The Web's Million-Dollar Typos

"It's such an easy process," said Ron Jackson, publisher of DNJournal.com, an online publication that covers the industry. "In two minutes, I can set up a thousand domain names."

The practice has sparked a speculative scramble to register unused names and test their ad potential. Because purchasers can change their minds within five days and avoid paying the $6 registration fee for the name, many investors enter the names in Google's ad program for a quick test and quickly drop those that don't yield enough clicks to cover the domain registration fee.

Of the 30 million dot-com names registered worldwide last month, more than 90 percent were dropped, according to domain name registrar GoDaddy.com. As a whole, the Internet has only 54 million active .com and .net addresses, according to VeriSign Inc.

Jackson said he has bought 6,600 domains and uses several different ad services to earn revenue on them. "I know quite a few guys making over a million dollars a year from advertising on their domains," he said. "It's like a 24-hour money-printing machine."

David Steele, an intellectual property lawyer at Christie, Parker & Hale and a professor at Loyola Law School in Los Angeles, said the practice amounts to someone making money off someone else's trademark without permission.

"Trademark law is designed to protect consumers so they can quickly identify what they want and get it," Steele said. "If everyone has to spend a whole bunch of time wading through all this lookalike crap online, then the value for Internet consumers is going to be seriously reduced."

John Meyers, general manager of Yahoo's ad service for parked domains, said Yahoo is strict about weeding out addresses that violate its guidelines, which prohibit celebrity names, typos of trademarks and references to illegal activity. Yahoo developed a software filter to identify domain names in its network that violate those rules so they can be removed.

But Hagan, Google's trademark lawyer, said that software formulas aren't smart enough to identify trademark infringements.

"It's subjective when you look at domain names to decide how many letters off does it have to be to form a trademark or conjure up that trademark," she said.

Google won't disclose how much revenue it is earning from ads on these types of sites, but chief executive Eric Schmidt said in an interview last week, "It's a lot of money."

The company also doesn't break out how much money it earns from showing ads on its own sites compared to partner sites, which include rival search engines such as Ask.com, thousands of news sites and blogs, and millions of vacant domains. Wall Street analysts, however, estimate a little less than half of Google's $6 billion in revenue last year came from ads shown on partner sites.

The Post, using a software tool created by the Microsoft Research division, found hundreds of active Web sites showing Google ads at addresses that appear to be misspelled variations of well-known company names, known as "typo-domains." Their owners are known as "typosquatters."

The Post generated roughly 100 random misspellings of "www.earthlink.net" and found 38 sites using variations of the Earthlink name "parked" at a Google-owned service called Oingo.com. All 38, which includes "dearthlink.net" and "rearthlink.net," serve Google ads.

Likewise, nearly a dozen sites with variations of "Verizon Wireless" were showing Google ads, with some linked to the company's official VerizonWireless.com. That suggests that Verizon Wireless may be paying Google for ads on typosquatter-owned sites.

Verizon Wireless spokesman John Johnson said the company has a successful track record of getting such sites shut down and takes "a particularly dim view of typosquatters."

"Do we think any traffic is good traffic as long as it ends up at our site? Clearly many of these sites are siphoning off traffic by tricking people who have tried to obtain information about Verizon Wireless," Johnson said. "This is never a good thing for our trademark or our company, and it's certainly not a good thing for customers trying to reach us on the Web."

Washington Post staff writer Yuki Noguchi contributed to this report.