Standard Tactics, LLC: How GoDaddy Profits from Expired Domains
Wednesday, December 3rd, 2008
GoDaddy goes to great lengths to hide its expired domain warehousing operations.
UPDATE 12/17/08: GoDaddy is shutting down Standard Tactics.
Scottsdale, Arizona based The Go Daddy Group, which runs the world’s largest domain name registrar GoDaddy.com, is warehousing its customers’ expired domain names and profiting from them. The company has taken a number of steps to hide this practice from public view. This article covers the results of a Domain Name Wire investigation into GoDaddy’s domain warehousing activities.
Profiting from Expired Domain Names
When domain names expire, most large domain name registrars try to make money from them. Network Solutions and eNom auction expired domains at NameJet. Register.com auctions domains through Snapnames .
GoDaddy.com and other registrars that are part of The Go Daddy Group don’t use a partner to sell customers’ expired domain names. Instead it auctions them on the company’s own platform originally called The Domain Name Aftermarket (TDNAM). It’s a fairly transparent system. But when a valuable domain doesn’t sell, something not-so-transparent goes on in the background, as described in detail below.
It’s not unique that GoDaddy profits from expired domains. What’s unique are the steps GoDaddy takes to cover up its tracks, that it holds on to some domains that aren’t sold at auction, and its apparent hypocrisy between domains it owns and some of its activities such as combating online pharmacy fraud.
Go Daddy’s Domain Name Warehouse
I first discovered GoDaddy’s domain warehousing efforts in 2005. I noticed a typo domain name that didn’t sell at TDNAM and wasn’t released. It was subsequently monetized by GoDaddy using a domain parking page. At the same time I purchased several domains on TDNAM that had expired but hadn’t sold in the initial auction, much like the typo. Interestingly, I received notification from an email address at StandardTactics.com offering to transfer all of the domains I purchased into my account.
Standard Tactics, LLC, is a The Go Daddy Group subsidiary that takes ownership of valuable expired domains that don’t sell at TDNAM. It then monetizes the domain names using parked domain pages and lists the domains for resale on TDNAM.
The Formation and Structure
When GoDaddy launched TDNAM back in 2005, it finally started cashing in on its customers’ expiring domain names. By auctioning off the domains it was able to generate revenue even when its customers didn’t pay to renew their domains. But GoDaddy understood it could also make money by keeping some of the domain names that didn’t sell at auction for itself.
On August 16, 2005, GoDaddy formed a subsidiary called Standard Tactics, LLC in New Mexico. Before founding Standard Tactics, all of GoDaddy’s subsidiaries were incorporated in Arizona where the company is headquartered. There are a couple reasons GoDaddy may have chosen to form the company as a New Mexico limited liability company rather than an Arizona corporation. First, by creating the company in New Mexico it could distance itself from it. Second, by filing as a limited liability company instead of a corporation, it didn’t have to list directors of the corporation. It only had to list an organizer — Scottsdale, Arizona lawyer Robert J. Rosepink. Rosepink filed the papers in New Mexico and listed the company’s principal address outside the state at 7373 North Scottsdale Rd, Suite E-200 in Scottsdale. That’s the address for Rosepink’s law firm.
GoDaddy says Rosepink is outside counsel for the company.
He may have run in the same circles as GoDaddy CEO Bob Parsons in Scottsdale. Both Rosepink and Parsons donated to Jon Kyl’s campaign for U.S. senate.
Earlier this year, Rosepink was indicted on 102 counts by the Arizona Attorney General office for his part in a concert promotion investment scheme. Rosepink allegedly earned nearly $1 million in fees for recruiting investors in what The Arizona Republic labeled a Ponzi scheme. [UPDATE: 12/17/08: In an interview with Parsons on his internet radio show today, Parsons told me that Rosepink was exonerated on all charges. Additionally, he says that Rosepink was merely outside counsel for the company.]
