Having working in the domain name industry myself for a couple of years, I’ve always been intrigued by the fact that there’s such a big business formed around something as trivial as a bunch of letters and numbers used to ‘translate’ IP addresses. And when there’s a big business in something, you just know there will be a grey area as well where ethics are left at the door sometimes.
Andrew Allemann over at Domain Name Wire has been doing an excellent job researching the hoops 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 as well as some other domain name related companies, is apparently warehousing its customers’ expired domain names and directly profiting from them.
Warehousing and auctioning off expired domain names is not necessarily against ICANN (the governing body over domain name registration) regulations and actually quite a common practice among larger registrars, but the story only gets interesting when you take a look at what goes on behind the transparent part of it. When a valuable expired domain doesn’t sell through an auction on The Domain Name Aftermarket (aka TDNAM, GoDaddy’s auction platform), The Go Daddy Group changes the ownership of the domain to one of its lesser known subsidiaries, Standard Tactics LLC, using Domains By Proxy’s whois privacy service to hide its identity. Next thing you know, that company will start monetizing the domain names using parked domain pages filled with ads and list the domains for resale on TDNAM.
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.
In fact, Standard Tactics LLC is a subsidiary of Special Domain Services Inc, which is a subsidiary of GoDaddy Inc, which is a subsidiary of The Go Daddy Group. See a pattern here? The only reason why we even know this is because the information got out when GoDaddy attempted to file for an IPO in 2006 (it eventually withdrew the filing).
So why is Go Daddy going through such lengths to keep the public from knowing about its aftermarket operations, when it’s not even against ICANN regulations? Paragraph 3.7.9 of the agreement between ICANN and Registrars says:
“Registrars shall abide by any ICANN adopted specifications or policies prohibiting or restricting warehousing of or speculation in domain names by registrars.”
Only problem is ICANN hasn’t yet adopted specifications or policies prohibiting or restricting warehousing, leaving registrars in a unique position to impact domain name pricing top-down by introducing competitive bidding or auctions for expired domain names.
It’s really no wonder GoDaddy is trying to cover its tracks and hide these practices, but thanks to Andrew the word is now out.
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So it’s not against policy now but might possibly be against policy in the future, IF ICANN deem it necessary to do so? So if that’s the case, Godaddy is hiding this practice in attempts to keep things under cover and out of ICANN view?
Only thing is, Godaddy would bring in a hell of a lot of money for ICANN - I doubt they would challenge Godaddy on this. Perhaps there is more to the story.
All I can say is the whole domain warehousing activity after expiration seems shady, against policy or not.
Yup, during a domain transfer gone wrong once, a domain name that was registered with GoDaddy was accidentally allowed to expire.
GoDaddy put a 30-day lock on the domain and placed ads all over every conceivable space, including pop-ups that my computer detected as malevolent.
Spread the word, GoDaddy is a predatory company whose behavior transcends the boundaries of ethical acceptability.
Domainers around the world are a shady bunch. Always were, always will be. As long as they dont steal your domain (had that done, net.cn stole my startup), count yourself lucky.
To make it worse… Google & Yahoo are serving ads on these parked pages.
If a GoDaddy-registered domain has expired, why shouldn’t GoDaddy have first dibs on it? If they shouldn’t, who should? If you wanted it, why’d you let it expire? If it was your mistake, don’t do it again! If it was their mistake, contact them and they will (should) fix it (if it was truly their mistake, not your credit card companies mistake or anyone else’s).
Regarding any value they can extract from a previously owned domain they acquire: Just because they might be able to get value out of something the previous owner couldn’t, it doesn’t mean they did anything wrong (maybe they did, but getting value is not evidence of it).
It’s like the bank getting a house because the previous owner let it expire (didn’t make the payments so it went into foreclosure). If the bank shouldn’t get dibs, who should? And why shouldn’t they try to get as much value as possible out of it. How/why in the world could the previous owner cry about that all that?
It all sounds very childish to me, but maybe there’s more to the story. If there is, it wasn’t explained in this article.
Chris, read the article again. I’m not stating GoDaddy shouldn’t be allowed to profit from expired domains, but it should be regulated. Don’t forget domain registrars should be there to help individuals and businesses promote and protect their identity online, not do all it can to prevent it.
