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I have a domain "word1-word2.com". (word1 is not actually a word, just three letters) I am number one on google, yahoo and msn for "word1 word2", people are searching for my site using these keywords, because there are almost no other results.
But today I found, that my competitor uses a domain "word1word2.com", he sells the same items and his site design is very similar to my. He also uses the title: "word1 word2".
I really do not know what to do. If he will be in the top10 of search engines I will get much less visitors (it is not very hard, because as I said "word1 word2" - is just my site name). Also customers, who use google to find me will be lost.
The main problem is that I don't have a trademark. I know it is my mistake.
So I have two ways:
1) Try to buy his domain. I will lost money, I think not less than $1,000.
2) Move to another domain, register the trademark and send email to all my customers to say, that we are moving.
May be there is something esle I can do.
If people find your website solely through internet search engines, then I don't see much of a problem.
However, if you mention your website to people or advertise it offline, then you might be losing some people who forget to put the dash in there.
One thing is for certain, though: If you ditch your domain name and start all over again, you'll almost certainly rank below your competitor. You'll get sandboxed in the search engines, possibly get in trouble with the dupe content filter if they still have your current site in their indexes, etc.
You switching horses in mid stream would basically be his dream come true.
First thing I would do is buy up every conceivably similar domain name. Get word1word2.net, .org, word2word1.com, word2-word1.com, etc.
Then approach him (possibly incognito) and see what it's going to cost to take the name off his hands. If he's actually running a business it seems highly unlikely to me that he'll fold and turn it over to you for a measly $1000 or less.
So determine how important the name really is, and then proceed from there. Good luck.
P.S. They do not use USA servers, the site is hosted in China, so I don't think that one email can help me. But I will try.
Just an idea to keep in your back pocket in case he becomes a real theat.