Cyber squatting is registering, selling, or using a domain name with the intent of earning a profit from someone else's trademark.
It generally refers to the practice of buying up domain names that use the names of existing businesses with the intent to sell the names for a profit to those businesses. In the interim, the domain is covered in advertisements to use the victims trademark to generate ad revenue.
Having to sue the cyber squatter can be costly and time consuming, so many businesses simply cave, and pay for it. Smaller businesses who cant afford it, simply have to go with a different top level domain(.org,.net,etc).
This makes it hard for consumers to find what they are looking for, and is responsible for millions of wasted domain names on the internet.