Cybersquatters
In this post, I discuss how to deal with cybersquatters. Cybersquatters register domain names similar to a domain name or trademark of an established business for profit. They may profit by selling the domain name to the established business or, more commonly, by monetizing the traffic generated on the domain by the popularity of the established business.
Typosquatters
A typosquatter is a type of cybersquatter who registers domain names that are common typos of a popular existing website, capturing Internet users who mistype the website domain name when entering it into the address bar. When the domain name is mistyped by Internet users seeking that website, they are instead directed to the typosquatters website. This website is typically automatically generated and will be full of pay-per-click advertisements from Google Adwords or other online advertisement programs for websites similar to the one the user was originally looking for.
In the Google Adwords program, an advertiser pays Google to get Internet users to click on the advertiser’s ads and visit its website. Google then automatically places the ads in search results and on websites wherever its system decides that such clicks are most likely to come from. A Google advertiser may therefore find its ads placed on the websites of typosquatters.
The typosquatter is paid some amount of money, generally a few cents to a few dollars, for every user who clicks through one of its links. Users looking for the popular website who end up at the typosquatter’s site instead will many times see a link back to the site they were originally looking for and just click it. The typosquatter is paid a couple dollars for the click, and the owner of the popular website pays a few dollars to Google Adwords for the click on their advertisement.
Thus, the typosquatter diverts existing customers of the popular website, who are attempting to navigate directly to that website, and channels them back to the website through sponsored links to generate income for themselves at the expense of the website owner.
In another common scenario, a user who inadvertently is diverted to the typosquatter’s site is likely to see a sponsored link to a competing website and navigate there instead. The popular website in that case has lost an existing customer to the competition, due to the actions of the typosquatter.
The Cybersquatter Business Model
In the early days of the Internet, cybersquatting was an activity participated in by a large number of individuals and small entities. Today, cybersquatting activity is concentrated in a small number of large, efficient cybersquatting companies.
These companies use automated software to determine which domain names are receiving or are likely to receive traffic, register those domain names, and throw up an automatically generated website with sponsored links as described above. If the domains are not returning enough income to cover the cost of registering and parking them, they are canceled. Otherwise, they will be added to the company’s portfolio, even if they are only generating a few dollars each year.
These companies may have hundreds of thousands of domains in their portfolio, generating large amounts of passive income for the owners. These domains are treated as assets with income streams, and are bought and sold freely between companies.
Cybersquatting is a big business that has grown with the Internet, and a big problem for companies with a significant online presence. Have you encountered a cybersquatter? Tell me about it in the comments.
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