Domain names: Risk & opportunity, two sides of the same gold coin

Each domain name potentially serves a dual purpose, that of fence and banner.  By registering your brand name as a domain name, you can mitigate the risk of third party infringement by staking a claim to your brand’s rightful virtual property.  At the same time, this registration also serves to improve your brand promotion efforts through recognition, goodwill, and greater ease of customer conversion via the Web.

The domain name world, replete with colorful industry terms such as “land rush,” “cybersquatting,” and “typosquatting,” has come to be associated with speculative and in many cases dishonest practices, behavior that tests the very limits of trademark law.  It is not surprising that these terms are reminiscent of the language used during the early days of the California Gold Rush.  After gold was discovered in January of 1848,  a flood of fortune seekers arrived hoping to exploit the golden hills, streams, and rivers of the newly acquired state. Struck by gold fever, these “land grabbers” created camps on every available piece of land that was thought to contain the precious metal, essentially “squatting” on the valuable land.

Let’s fast forward 150 years.  By 1998, computers had become as standard in people’s homes as television and running water, the Internet had become a major medium for communication, and a new gold miner had arrived in the form of the domainer.  Some individuals began buying many of the more market friendly and therefore potentially valuable words in the English language as domain names, contributing to the explosive 3,000 percent growth in the number of .com’s between 1993 and 1998.  This speculative behavior soon began to incorporate trademark filings as a method of identifying potentially high value/high traffic domain names.  This behavior bears resemblance to the speculative land grabs during the Gold Rush period. Just as miners sought land that likely possessed gold, domainers wanted domain names with the potential for high traffic.

Today’s gold-laden hills are the high traffic domain names that result from popular consumer Web searches.  As brand Web sites generate more commerce and as consumers become ever more Web-savvy, it is critically important for a brand owner to control the potential customer’s experience before they’ve even arrived at the brand Web site. To ease a potential customer’s navigation to their site, a brand owner should own the most important domain names that contain their brand’s name.

With the variety of methods for monetizing high traffic Web sites, cybersquatters are able to capitalize more than ever on your brand’s  popularity and hard-won customer loyalty.  It is the brand owner’s duty to ensure that they are staking claim to their valuable online property for two important reasons: to defend their trademark and to promote their brand.  Someone will be “pulling gold out of the hills.” It is up to the brand owner to ensure that they are building a solid fence around their virtual claim so they can best promote their brand to those who seek it.

Ilan Beesen
Brand Advisor
Corporation Service Company