Cybersquatting

These days, a business’s website is its single most valuable marketing asset. With 90% of buyers beginning their search for goods and services online, having a strong digital presence can make or break your business. One of the keys to getting found online is your business URL. Most new businesses seem to want .com URL extensions for their websites, but finding an unclaimed .com URL is getting harder and harder. Maybe thats why ICANN (the Internet Corporation for Assigned Names and Numbers) recently changed the rules of the game and introduced a long list of new URL extensions (think .club or .plumbing).

While this move has meant greater choice for companies looking to register a domain, it also means increased risk for established companies and brands and more opportunities for cybersquatters to scoop up domain names.

What is cybersquatting?

Cybersquatting is the registering, selling or use of a domain name with the intention of profiting from the goodwill of someone else’s trademark. Often times it refers to the practice of purchasing domain names that utilize the names of existing businesses with the intent to sell those names to the actual business for a profit.

How does it happen?

When you obtain a domain name from one of the many registries out there (ie: GoDaddy, Network Solutions, register.com, etc.) they simply allow you to purchase the name, no questions asked. Anyone with any intent – good or bad – can purchase a domain name that contains your business name, or something strikingly similar.

Cybersquatters even go so far as to employ strategic tactics. They will reserve common words, mis-spellings of already popular domains, and domains that have recently expired.

If you haven’t yet set your domain to “auto-renew” with your registrar, you should immediately swap out your settings.

Often times, cyber squatters can snatch a recently expired domain name and hold the name hostage. From there, the business owner can choose to contact ICANN and sue for the domain’s use or simply pay the cybersquatter for use of the domain and move on. Most of the time, it is far less painful to “sell-out” than it is to stick to steadfast principles, hence the reason this entire ploy is so successful.

What’s Changing?

More than we realize. An executive at the ICANN recently stated that this is “the biggest change to the Internet since its inception.” Yes, that is enough to make anyone pay close attention.

ICANN is beginning to launch new generic TLD extensions. A TLD (or “top-level domain”) is the last segment of a domain name or the letters immediately following the final dot in a url. Most often you see TLD’s such as .com, .net .org, or .biz. Before the announcement of this change, there were about 22 existing TLD extensions.

Starting February 4, 2014, new TLD extensions started to roll out. They include extensions such as .actor, .fish, .vacations, .condos and even .christmas.  A full report of the proposed 1,400 new names that have already been launched can be viewed here.

What does it mean for your brand?

ICANN announced that the intention of the additional TLD’s is to “enhance competition, innovation and choice in the domain name space. It has hopes of providing a wider variety of organizations, communities and brands with new ways to communicate with their audiences.”

In practical terms, this change will mean that the average domain registrant needs to be deeply vigilant about upcoming changes, spend more to own more domains, and work that much harder to ensure the integrity of your brand.

Yes, it seems crazy and confusing and more than likely, not much will come of it. Consumers are used to the .com TLD extension. If you remember back to 2012 when the .xxx TLD was released, it wasn’t well received. There were a low number of applicants and those that did have the extension were seeing low amounts of traffic. Not a single site using this extension populated in the “Top 500” category in their industry.

While these uncommon TLD extensions have yet to see their heyday, it isn’t something to ignore. What happens when you don’t purchase these new extensions? You could run the risk of a cybersquatter purchasing domains such as, yourcompanyname.cheap, yourcompanyname.club or yourcompanyname.sexy. Not only will you suffer possible brand inconsistency, but it could potentially be a very embarrassing and reputation damaging mess for your company to go back and clean up.

The only way to prevent the above scenario is to purchase the domains yourself, but at $8-$10 a piece, this solution (while the cheapest) can get very expensive very quickly.

This is an evolving issue, one that I am sure will come to the forefront once a large corporation falls victim and the problem is publicized. For now, the best thing you can do is continue to research and stay informed. This is a list from ICANN that includes all of the current TLDs available. If they are consistent with your brand, or have the potential to be in the future, my recommendation is that you consider purchasing them.

Have any of you run into a cybersquatting problem in the past? How did you handle it? Let us know in the comments below, or feel free to continue the conversation on Twitter @jhyphenl.