An in-depth look at CitizenHawk’s business model.
Brand protection company CitizenHawk has been granted a patent that broadly covers its business model of recovering typo domain names on behalf of clients and then monetizing them.
The U.S. patent basically explains the company’s entire business model from start to end; at least what the model was at the time it filed its patent.
If you want to know exactly how it goes about discovery, categorizing, and recovering domain names, you should read the entire patent (pdf). But here’s a summary.
First, CitizenHawk signs up a web brand as a customer. (CitizenHawk submitted a copy of its contract with Lillian Vernon as an example.)
Then its software goes to work, identifying possible typos of the client’s domain names. It then analyzes each typo including who owns it, how they are monetizing it (it even grabs affiliate IDs if the domains are monetized through affiliate programs), etc. It collects as much evidence and information about the domains as possible including their IP addresses, screenshots, etc.
Next, the system determines which typos might get a high volume of traffic. It checks this data against information about the domain owner to determine which domains to go after and how to do it.
For example, the system might determine that 10 Lillian Vernon typo’s are high traffic and are owned by the same person. It might piece this information together even if the whois information on each domain is different.
Then there’s a process to determine the best way to recover the domains. If the owner has cooperated with Citizenhawk in the past then they might just request the domains. The system could also determine that filing a UDRP is a good route.
If a UDRP is in order, the system automatically collects much of the evidence and arguments needed for the UDRP and puts in in a template (which can sometimes go awry).
Once a domain is recovered, Citizenhawk monetizes the domain name and takes a cut of the earnings. This is one reason they are keen to get clients who have affiliate programs; once they recover a domain they can monetize the traffic through the affiliate program for a period of time and earn revenue. The patent also mentions that the company can be paid based on the traffic the domain receives (e.g. CPC or CPV).
Here’s how the patent describes this post-recovery monetization. (Customer’s representative refers to CitizenHawk in this case.)
For instance, suppose the customer’s representative recovers the typo domain aeroopostale (a typo derivation of the trademarked term Aeropostale). Upon transfer of the domain by the cybersquatter to customer’s representative’s chosen registrar, such as, GoDaddy, Inc., the WhoIs record for the domain can be updated to reflect Aeropostale-approved data. Additionally, the DNS information for aeroopostale may be updated to reflect customer’s representative’s names servers. Subsequent or following the name server change to reflect customer’s representative’s name servers, customer database 140 may be updated to reflect that the domain has been recovered (See FIG. 4; stage classification drop down) and a new redirect URL can be added.
One example of monetization by the customer’s representative could be CPA fees. Should a visitor purchase an item using a redirect link, customer’s representative may be entitled to a commission on the value of the items purchased. The commission-value could be designated in the customer’s representative’s contract with the customer (Aeropostale). Assuming the commission value is 5% and a visitor who uses a redirect link with a customer’s representative’s ID purchases a garment at Aeropostale for $100, customer’s representative would be entitled to a commission fee of $5 for that transaction (5% commission multiplied by $100 shopping cart value). The customer, Aeropostale, is responsible for all commission payments due. Because of the association with the monetization network, the customer can first pay the monetization network all commission fees due (including the monetization networks service fees). The monetization network then can pay the customer’s representative fees owed once all payments have been received from the customer. For those customers who do not have a monetization network affiliation, payment from the customer can occur directly.
Another feature is that the system can scan auctions to see if typos can be recovered by bidding for less than the cost of a UDRP. Of course, CitizenHawk has even hand registered domains in the past (especially expired ones) as part of its efforts.
Other companies, including Microsoft, have received patents related to discovering typosquatted domains and figuring out who owns them. Microsoft’s patent is reference with the application.