Security company claims GoDaddy didn’t pay what it owes.
Website security company SiteLock has sued domain name registrar and hosting company GoDaddy (NYSE: GDDY) for breach of contract and trademark claims.
The two companies signed a reseller agreement in 2013 under which GoDaddy could sell SiteLock’s website security services. SiteLock charged per subscription and GoDaddy could mark up the price however much it wanted so long as it met a minimum retail price. For example, SiteLock charged GoDaddy $5 per customer for a basic annual site scan service. GoDaddy could sell it for $12 or more per year and keep the difference.
SiteLock claims that GoDaddy only paid it when a customer paid for and activated the service but did not pay if a customer paid for the service but did not activate it. It argues that GoDaddy should have paid even when a customer failed to activate the service. It also alleges that GoDaddy did not provide required reporting in an effort to obscure this.
The relationship soured further after GoDaddy bought SiteLock competitor Sucuri in 2017. GoDaddy transitioned customers to Securi and forwarded pages on its site that used to be for SiteLock products to pages promoting Securi. According to the lawsuit, links on GoDaddy for people to sign up for SiteLock instead forwarded to pages about Securi.
SiteLock is owned by Abry Partners, the same private equity company that owns top level domain company Donuts.
The full lawsuit is here.
The direction for the service category that SiteLock is in is that the price point is collapsing as the true production cost for providing this functionality is approaching zero.
With the acquisition of BitMitigate.com earlier this month, Epik is now giving pro domainers the ability to get this service for free with their domain name. That is described at NamePros here:
https://www.namepros.com/threads/free-ssl-cdn-ddos-mitigation-for-namepro-members.1134877
Retail customers still pay for this product, and we market that as a Resilient domain name which is described here:
https://www.epik.com/resilient/
However, SiteLock sold at the right time. The service is extremely important and for a time was also extremely lucrative before CloudFlare decided to Blitzscale the market.
Within a very short time, all domains will come standard with SSL, CDN, DDoS mitigation, etc. Why? Because the cost to provide this service is approaching zero. If it can be free, it will be free.
Of course some retail customers will keep paying for these products and that is wonderful for funding development and support. However for pro domainers with large portfolios, it has to be free or near-free for it to scale.
The product can also be white labeled. I think for registrars and hosts, it is absolutely wise to offer products like this since the value proposition is very good, e.g. 10X reduction in average page load times.
Wasn’t SiteLock owned by EIG?
I’ve had an “interesting” experience with HostGator, which were trying to scam me into signing up for SiteLock.
HostGator (also owned by EIG) used a fake malware alert to disable all my domains and were very aggressively pushing me to SiteLock. Apparently they were getting high referral commissions.
Eventually I moved away from HostGator and have been advising against any hosting provider that was partnered with or advertising SiteLock.
After writing about it on the blog, my article has been viewed tens of thousands of times and have gotten hundreds of comments from people going through exactly the same scam.
Meanwhile SiteLock press releases were boasting about their amazing growth thanks to “strategic partnerships”.
No, Sitelock was never owned by EIG. They simply partnered together.
Dumitru, I had the exact same experience with Bluehost. Why? They’re both owned by AIG and AIG has an arrangement with Sitelock. Sitelock’s practices should be illegal. They hold your site hostage and if you don’t buy their services, you get more veiled threats and malware. This amounts to extortion. Google “Bluehost Sitelock Scam” for more. Read the Better Business Bureau complaints about Sitelock.