The Professional Cybersquatters— “Corn Bugs”

Issue 25 By Liu Rong China IP,[Internet & Domain]


                          
Following several big domain name infringement cases, “cybersquatting” has become a topical issue arousing great attention. Professional cybersquatters hiding behind infringements and call themselves “corn bugs”, and maintain a low profile. The media reports that the number of “corn bugs” is growing nowadays. Who are they? What is the actual number? What are they doing? These questions are totally strange to the public. This kind of “low-profile” is possibly because of the “technical nature” of domain names, or because of the subtle condition of cybersquatting behavior both legally and morally. Nevertheless, the booming Internet industry has paved the road for ordinary people to professionals.

 

“Corn bugs” received the name from a close transliteration of “domain name” (Yu Ming in Pinyin) with “corn” (Yu Mi in Pinyin) in Chinese, as well as their “bug-like” assiduous spirit in this field. “Corn” has been nicknamed “rice” in forums. In a few relatively popular domain name forums, “bugs” hop here and there and greet each other with “Hi, man, show me your rice.” Most of these forums are administered by legitimate domain name registrars who provide various types of domain name services for users and agents. Usually, senior “corn bugs” have their IDs on all popular domain name forums. They spend most of their time in forums, posting ads that read, “Corn wanted” or “Rice for sale, ”exchanging news, chatting and watering. However, one thing they will never forget is to put their business information in large, bold and shining letters in the signature block.         

 

“Cybersquatting” is not a frequently used word in the world of “bugs”, not simply because of its controversial essence. “Bugs” consider that their behavior has nothing to do with “cybersquatting.” They officially call themselves “domain name investors.”   

 

The way out for domain name is web site— by Zhou Yanan

 

Zhou Yanan denies that he is known as a domain name investor. “It’s just a personal hobby”, he said, “not as deep as any investment.”

 

However, he never denies that he does earn money from this interest. “I have never lost my money in doing this,” he said.

 

Zhou is only 20 years old this year. He quit school when he was a sophomore, and started his career at Miba.cn’s Forum. “Miba.cn” is a popular domain name forum, and is the service agent of HiChina - the largest domain name registrar in China. Zhou is both a customer service provider and super moderator. He is very active in the forum. 

 

Young as he is, he has rich experience as a domain name player. His first contact with domain names may be traced back four years when he was a senior Grade 2. At that time, “.BE” domain names from Belgium were free. Zhou registered for a couple of them just for fun. “.CN” and “.COM” domain names had a cost of 10-20 US dollars. As a poor student with only three Yuan for his daily meals, Zhou could not afford them. After attending college and with the increase in his financial ability, Zhou started his “.COM” purchasing plan. 

 

“Now I have nearly 100 ‘.COM’. Conversely, I missed ‘.CN,’ It’s a big mistake.” Then he explained, “At the very beginning, these two kinds of domain names were similarly priced, but ‘.COM’ had high international potential, whereas ‘.CN’ was too limited, and there wasn’t any good policy for it.” 

 

“Corn bugs” from the inception never expected too much from “.CN” domain names. According to official CNNIC statistics, the number of “.CN” registrations in 2003 was only 1/10th of that of “.COM” registrations. Then at year end in 2004, the Ministry of Information Industry promulgated the Amended Administration of China Internet Domain Names Procedures. Consequently, the registration price of “.CN” domain names was cut by 50% since the beginning of 2005 and stood between 70 and 100 Yuan. In March 2007, CNNIC promulgated a new preferential policy: new “.CN” domain names registered before May 31 would have the registry fee reduced to 1 Yuan for the first year. Under these preferential policies, the percentage of “.CN” domain names of China’s WWW sites was increased from 7.4% in 2003 to 80.1% in 2008, and the quantity rose sharply from 35,196 to 11,900,144. Although not comparable to “.COM”, “.CN” does enjoy a large popularity.    

 

“A few days ago, I registered for several foreigners”, Zhou said, “I made seven ‘.CN’ domain names for a Finlander. When this lovely guy knew that in China, the registration fee for one ‘.CN’ was only 0.13 US dollar; he was overjoyed and decided to take a bundle of them.”

 

Zhou himself is not so interested in “.CN’ domain names. He said, “It is neither as good-looking as .IN, nor as funny as .COM.” 

 

Zhou likes “.IN”, the national domain name of India. He has collected and sold many of them. Through negotiations with foreigners, he finds a divergence between Chinese and foreign “corn bugs”: when new Chinese investors pile in “.CN”, foreign “bugs” show their favor for “.IN”, either by domain name ranking or by the development degree of countries, “.IN” and “.COM” should have been treated equally though. Actually, there are reasons for this: English is the official language of India, and “.IN” is open for individual registration. Zhou Yanan put forward another reason that in his opinion: there are too many official restrictions on “.CN”. “.CN” registration rules forbid the use of those so-called sensitive or illicit words, and consequently, foreign registrars turn to “.IN”.  

 

How many restrictions have been put on “.CN”? Here is an interesting example. If you search for the domain name “pig.cn” on the whois registration system, you will receive the following response: “Approved by competent authorities, the domain name you apply for is on the restricted list, and in accordance with the relevant provisions, this domain name cannot be applied for by on-line mode.” As far as we know, the most expensive domain name is “sex.cn.” In a lengthy lawsuit against it, a US Court ruled its value at 65 million USD. When you search for “sex.cn”, you will receive the message, “the information you search for does not exist”.    

