Verizon Says More Than 600 Websites Used In Cybersquatting Scam

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In a case that shines light on the world of professional cybersquatters, Verizon is suing a website and a domain name registrar that placed ads on hundreds of sites with Verizon-like names.

In a complaint filed in Los Angeles federal court, Verizon accuses “serial cybersquatters” Parked.com and registrar DNLtd of controlling more than 660 websites. The complaint says their unidentified owners used shell companies as part of a scheme to collect ad revenue when users seeking Verizon landed on these sites by mistake.

The phone giant has already won back control of sites like verizn.com and cerizon.com, but is using the lawsuit to seek trademark and cyber-squatting damages of $100,000 per site.

According to Verizon, Parked helps customers, including Yahoo! (NSDQ: YHOO), squeeze money out of unused websites by placing ads on them. It’s unclear if Yahoo! is also making money by serving ads onto the blank sites.

Verizon says DNLtd worked with Parked by taking over expired domain names under its control. The complaint also says the defendants make money by offering a service that, like an unlisted phone number, masks website registrants’ real identity in the Whois directory.

Both Parked.com and DNLtd are incorporated in the Cayman Islands, meaning it will be difficult for Verizon to obtain the identities of the owners who are now listed in the lawsuit as “Does 1-10.”

Big companies have been tangling with cybersquatters for years but this case is remarkable because of the number of sites involved. Verizon says the defendants have used “over 660 domain names which are confusingly similar” and lists eight pages of names on its complaint. Here’s a sample:

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