The Cost of Typosquatting

Discussion

Based on the findings of this study, the task of enforcing the domain name space and pursuing infringements may seem daunting. However, the good news is that much of the harm and loss of revenue is concentrated in only a few, highly valuable infringements for each target brand. A proper domain name enforcement strategy provides guidance regarding how to prioritize these infringements according to which are the most harmful and when to pursue them.

For example, out of the 28,000 Potential Squatter domains, only 4,632 (or 16.5 percent) garner traffic.

Also, consider the following graph, which shows the 25 target domains that have the most highly trafficked typosquatted domains:

 

To provide an example of the distribution of traffic within the typos of these target domains, let’s consider the popular social networking site Facebook. Traffic data for Facebook can be found in the second bar from the left in Graph 6. All of the 239 Potential Squatter registered typo domain names of facebook.com garner an aggregate of over 48 million visitors per year; however, further analysis shows that 60 percent of this diverted traffic is going to just seven of those domain names. Clearly, Facebook does not need to pursue all 239 registered infringements to drastically reduce the impact of typosquatting on its brand. It is all about determining which domains are the most valuable based on the volume and quality of traffic and then pursuing those domains accordingly.

It is also important, as we have pointed out, for brand owners to appropriately use the domain names that they do own. Domain names that garner traffic should point to the most relevant content in order to provide Internet users with the best possible online experience.

The study showed some interesting infringements that engaged in affiliate fraud, which FairWinds wrote about in 2009. The domain names tysrus.com and toysryus.com (both typos of ToysRUs.com) redirect to content featuring toys and games on Amazon.com. The domain name wwwpandora.com (a typo of www.pandora.com, which allows visitors to stream music) similarly redirects users to music content on Amazon.com.

All too often, though, brand owners allow their domain names to go unused or misused—we found that typo domains such as tiicketmaster.com, youtube,org, hotmaol.com and walgreens.org were all owned by the appropriate brand owner yet at the time of this study still pointed to PPC sites.

The Cost of Recovering Potential Squatter Domain Names

Beyond the ongoing cost of lost sales, unnecessary advertising, lost impressions and commissions to affiliate fraudsters, brand owners spend significant amounts of time and money recovering typosquatted domains by filing UDRP complaints. Brand owners can file UDRP complaints against a registrant who has registered one or more domains that contain infringements on their brand.

There were domain names in our data set for which the registrant information was readily available—for these it was simple to determine how many UDRPs would need to be filed by each brand owner. The domains that infringed on the same brand and were registered to the same owner could be filed as one dispute.

However, the registrant information for many of the domain names in our data set was “protected” or hidden from view. In order to project how many UDRPs would need to be filed in this set, we multiplied the number of domains in this set by 2.1—the average number of domains per registrant that we found in the set of domains with readily available data.

All totaled, we estimated that to reclaim all of the 28,000 Potentially Squatted domain names, 13,185 UDRP complaints would need to be filed. Luckily, brand owners do not need to spend the time and money to reclaim all existing infringements—this is not possible or necessary.

The average cost associated with hiring a law firm to reclaim a name is about $6,000, which includes the UDRP fees, legal fees and (minimal) registration fees. In order to reclaim the 28,000 Potentially Squatted domain names from an estimated 13,185 registrants, brand owners would need to spend $79,110,000.

Added to the cost of lost impressions, lost sales, fraudulent commissions and unnecessary advertising, the recovery of all of these names brings the total cost of Potential Squatter domain names to $364,276,873.

 

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