Monetizing on the domains

How do the cybersquatters / typosquatters make money from registering these trademarked domain names? And what do they do to hide their identity?

Domain parking

Developing a homepage can take a lot of time, especially if you want a page that has a potential of being useful for the visitors. If the visitors do not find the page useful you will most likely have a hard time earning money from it. The idea behind domain parking is to be able to monetize the traffic that the domain receives without spending time developing a homepage. This is done by redirecting the traffic to a PPC, Pay per Click, search engine.

Nowadays there are many companies, like for example Sedo and Namedrive that provide this domain parking service. As a domain owner it is very easy to use this kind of service. The only thing needed to be done to get started is to redirect your domain name to the parking company’s server and then fill in some information about the domain. The information needed consists of keywords related to what the visitor might be looking for and to choose a suiting page template. When this setup is done there’s no more action needed from the domain owner.

So, what happens when a visitor gets to the landing page? Well, the domain parking service will generate a webpage based on the settings done earlier. Let’s say that the domain is usedcars.com with ‘used cars’ as keywords. Then the parking service will generate a Google-like search result page related to ‘used cars’. The links that appears on this page are advertisements paid by companies that want to increase the amount of traffic to their homepage. The parking service makes money if a visitor clicks any of the links in the search result. The money earned is shared between the domain owner and the provider of the service. A company’s position in the search result depends on how much they are willing to pay per click. The higher amount they pay per click, the higher up they will appear on the result. The companies can specify how much they’re willing to pay per click depending on the keywords used. That way they are able to pay different amounts per click depending on what the visitor is looking for.

While this is a way to monetize an unused domain name while for example developing the future homepage, it is also the only way a great deal of domain names are used. This is one of the ways for typosquatters to monetize their typo domains. One issue with this is that if someone for example would want to go to Pepsi’s homepage and accidentally makes a typo and end up at a webpage owned by a typosquatter, that person might see one of these parking pages serving links to Coca Cola’s homepage. So not only can the traffic be driven away from Pepsi’s homepage, it can end up at one of their competitor’s homepage.

Sell the domains

While parking the squatted domain name could be a considerable income source, selling the domain name to the trademark owner could be even better. It is often quite expensive to start a legal process and therefore many companies decide to settle with the squatter instead. When it comes to larger companies they are not that fond of paying off squatters since that would most likely increase the number of squatting attempts. Instead they start with letting their lawyers threat the squatter by saying that they will take legal actions if the domain is not turned over. In many cases this is enough to scare away most of the squatters.

Private registrations

Many domain name registrars, like for example Dotster.com, offer private domain name registrations for an extra fee. The original idea with this was for domain name owners to be able to get some privacy since their name, address, phone number and e-mail will otherwise be publicly visible in the domain name registry.

When using this service the contact information to the registrar will be shown instead of your own. They also assign you a special e-mail address that will forward all received e-mails to your real e-mail address. This way you are anonymous, but at the same time contactable.

This kind of services are widely used among squatters since it makes it harder for companies to threat the squatter since they first have to find out who they are actually dealing with.

-> Legal action