Although GoDaddy did a good job distancing itself from Standard Tactics as a separate company (one source said Standard Tactics was commonly called “a client” of GoDaddy’s even inside the company), GoDaddy’s filing to go public in 2006 provides a definitive link between the two companies. It showed that Standard Tactics, LLC is indeed a subsidiary of GoDaddy. It’s distanced even further from the parent company as a subsidiary of a subsidiary. Special Domain Services, Inc., is a subsidiary of The Go Daddy Group. Standard Tactics, LLC is a wholly owned subsidiary of Special Domain Services, Inc. Special Domain Services, Inc. is also the parent company of GoDaddy’s Domains By Proxy, a whois privacy service that helps people shield their information from the whois database.
GoDaddy’s S-1 filing lists subsidiaries including Standard Tactics, LLC.
Because GoDaddy.com is itself a subsidiary of The Go Daddy Group, the domain registrar could technically say it did not warehouse domain names.
How it Works
GoDaddy is able to determine potential traffic to its customers’ expired domains. When a domain expires, GoDaddy places a parking page with paid advertising on the domain to count traffic. This also gives the company the ability to measure potential revenue. If a domain gets lots of traffic, GoDaddy places a higher starting bid on the domain when it is subsequently auctioned on TDNAM. GoDaddy also discloses estimated traffic to potential buyers. If a high traffic domain doesn’t sell at TDNAM, it is often transferred to Standard Tactics.
Standard Tactics makes money from the domains by placing parked pages on them. It sometimes lists the domains for sale on TDNAM at fixed prices, creating another opportunity to profit.
When Standard Tactics takes over a domain, it typically uses Domains By Proxy’s whois privacy service to hide its identity. There are a couple reasons Standard Tactics may do this. First, it hides the fact that a Go Daddy company owns domains its customers originally registered. This comes in handy when a customer merely forgets to renew a domain and later wants to re-acquire it. It also allows GoDaddy to tell customers that it doesn’t own the domains. Second, and perhaps more importantly, it hides that Standard Tactics’ portfolio includes a number of unsavory domain names including trademarks.
One way to uncover the name of a domain owner that uses whois privacy is to file for arbitration under ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP). Whois privacy services are required to disclose the owner’s name when an arbitration is filed. Standard Tactics has been on the losing end of a number of arbitration cases, including for the domains Ambian.org, buy-ambien-now.com, cheapest-ambien.net, JunoDSL.com, and PorschePartSite. It’s especially ironic that Standard Tactics owns prescription drug names since GoDaddy touts its lobbying efforts at the U.S. Congress to stomp out online prescription drug fraud. When I asked Camille Ede, Director of Domain Services at GoDaddy, about the company’s ownership of pharmacy and trademark domains, she said the accusation that the company owned such domains was false. Records at the arbitration companies prove otherwise. In fact, in one UDRP case a Standard Tactics representative asked complainant Sanofi-aventis, a pharmaceutical company in France, to close the arbitration request and that it would transfer the domain automatically:
“Hello
We are aware of the domain dispute that has been filed on this domain. This domain was purchased in a bulk backorder. We do not support trademark infringement. We would like to transfer this domain to you at no cost you.
You will have to contact WIPO to close the dispute before I will be allowed to transfer the domain to you.
Please feel free to contact me with any questions.
Regards
Administrator
Standard Tactics”
In a follow up to my questioning, Ede wrote:
We by no means meant to mislead you about trademarks. We are NOT saying Standard Tactics doesn’t own a variety of names in a variety of different contexts, but disagreed with your characterization. Go Daddy treats all parked pages in the same way. If the trademark holder contacts DBP, asking us to remove…we remove it.
Standard Tactics Today
It’s clear that GoDaddy has taken a number of steps, including setting up a subsidiary in a different state, to cover its tracks warehousing domain names. GoDaddy has over 30 million domains registered, and a quick look at TDNAM shows a number of high traffic domains being auctioned off every day. One source said the company receives millions of hits a week on its Standard Tactics domains.
