Can I name my domain similar to a major site/company?

[Jake]

yahoofriends.com is already taken.

I believe incorporating the entire name is considered a trademark violation, apparently Ebay automatically sends cease and desist notices to any new name incorporating Ebay. Mis-spelling like Floogle is probably more acceptable, as long as your not misrepresenting yourself like the countless counterfeit sites out there.

Unlike the early days of the internet when cab drivers were speculating in names, buying Pepsi.com and holding it hostage, "cyber squatting" laws have been put in place to restrict such activity playing off an established business name.