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Why Protecting Your Domain Name Is A Good Investment

It can be expensive if you don't.

by Nancy Nally (December 4, 2006)

Trademarks, copyrights ... and Domain Names? You may be surprised that those three items should be grouped together. They are all assets that are invaluable to a business and which need to be protected. None of us think twice about safeguarding the first two. And yet even in the 21st Century, too many of us pay too little attention to domain name assets. And we ignore them at our peril in a world increasingly ruled by technology.

Rather than the last asset that we think about, domain names should actually be the first whenever we begin a new venture or plan a new product. The naming process for anything should include domain name considerations. Names under consideration for companies and even product lines should be searched with a domain name registrar such as Go Daddy (www.godaddy.com) to see if relevant domain names are available. If the domain name is not available, that information should be carefully considered in selecting a name for the project. (And don�t forget that if you yourself are the product, such as a teacher, designer, or writer, that your personal name is a product name, and should be secured if possible.)

But I�m not planning on starting a website or needing that particular domain, you might be saying. That may be true � today. But plans change. As products and businesses develop, marketing plans may also change. The evolving market may dictate the necessity of an online presence.

Once a name � and thus the related domain name � is determined for a product, company or service, steps should be taken to immediately secure that domain even if you aren�t planning on using it immediately. Yes, it costs money to secure the domain while you are waiting to use it, but the cost is relatively nominal compared to the potential costs and hazards of domain squatting.

Domain squatting is the term used when a domain is purchased not for the purpose of using it for a site, but to extort the rightful user of the domain in some manner. This can be done in several ways. The first is to simply demand an inflated price to sell the rights to the domain to the intended user of it. In the early days of the world wide web, this cost many companies millions of dollars to secure the rights to domain names of registered trademarks that had been registered by savvy squatters before the companies realized the benefits of owning the names.

Another way domains can be used by squatters to harm a company is by using the domain to direct traffic to a competing product�s website, or by creating a page that is actually critical of the company or product most people would associate with that domain name. Or a "phishing" page designed to extract personal information may be put up, or a "parked" page designed to fool people into thinking they are actually visiting the company�s real site while in fact the page is collecting revenue for its owner from ad clicks. Any of these usages could harm a legitimate company�s reputation, and may be preludes to an attempt from the squatter to extort a high price for selling the domain name to a legitimate user of it.

All of this sounds nasty, you may be saying, but who would care about my small company? Domain squatting is more common than most people realize. You don�t have to be a large, multi-national company to worry about protecting your domain names. Even blogs and other not-for-profit sites can be the target of domain squatting if the squatter thinks that the domain has some value to a potential user.

I was the victim of this myself recently, which lead partially to the name change of my Inside Scrapbooking website to its new incarnation as Scrapbook Update. In my case, the name change was reasonably easy to effect and even beneficial to the site. However, in the case of an established retail product or company, that may not be an option.

All of these problems can be avoided with a few minutes of homework at the beginning of the naming process and with a few dollars per year in fees to secure the domains. Think of it as intellectual property insurance on the internet.

(Note: Nancy operates a blog, Scrapbook Update at www.scrapbookupdate.com. She is a columnist for Creative TECHniques magazine and has had articles and projects published in a number of hard-copy and online publications. Nancy can be contacted at nanally@gmail.com. To read previous Tech Topics articles, click on the titles in the right-hand column.)

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