 

Zhou repeatedly emphasized that his investment in domain names is just for fun. When asked about his profits, he said the average monthly income in March and April was 5,000 Yuan, and in July was 2,000 Yuan. Compared to the average monthly income (1,500 Yuan) of citizens in Dongguan City (the place where he stays now), this young man feels it’s quite reasonable for him to earn much more than the average. “Otherwise, how can I finance so many ‘.COMs’ in my hand?” He always maintains about 100 domain names. Say one domain name costs 60 Yuan for the registration fee, Zhou pays 6,000 Yuan a year.   

 

Besides his work in “Miba.cn,” Zhou also does some part time job as a website designer. He has collected many good domain names in the past four years as a reservation for websites. “Now there are too many domain name investors, and I am planning to shift my attention to websites.” he said, “The way out for domain name investment is website construction.”

 

Miba: “Fashionable and free” domain name investment 

 

Zhou is not the only person who believes “the way out for domain name is website.” We can find many discussions about it in domain name forums. Of course, there are also those considering domain name investments a career. Miba, the administrator of “Miba.cn”, is one of them.

 

Miba is the official agent of HiChina, an official register certified by the CNNIC. Users may apply for domain name registration through HiChina or “Miba.cn.” Unlike other commodities, selling a domain name is not subject to any territorial or distribution channel restrictions. It is a war of price and service quality. Winners are always those masterful hands in this industry, who have other businesses besides the registration service.

 

During the interview, Miba introduced some domain names that have been sold or is being dealt with. “Ksou.cn”, registered for 20 Yuan, received a bid of 5,000 Yuan from a buyer. “Lyv.cn” and “6661.com.cn” sold for 10,000 Yuan each. Of course, there are deals that fail as well. A domain name related to Danone, for example, Miba asked for 3,000 US dollars, which was 6 times higher than the offer made by the Danone Group. Finally the domain name was arbitrated and transferred for free. Miba sent the journalist a “crying” icon through QQ, but soon cheered up – obviously, not a big deal for him.

 

Compared to the “for fun” protester Zhou Yanan, Miba seems to be more tactful. Zhou keeps to his several rules of investment: no renewal, because it is too costly; not being “bellicose”, that is to have a balanced mood and not expect too much. However, Miba claims that he does not care about market conditions, because he thinks it is unnecessary. “It only took me 20-40 Yuan for one domain name registered before, and it is only 110 Yuan for each additional two years of renewal. If there are 1,000 domain names, the total cost is about 100,000 Yuan. A few sales will compensate for that.” 

 

Domain names transacted by Miba have resulted in large numbers. He said that he had nearly 1,000 domain names, and produced a long list aligned separately by numbers, initials and words. He refused to disclose his profits and deliberately shunned questions about the legitimacy of such investments. He said, the “CNNIC has approved cybersquatting.” (Cybersquatting in its narrow sense is not legitimate. The following article will refer to CNNIC’s attitude.)  

 

Miba showed his disdain for ordinary “corn bugs.” In his eyes, they are just profit hunters, not qualified investors. He defines domain name investments as a “free and fashionable” career, and sets criteria for “up-to-the-standard”: good psychological quality, correct positioning of domain name investment orientation, its long-term development, and acute insight and rich experience. According to his understanding, for a qualified domain name investor, income simply from domain name investment is sufficient for his everyday life. 

 

We are still unaware of how many “corn bugs” are “up-to-the-standard.” Newspapers usually discuss the exceptional case: people crazy over investments either involve themselves in lawsuits or break the bank. Shen Yang, editor in chief of China Domain Name Economy, once wrote an article to remind investors of an “ordinary mind.” He put forward an example of a college student who could not afford his tuition after failing in an investment. There are also many examples of failures in chat rooms of “corn bugs.” They take a good number of domain names and just wait for buyers. If they are fortunate to get one, they will receive tremendous gains. However, if they do not, the expenditures for the domain names are “gone with the wind.” Over-activity towards risk and chance makes many people become investors eager for quick success, and maybe this is why Miba dislikes them.           

Although “corn bugs” love discussing so-called “technical” issues, few of them talk about legalities, except for educating or studying risk aversion. As a guideline for “corn bugs”, Policies for Resolution of Domain Name Disputes effective as of March 2006 stipulates the methods of judgment for malicious cybersquatting such as the selling domain names to the competitors of potential buyers. Since the promulgation of the policies, “corn bugs” seldom behave in this manner. 

 

“Corn bugs” passively evade lawsuits. However, they also do not take the initiative legitimize. They stroll in grey area marginalized by law – neither explicitly approved, nor explicitly forbidden. “Not forbidden by law” means that the business may continue. Conversely, “not approved by law” possibly means that one day, an unexpected “disaster” will kill the sweet dreams of investors. Some “bugs” insist that their ventures are lawful because it is just a kind of investment and totally different from “cybersquatting” - although not all of them can tell the difference. We think Zhou Yanan’s words may explain such insistence: “The domain name field is just like the stock market. They are both a way of maintaining the value of your money.”

                                                                       (Translated by Hu Xiaoying)


 

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