We understand that the world wide web is a big, scary thing for most people, so each month we’ll try to take a word, acronym or phrase and explain to you in simple, ‘non-techie’ terms what it all means. This is DBG’s Digital Definition of the Month!
So what is domain squatting, or WHO is a domain squatter?
Also sometimes called ‘cyber squatting’, domain squatters are people who register domain names that they don’t intend on using, and who then try to sell them off to people who want or need them. Their “intent is to profit from the goodwill of someone else’s trademark” (NOLO.com).
This practice was rife some years ago, before businesses started getting savvy about their online reputations, however we now see it occurring more so with individuals registering keyword-rich domains and trying to sell them off to people operating within that industry. Examples of keyword rich domain names would be www.HomeInsuranceAdelaide.com.au, or www.PropertyInvestingMelbourne.com.au.
Let’s look at a local example of domain squatting….
In 2011 when Groupon was gaining a lot of momentum in the US, two Australian brothers who created the local company Scoopon, registered the Groupon.com.au domain name, it’s associated trademark and business name. All of this was before the US company had even revealed plans to enter the Australian market. When Groupon did decide to launch in Australia, they were unable to get their domain name, and had to instead enter the market under a different name: Star Deals. Eventually the domain and trademarks were handed over, but not before legal proceedings, and a payout of hundreds of thousands of dollars to the Aussie brothers.
Now while this may not have strictly been a case of cybersquatting (as it would appear the brothers were simply looking to protect their own business interests) – we can quickly see the trouble that can arise when you don’t own the right versions of your domain name! We discuss this further in another blog post: Domain Names: Which extension should you register?