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?
Maybe the next Godaddy Super Bowl ad should be something like…
“Come buy a domain from us! When you forget to renew it next year, we get another domain for free!”
In the background you can have some worthless washed up athlete dancing in the background with a bunch of other Godaddy suckers. Maybe Dennis Rodmann is available.
Someone email this to Bob! 🙂
How can I trust Godaddy with all my names when they do this type of stuff. CEO Bob Parsons should know better, shame on you.
Stephen Douglas says
Andrew is my hero.
I added a 2 links to Wikipedia’s cybersquatting wiki a few days ago for the DNOA and ICA.
We’re all going to have to do what small things we can to show we’re not all like these large idiot corporations.
Rob Sequin says
1. How much revenue does GoDaddy get off of this practice? If it is a minimal percentage of annual revenue then we should weigh this in context of the entire business.
2. I do not like the fact that TDNAM starts domains with traffic at higher dollar amounts. I was watching two domains priced at $160 and $670. The auction ended and the domains disappeared from TDNAM. THAT does seem unethical.
If they want to keep domains that they put out to the public for $10 and then $5, I don’t have a problem with that but jacking up the price just so they can keep a domain is wrong.
3. They need to clean out their TM domains but that’s more of a compliance issue than a business practice. By default registrars are going to deal in TM domains. I’m sure Godaddy and other registrars release TM domains as soon as it is brought to their attention, otherwise it is probably on the “to do” list. I would imagine it is VERY time consuming to filter out all the TM domains.
4. Andrew, you certainly have a great read on GoDaddy now so I will defer to you on your opinion of GoDaddy but overall I don’t mind saying publicly that I like GoDaddy (I have been a Wild West Domains reseller since they first started the program many years ago.)
As I mentioned over at TheDomains.com in the comments section about GoDaddy buying superbowl ads and celebrating with a huge year end party, good for them.
We should be VERY happy that GoDaddy is publicly celebrating a great year AND buying Superbowl ads.
They represent the domain industry and they are a great registrar overall. I have had hundreds of domains at dozens of registrars from drop catching and ALWAYS move them to WWD.
Let’s try to focus on the postive aspects of our industry folks. Many people have many reasons to be pissed off at their industries. We should be proud of ours and look for the positive.
Go Daddy Employee of the Year says
Go Daddy earns in excess of $250,000 a month on Standard Tactics domains. That may be down now due to current PPC payouts.
If Go Daddy felt what they were doing was okay, why didn’t they tell their VP of Aftermarket Adam Dicker about it? He was kept in the dark about Standard Tactics but he is the one who was pushing for increased TDNAM starting bids.
Little did Adam know that if the domain didn’t sell it went to Standard Tactics! So Go Daddy won either way, except Adam did not get to benefit from the sale if the domain went to Standard Tactics. Go Daddy had a sweet deal and they did not want to share the spoils with Adam.
Another ex-Employee says
“”I’m sure Godaddy and other registrars release TM domains as soon as it is brought to their attention, otherwise it is probably on the “to do” list. I would imagine it is VERY time consuming to filter out all the TM domains.””
Go Daddy can use Fabulous’s TM filter like they use for Premium domains for sale.
OR . . . Go Daddy has an entire TM database that filters TM keywords on parked domains.
Believe me, Go Daddy has all the tools they need to do an “above the board” job. The business model is to be reactive and NEVER proactive. In other words, why upset a profitable apple cart if you don’t have to?