Recently an Irish friend of mine was setting up his own personal Web site. He was considering all sorts of domain names, including one named after the area he is from, Castleknock.com. However, that name was taken, along with nearby, Blanchardstown.com. When he checked with the company that registers domain names, he noticed that these and other Irish names were registered to the same owner, Celtic.com, a New York-based company set up last December.
While Celtic.com offers an e-mail service to 20,000 subscribers, it has also locked up 1,200 domain names including the names of more than 500 Irish and Scottish towns and villages, 200 slang words from brogue.com to laddy.com, along with 20 words in gaelic.
Two years ago, Mr Dermot O'Brien, founder and e-postmaster of Celtic.com began buying up domain names in order to build an ethnic portal site based on e-mail. He said that by allowing free use of domain names for email addresses people could create new e-mail addresses with "something that reflects their Irish heritage, like a vanity licence plate".
He estimates there are about 30 companies in the US doing the same thing. However, where Celtic.com may differ is that these names are not for sale. In fact, Mr O'Brien said he has sold only one and that was to the Irish Government last year for the name enterprise-ireland.com.
"Domain names are very valuable," said Mr O'Brien. "I bought these domain names so that they would be a signpost for people to find their way back to Ireland and reconnect to the country through an online community."
The practice of buying and then trying to sell domain names is widespread and in the language of the Internet is referred to as cybersquatting. Much the same way as there was a rush to claim land in the American Wild West of the 1800s, there is now a scramble to claim title to virtual real estate. The whole business of being a cybersquatter is to register popular, easy to remember, business-related domain names in the hopes of selling them to third parties for big money.
One New Jersey-based computer consultant I spoke to said: "the buying and selling of Internet domain names is analogous to buying a home. Houses in the fashionable areas of town are more expensive and the same holds true for domain names that have valid business connotations. They are going to cost you".
The question, he asked, was whether these people were entrepreneurs who had the foresight to see a new business opportunity or virtual real estate claim jumpers. "I think the answer," he said, "lies somewhere in between."
There is no doubt that profits can be made. Take the case of Mr Eric MacIver, a 21-year-old Internet entrepreneur from Mesa, Arizona. He had registered the domain name drugs.com. This month, when the name went up for auction online, last-minute frenzied bidding brought $823,456 (€773,270) from a bidder who wanted to remain anonymous.
Several large drug companies had expressed an interest in the domain name and as a result, Mr MacIver netted a cool six-figure sum.
Other Internet names currently on auction include loans.com, houses.com and tobacco.com. Names such as Altavista.com sold for $3.35 million, London.com and England.com went for $2 million and even 10downing.com has a price tag of $1,000.
Network Solutions of Herndon, Virginia, is currently the exclusive registrar of names ending in .com, .net and .org. It has registered 5.3 million domain names, representing a 75 per cent market share. Because the .com ending is designated for business-related sites, it has grown to represent two-thirds of worldwide Internet registrations and has become synonymous with electronic commerce.
It is not hard to register a domain name on the Internet. In fact, all you need to do is to pay Network Solutions $70 for two years and get there first. In fact, there are several companies called brokers that specialise in buying up names and then selling them for profits. These include the largest domain name broker, greatdomains.com. and another called domain.com.
Major corporations like Mattel, Microsoft and Apple have all taken legal action against domain holders they believed infringed their rights and have invariably won.
Citing the Trademark Dilution Act of 1995, Microsoft recently refused to pay a cyber-ransom and instead filed a dilution lawsuit against the registrars of microsoftwindows.com and microsoftoffice.com. Microsoft won.
All this activity in the cyberworld prompted regulators to act. Earlier this month, the US Senate's Judiciary Committee passed a bill called the "Domain Name Piracy Prevention Act of 1999" which is aimed at curtailing cybersquatting by people who register domain names that are similar to well-known trademarks.
The bill will allow trademark owners to recover damages up to $100,000 if someone with a registered name attempts to cash in on it by extortion or by any other means. But of course, while the US can make laws for its own country, there is as yet, no international enforcement mechanism in place to enact copyright protection overseas.
In fact, the European Commission is currently investigating Network Solutions, claiming that it is abusing its dominant position for assigning Internet domain names. And in the US, in an effort to reduce Network Solutions' monopoly, the Commerce Department has sought to turn administration of the Internet over to a new body.
Last year, it set up the Internet Corporation for Assigned Names and Numbers, known as Icann. This has authorised 12 other companies to compete in the registration process on a trial basis.
Currently, the US government is at a stalemate with Network Solutions on how to open its business to permanent competition. One of the deadlock issues is over who should hold the rights to the database of Internet addresses the company has compiled.
There is a future scenario, though, as useful business-related names ending with .com dry up. There will most likely be a demand for names ending with .firm and .web .
