Press Releases

Domain Typos Cost Brands Millions a Year, Frustrate Consumers

WASHINGTON, June 23, 2010 – According to a recent study by domain name strategy consultancy FairWinds Partners, the companies behind 250 of the most visited websites are, in aggregate, losing over 448 million impressions and $327 million per year through domains that are typos of those 250 websites (for example, facebok.com is a common typo of facebook.com). These losses are due to a variety of unintended consequences including increased visitor acquisition costs, lost sales and lost impressions.

Cybersquatting, the practice of registering domain names resembling a trademark with the purpose of exploiting that trademark, inflicts significant harm on both businesses and consumers. One form of cybersquatting is typosquatting, or the practice by which individuals look to monetize or otherwise benefit from the traffic generated when Internet users make spelling or keystroke errors when typing a domain name directly into the address bar. FairWinds Partners conducted a study to measure the acute effects of typosquatting on a cross-section of brands and the full extent of its economic impact on brands.

The study examined the top 250 websites that garner the most traffic from the U.S. and have at least six characters in their name – names with fewer than six characters could run the risk of being typo variations that are actually the correct name of another brand and thus were left out.

“Fortunately, not all typos are created equal,” said FairWinds Managing Partner Josh Bourne. “Typically, less than one percent of typo variations of any brand are responsible for more than 50 percent of traffic diversion and risk to the brand’s reputation. This means that by prioritizing the infringements that cause the most harm, brands will be able to see a significant return on investment by recovering the most important domains.”

The study concludes that brands can benefit greatly from first recognizing that typosquatting poses a significant problem, and second, by understanding how to properly prioritize the recovery of infringements based on which ones cause the most harm and would contribute the greatest value if recovered.

“Eighty-eight percent of domains identified were not owned by the eponymous brand, which is evidence of the massive scale of the cybersquatting problem. However, of those 28,000 third-party owned domains, only 4,632 (or 16.5 percent) garner meaningful traffic – the trick is knowing how to identify what matters most,” said FairWinds Managing Partner Phil Lodico.

FairWinds is the leading domain name strategy consulting firm, offering its clients authoritative knowledge on domain names, online trademark enforcement, domain name recovery and online traffic optimization.

Affiliate Fraud Cybersquatting Model More Lucrative than Pay-Per-Click

WASHINGTON, June 22, 2009 - While pay-per-click (PPC) sites remain a large part of the cybersquatting business model, there is another wave of massive-scale online infringement monetization called affiliate fraud that often goes undetected, according to a new whitepaper released by FairWinds Partners.

FairWinds Partners, a domain name strategy consulting firm based in Washington, DC, analyzed this monetization practice, which can garner 5.6 times the revenue than that of a pay-per-click model on the same Web site. An average typo used to pull off this sort of affiliate fraud against a top Internet retailer's brand generates $100,000 in cost to the brand annually.

Some companies offer legitimate affiliate programs that allow third-party Web site owners to post links and banners with the company’s branded content on their site or to send traffic to the company’s site directly through domain forwards. In return, the owner of the site hosting the link receives a commission for every click-through that results in a purchase. This lucrative commission structure has enticed cybercriminals to take advantage of affiliate programs by registering typo domains that redirect to legitimate content and enable them to collect affiliate fees.

Since most instances of affiliate fraud result in the infringing domain resolving to the expected brand site, it is extremely difficult to distinguish the domains that are illegitimate. Moreover, it is nearly impossible, not to mention highly impractical, for companies to purchase every possible variation of their domains.

“Policing the domain name space can seem like a daunting task, but it can be done by staying informed and keeping one step ahead of cybersquatters,” said Josh Bourne, a Managing Partner at FairWinds. “You need to know what to look for and how to find it.”

Identifying the domains that are the most intuitive to Internet users and the most valuable for fraudsters can help prioritize which domains companies should register or pursue for recovery. Proper prioritization can only be achieved through an in-depth understanding of consumer behavior; how infringers select domain names and conduct domain abuse; and what avenues are available for recourse.

Knowing that affiliate fraud provides a lucrative opportunity for cybersquatters and understanding that the practice may gain popularity allows brand owners to take proactive steps to protect their brands and reduce payment of illegitimately acquired affiliate fees.

Contact: Yvette Wojciechowski
yvette.wojciechowski@fairwindspartners.com
(202) 223-9355

Innovative Approach to Domain Name Strategy Delivers Significant Savings to Fortune 500 Company

WASHINGTON, November 4, 2008 – FairWinds Partners, LLC, has been working with Verizon Communications to develop and implement an innovative approach to optimizing Verizon’s domain portfolio. This new approach has enabled Verizon not only to better provide its customers with more relevant online experiences that deliver desired content, but also to do so in a more cost-effective manner.

