Daily Domainer

In a return to anti-competitive strategies that got it into trouble with the U.S. justice department years ago, Microsoft is attacking its competitors like there is no tomorrow. This time, they go after competing cybersquatters, who, in cooperation with Google and Yahoo, apparently take a big bite out of Microsoft's domain typo profits.

As the Daily Domainer reported last month, Microsoft is Quietly Making Untold Millions by hijacking non-existent domains, including those that violate trademark laws, to its Live search engine, where the trademarked terms are monetized through PPC (pay per click) ads.

The primary target of Microsoft's barrage of lawsuits is domain taster Maltuzi LLC, a company that tests hundreds of thousands of domains for traffic and revenue each month with the goal of keeping only profitable domains.

Maltuzi's domains are monetized through Oversee.net/Domainsponsor, which primarily uses Google's PPC feeds, thereby generating unknown amounts of revenue for Google.

The legal brains at Microsoft have thought this through very well. Microsoft cannot be accused of cybersquatting, even though they do it all the time by automatically and indiscriminately generating PPC-filled results pages for a virtually infinite number of non-existent domains.

However, if a company complains about Microsoft profiting from their trademark, Microsoft can simply respond, "If you don't like it, just register the domain!". By registering the domain, of course, the trademark owner would gain immediate control over it and Microsoft would be off the hook.

Therefore, it is in Microsoft's best interest to pounce upon competing cybersquatters who currently use Google and Yahoo to monetize their domains. By doing so, Microsoft harms both Google and Yahoo and boosts its own PPC income.

If they can root out cybersquatters by attacking them in court and encouraging others to do the same, Microsoft will be able to effectively monopolize profits from trademarked domain typos.

The only thing that could reverse this trend would be for trademark owners to sue Microsoft, Earthlink, Charter and others for profiting from trademark domain typos. If Microsoft is not reigned in, cybersquatters will in turn respond by downsizing and splitting up their operations and setting up shop in offshore countries, and thereby becoming less of a target.

It is important to note that most domainers are not interested in cybersquatting. Domainers buy, sell, monetize and develop domains in general, while cybersquatters register trademarked domains and typos thereof with a goal of diverting traffic from the trademark in question in order to make a profit.

As Chris Bayiokos said yesterday:

There are still plenty of people who label anyone who owns a domain name a cybersquatter. I think time is the key for legitimacy, just like with any other 'discrimination.' If someone can buy up tangible earth and sell it for a profit, then domain buying and selling should get by easy.