Editorial: Where Network Solutions Went Wrong
Wednesday, January 9th, 2008
If Network Solutions had good intentions, then it had a very poor implementation.
Yesterday was media-frenzy day in the domain world. Thanks to a thread on DomainState and article at Domain Name News, major media outlets picked up on the story of how Network Solutions is reserving all .com domains searched for by its customers. Domain Name News’ server melted down with traffic, and DomainNameWire ran slow all day.
If you missed it, here’s the story.
I didn’t believe what was going on at first, so I called Network Solutions’ head of PR Susan Wade. She was ready for my questions, so clearly there was internal messaging prepared for a potential backlash.
Here’s Network Solutions’ position:
1. It is trying to stop “domain frontrunning”, whereby people steal domain queries. NSI believes this is happening somewhere along the chain between when someone searches for a domain at NetSol.com and the registry. It could be ISPs or it could be people at the registries themselves.
2. To stop this, Network Solutions is placing a four day hold on all domains searched for at its site. The domains can be registered by anyone, but only at Network Solutions.
3. Network Solutions claims this is fair and is not a form of “domain frontrunning” for two reasons: 1) It has no intention to actually keep the name after the 4 day window and 2) It is not monetizing the domains.
Great story. But if this was the company’s goal, someone should be fired over the implementation.
Here’s how Network Solutions messed up:
1. There’s no notice on its website. When people search for domains, they are not warned that a domain will be held. Furthermore, there’s no notice after searching that the name is held. It took a few registrants’ suspicions and investigations to figure out what was going on.
2. Network Solutions has a limited view of what “monetizing” means. The company says it is not monetizing the domains it reserves, but this simply isn’t the case. Apparently the company thinks “monetizing” only means putting targeted pay-per-click ads on a site. But Network Solutions is placing full page billboards on each of these domains, like the one below:
The company is now squatting on hundreds, if not thousands, of trademark domains. Anytime someone searches for a trademark, Network Solutions is registering it and putting up its billboard. Even though the billboard may not be targeted to the trademarked brand, it is using that company’s goodwill. Furthermore, sometimes the billboards are targeted. For example, yesterday I searched for DotsterDomainNames.com and RegisteratGoDaddy.com. Now Network Solutions is advertising its services on these competitors’ names! [Update: In part due to this criticism, Network Solutions has taken down their billboard ads and put up "under construction pages". Soon, the domains will not resolve at all.]
3. Network Solutions is abusing the registration grace period. The company is dropping domains after 4 days, which allows the company to get a refund for the registration price from the registry VeriSign (NASDAQ: VRSN). The grace period was designed to refund domains that customers didn’t mean to register (e.g. they typed it wrong). Yes, many companies are abusing this grace period, but now Network Solutions has thrown its hat in the ring.
4. It is exposing all of its customers’ queries to the world. The company said it’s trying to avoid letting someone else find out about your potential domain and registering it. But by pointing all reserved domains to dns1.reserveddomainname.com, the company has willingly disclosed searches to everyone. All you need to do is monitor the server. Take a look: here are over 20,000 domain searches at NSI.
5. Network Solutions didn’t think about the ramifications. What if every registrar did this? Then registrars would start reserving all possible domain names to keep competitors, including Network Solutions, from registering them for their customers.
6. Anyone can register the domains at Network Solutions. If the company’s goal was really to protect you from having someone else steal your domain idea, why do they let anyone else register the domain through them?
Here’s what Network Solutions could have done to be fair. It’s somewhat debatable, but it would have been a better implementation than what they have now:
1. Inform customers that, by searching for a domain, the company would put it on hold for a specified period of time.
2. After searching, inform the customer that a hold of 20 minutes was placed on the domain and that, after that period, the information may be taken and used by someone else (with an explanation, of course). Give them the option to “release” the domain.
3. The domain can then be registered only by the person who searched for it.
4. Do not park the domain with an ad for Network Solutions.
5. Use regular Network Solutions name servers to make it more difficult for people to spy on searches. This wouldn’t eliminate the problem, but would certainly help.
In summary, I believe that Network Solutions was trying to solve a problem. In the process, they decided they could twist it to their advantage to line their own pockets. This is an unethical business practice and was poorly implemented.