What's in a Web name? Maybe as much as $1 million

Pressure is building to stop 'cybersquatters' who buy sites and sellthem for profit.

Joseph Culligan recently made a deal he thought Sen. Orrin Hatch couldn't refuse.

After paying $70 each for a few Web addresses that the Utah Republican might find useful, such as "senatororrinhatch.com," the Miami detective-turned-entrepreneur suggested Senator Hatch buy them back for the "bargain" price of $45,000.

Hatch's response: extortion.

Mr. Culligan, who owns hundreds of Internet domain names (addresses that take you to Web sites) is part of a growing group of online real-estate tycoons known as "cybersquatters." For cheap, they register the Web addresses and then sell them to businesses or politicians such as Hatch at highly inflated prices.

With no zoning laws to hold them back, cybersquatters are snatching up blocks of catchy sites that would presumably garner heavy traffic, sparking a "dot-com" frenzy that's created instant millionaires and clogged courts with corporations fighting to defend their trademarks.

And with Web sites becoming almost as vital to public image as owning prime real estate, many businesses and politicians are caving in, often paying 50 or 100 times more than they normally would to buy site names from cybersquatters.

"Wallstreet.com" and "bingo.com," for instance, have fetched $1 million or more, and $1 million was reportedly asked for Bill Gates's Web address. Recently, an online wine seller reportedly paid more than $3.3 million - the highest price ever paid for a domain name - for "wine.com."

The practice has spurred complaints and lawsuits as well as proposed policy changes.

"The implication is if you don't go and buy the name, they'll put negative things on the site," says Hatch's presidential campaign director, Spencer Stokes.

Hatch is cosponsoring an anticybersquatting bill, which aims to protect trademark names on the Web.

"For the average consumer, it is simply fraud, deception, and the bad-faith trading on the good will of others," Hatch wrote on July 29. "Whatever you call it, it is an issue that has a great impact on ... brand names [consumers] rely on...."

Culligan, who says he bought Hatch's sites "to make a point," says he buys Web addresses to keep them from being used inappropriately. He wants Hatch to set up a trust to protect the names of American officials, landmarks, and treasures.

Businesses fight back

But businesses, especially those trying to establish a Web presence, are fighting back in court.

In September, Wendy's International joined a growing list of companies suing over cyberpiracy. The company alleges a plot to extort money from the chain and some 10 other US companies, including Taco Bell Corp., Coca-Cola Co., and McDonald's Corp.

Beanie Baby manufacturer Ty Inc. also filed a federal suit this spring against an Arizona resident over the site beaniecollectibles.com after she allegedly sought to sell the domain name.

The George W. Bush campaign has also become pointedly aware of cybersquatting. At the beginning of the campaign, one aide tried to buy up as many Web names as possible, especially those with negative connotations, but "www.gwbush.com" fell through the cracks. The site's banner proclaims: "Hypocrisy With Bravado."

Satire and profit are not the only motives for grabbing up such popular sites.

There's also concern about unfriendly foreign powers using Web sites to mock national treasures or to shock an unsuspecting American public. The White House, for instance, has long been the unfortunate subject of a pornography site. In another case, a boy called up "zelda.com" in his school library. He expected to find a site related to a computer game, but instead a pornography site popped up.

But one organization has chosen to fight cybersquatters on their own turf.

Beating them at their own game

Friend To Friend, founded by Rob Moritz, buys up the Web-site names of public figures and then returns them to the proper owners for free.

Mr. Moritz formed Friend To Friend after he discovered cybersquatting by accident. He was registering his own name as well as his Lenexa, Kan.-based ministry when he started searching for names of famous people.

"Out of curiosity, I began typing in the names of ... Tom Hanks, Sandra Bullock, Demi Moore," he says. "To my surprise and concern, they were on pages with links directly to adult sites."

Today, his foundation has returned more than 70 domain names to people like Jeff Bridges and Larry Hagman.

(c) Copyright 1999. The Christian Science Publishing Society