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8/23/2006
08:38 PM
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Pay-Per-Click Ad Model Becomes Thieves' Cash Cow

Cybersquatters spoof legitimate Web sites and register them with Google's ad service, observers say.

Cybersquatters and typosquatters have stepped up efforts to get rich quick, and businesses and consumers are paying the price.

While Cybersquatting and typosquatting, the practices of registering domain names that violate a company's trademark, aren't new, experts said Wednesday they're fast becoming a cash cow for thieves who want to turn a quick profit through pay-per-click advertising made profitable by Google Inc. and others.

Microsoft this week launched an enforcement campaign, along with several lawsuits, targeting cybersquatters and typosquatters who illegally profit from online ads through the misuse of intellectual property and Internet domain names.

"We're not certain of how much they're making and who they are working with, but we believe that many owners of these sites work through well-known established online ad networks," said Aaron Kornblum, Microsoft's Internet safety enforcement attorney. "Most times these networks work with them unknowingly."

Kornblum said Google Inc. and Yahoo Inc. operate similar types of advertising networks, and Microsoft is working with them to "address the problem."

Greenberg Traurig LLC intellectual property attorney Ian Ballon said cybersquatters spoof legitimate Web sites and register them with Google's ad service.

"I've heard of trademark infringements on misspelled domain names for the purpose of diverting traffic to another site," Ballon said. "The people who own the misspelled domain name register the site in Google's ad program to profit."

The consumer types in a domain name. If it's a common misspelling, they'll typically end up on a page full of contextual ads and click through links contracted through search engines or ad placement services.

Before Microsoft publicly announced Zune last month there were less than 400 domain names registered that include the word "Zune," for example. Now there are between 4,000 and 5,000 domain names that include "Zune," and the majority Microsoft doesn't own, said Rod Rasmussen, director of operations at Internet Identity, Tacoma, Wash., which will help the Redmond, Wash. software company track ad traffic to infringing sites.

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