Like every other industry, the domain industry has its own set of etiquette rules. Ignoring these rules could result in a bad reputation or being banned from certain sites. In some cases, it could even land you in court.
The term cybersquatting refers to the practice of buying a trademarked domain name with the intention of reselling it for a high price or damaging the reputation of the trademark owner. That sounds like a nice simple explanation, but the rules concerning cybersquatting are still somewhat open to interpretation.
For example, the company Virtual Works registered the name VW.com. It was challenged by Volkswagen, known as VW for short, in 1999. Volkswagen lost the battle that year, but came back later with an appeal and won the court case and the domain. Conversely, eToys.com tried taking the name etoy.com from a Swiss art company; the courts found in favor of the Swiss art company in this case.
As long as you remember to use common sense when registering domains, you probably won’t have any trouble related to cybersquatting. Registering kodak.ru and using it to sell cameras is obviously a bad idea, and it could likely land you in court. It has happened before and will likely happen again.
There are several forms of click fraud. The only one concerning this guide is the kind PPC sites or parked pages would use to make fraudulent money. In this case, a website owner clicks on the various PPC ads on their own site in an attempt to generate more revenue. Sometimes software is used to automatically click through links from different IP addresses. Either tactic will get you banned from most PPC networks or parking services.
You would also gain a bad reputation with other domainers since the high click-through rates would make your site seem more valuable than it really is. If someone were to buy a name from you that vastly under-performs, word could spread and damage your ability to make future sales.
Typo-squatting has not yet been established as a crime the way cybersquatting is. It also is not yet as damaging for your reputation. But, many in the industry do frown upon the practice.
Typo-squatting is when you buy a domain name that is very similar to a popular domain or trademark, hoping for unsuspecting users to mistype a common domain into their browsers. For example, buying frod.com in the hopes of receiving traffic from those who meant to type in ford.com would be typo-squatting.
In most cases, typo-squatted domains are full of PPC ads. The first of the links is often one that leads to the site users had meant to type in.
Obviously, the owners of many large, well-known sites are opposed to this tactic since it preys on their visitors. It remains to be seen if such practices lead to anything definite in the way of legislation (recent court cases have not been unanimous in decision). Regardless, the practice of typo-squatting is becoming increasingly frowned upon in the online community and is not advised or advocated by this guide.