The rapid expansion of the Internet has given birth to a lucrative
new business -- registration of internet domain names, such as
"books-dot-com." A new squad of entrepreneurs known as cybersquatters have
rushed to register names of everything from products to cities, so they can
sell the right to use those names to the companies that need them for their
websites. RFE/RL correspondent Nikola Krastev looks at how the lack of
regulation and awareness in Eastern Europe makes the region a prime target
for cybersquatting.
Prague, 11 July 2000 (RFE/RL) -- U.S. authorities have
been cracking down on cybersquatting. But the practice of registering many
Internet domain names and then selling them is poorly regulated in Eastern
Europe and the former Soviet Union.
Desirable domain names, particularly those that end in "dot-com," can sometimes command astronomical sums. One bogus attempt to auction the address "year2000.com" fetched a bid for 10 million dollars before it was called off. One sale that was not bogus was "if.com" -- the seller of that name eventually pocketed a check for over 1 million dollars.
Internet domain names in the countries of the former Eastern bloc cannot perhaps command such large amounts of money, but some of them certainly whet the appetites of the individuals and companies known as cybersquatters.
What's in a name? Potentially a lot of money.
Cybersquatting is the practice of registering desirable or thought to be desirable domain names with the intention of selling them later for a profit.
According to one estimate by Jupiter Communications, at the end of 1999, approximately 98 percent of the words in the English language had been registered as domain names.
In most countries of the former East bloc, the Internet is still a young medium. Laws governing Internet use and registration of domain names are also in their infancy, so the line between legality and illegality is often blurred.
In some countries, Internet laws have been devised with clearly political intentions, as appears to be the case in Tajikistan. In other countries, the rules are liberal but the costs are prohibitive -- as in Moldova, where the annual fee for a domain name is close to 300 dollars.
Guntis Barzdins from the internet registrar office in Riga said that in Latvia, there have been no major incidents of cybersquatting so far. He said his office will not allow a well-known name, such as Microsoft, to be registered in Latvia as microsoft.lv by someone who has no connection with the Microsoft company.
Dragomir Slavov is the manager of Digital Systems, the internet registrar in Bulgaria. He said cybersquatting has the potential to be a real problem in Bulgaria.
"There is a serious pressure for speculation with internet names," Slavov said. "This is normal in the beginning of the internet development in the country. Some people want to speculate with internet names, to register names of world famous brands with the intention of later blackmailing the legitimate owners. Our rules hamper such attempts."
The most desirable domain names for cybersquatters to buy up are the widely recognized brand names, such as Coca-Cola, Ford, Adidas, or geographical names like Moravia, Kyiv, or Sofia. Most such names have already been registered -- but not all of them have been registered by the companies or cities themselves.
For instance, the domain names sofia.net, krakow.org, brno.com or zagreb.net all feature a small picture of a sea beach along with the greeting "Welcome to our future website." These addresses are just a small chunk of a bigger collection of domain names reserved by Marcel Stencel, a self-described entrepreneur from California.
At least 37 domain names of large cities in Eastern Europe and the former the Soviet Union are registered to Stencel, but none has a functioning website. Stencel said he has reserved these addresses for "future use." He said the addresses will be developed as free email providers or, in his words, "something like that."
He said he is undeterred by the competition such sites would face from well-established free email sites such as Hotmail. He said, "Competition is good, and then, you know, it's then for the users to choose whether they want an email address like x-y-z at hotmail.com or x-y-z at yahoo.com or x-y-z at, whatever, other names we could provide for them possibly. Some people will want to have hotmail and some will have yahoo and some will want to have a city name."
Stencel said he has not yet begun to develop any websites on the names he has registered. "Well, we are just so far we have only started out by getting ready, by first having the possibility to later on apply our, our, you know, plan. But it has not yet, of course, been implemented in any way."
If Stencel does not develop websites on the domain names he has registered, he could certainly find a market to sell them. In Kyiv, for example, if a new internet service provider company were to start up there, a logical name for it to choose would be www.kiev.net. Such a company would have to buy that name from Stencel.
