Within the past week an ugly story broke about fake bidding on one the the leading domain name auction websites. Early versions of the story claim an insider in one of the leading companies used an alias to bid on as many as 50,000 domains his company was auctioning off. The phony bids raised prices artificially, increasing this miscreant’s compensation. Details of the story are still leaking in and I am not inside the news pipeline, so I will leave it to others to report developments.

In some of the blog comments scattered in various places some people are talking about class action lawsuits against various companies. In this case of this breaking story there already is a lawfirm exploring the possibility of initiating a suit. The lawfirm has set up a domain to collect information. The domain is named [name of the suspect company]classactionlawsuit.com Whether or not they go forward with an actual lawsuit depends on the information they gather, including whatever nuggets stray in at their .com domain.

This sad story and the actions of the law firm lit a lightbulb in my head. It gave me the idea for a whole new class of domains to create and invest in.

There are people and companies who invest in a wide class of domains with names such as [city]hotels.com Fill in the name of any popular city and the potential to create a website with information about the hotels in that city falls into the domain owner’s lap.

How about creating a class of websites with the following type of name: [fill in the name of a company]classactionlawsuit.com ? Fill in, say, Microsoft or Chevron or whatever. The idea is that maybe some day some law firm might want to sue the company, so they would have to buy the name of the domain from you. Neat, no?

For those who dislike domain investors, using this technique might be the best example of predatory cybersquatting. On the other hand, this might just be a decent example of buying low and selling high.

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Tags: auction websites, domain name auction, fake bidding