Ask yourself why GoDaddy jumps through so many hoops trying to hide what they’re doing behind the scenes, because that’s what’s explained in the article. If they believe they’re not doing anything unethical, then why bother?
I hear ya. And I agree 100%. Just want to make sure legit things don’t get mixed in with illegit. Cheers!
I dunno if setting up several business names necessarily indicates unethical behavior. That’s not a card I would try to play in a debate about whether or not the behavior is ethical. “It must be unethical! Look, they created a new LLC to do it!” Perhaps, but not necessarily so.
This warehousing does bug me, though. You used to have to worry about other private parties snapping up your domain if you weren’t careful. Now the registrars, who have unfettered access to information about countless domains, are in the game too? Watch out. Far from the simple registration desks they used to be, and beyond the marketplaces they became years ago, now they’re ransoming lapsed domains themselves? That doesn’t seem right.
I don’t know how unethical it really is and ICANN is clearly asleep at the switch. But it feels much like the NYSE board of directors banding together to start a hedge fund or something of that ilk. Anyone with inside access to information about a certain marketplace should be subject to regulation that prevents them from leveraging it. That keeps markets healthy. The domain name market is already held hostage by a secondary market of scalpers. Seeing the registrars getting into the game is not a good sign.
The bank analogy is ill-conceived and wrong. It would suggest that at some point GoDaddy either owned the domain name first and sold it to the client, or that they lent the client the money to buy the domain.
If you replace Bank with Estate Agent in the analogy then you’d be nearer the truth. So, what right does an Estate Agent have to take ownership of a property they never bought?
A “godaddy registered domain” does not belong to godaddy. Once it expires, it belongs to no one. Registrars have no right to profit from a domain whose paid registration term has expired. Domains should return to unregistered status, as if never registered. Then the process starts all over again for that domain.
CONFLICT OF INTEREST: Registrars should be banned from auctioning expired domains. Same with Backordering active domains. You simply can not auction off, backorder, or rent out something you don’t own. Period. End of story.
How come I don’t see the facebook peeps posting on techcrunch beside the first facebook connect article?
Beside this, GoDaddy sux. They got bad service and always trying to milk u for every dime.
Because people don’t want to be linking to their Facebook profile all over the web.
ditto, what Neil said
GoDaddyLocator.com
PS: Domain Tasting (http://en.wikipedia.org/wiki/Domain_tasting), now that’s abusing the system.
@Chrisco said
…If the bank shouldn’t get dibs, who should?
Answer; they are not in that line of business.
What a shame. Just when I thought GoDaddy was legit in al already shady Domain business they get exposed.
Add them to the unethical scumbag list.
OMG - this reeks of preparedness and capitalism….and the lack of full disclosure implies shady tactics! Quick, an all-out inquiry is needed, stat!
GoDaddy offers a better than average service at a competitive price (granted, I’m waiting for them to make the privacy option ‘Domains By Proxy’ free already).
While I’ll admit it appears somewhat suspect to passers by, the fact that a company can afford a legal team and makes use of ‘entity structuring’ just makes good business sense to me.
Yes, I’m pissed. I called them yesterday morning about my barely expired domain name. Normally they’d give you a month grace period, just in case after expiration. I have other expired names that were expired on the same date as this one, yet Godaddy specifically took the one that one and prevented me from renewing it. Yet, I can renew the others that were expired on the same day! Bastards.
I think it depends on TLD (top level domain). If I’m not mistaken .com, .net, .org TLD’s have a one month grace period while others may or may not.
What was the TLD?
it was a .com 3xnetwork.com.
Thanks for this post. I currently have some 200+ domains with GoDaddy which I was considering moving away from them as a result of the price increase.
I would have to say this will push me to finally move them over to another registrar.
Only people that still have domains at go daddy are people who bought them because of their stupid Superbowl commercials (no offense mahalo).
There was backslash on them from web hosting community few years ago, and I’m very surprised anyone who is tech savvy would host with them. They turned into scum of domain registrations around 2000.
Move your domains from them if you still have them there. I would personally go with http://www.namecheap.com.
The only registrar I know (among the world top registrars) that is not doing these “off limits things” is Gandi.net.
Welcome in our world
This is not limited to GoDaddy. Network Solutions has also been cited for doing this a number of times (as well as others). Just Google “network solutions hoarding domains” and you’ll find tons of info about them.