Ede calls Standard Tactics a “research” subsidiary:
For a number of years, traffic aggregation, monetization and advertising has become an increasingly prevalent aspect of the domain name industry.
As the world’s largest registrar, we felt it was important for us to understand trends and developments in this industry. As a result, we created Standard Tactics as a research group.
All names in Standard Tactics are presented to the public for purchase in TDNAM. We do not withhold these names from TDNAM. There are relatively few names with Standard Tactics and there is randomness built in to the process in order to provide sample types representing all domain characteristics. By comparison, domain aggregators have 100’s of 1000’s of domain names.
This is an interesting response given the multitude of evidence that Standard Tactics acquires domains that don’t sell on TDNAM, including the statement in the above mentioned UDRP that Standard Tactics acquires domains in “bulk backorders”. Whether Standard Tactics technically acquires the domains before or after the auction is irrelevant, although expired domains are in a grace period until after the auction and should not be transferred to a new owner.
Furthermore, Standard Tactic’s web page states that the company buys and sells domain names, that it may own trademarks as a result of bulk purchases, and refers interested buyers to TDNAM.
A phone number for Standard Tactics, found on the whois record for a .us domain name owned by the company (.us domains cannot use whois privacy), has a New Mexico phone number. A Call to the number is answered by a recording that asks you to wait for a representative, and then sends you straight to voicemail. A fax number on the same record is in the Phoenix/Scottsdale area.
Getting former GoDaddy employees to talk about Standard Tactics is a challenge. I contacted former employees who were happy to talk about GoDaddy in general. When I brought up Standard Tactics, a common response was for a brief pause followed by, “I can’t talk about that”.
Perhaps Standard Tactics answers another question: why Bob Parsons is so adamant that customers need whois privacy.
[This story was edited at 2:18 PM CDT on Wednesday, 12/3/08 to include Ede's response to denying that the company owns trademark and pharmaceutical names.]
Tags: domain warehousing, Expired Domains, GoDaddy, standard tactics llc, the go daddy group
Man…..it just gets grosser.
Is everyone a slime ball in the services industry for domains now?
I guess regulation will come since no company can be expected to have morals and integrity anymore.
Very nice work and good info there.
I am quite surprised to see GD doing this.
Thank you for sharing.
Amazing investigation - thanks for doing this!
I hope that Domainers roast Goaddy the way that they did Tucows - at least Tucows was honest and upfront about everything they did.
Great article
Wow!
Outstanding post Andrew! I guess people will figure out my “trick” that I posted about faster then I thought. I wanted people to see it for themself.
This post is going to blow up like a fire storm! Just another reason to be sure to read DNW.com daily!
Jamie Zoch
I have heard that Go Daddy owns hundreds of thousands of domain names. I would call this strategic “cherry-picking” since they have insider information about the value of a domain.
What does Adam Dicker have to say about this unethical business practice?
I think Go Daddy already responded Gerald.
Steve
I don’t see anything wrong with Go Daddy selling off expired names on their auction system that was setup for expired names.
Maybe I am missing something.
Pete
I believe you guys named GoDaddy as best registrar. After reading a few of your recent articles would you still make the same decision?
@ Gerard - this all came about before Dicker joined GoDaddy
@ Peter - has more to do with a) how they tried to cover it up and b) that they own trademark domains
@ Chef Patrick - If by “you guys” you mean DNW, then no. DNW has a reader poll each year, and GoDaddy is ranked highest in that.
great investigative journalism andrew!!!
Gotcha, makes sense Andrew. Even with some of the negative news recently I would still say that GoDaddy is my favorite registrar.
Love the blog, I would say that DNW and Elliots blog are my two of my top three. DNKitchen would be my favorite, I guess because it’s mine
Agree with the great Chef Patrick,
Godaddy is my registrar of choice but it is a good read.