Verizon’s domain name portfolio strategy has enabled cuts of over $1.1 million in unnecessary spending while at the same time increasing incoming revenue and the overall strength of the brand. Verizon and FairWinds worked together to halt the wasteful registration of domains that offered little or no value to the company. It is estimated that it would have cost Verizon $725,000 over the next two years to maintain the unproductive domain names it cut from its portfolio.

“In the past, domains that generated little traffic, including some that were hugely expensive to maintain over time, were added to the portfolio,” said Sarah Deutsch, Vice President & Associate General Counsel of Verizon Communications. “Moving forward, we are making a concerted effort to be vigilant in our efforts to create a targeted and effective portfolio.”

In addition to the cuts made to the portfolio, the two companies together identified unbranded domains owned by Verizon that were not critical to Verizon’s online strategy and may be desirable to other companies. As a result of these efforts, Verizon can now broker these unneeded domains to third parties to produce as much as $2 million in new cash which can be applied to other areas of the business or returned to shareholders.

These savings highlight important ways in which other companies can retool their domain name program to increase brand visibility, cut wasteful expenditures and identify new sources of revenue. Verizon will be able to bring in approximately 3 million new visitors for its Web sites with its new strategy, often by redirecting domains in order to provide customers with expected content.

“We want to make sure that our customers get to where they want to be on the first try,” said Brian Price, Executive Director of Verizon’s Online Center of Excellence. This provides a better experience for customers and benefits the company as well. “The top ten domains that we redirected have garnered a quarter of a million visitors and over 1K sales in the last six weeks alone.”

Contact: Yvette Wojciechowski
yvette.wojciechowski@fairwindspartners.com
(202) 223-9355

FairWinds Provides Outsources Domain Name Administration to Multinational Corporations

Delivering Improved Performance and Cost Savings to Global Businesses

WASHINGTON, October 4, 2007 – Strategy consultants FairWinds Partners announced today the introduction of a premium domain name administration outsourced solution for leading brand owners. The service offers proactive strategic recommendations and decision-making support along with the oversight and administration of all internal and external activities needed to ensure expert domain name management and to extract maximum value from the web-brand interplay.

This service was created in response to the dramatic changes on the Internet over the past few years and the increasing need for brand owners to have trusted partners to guide them with leading best practices as the Internet continues to evolve.

With at least 40% of Internet users now accessing Web sites through direct navigation, and the simplicity associated with registering domains and posting recycled advertisements to monetize traffic intended for brand owners, the importance and value of domain names has dramatically increased.

Owning and using the right domain names enables brand owners to meet customers at their anticipated locations, and to interact with consumers in trustworthy and expected ways. Similarly, because of the low cost of domain names and the ability to quickly and profitably monetize direct navigation traffic, cybersquatters are attempting to use the namespace for their own good and at the expense of consumers and brand owners alike.

Since cybersquatting costs brand owners well over $1 billion per year in diverted sales and lost trust and goodwill, focusing registration and enforcement activities on the names that are most likely to be used by online criminals to damage a brand’s reputation will simultaneously protect brand owners’ marks and provide for more meaningful interactions with their customers and partners.

FairWinds recognizes that in most cases corporations have not been able to successfully navigate this new domain name landscape due to the lack of expert and objective advice from external advisors and due to insufficient internal resources.

“Countless brand owners have told us that they recognize the need to utilize both informed decision-making regarding what names to own and expert oversight of those names in order to extract more value from their domain name portfolios,” said FairWinds Managing Partner, Josh Bourne.

The FairWinds domain name administration service will enable corporations to optimize their domain name programs with expert and neutral outsourcing by leveraging the proven and trusted expertise and experience of FairWinds Partners.

“Many of our clients want us to improve their domain name programs by leveraging our domain fulfillment and corporate domain name administration experiences to deliver cost savings and improved operational efficiencies. We have launched this service to meet the needs of brand owners that have expressed the desire to find an alternative to biased providers and continued use of over-extended internal resources – not only do we bridge the gap between the client and their various domain name and monitoring services vendors, but we ensure a seamless and efficient process,” said FairWinds Managing Partner, Phil Lodico.

In keeping with its commitment to the highest quality of client service, FairWinds has hired Internet veteran Brendan Becker to lead the Domain Name Administration Outsource Service division. Becker comes to FairWinds from the GlaxoSmithKline Corporate Intellectual Property Division, where he was the sole manager of the company’s Domain Name Portfolio for the past five years. Previously, Becker served as a Network analyst for Dow Jones and Company in Princeton, NJ, and as a Systems Operations Specialist in the United States Air Force.

Contact: Yvette Wojciechowski
yvette.wojciechowski@fairwindspartners.com
(202) 223-9355