Analysis of Go Daddy’s Standard Tactics subsidiary.
UPDATE 12/17/08: GoDaddy is shutting down Standard Tactics.
It’s been five days since Domain Name Wire published its expose on The Go Daddy Group’s subsidiary Standard Tactics LLC. Judging from the over 100 comments, it appears to have struck a nerve in a lot of people. Interestingly, I received some feedback that people “disagreed” with my story. This is interesting because there really aren’t any opinions in the story. It just gives the facts about Standard Tactics, LLC. Some people read it as I’m against domain warehousing by registrars. I’m not fully against domain warehousing but I think it needs some sort of regulation.
But now it’s time to give my thoughts on what GoDaddy is doing through its Standard Tactics subsidiary.
1. GoDaddy: The pot calling the kettle black
No one likes a hypocrite. And GoDaddy certainly is one.
Its CEO Bob Parsons has publicly railed against other companies that used loopholes and sneaky tactics in the domain industry.
He complained about not getting enough domains in the .eu landrush and said other registrars formed many shell registrars to capture the domains.
He complained about domain tasting and kiting and how it was hurting his business, even though it was “allowed” under ICANN’s rules.
Add to that how GoDaddy sings its praises about protecting the world from illegal online pharmacies, and you have a tough time reconciling the news that Standard Tactics owns (or has owned) trademarked drug names.
So GoDaddy found its own sneaky way to profit off domain names, including a loophole in ICANN rules that doesn’t expressly prohibit domain warehousing, and went for it. Perhaps Parsons was only upset about .eu and domain tasting because he didn’t think of them first.
2. GoDaddy is still bidding against its customers
People were rather upset when news emerged that GoDaddy’s VP of aftermarket Adam Dicker was bidding against his own customers on TDNAM. Shouldn’t these people be just as upset about Standard Tactics? After all, Standard Tactics is essentially doing the same thing Dicker did. It’s just a little more transparent.
If a domain gets lots of traffic GoDaddy may put it on auction with a starting bid of $300. This means GoDaddy (through Standard Tactics) has effectively bid $295 or so for the domain. If you’re the only bidder and win at $300, you’ve bid just above Standard Tactics. If you bid $290 (which is technically impossible) then you’ve been beaten by Standard Tactics and it “buys” the domain. So your bidding against the house, which is only handicapped by having the place one bid and place it first.
3. GoDaddy is perpetuating the negative image of domain owners amongst trademark holders
The domain industry has a black mark on its record and a public image problem because of cybersquatting and typosquatting. GoDaddy isn’t helping. Standard Tactics owns trademarked domain names. We don’t know how many, but based on existing UDRP filings and domains that have closed on TDNAM, you can bet it’s substantial. Names like GetGenericAmbien.com and JunoDSL.com are clear trademark violations. By owning these domains (until they were served arbitration papers) GoDaddy is perpetuating the problem.
4. GoDaddy Hid its Activities
This is the part that should be most concerning. GoDaddy took many steps to hide the existence and activities of Standard Tactics. Why? Surely if GoDaddy thought it was ethical and above the board it wouldn’t have gone through the hassle. What else is the company hiding?