Pete
I dont get it….They are offering the name for sale yet no one is buying then who cares what they do after it drops past the $5 mark…Maybe im reading this wrong
I’m not bothered that GoDaddy auctions off names, but grabbing trademark names that belong to other companies and hiding the ownership while raking in a cut for redirecting the traffic is STEALING STEALING STEALING. Parsons should go to jail.
Andrew,
Excellent reporting. This is one of your best investigative reports to date.
I believe we starting to see that most of the major registrars are slime.
I wonder how much is going on that we don’t realize.
Ah! Too bad.
DomainDetective.com is already regged.
@ DN Champ - they aren’t offering them for $5. They make the starting price higher for the domains that get a lot of traffic. If the starting bid is, say $300, and no one bids, then it keeps the domain.
But DomainerDetective.com is available!
@ Andrew…Awww ok..got it! so word to the wise…pay the BIN or never see it again!
Here are a couple examples (sorry for all the links Andrew.
http://www.travelterry.com/notice.html
http://whois.domaintools.com/g13.us
http://whois.domaintools.com/savour.us
Forget Go Daddy…Go Andrew!
Great job, buddy (60 minutes couldn’t do any better) … and; based on all the Scotsdale visitors rushing over to read your great investigative reporting; a big welcome & hello to all the visiting GD employees.
Any worthwhile additional inside info you’d like to share with the industry while you’re here?
Andrew won’t tell Robber Bob; promise.
Andrew
Great work.
Here is another way to look at it.
Say there is a domain like, dishnetwork.net
A clear trademark violation type name.
This is an expired domain and happens to be in auction at TDNAM as we speak.
And lets say the minimum price they put on the domain is $2,880 because the domain is being parked, has a lot of traffic and Godaddy is earning PPC revenue, from people looking for, and lets take a wild guess here, for say Dish Network info.
The domain shows over 4200 monthly visitors
Now if Godaddy sells the domain for $2,880, it is actually making money off of the trademark, because they are selling its anticipated earnings for a year (I was once told by a GD rep. that is how that number is derived).
If no one bids on the name, then they keep the name and they continue to make money off a trademarked domain.
If they didn’t have intentions of keeping the high traffic domains, there would be no purpose of having a higher minimum bid on any domain.
The situation is that GoDaddy does place a high value on high revenue domains, because if the domain doesn’t sell for the high minimum they keep the domain and continue to monetize it, trademark or no trademark.
Any way you look at it, Godaddy is making money off of the traffic from trademarked domains.
Wow, you are quite the investigative journalist. That was fantastic Andrew!
I’n not shocked or bothered by GoDaddy selling expired names. It seems like for some reason everyone is 100% ok with Snapnames doing this, but not anyone else? Its either the old days of drop catching, or let these companies do it for us, then everybody gets a fair shake at it in the auction.
I am however shocked and dismayed that GoDadday turns out to be such big fat hippocrits. They are against all these different categories of domains, yet they profit (probably huge profits) off of them? They were always against domain tasting too, I wonder if Andrew can prove they were tasting or Kiting names as well.
I think the best part of the whole thing is that they named this subsidary, “Standard Practices”. So is gross neglegence a standard practice at GoDaddy? Who is the mastermind that came up with that name?
BTW
DishNetwork.net has a bid at $2,880 so let’s watch this and see who winds up with it.
sorry, I meant “Standard Tactics” not “Practices” but same difference
Go Daddy aka Standard Tactics places backorders on domains that have high traffic on them. At this time, only one backorder is allowed on a domain, so Standard Tactics is now in position one.
The domain goes up for auction. If there is considerable traffic, TDNAM sets a high starting bid. No one bids against it . .. the domain goes to Standard Tactics at the backorder price.
Anyway you look at it, it’s wrong and unethical. AND Go Daddy has ALWAYS said they do NOT own domains.
Also, if the former owner appears, Standard Tactics sells the domain at a tidy profit.
Go Daddy runs scripts to ferret out the high traffic expiring domains.
Do you remember when Go Daddy’s aftermarket came under fire for taking part in auctions . . . isn’t this much worse?
