels unfair because the middleman adds no value whatsoever.

mistercow 8y ago
I'm not sure this really fits as rent-seeking. Usually, with rent-seeking, you manipulate either the political or economic landscape to give yourself a benefit without creating any value. In this case, resellers are taking advantage of a poorly designed system that was already in place to create a market for something that was being allocated stupidly. And I think a key point here is that some form of this was inevitable. Even if they didn't set up the privileged API, you'd still have a glut of speculation, because that's what happens when you sell off a high value commodity below market. The only question is who is in a position to take advantage, and it doesn't seem from the article like resellers manipulated themselves into that position, so much as found themselves there by default.
- rhizome 8y ago
  >a poorly designed system that was already in place to create a market for something So...an economic landscape?
  - mistercow 8y ago
    Yes, but not one they manipulated for this end, at least as far as the we can tell from the information in the article.
    - eridius 8y ago
      They bought a reseller license for the purpose of snapping up and auctioning off high-value domains rather than acting like a traditional reseller.
      - mistercow 8y ago
        Did they? Or did they do the same thing domain resellers have been doing for decades, with the only notable thing about this being that a bunch of more desirable domains came up for sale recently?
        eridius 8y ago
        Domain resellers that have been caught doing this sort of thing in the past have also been criticized. In particular I remember a lot of criticism some time ago about the practice of watching for WHOIS queries to see what domains people are interested in, then buying the domain and trying to sell it back to the original searcher for more.
        mistercow 8y ago
        They have been criticized for that, yes, but I think undeservedly so. Fundamentally, I just think it's pretty dumb how we allocate domains in the first place, and that this sort of thing should be seen as the natural consequence of allocating resources stupidly. As for the other thing, I think front-running is a pretty different situation, and is bad for reasons that don't apply here. Although I believe most of the legend of that came in part from a misunderstanding of what was happening. Some registrars would put a hold on the domain you searched for, which would automatically be released after a day or two. Their rationale was that it was a bad experience to search for a domain, and then have it snapped out from under you during checkout. Of course, it also conveniently prevented you from buying the domain from a competitor, and I have no doubt that that was part of the motivation for doing it. I agree that that's a bad practice, but true front-running is much worse.

mistercow 8y ago

I'm not sure this really fits as rent-seeking. Usually, with rent-seeking, you manipulate either the political or economic landscape to give yourself a benefit without creating any value. In this case, resellers are taking advantage of a poorly designed system that was already in place to create a market for something that was being allocated stupidly. And I think a key point here is that some form of this was inevitable. Even if they didn't set up the privileged API, you'd still have a glut of speculation, because that's what happens when you sell off a high value commodity below market. The only question is who is in a position to take advantage, and it doesn't seem from the article like resellers manipulated themselves into that position, so much as found themselves there by default.

rhizome 8y ago
>a poorly designed system that was already in place to create a market for something So...an economic landscape?
- mistercow 8y ago
  Yes, but not one they manipulated for this end, at least as far as the we can tell from the information in the article.
  - eridius 8y ago
    They bought a reseller license for the purpose of snapping up and auctioning off high-value domains rather than acting like a traditional reseller.
    - mistercow 8y ago
      Did they? Or did they do the same thing domain resellers have been doing for decades, with the only notable thing about this being that a bunch of more desirable domains came up for sale recently?
      - eridius 8y ago
        Domain resellers that have been caught doing this sort of thing in the past have also been criticized. In particular I remember a lot of criticism some time ago about the practice of watching for WHOIS queries to see what domains people are interested in, then buying the domain and trying to sell it back to the original searcher for more.
        mistercow 8y ago
        They have been criticized for that, yes, but I think undeservedly so. Fundamentally, I just think it's pretty dumb how we allocate domains in the first place, and that this sort of thing should be seen as the natural consequence of allocating resources stupidly. As for the other thing, I think front-running is a pretty different situation, and is bad for reasons that don't apply here. Although I believe most of the legend of that came in part from a misunderstanding of what was happening. Some registrars would put a hold on the domain you searched for, which would automatically be released after a day or two. Their rationale was that it was a bad experience to search for a domain, and then have it snapped out from under you during checkout. Of course, it also conveniently prevented you from buying the domain from a competitor, and I have no doubt that that was part of the motivation for doing it. I agree that that's a bad practice, but true front-running is much worse.