Slavov of Bulgaria's Digital Systems, which screens people who try to register names, said that approximately 1 in 10 requests for registration in Bulgaria are speculative. In one recent case, he said, a well-established Western company expanding its business in Bulgaria complained that its trademark had been registered and that the registrant was asking for a 20,000 dollar fee.
Desirable domain names, particularly those that end in "dot-com," can sometimes command astronomical sums. One bogus attempt to auction the address "year2000.com" fetched a bid for 10 million dollars before it was called off. One sale that was not bogus was "if.com" -- the seller of that name eventually pocketed a check for over 1 million dollars.
Internet domain names in the countries of the former Eastern bloc cannot perhaps command such large amounts of money, but some of them certainly whet the appetites of the individuals and companies known as cybersquatters.
What's in a name? Potentially a lot of money.
Cybersquatting is the practice of registering desirable or thought to be desirable domain names with the intention of selling them later for a profit.
According to one estimate by Jupiter Communications, at the end of 1999, approximately 98 percent of the words in the English language had been registered as domain names.
In most countries of the former East bloc, the Internet is still a young medium. Laws governing Internet use and registration of domain names are also in their infancy, so the line between legality and illegality is often blurred.
In some countries, Internet laws have been devised with clearly political intentions, as appears to be the case in Tajikistan. In other countries, the rules are liberal but the costs are prohibitive -- as in Moldova, where the annual fee for a domain name is close to 300 dollars.
Guntis Barzdins from the internet registrar office in Riga said that in Latvia, there have been no major incidents of cybersquatting so far. He said his office will not allow a well-known name, such as Microsoft, to be registered in Latvia as microsoft.lv by someone who has no connection with the Microsoft company.
Dragomir Slavov is the manager of Digital Systems, the internet registrar in Bulgaria. He said cybersquatting has the potential to be a real problem in Bulgaria.
"There is a serious pressure for speculation with internet names," Slavov said. "This is normal in the beginning of the internet development in the country. Some people want to speculate with internet names, to register names of world famous brands with the intention of later blackmailing the legitimate owners. Our rules hamper such attempts."
The most desirable domain names for cybersquatters to buy up are the widely recognized brand names, such as Coca-Cola, Ford, Adidas, or geographical names like Moravia, Kyiv, or Sofia. Most such names have already been registered -- but not all of them have been registered by the companies or cities themselves.
For instance, the domain names sofia.net, krakow.org, brno.com or zagreb.net all feature a small picture of a sea beach along with the greeting "Welcome to our future website." These addresses are just a small chunk of a bigger collection of domain names reserved by Marcel Stencel, a self-described entrepreneur from California.
At least 37 domain names of large cities in Eastern Europe and the former the Soviet Union are registered to Stencel, but none has a functioning website. Stencel said he has reserved these addresses for "future use." He said the addresses will be developed as free email providers or, in his words, "something like that."
He said he is undeterred by the competition such sites would face from well-established free email sites such as Hotmail. He said, "Competition is good, and then, you know, it's then for the users to choose whether they want an email address like x-y-z at hotmail.com or x-y-z at yahoo.com or x-y-z at, whatever, other names we could provide for them possibly. Some people will want to have hotmail and some will have yahoo and some will want to have a city name."
Stencel said he has not yet begun to develop any websites on the names he has registered. "Well, we are just so far we have only started out by getting ready, by first having the possibility to later on apply our, our, you know, plan. But it has not yet, of course, been implemented in any way."
If Stencel does not develop websites on the domain names he has registered, he could certainly find a market to sell them. In Kyiv, for example, if a new internet service provider company were to start up there, a logical name for it to choose would be www.kiev.net. Such a company would have to buy that name from Stencel.
Slavov of Bulgaria's Digital Systems, which screens people who try to register names, said that approximately 1 in 10 requests for registration in Bulgaria are speculative. In one recent case, he said, a well-established Western company expanding its business in Bulgaria complained that its trademark had been registered and that the registrant was asking for a 20,000 dollar fee.