Companies need to think laterally about domain names for their online businesses, as the rise in competing for an online presence reaches an all time high.

The warning comes as the result of recent statistics from online company formation group, Companies Made Simple, which shows the sharp rise in online businesses in the past 12 months.

In the past year they alone have formed over 150,000 businesses online. The steep rise the UK is seeing in online businesses is perhaps no surprise considering that in the last 10 years Internet usage around the world has increased dramatically. For example, China had just over 2 million Internet users in 1998 compared with almost 300 million in 2008. Similarly in 1998 there were 8 million Internet users in Germany and over 60 million ten years later.

However as the Internet becomes increasingly populated, businesses are being placed under increasing pressures. Thomas Vollrath, chief executive of 123-Reg explains: “The British economy has seen a significant surge in start-up businesses in the past year, many of which are either solely e-commerce based operations or have a significant need for a Web presence.

“I’m sure everyone would agree that the growth of online British businesses should be actively encouraged—an online presence creates great opportunities for organisations to reach and communicate with new audiences. However, as an increasing number of businesses set up online, the Internet becomes at risk of domain-overcrowding which presents tremendous threats to businesses. This threat is particularly prevalent for small start-ups that have limited cash flow and now face bigger hurdles than ever before in ensuring they stay ahead of the competition.

“One of the most increasing pressures businesses face in competing for an online presence comes from business owners which are buying more domains and using them for different purposes, such as marketing campaigns for certain products or services to direct to the main site.

“For example, we recently launched a pre-registration for .co domain names which aren’t due to register until 20 July, yet we have already seen thousands of pre-registrations. This high uptake of the new .co domain should act as a warning to businesses that if they fail to protect their brand by registering under a number of domain names, they are at risk of competitors hijacking their established brand by registering the name instead.”

So what are the options for businesses? For businesses that are looking to register a domain name and find the name is already taken, there are a number of options available. If the name is a trademark, the trademark owner can pursue it via domain name resolution services which are offered by the domain name registries. However be careful; this could cost hundreds if not thousands of pounds to get back and can take months. Sometimes it can be quicker and cheaper to make a nominal offer to the current owner rather than take legal action.

If the domain name is not a trademark, a store owner can consider purchasing the domain from the current owner. By using a WHOIS service, details of the domain registrant is shown and the store owner can then contact them with the information provided.

Finally, think laterally. Not every company needs to end in a .co.uk or .com extension. There is a huge variety of domains available that can enhance a business or play on its brand presence, such as extensions such as .me, .in and .be. Those who need a domain name for a business have the opportunity to be as creative and ingenious as they can allow themselves.