Domain names, like the valuable pieces of commercial land, have become the target of virtual sharks. Due to the fact that domain names cost less than $10, these domain sharks are able to grab multiple domain names at bulk where the costs are much lower. These early birds grab the funkiest and the catchiest domain names that are of no particular use to them. Their strategy is to put the money in the eggs and wait for them to hatch; only one out of fifty might hatch but that is more than they could ask for.
Entrepreneurs who brainstorm for hours and come up with a domain name are left with no choice but to register these names at hundreds or thousands of times their actual value. Paying thousands of dollars makes sense for big companies with deep pockets but if you are a making a fresh start, then every penny counts. Another form of domain grabbing is seen where whenever a .com domain name is registered, the domain sharks go ahead and grab domains which end with .net or. Info. This leads you to pay thousands of dollars later on just to avoid your customers to go on the wrong site.
This is extremely prevalent in the domain registration business and has caused many domain registers to go for unusual extensions. There are sites such as flickr, bookr and many others who have settled for alternatives so that they get something similar to what they are looking for. It has turned into a huge business, since even if one out of fifty sites is sold for $5000; it turns into a huge profit and it does not matter if the other sites are sold or not. The statistics favor the Domain shark by a huge margin. These domain sharks are also on the lookout for expiring domain names and grab these before any other user can set their sight on them. This is just plain virtual blackmailing, which yet has no particular law terming it illegal.