Unfortunately this is all too common a practice among registrars.
“Standard Tactics, LLC” is a brilliant name for a somewhat shady company. I know what I want to name my hitman agency now.
I am a domainer holding hundreds and i use software to find the most valuable but i will tell you something,there is no way an experienced domainer would mis a valuable domain the ones they are holding are junk but maybe a couple of hundred uniques they can profit from over a period……..but to me and other domainers probably not worth the reg fee but to godaddy it costs nothing so a few thousand of them generating a dollar or two a month adds up to a lot of cash but i do dispute that they hold valuable domains what have not sold in auction as that would be ne impossible with all the software scanning software available these days.
This is actually fairly common, and yes, a very insidious practice. Ultimately, it’s ICANN’s responsibility to prevent this. There is no logical reason for the 45 day restricted period, nor is there any justification for the $100+ GoDaddy and others charge to renew a domain after this period has been entered. The first time this happened to me with GoDaddy I told them it was extortion and they responded that it was completely legal.
It’s almost as bad as what Yahoo Domains does…which is in a way the opposite, they attempt to lock you into auto-renewal by making it so that if you disable auto-renewal you can no longer manage the domain in the web ui, meaning you can’t change dns entries, transfer it, or renew it…making it essentially useless. And since they to have a restricted period you can’t expect to be able to re-register your domain immediately after it expires.
The bottom line is though, these domain holding companies and registrars are the bottom feeders of the internet economy, so it’s up to the regulatory bodies to keep them in check.
I got around the $80 that GoDaddy was charging me to renew a domain that expired and was in the 45 day restricted period.
I did a little hacking of the html page and was able to renew the domain. They called me up asking how I was able to register the domain when it was in the restricted period. I had their programmers scratching their heads. I wanted to tell them how I did it, but I was afraid they would take over all my domains.
Oh well.
Anon
Awesome. I love it.
And then a green pig flew across the purple sky eating a fish with five legs. :rolleyes: Yes my story is equally as valid and true as yours.
Heh, be fortunate they’re currently not holding you liable for that. *knock on wood*
Maybe there isn’t a so-called logical reason because people generally don’t understand, much more care, what happens behind the scenes?
Especially for .com, registrars are billed for autorenewing an expired domain name. They have that 45-day window to collect payment or tell the Registry (VeriSign for com/net, PIR for org, etc.) to delete it and be refunded, although I forgot the rationale behind 45 days instead of, say, 90.
The 30-day Redemption Grace Period was created to address “accidental” deletions, given it wasn’t rather “predictable” how soon an expired domain name will be released for availability. Registrars do get charged higher than their standard renewal fee for redeeming a domain name, and they can very well pass on that cost to its registrant.
Bottom line: if you don’t want any of that to happen, stay on top of your renewals.
On the side, the major issue this article discussed is it can potentially “leave out” other people from having a shot at the desired domain name. Well, I’d like to ask if some of you seek ways to gain a subjectively “unfair” advantage over the average person in other fields, just to get ahead?
Even if, say, ICANN eventually orders that registrars release their expired domain names to the standard Redemption Period-Pending Delete-availability stages, coupled with not actually so-called “warehousing” them (whatever that means), nothing is going to stop other parties with more resources than the average user from still having an arguably unfair advantage over them. I don’t know how exactly can one enact any kind of realistically enforceable law banning them from participating, especially since they can always go overseas.
Then again, how many really like to work out the devil in the details?
I have backordered a few domains from GoDaddy in the past, yet I have never secured one when they became available. They were always bought, privately registered, and turned into ad-serving parked domain pages (with a template that you see frequently, must be a large company).
So what if these domains went to one of these subsidiaries rather than a paying GoDaddy customer? That would take the shadiness to another level. Is there a way to find out who owns them since they are privately registered?
tell me about it. Once had a domain that expired and went into the lock down process. Instead of paying the 250 dollars the domain registrar ( name cheap ) asked to give it back to me, I chose to get snapnames to get it. Snapnames got the domain and then kept it themselves. The domain is still owned by snapnames even thus the rep told me they had sold it. Snapnames is soo shady.
Godaddy is shady, but you cant blame them for trying, after all it is just a “big business formed around something as trivial as a bunch of letters and numbers used to ‘translate’ IP addresses.”