[...] bien, hoy me entero también a través de DotWeekly, que Domain Name Wire despeja la incógnita dejada por Jamie en su post, sobre esos misteriosos dominios que no son [...]
So it turns out GoDaddy was hating on tasters because they were just jealous they didn’t think of it first…
If anyone is having a hard time understanding the news that Andrew has so eloquently reported, refer back to Michael Berkens comment#23.
The ultimate question that I’m left with is: What organization is making an active effort to put a stop to this unfair practice? This has been going on for quite some time. Wealth has been transferred. TRAFFIC is still being held hostage.
Great work Andrew.
good dig andrew. . . There goes your godaddy christmas discount !
Uh oh, the cat is out of the bag. I think it’s about to hit the fan. Lol.
As far as this statement goes…
“There are relatively few names with Standard Tactics”
This is not true. The standard tactics account contains tens of thousands of domain names in it. Just look at http://whois.domaintools.com/g13.us, this shows that admin@standardtactics.com is associated with 538 domains. The admin@standardtactics.com email address is only attached to domains that are not able to have privacy which happens to be .us domains. This means that they have at least 538 .us domain names. Just imagine how many .com’s they own. Lol.
Great story. Just gave it a stumble and a digg. This story only has 3 diggs. 30 comments so far should = 30 diggs! Thanks for your work.
Are you sure that GD is making ALL dropping names available on TDNAM to begin with? I highly doubt it. you can’t tell me that if a name is above a certain value threshold they just don’t transfer it to their ST account right away.
@ BK - Although it’s possible, I’ve got nothing to suggest it does. When you think about it, by changing the starting price the company is basically saying how much they want for the domain. If someone will pay it, they sell. If no one will pay it they hold onto it.
@ JK - notice how GoDaddy said aggregators own “100s of 1000s of domains”. So if GoDaddy has under 199,999 domains, it’s covered by that statement.
I used to work fro Godaddy and can tell you all you want to know..
Many supervisors would buy domains that customers would not pay the $ 80.00 to redeem and then laugh when they got it
Talk about stealing a Domain away from their own customers..
listen 2 a real horror story
http://marc.perkel.com/audio/godaddy.mp3
http://marc.perkel.com/audio/godaddy2.mp3
http://www.nodaddy.com
Andrew,
Congrats on the thorough research. This is a very interesting angle but I think I am going to defend GoDaddy a bit on this. I have no stake in GoDaddy other than that I have been a Wild West Domains reseller since they first offered the program many years ago.
I will say I HATE their 60 day hold for all whois info changes and their email customer service is not very knowledgeable but on balance I have been happy with GD and WWD.
I regularly let maybe 5 to 20 domains drop each month and since I tend to focus on similar keywords, I see my own domains get listed in TDNAM. First for $10 and then for $5 and then, for the few times I have checked, they were available for hand reg again.
Now if you are saying that they are trying to circumvent ICANN restrictions, that would be very bad. If they are not doing anything illegal or against ICANN policy then the real problem is with ICANN, not GoDaddy.
So, I’m probably in the minority here but GD and WWD work for me.
I’ll look forward to the fallout out from the story.
Rob - I think you hit the nail on the head. This is the problem: there is no true ICANN policy either way on this. They are the ones that need to step in and put an end to this obvious insider trading.
I agree, the problem lies in policy & ICANN. Although this is some shiesty activity, it is up to code right? Still the thing that makes this so bad IMHO is GoDaddy’s inability to practice the good politics they preach, and in large volume. I’ll say it again I would just love for someone to prove they’ve been tasting/kiting registrations.
Bottom line BK is right, registrars registering names should be handled just like inside trades.
GD are definitely some smart folks. They became the cheapest registrar for .com a long time ago (in general). They got more registrations than anyone at the expense of small margins, but the data and opportunities that it got them in return have been invaluable. When I didn’t know better, before I was a domainer, I thought that domain registrations must have been a loss leader for them.
