How misspellings make money.

By the end of 2007, at least 8,000 URLs using the word "iphone" will be registered.

Deep in the virtual space of the Internet some people make real money with speculations on misspellings. McAfee (not McAffee or McAfie) has published a very interesting article about the art and business of Typo-Squatting.

Definition and Trend

Typo-squatting, the practice of registering domains using common misspellings of popular brands, products and people in order to profit from consumer typing errors, is increasing dramatically.

Targets

The five most highly squatted categories are game sites (14.0%), airlines (11.4%), main stream media company sites (10.8%), adult sites (10.2%) and technology and Web 2.0 related sites (9.6%).

Some facts

Cybersquatting cases filed with the World Intellectual Property Organization’s (WIPO) arbitration system increased 20% in 2005 and another 25% in 2006.

Microsoft says that “on an average day more than 2,000 domain names are registered that contain Microsoft trademark terms.”

According to the US Government Accounting Office, at least 8.65% of all domain names are registered with false or incomplete Whois information, a practice that makes domain squatting easier.

More recently, in September 2007, the managers of the .eu top level domain suspended 10,000 domains registered by a Chinese woman who was accused of being a cyber-squatter.

Frightening

Children’s sites are highly targeted by typo squatters. The average for the category is 8.4% and 24 of the top most squatted sites are children’s properties for kids 12 and under. Add in sites like MySpace and Miniclip and more than 60 of the top most squatted sites are properties that appeal to the 18 and under demographic.

Very interesting article about one of the not so well known Internet industries.

What’s In A Name: The State of Typo-Squatting 2007

If you’re an SEO and haven't been hiding in a cave you’ve likely been reading for the past few months about all the benefits of a marriage between SEO and domaining. Despite all the rhetoric, however, nobody has been real forthcoming with practical information about how to actually profitably combine the two fields. So without further adieu I’m going to explain what I believe to be the single most important and practical domaining technique for SEO’s. There will be no theory here, just a plain and simple explanation of how to implement domaining for SEOs.

Exact Match

The “exact match” domain is not a new concept. In fact, it’s the foundation of what domainers have been doing for years. An ‘exact match’ domain simply means that the URL is letter for letter the same as the keyword it is targeting.

So for “Hurricane Insurance” you purchase the URL www.HurricaneInsurance.com (sorry, I already own it).

The reason domainers love exact match domains, is that there are still millions of people out there surfing the interweb who haven’t grown accustomed to using Google or Yahoo! to search for things. These individuals often simply type the keyword into their URL bar (sometimes with or without the “www” or the “.com”. Because browsers fill in the blanks, there are dozens of people who land on www.hurricaneinsurance.com each month simply because it is an exact match domain. Domainers make their money by converting via landing pages on the domain.

So why does all of this matter for SEO-cum-domainers? Because of something called the ‘Google Exact Match Bump’.

The Google Exact Match Bump

SEO aren’t interested in buying up tens of thousands of domains and making a few pennies on each. Instead we specialize in buying a few domains and marching them up the search engines. That’s where exact match domains come in handy.

In addition to picking up a large number of links with keyword anchor text which is itself an exact match, Google treats the URL itself as a relevancy booster. Based on some testing, it is pretty clear that a major indicator of relevancy with search engines (particularly Google) are the words in a URL.

Simply stated, it is a whole lot easier to rank a site that has an exact match URL as compared to one that doesn’t.

Sub-Prime TLD’s

But if you’re considering going out and buying a bunch of high-traffic one and two word generic exact match .com’s in your niche, think again. For established online industries such as porn, dating, real estate, credit, insurance, web hosting, and investing you’re going to start at $100,000 and go well into the millions of dollars.

Thankfully, the Google exact match bump applies in a similar way to other tier one TLD’s. Buying an exact match .org or .net can go for anywhere from 1 to 20% of the value of the .com. While a .net or a .org does not get any type-in traffic, that only matters to domainers. For SEOs who are focused on marching their purchases up the search engine rankings, type-in traffic is so negligible that its almost not worth considering.

Putting it all together

Now that you know that the key to domaining for SEO’s is ‘one and two word generic exact match sub-prime TLD domains’ its time to put it all together. There are two primary ways you can put this information into action, enter proven industries or unproven industries.

Proven industries are like those mentioned above: "buying insurance online" is a proven model as is converting American Express business card leads. There is no question that having your exact match site rank for keywords in those niches is going to bring a big and certain return. Unfortunately, because the return is virtually guaranteed you will have to pay a premium for domains. A .net exact match domain in an industry as competitive as insurance or credit is going to go for the full 20% of the .com.

On the other hand, you can take this information and apply it to an unproven or semi-proven industry. This is an option if you have insider information and not a lot of capital to throw around. For example, if you have a friend in the wine business you can target obscure wine terms for your exact match purposes. Or, if you have a friend that is a lawyer you can ask him or her about obscure high-margin legal work. For example, I recently helped an attorney friend acquire domains related to Jones Act maritime law cases and trucking accident cases. Not only did I have no idea that those were lucrative leads, but it turns out not a lot of other SEOs and domainers did either, since some pretty decent exact match sub-prime TLD domains were available as freebies.

Conclusion

Whether you decide to utilize the one and two word generic exact match sub-prime TLD technique (Geez that’s a mouthful) to enter into established markets or unproven markets will depend upon your access to capital and aspirations.

Even after this, you’re going to need solid original design, top-notch content, and excellent on-page SEO. None of that is changed by the fact that you adopt this technique. The bottom line is that this technique is a practical and effective integration of the benefits of domaining with the traditional strengths of SEOs, and it’s an approach that I know flat-out works.