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Sarah UKFast | Account Manager

DNS shows signs of stress from financial maneuverings

Cybersquatting — the practice of registering Internet domain names that poach well-known trademarks — is profitable for just about everybody involved. Money is made off of registration fees and advertising, and even the regulator of the Domain Name System gets a piece of the action. But it’s not so lucrative for corporate officials like Lynn Goodendorf, who heads global privacy at InterContinental Hotels Group PLC. The Windsor, England-based company owns seven hotel chains, including Holiday Inn and Crowne Plaza, with more than 3,700 properties worldwide. Each day, Goodendorf gets about 100 e-mail alerts concerning potential trademark infringements from three different domain monitoring services. Goodendorf said that in most of those cases, she doesn’t know the identities of the potentially infringing domain holders. Their registrations often are private, and when identifying information is available, it may be inaccurate. Subpoenas are sometimes needed to uncover the identities of individuals, she said. Defensive measures, such as registering domain names that cybersquatters might target, can help, but only to a point. “We have tried to register common misspellings or to have letters transposed,” Goodendorf said. But it’s impossible to anticipate every name combination, she added, citing the cybersquatting site as an example. Speculators Rule As Goodendorf’s experiences illustrate, the Domain Name System is showing signs of being out of control. Speculators now use automated software systems to re-register large batches of expired domain names. They’re also helped by a loophole in the registration process that lets domains be tested for their potential profitability as pay-per-click advertising sites during a free five-day “tasting” period. The World Intellectual Property Organization warned in a report issued last month that those practices threaten the interests of trademark holders and are causing confusion among Internet users. Francis Gurry, deputy director general of the Geneva-based WIPO, said in a statement that the new methods “risk turning the domain name system into a mostly speculative market.” Gurry added that instead of being used to identify specific businesses or other Internet users, “many [domain] names nowadays are mere commodities” to be bought and sold. It’s already possible to make astonishing sums of money selling domain names. Domain Name Journal, an online magazine published by Internet Edge Inc. in Tampa, Fla., reported that fetched $7.5 million from a buyer last year and that sold for $3 million. What makes generic names such as those valuable is so-called type-in traffic from users who enter generic Web address names into their browsers to see what turns up, said Frank Schilling, a domain name investor and blogger who lives in the Cayman Islands. Schilling claims to own several hundred thousand domains, including generic ones such as Domain investors such as Schilling draw a sharp distinction between what they do in registering legitimate generic names and the actions of cybersquatters who register domains that use or closely resemble real brand or company names, such as That misspelled domain name was registered through EnCirca Inc., a registrar in Woburn, Mass. Private registration policies keep the domain owner’s name and contact information hidden from public view. EnCirca does provide a Web interface for e-mailing the owner of, but a note sent by Computerworld received no response. Citing the software advertising on, Tom Barrett, EnCirca’s president, said he would call the use of that domain name cybersquatting. But Barrett added that he doesn’t have the power to do anything about the name or the Web site without exposing himself to possible litigation. Asked about, a spokeswoman for Microsoft Corp. said the software vendor wouldn’t comment about a specific domain. But Microsoft announced last month that it had filed lawsuits against alleged cybersquatters in the U.S. and the U.K. The company also said that it had reclaimed more than 1,100 infringing domain names worldwide over the past six months. Frederick Feldman, chief marketing officer at MarkMonitor Inc., a company in San Francisco that registers corporate domains and offers a variety of brand protection services, said a recent audit of 25 leading brand names found nearly 45,000 pay-per-click ad sites that use one of those 25 brand names in some way. Fixing the domain name problems isn’t simple. For instance, private registrations protect domain holders from things such as identity theft. And trademarks aren’t always black and white. Domain name holders have complained of “reverse cybersquatting,” in which a trademark holder attempts to gain control of a name that the domain owner considers to be a generic term. Jason H. Fisher, an attorney at Los Angeles law firm Buchalter Nemer Fields & Younger, said the biggest obstacles to fixing the Domain Name System are its international nature and the reluctance of the Internet Corporation for Assigned Names and Numbers to take action. Fisher said ICANN “would rather do nothing than make waves.”

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