Verizon has implemented a DNS redirection service that redirects users who have typed in a wrong domain to a Yahoo!-powered search page instead of a plain error message. This search page is, of course, filled with pay-per-click links. Verizon says the service was created to help users quickly reach their desired destination, but it’s obvious that Verizon has realized that there is lots of money to be made with error traffic.

Verizon Online will begin the trial of a new Advanced Web Search service designed to reduce the amount of dead-end, “no file exists” or similar error messages you see and to help you quickly find the destination web site you were seeking. If you type a nonexistent or unavailable URL (e.g., www.verizon.cmo), or enter a search term, into your browser address bar, Verizon may present you with an Advanced Web Search page containing suggested links based upon the query you entered. The Advanced Web Search page would be presented instead of your receiving an NXDOMAIN or similar error message.

In my opinion, this is not much different to cybersquatters profiting from typo domains. Other companies, including Google, Microsoft, Dell, Gateway and Sony, have implemented similar services, too. I don’t understand why everybody is complaining about domainers monetizing generic domains through parking services while large corporations are using exactly the same methods for making money from Internet traffic, with the only difference that these companies do not even own the domains they monetize! They don’t own any of the URLs wrongly typed into a browser’s address bar and they don’t have rights to the TMs they make money from by monetizing traffic from people looking for a specific company name. For example, if I’m a Verizon user typing in Microsoft.xom I will automatically get redirected to a Yahoo! PPC page and Microsoft will then have to pay money if I click on their ad, although it’s their trademark.

To be fair, Verizon allows its users to opt out of this service. But still, why do the big players get away with making money from “unmoral” parking pages and monetizing typo traffic, while domainers owning generic domain names, on the other hand, are still wrongly being called cybersquatters by many? What’s even more interesting: Verizon sued iREIT for alleged cybersquatting, but now they make money from TM domains themselves?