March 26, 2015

New domains make “cybersquatting” a concern

For companies in any stage of an M&A deal, carefully cultivating their corporate images is critical to success. This year, a host of new domain names will allow individuals and businesses to purchase websites with unusual words after the [dot]. Where websites have traditionally relied on .com, .org, .net and other popular domains, those have expanded to include .baby, .app and .fish. 

This has led to a spike in "cybersquatting" or snapping up domain names with no intent to use them. The practice has allowed users to buy website URLs with popular meanings so that they can either capitalize on the sale of those sites or block others from obtaining them. For tech startups, the rollout of new domains means that despite owning the coveted .com address for your company, someone else could purchase the .app domain. 

This has the potential to dilute traffic through misdirection. In some circumstances, established companies are wary about the potential for internet "trolls" to connect brands with inappropriate content. For example, this week it was revealed that pop star Taylor Swift purchased a host of new taylorswift [dot] URLs to prevent them from falling into the wrong hands. 

"Businesses are being forced to expend time and money in these dispute," said Tracey Singlehurst-Ward, Senior Associate at Hugh James, to the Telegraph. "Tech-savvy but often unscrupulous individuals are looking to hold established companies to ransom."

In this climate, it's important for companies at any point in M&A proceedings to determine whether it's prudent and cost-effective to purchase any domains that could rival their primary company address. Taking complete ownership of your company's web presence means anticipating and proactively subverting efforts to undercut that presence. With a strong acquisition strategy and the consultation of an M&A advisor, your business can ensure its public image is as airtight as possible.