Cybersquatters and the Need for Domain Name Laws

Ever have a really good idea for a business, like a really good one? You feel like grabbing the domain–just in case–and you find that it’s being sat on by some guy from Iowa? You can buy it back from him of course, for $400-$10,000+.

We’ve all been there.

Cybersquatters (or domain squatters) may be the most hated and most useless people on the internet. In order to be a cybersquatter all you need to do is register with a domain hosting service, pay a yearly fee and buy up names on the internet that sound cool. The cost of purchasing a domain can be as low as $.99, but be sold for hundreds (or even thousands) of times that.

This can be a lucrative business, especially if you were on the internet in the early 90’s and knew what you were doing. According to one source the guy who owns,, and doesn’t even sell his domains, he trades them to startups for stock in their company.

However, if you want a domain and the person who owns it is asking more than you are willing to pay, then you are out of luck. Legally there is very little you can do to make this problem go away. They own it. You want it. Too bad. However should there be domain name laws? We all agree cybersquatters are the worst, they add nothing to the economy, they hurt small and large businesses alike and they are terrible dinner guests, but should we be able to limit the time someone owns a domain?

In the late 90’s Mother Jones posted an article about how groups like the NAACP had been buying up domains that contained hate speech. The intention was to keep others from buying hateful domain names in order to prevent them from being used for inflammatory purposes. However, since the combination of hateful words is vast and ever changing, it seems like a futile effort. With the addition of .net .jobs and even .tv domains available now, it seems as if you could never buy enough domains to keep the haters at bay.

With all that in mind, the vast majority of cybersquatters are not holding on to domains for ethical reasons, they are holding on to them for a profit. Often, cybersquatters try to latch on to a registered trademark and purchase something very similar. Someone bought with the intention of tricking people into thinking it was Once you have someone at your website you can trick them into giving you their phone numbers, or credit card numbers.

For up and coming businesses it can be a problem getting off the ground or even hurt established businesses who haven’t made it online yet. Say a bar in Denver has been running smoothly for a few years, and they are just finally getting a website set up. The company is called Denver Beer Works, but is taken.  So is and Finally they can find a solution at, however since people aren’t sure what the DV stands for they lose traffic online and therefore lose customers.

In this process, the cybersquatters haven’t made any money (in fact they’ve lost money paying for the yearly fee) and the local business has lost money as well. If we were to implement a domain law that limited the amount of time those people could hold on to, then the small business would profit and the cybersquatter would need to sell for an affordable price before their time was up. Now, we aren’t suggesting laws for the sake of laws. Restrictive legislation for the sake of government control is contrary to what the internet is all about, however limiting domain owners time to hold onto a domain would foster economic growth for both the people buying the domains, and the people selling.
What do you think? Should we limit cybersquatters time in order to move the economy forward? Or should we let people keep their purchases as their own?

BitNavi is a blog conceived by Karl Motey in the heart of Silicon Valley, dedicated to emerging technologies and strategic business issues challenging the industry.

Kaya Lindsay is a local Santa Cruz contributor who spends her time globetrotting, surfing the web, and writing for the BitNavi team.

Follow her on Twitter: @KayaSays


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