AmazoM.com was a success story using that technique, but I don't know how it ended. I think he ended up selling to Amazon or something.
I stumbled upon one the other day, I mis-spelled netflix. When I realized what I had done, I just clicked on the netflix ad in order to get to their site because I was so impressed with the clever-ness of the designer. The site was red and looked a lot like netflix, but one ad was for netflix and the other was for blockbuster.
I agree with posters who advise you to check out the legality first. I think the netflix-misspelled site might have been crossing the line a bit with the red background.
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