While Microsoft is now close to becoming a trillion-dollar company, there was a time when it was forgetting to do the simplest things, such as checking domain availability before announcing a new product.

This is exactly what happened in late 1998, shortly after Microsoft announced that Windows 2000 would be the official name of Windows NT 5.0. While the name took many by surprise, what was even more surprising was the fact that the company failed to check if the domain and the trademark that it planned to use were already owned by someone else.

In other words, not only that Microsoft wasn’t allowed to use the Windows 2000 trademark, but whoever pointed their browsers to Windows2000.com ended up on a completely different website than the one they expected.

Robert Kerstein, from Falls Church, Virginia and CFO of a company called McCaw Cellular was the owner of both the trademark and the domain name, not for making a fortune out of selling it to Microsoft afterward, but for using them for his own business. Kerstein registered the domain for a website called Encyberpedia in 1996 at a time when Windows 2000 as an operating system that didn’t exist.

You wouldn’t normally expect an individual to resist Microsoft and not give up on a certain domain when taking into account the legal trouble such a dispute could cause, but Kerstein only agreed to hand the software giant the keys to Windows2000.com with one big condition: receive Bob.com in exchange, a domain that Microsoft owned since 1996 for its rather controversial service called Bob.

Why Microsoft wanted to forget about Bob

Microsoft Bob was released in 1995 and discontinued only one year later even before Windows 95 got to see daylight, and it was supposed to make the Windows user interface easier to use. Bob’s main purpose was to help users adapt to “modern” Windows, bundling features like cartoon characters and speech bubbles for a simplified experience.

Given the name of the domain, Bob.com, and the name of Windows2000.com’s owner, Robert Kerstein, Microsoft quickly noticed the opportunity, as everyone knew that moving the dispute to court would have only meant bad publicity for the company. Furthermore, Microsoft’s leadership team was aware that this approach would have taken a lot more time, and given the approaching launch of Windows 2000, it couldn’t afford not to own the domain.

The deal between the two came down to an exchange of domains, as well as some “other considerations” which have never been detailed. Most likely, this means that Microsoft paid Kerstein some cash to ease the pain of giving up on such a great domain, but the exact amount has never been disclosed.

Microsoft and Kerstein thus managed to resolve the whole dispute without any legal trouble. Microsoft offered Bob.com in exchange for Windows2000.com, keeping all details secret and without going to court.

Somewhat funny is that Microsoft has in the meantime left the Windows2000.com domain to expire and somebody else managed to get their hands on it. So if you try to load it in your browser today, you’re only going to see ads that the owner is using probably in an attempt to capitalize on the popularity of an operating system that has already been retired.

But without a doubt, Microsoft has learned from its past mistakes and registered domain names way before announcing the names of its new products. One such example is WindowsVista.com, which the company still owns nowadays and which when loaded redirects users to a Bing search for the keywords “Windows Vista” where users can find more information about the failed operating system.