As if it weren't enough that buying a domain name requires all sorts of linguistic acrobatics, creating an account with popular social networks and other online utilities is starting to be taxing as well. Pages at myspace.com/McDonald's, GAP, Applebee's, IBM, Xerox, Microsoft, Sony, iPhone and many others have little to do with the respective brands apart from the page owners' usernames. Common dictionary words are long gone as well; here's, for example "/sex" on MySpace and YouTube.
You don't hear about username squatting much, although there was a blog post last year comparing twittersquatting to the domain name rush of the 1990s. Why is it important? Three reasons.
1. Convenience. MySpace.com/myblendtec is less obvious than /blendtec, which is taken by someone other than the socially successful blender maker.
2. Danger of misrepresentation. It is easy to recognize /billgates and /microsoft as obvious parodies, but hijacking an online identity of someone less famous can't be too hard.
3. Search traffic. Perhaps not a threat to bigger companies, but part of the search traffic for brands with limited online presence and for common words can be derailed to pages on MySpace, videos on YouTube (and stories on Digg, but that's a different story). I don't have a good "bad" example off the top of my head, but see how CBS YouTube channel ranks way above many of the network affiliates' sites. And if you search for "tequila", MySpace celeb Tila Tequila comes up above many businesses with the word in their names.