Rob, it’s like saying that since it’s not against the law to lie, it’s OK to do it?
Until laws against lying are established, should it be legal to tell lies? The evidence in this case reeks of foul play but who’s going to do anything about it?
This is just another reason that ICANN needs to be held accountable for it’s lack of registrar oversight. But whose going to hold them accountable? Can we actually think of ICANN as the equivalent to the SEC of domaining? I think not.
Screw being a domainer, I’m opening my own registrar =)
@ Rob Sequin - I always appreciate your comments as you look at things from both sides.
From what I can tell, there’s nothing “illegal” about what GD is doing. And it doesn’t violate ICANN policy.
So the question is, was it ethical? If so, why would GD go through all of this trouble to cover up its activities?
Now, as for owning trademark domain names, that of course is “against the law”, in so much as there’s a federal law against it punishable in as a civil matter up to $100k. And it seems hypocritical that the company owned pharma names.
*
Fascinating research, Andrew.
If reselling domains is not against ICANN policy, then why is GoDaddy going to such great lengths to shield their activities?
If registrars aren’t careful about cybersquatting, they WILL end up in court, especially when it becomes apparent that they do have the tools to ferret out TM’s and TM typos and make “reasonable” attempts to avoid them.
*
[...] The Go Daddy Group jumps through to keep its shady tactics outside of the public view, resulting in this great blog post. Turns out The Go Daddy Group, which runs the world’s largest domain name registrar GoDaddy.com [...]
[...] The Go Daddy Group jumps through to keep its shady tactics outside of the public view, resulting in this great blog post. Turns out The Go Daddy Group, which runs the world’s largest domain name registrar GoDaddy.com [...]
[...] Go check out the big writeup here. [...]
[...] Domain Name WireのAndrew Allemannは、The Go Daddy Groupがそのいかがわしいやり方を隠すために使った手口を研究し、優れた研究報告をこの素晴らしいブログ記事にまとめた。世界最大のドメインネーム登録業者であるGoDaddy.comや、そのほかのドメインネーム関連企業を経営するThe Go Daddy Groupは、どうやら顧客の失効ドメインネームを私蔵して、それを直接、利益に結びつけていたのだ。 [...]
[...] The Go Daddy Group jumps through to keep its shady tactics outside of the public view, resulting in this great blog post. Turns out The Go Daddy Group, which runs the world’s largest domain name registrar GoDaddy.com [...]
I’d like to know, Andrew, who gets the money from those auctions most of the time?
I’m completely new to your site and, despite being a long-time developer, haven’t really delved too much into the whole domain name business - although I’m always enormously irritated when I find squatters on any good domain name ideas I have.
I recently noticed sc.com went for several hundred thousand dollars. My question is, who is the beneficiary of that money? If it’s GoDaddy - even without any of the underhand (and they ARE underhand) tactics discussed in your excellent article - how can that possibly be justified?
I can only assume the registrar IS the one making the money since those being auctioned are (almost?) always expired domains, which would mean the previous owner no longer has a claim over it.
Given that GoDaddy sets minimum starting prices on domains up for auction, which is determined by the traffic - possibly amongst other things - it can only be described as insider trading.
And, if GoDaddy is indeed receiving the profits from the auctions, the only logical explanation for WHY they receive the money is that they OWN the domain - how can you possibly sell something that isn’t yours to sell?
Even IF they didn’t set minimum auction prices, how can they justify making ALL the money from an auction of something they don’t own? When someone sells something on eBay, eBay takes a small cut of the sale price, not the whole sale price - they don’t own the item so they’re not the one that gets the money for it.
If NO ONE owns the domain, the only scenario that works (other than first come, first served) is an auction where GoDaddy takes a set fee for hosting the auction and the money goes to, well, somewhere else. To charity or something.
GoDaddy cannot claim they own no domains if they are making money from selling domains that is not a simple commission. In every transaction, there must be a buyer and a seller. We know the buyer but who is the seller if it’s not GoDaddy? And if GoDaddy IS the seller, that can only mean they own the domain.
