Domain Name Games.

• Author: McGeehan, Patrick
• Position: Brief Article

Who owns a Web address? A business with that name? Or the first person there?

To the brokers at Morgan Stanley Dean Witter & Co., the plan seemed simple enough: Set up a Web site where clients could buy and sell stocks online, which would boost Morgan Stanley's profits and give them an edge on their Wall Street competitors. Trouble was, the brokers hadn't banked on Ivan Wong, a 17-year-old California high school senior.

The Morgan Stanley Dean Witter executives had planned to use a Web site address based on their company's initials and that clients could easily remember: msdwonline.com. Wong, however, had already registered that address, or domain name, for a site of his own, apparently dedicated to mountain biking. (Its single page shows the photo of a helmeted bicyclist and the title "Mud Sweat's Downhill World.") Wong, who lives in Hillsborough, California, just a short drive north of Silicon Valley, says he named the site for Mud Sweat and Gears, the company that sold him his mountain bike. "Me and my friends saw other sites on the Net," he says, and "wanted to start our own, with a bunch of pictures and videos and stuff."

When Morgan Stanley offered to buy the domain name for "a reasonable fee," they got a quick email reply: "Give us an offer we cannot refuse." The brokerage firm then offered $10,000 ("a nice bag of money for a guy your age," noted one of the firm's representatives). Wong, who seemed to be working closely with his father, Sau, a computer-chip engineer, declined, demanding $75,000 instead.

"As you may not be aware, some `useful' domain names can fetch as much as six figures or more," the elder Wong e-mailed Morgan Stanley. In fact, he had "registered many relevant domain names," said Wong, including some that Morgan Stanley's competitors might also like to buy.

COINCIDENCE OR NOT?

Eventually, Wong lowered his asking price to $50,000 and, to sweeten the deal, offered to throw in a second Web address that he had also registered: morganstanley-direct.com. The brokers weren't buying. Last month, their lawyers went to court in Manhattan to denounce the Wongs' "fraudulent ransom scheme." Their registration of msdwonline.com wasn't coincidence, the lawyers said, but "cybersquatting," the practice of registering Internet addresses--at $70 for two years--in hopes of selling them later at a profit.

With some companies paying hundreds of thousands of dollars for such already-registered domain names, complaints about cybersquatting...