Up until recently, "yahoo.com.cn" was registered in the name of several Beijing companies, all of which are unaffiliated with the Santa Clara, California, portal. With the help of a local lawyer and two U.S. companies, Yahoo has secured the Internet address, according to the company.
Yahoo has made a significant investment in the Chinese-language market with its Yahoo Chinese site. But the company faces competition from Excite's Chinese-language portal, as well as planned portals for Asia and Chinese speakers that Netscape Communications intends to launch.
Sinanet is also a player in the Chinese portal space.
Yahoo secured its Chinese Internet address through the U.S. firms International Communications and its client NetNames USA. International Communications' Beijing division, ChinaConnect, helps U.S. firms negotiate the tightly regulated terrain of registering a ".cn" domain with the Chinese government.
"The Internet is still very much controlled by the government in China," said International Communications spokesperson Xueni Ye. "We worked with the government to set up the process to allow U.S. companies to register Chinese domain names."
Ye said that two or three other companies had already registered "yahoo.com.cn." Since those registrations, China has disallowed companies from registering names that do not belong to them. Yahoo's Chinese lawyer used this new regulation to get the name for Yahoo, Ye said. Yahoo did not have to pay the illegitimate registrants to acquire the name, she added.
Yahoo is not alone in scrambling to secure its company name with foreign governments and domain registration services.
"It's a big issue for U.S. companies, and some have tended to overlook it," said Jeffrey Neuburger, an attorney with Brown Raysman Millstein Felder & Steiner who specializes in technology and intellectual property. "Companies tend to focus on their domain names domestically, but companies like Yahoo that view themselves as international would be wise to secure their rights abroad."
Recourse available to companies whose names have been swiped by squatters will vary from country to country, said Neuburger, depending on the national trademark law.
"In some countries, someone like Yahoo could use the fact that they have a strong trademark internationally," Neuburger said. "But other countries require that the company name be in national use before they can acquire trademark rights."
In those cases, Neuburger said, companies may be faced with shelling out to the squatters to get their foreign domains.
While Asian economies currently are reeling, the Chinese Internet market is booming. The number of registered Chinese Internet users nearly doubled to 1.17 million in the first half of 1998, according to the China National Network Information Center. The number of actual users is thought to be higher, since multiple users tend to share registered accounts.
News.com's Jim Hu contributed to this report.