Assuming, of course, GoDaddy the money from the auction goes into GoDaddy’s coffers.
[...] The Go Daddy Group jumps through to keep its shady tactics outside of the public view, resulting in this great blog post. Turns out The Go Daddy Group, which runs the world’s largest domain name registrar GoDaddy.com [...]
Very impressive research and reporting here on domain name wire. Another interesting and informative story…
PERFECT
I vote Andrew as the best investigative journalist in the domain industry with this article. I pointed the finger at Godaddy months ago, but I didn’t have the time to get the damning information that Andrew found in this article. It’s a
“Nobel Domainer Prize” winner.
For those who still, amazingly, believe in GoDaddy (maybe Danica is the selling point for them), I advise them to read the writing on the wall, as this Domainnamewire wall.
Let’s start hearing some recommendations for a “replacement” registrar for domain noobies who actually think Godaddy is right for their “domain investments”.
EXCELLENT JOB, ANDREW!
ICANN is the root of a lot of problems. We have stated many times that ICANN refuses to protect the rights of current lease holders.
This is a blatant neglect of fiduciary rights of all current lease holders. The truth of the matter is registrars will sell you a lease ,but they accept no fiduciary responsibility that you will keep the lease till expiration. This is why in all the hyjacking of leases by Kentucky-and contless others ICANN has been completely SILENT, as if lease holders have no rights. Is this a problem? As Sarah Palin says ” You BETCHA “
Oh Please - more GoDaddy bashing…
I use many different regsitrars and they all have somewhat questionable practices in one area or another, but this story is a bit over the top.
You’re mixing issues of the practice of keeping domians that have expired and not been purchased in auction. So what? They ALL do this in one way or another.
And the issue of a sub-subsidary holding some obscure pharmacuetical domain names.
Give us a break. Who cares? If they are breaking copyright law and the owner wants the name, they can get it the same way anone else would.
Good job on getting a stir going though. People love to bash GoDaddy. A side effect of being #1 I guess. Jealousy always involved there.
Or maybe it is just all Danicas fault
In post #44, Andrew raises the most important points.
Even though GD is not violating Icann’s rules, they are still being unethical.
Do you really want to trust your valuable (money making) domains with a registrar that is just waiting to confiscate them for themselves?
Logically, they will offer the best transfer price for .com’s because they want the domains under their control when you don’t renew them in the future.
The few pennies they make from transfered in domains will pay them back hundreds or thousands of dollars in the future.
And, in the meantime, you are paying them to safeguard your domains.
Plus, what a great tool for them to decide which domains to keep for themselves by tasting the domains for the few weeks following the renewal date.
Moreover, by them tasting the domains right after the expiration date, do you really think they care if AppleMarketing is pointed towards Apple links? Or, IBMovies is pointed towards IBM links?
If Apple files an UDRP the week after the expiration date, is the domain owner guilty of TM infringements? Will Godaddy charge their typical UDRP fee against the domain owner? $29 ??
I see some simularities between Godaddy’s business practices and Gov. Eliot Spitzer’s conduct.
On the surface, they both project they are against illegal and unethical activities.
But, behind closed doors, they are breaking the law. Plus, betraying the people closest to them.
Godaddy is just waiting to take all of the sheep to slaughter for their economic gain.
I think this story will send me to TDNAm to buy some of the domains that are priced higher because they earn more.
This story is all about bashing Godaddy. It’s always the same 25-50 people that jump on and bash Godaddy whenever possible.
A true domainer would take this story and see that maybe they should pay more attention to TDNAM and buy names off there since the pricing is clearly an indication of value based on Andrew’s article.
The the domain whiners whine about godaddy. let the domainers learn and see if there are some good bargains there.
Good article Andrew.
Pete
Andrew
Tech Crunch has now picked up the story
Congrats
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/04/AR2008120400170.html
I did not read it as bashing, just telling an interesting story of GoDaddy corporate structure, operations, and public relations. Objective, professional - great writing, Andrew. Keep it up.
