Why Shutting Down IKEAhackers.net Is Bad Business

You can't make a ceiling decoration out of table tops!

You can't turn a bookshelf and desk into a minibar!

Are you sure about that? Source: IKEAhackers.net

Over the weekend, IKEAhackers.net editor Jules Yap (pseudonym) informed her audience that she received a cease and desist letter from IKEA some months ago. Now she is faced with the choice of either removing the ads that fund her site and pay her rent or handing over the domain name to IKEA.

Yap has opted to remove advertising from IKEAhackers.net, but is urging followers to sign up for an email alert for when a new domain name (one that supports advertising) is announced. Although Yap should be able to forward visitors to IKEAhackers.net to her new site, she's losing a brand she spent eight years building. The whole time, she was supporting IKEA.

This is just bad business.

Can IKEA even do this?
IKEA is claiming that IKEAhackers.net infringes on the company's intellectual property rights. That is, the trademark IKEA is being misused.

The main purpose of trademarks is to avoid consumer confusion. While it's feasible someone might confuse IKEAhackers.net for an official IKEA-endorsed website, it's highly unlikely. Moreover, IKEAhackers.net prominently features products produced by IKEA, and it's not passing off other products as IKEA products.

Indeed, the grounds of IKEA's C&D letter seem dubious.

But even if it can, why?
Yap is doing IKEA a service by practically offering free promotion for its products.

Someone who may not be terribly interested in a standard IKEA piece may come across an intriguing way to repurpose those drawers, shelves, tabletops, and other items spurring a trip to the IKEA warehouse. Few other news and fan sites have the power to do this.

Lack Table Ceiling Sculpture Source: IKEAhackers.net

For example, I'm an avid reader of AppleInsider.com. The website technically uses Apple's trademark (the dot over the "i" in the site's logo even looks similar to the Apple logo), and discusses news and rumors related to Apple. There are dozens of other Apple news and fan sites out there using Apple trademarks like Apple and Mac. Most of them might encourage buying Apple products, but none are going to make you jump out of your seat and head to the nearest Apple store. Still, Apple isn't pursuing legal action.

In fact, the biggest upstream site (the site people visit immediately preceding) for IKEAhackers.net is IKEA.com. This indicates two things: Yap has built a very strong brand and that people go to IKEAhackers.net to find a reason to buy something from IKEA.

Why would IKEA want to get rid of that?

The biggest point of contention seems to be advertising revenue. Yap negotiated the ability to keep the domain name if she agreed to remove all advertising. IKEA, apparently, doesn't want anyone profiting off its brand besides itself.

Forcing some innocent blogger to rebuild her brand over a relatively small amount of advertising revenue is a bad PR move for IKEA, which usually has very favorable relations with the public. Not only that, but it's hurting a blogger who provides free advertising for its products. Double fault.

How will this affect traffic to Yap's site?

Source: Alexa.com

About 25% of IKEAhackers.net's web traffic came from search engines, according to Alexa.com. That number has steadily increased over the last two years from about 10%. That's to be expected as more content is added to the site (generating more potential hits for Google searches and pages for sites to link to) and Yap built the IKEAhackers.net brand.

The problem is Google prefers websites that are kept up to date with fresh content and regular maintenance. As a result, Yap may see the rank of IKEAhackers.net fall on Google results pages.

Luckily, IKEAhackers.net is also popular on photo and project sharing sites like Pinterest and Facebook. These sites are mostly agnostic when it comes to who is providing the content as long as people like it. Yap, and her core group of fans, should be able to maintain their success on social media.

But the brand will be hurt. Most people find her site by searching for "ikea hacks" or "ikea hackers" -- evidence of a strong brand. Losing the ability to use that domain name is a pretty big blow.

A low blow
IKEA's decision to send IKEAhackers.net a cease and desist letter is bad business. The website has been in operation for eight years, and has done nothing to defame or hurt the IKEA brand. If anything, it has promoted the company and its products. While I understand IKEA wanting to protect its consumers and its brand, in the last eight years IKEAhackers.net has shown no indication that it's a threat to either.

The worst part, not only will this hurt IKEAhackers.net, it's going to hurt IKEA too.

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The article Why Shutting Down IKEAhackers.net Is Bad Business originally appeared on Fool.com.

Adam Levy owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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