I’m still an admirer of Bob’s work but his duplicitous crusade against tasting while he practiced something only subtly different disappointed me.
@ 51 Paul - in the case of SC.com, the person who sold the domain got the money. Expired domain auctions are different. In the case where a registrar has an exclusive drop agreement with an auction company, the money goes to the registrar at which the domain was expired minus a cut to the auction company. In the case of GoDaddy, it uses its own auction house so it gets to keep all of the money.
Thanks for your reply, Andrew.
Based on what you’ve said, then, it seems apparent that GoDaddy MUST become the owner of the domain once it has expired, else there can be no justification at all for selling expired domains at different prices, based entirely on perceived (GoDaddy-calculated) value.
As a developer, it would be like me saying to someone, “Well, I would normally charge $x for that piece of work but, because I think it’s something that’ll make you money, I’m going to put my prices up.”
In ANY arena, such a practice would be looked upon very unfavourably. And you know what would happen if I said that to them - they’d tell me to go take a running jump and give someone else the work.
Also, if a domain’s listed on GoDaddy’s auction site, I’m assuming it cannot be registered through another registrar - say, 1and1.com. That, too, implies ownership of the domain rests with GoDaddy.
@ Paul - when a domain expires there is a grace period in which the registrar doesn’t really own the domain but controls it. So when it expires and GoDaddy lists it on TDNAM, it may not technically be the owner of it. From what I understand, the domain is only transferred to its subsidiary if it doesn’t get a bid at auction.
Ah, I think we’re talking semantics now and we probably both have the same dislike of the terminology.
The registrar says it doesn’t OWN the domain but CONTROLS it, which is tantamount to the same thing when the result is that they realise any and all payment for it.
When someone dies, a solicitor CONTROLS someone’s estate but that doesn’t mean they get anything more from it than their standard solicitor fees.
@Paul
Ok, here is how I believe it works:
When a domain name expires it isn’t actually (technically) over yet. Upon expiration it enters into a grace period (someone help me with the technical jargon, but it think its called RGP, or Renewal Grace Period). I believe after this it goes to a RHP (renewal Hold Period).
So I believe the deal is once a domain expires, the registrar has the right to take possesion of it, and then the domain is subject to each registrar’s individual policies.
Some registrars will take your domain the second it expires, and if you call and complain within the RGP they will allow you to re-activate it, but for a harsh penalty. Other registrars will allow you to reactivate for just about no penalty. Some registrars won’t take the domain the second it expires, but leave it in your account a little bit longer, and put it in bold letters “STATUS = EXPIRED, RENEW NOW”, or something like that. These are the nice registrars.
Now I don’t think the domain can be transfered to another users account (other than an account owned by the registrar) during the RGP, or RHP, but I wonder if the registrar trys to sell it for a high price during these periods, and then if it sold, the registrar immediately re-purchases the domain themselves at the end of the RGP/RHP, and then just flips it over to the person that bought it at auction. When you win an expired domain at GoDaddy it does warn you that even though you won, its not official until 5 more days of the registrant failing to renew.
Definitely a system of questionable ethics but ok as to the letter of ICANN’s policy. If the registrar was truly a saint they would give you access to the domain until the very end of the RGP (and some do I think).
What it sounds like to me (again if I’m off on this or terms, someone please correct me) is that GoDaddy starts tracking the performance of the domain the second it enters RGP (its like free tasting!). When it gets to the last week of RGP they start the auction. The auction ends just as the RHP begins. As soon as the RHP ends, if you won the auction then GoDaddy buys the domain themselves, then transfers it to your GoDaddy account.
But in the end of all this, the answer to your question is: yes the registrar gets to keep all the money from the sale, because they did have their flag stuck in it when they sold it.
BTW, I hear that some registrars give the expired registrant a cut of the proceeds in the even this happens. I don’t believe GoDaddy does though.