Ill be moving my domains over now… Thanks for the advice.
I never knew.
It’s like 7 people controlling the planet and rest of the little impotent fuckers completely helpless to change one bit what goes around.
Kill or be killed. As Nike says - “Just do it.”
There are several issues here.
1. Go Daddy has always said they do not own domains.
2. Go Daddy owns pharma domain names, although they are lobbying against it.
3. Go Daddy owns TM domains, although they state that is not a good practice.
4. Go Daddy is using insider information to strategically cherry pick high traffic domains.
As a former employee I can tell you more horror stories on how the monitor domains for traffic and hits in order to make more money by competing with their own customers..
check out nodaddy.com
Ask and I will tell all
The top 20 registrars have been doing this for 4+ years. I do not know whey this is even news.
The fact that it’s common practice is mentionned in the post. None of the other registrars doing this are trying to cover up their operations. Did you read the article before complaining?
I always enjoy reading the articles on Andrew’s blog. Domain warehousing is an important issue that needs to be addressed. It might be okay legally, but I agree that there needs to be more regulation. Obviously, there is also a conflict of interest between registrars and their clients. Thanks for picking it up!
Warren Adelman did not tell Adam Dicker about Standard Tactics. He did not believe that he could trust Adam with this information, nor did he want Adam or Aftermarket’s departmental numbers to benefit from the shady practice.
Adam for a year now has been stating that Go Daddy needs to get in the business of buying expired domains — so don’t give him any credit for being an ethical guy.
godaddy should be on top
Since you are talking about godaddy, I’ll also provide some recent findings for Godaddy.com promo codes. I am a .NET Programmer, and these codes come in very handy when purchasing or renewing a domain name. Use Godaddy promo code ZINE3 for $7.49 .com domains and renewals. I save about $10 every time I purchase from godaddy. When I buy at least five domain names, I also get free private registration when I use ZINE3. For other Godaddy coupons, use ZINE1 for 10% off, ZINE2 for $5 off any $30+ purchase, and ZINE25 for $25 off any purchase of $100 or greater, like hosting plans. These promo codes are current, working, and do not expire. Hopefully these Godaddy coupon codes work as well for the other blog subscribers as they have for my web site projects. Take it easy! -Melva from South Hill, NY.
“A lot of businesses giving out pink slips for the holidays, but we’ll talk to one CEO who’s hiring by the hundreds!” The company may be hiring a limited number of highly technical employees but they are only hiring for attrition on the call center side. In the past, Go Daddy had mass amounts of new employee training sessions. Right now they have none scheduled. Sales and revenue are down.
When Mr. Parsons brings up the 2008 SuperBowl ad, he will state that Go Daddy received the highest number of website traffic on the day it aired. Traffic did not equate to increased sales. I know this because I viewed the reports.
Moreover, Go Daddy’s holiday party is in poor taste given the current economic conditions. As the Arizona Republic featured yesterday, local companies are cutting back and/or donating to the community. Go Daddy should be adopting Google’s way of thinking.
Anything Go Daddy does is for publicity. The holiday party is not about the employees but about how much air and print time Go Daddy can garner from the press. $2mm for the party is cheap if they receive more than that in press exposure.
Bob Parsons wanted to reward his employees for their hard work over the course of the year. He pumped $2 million into a struggling economy, which gave jobs to many people catering and setting up. In addition, donations were made to the Humana Fund in the name of EVERY employee. I do not see how it is poor taste to spend money rewarding your employees, which should help fight against recession instead of hording money, and donating on be half of all of your employees.
And I do not buy that the holiday party is only for the press… because I did not hear anything about the donations to the Humana Fund. In addition, the prizes were over half a million dollars… if the party was in deed only for the press, don’t think half a million dollars would been used making the party seem more over the top?
Katie….how long have you worked in gopoopies company communications. I know a plant when I see one.
THE SIMPLE FIXES DOMAIN INDUSTRY NEEDS.
1. THE OBAMA/BIDEN administration w/US Department of Commerce needs to take a greater active role with ICANN to take control of all general domains and kick out the private sector (.com, .net., .org, .info, etc) like verisign.
2. They need to put salary caps of 100k on all ICANN employees with 100k bonues divded quarterly at best.
3. Increase all domain names prices to $99 where the ICANN government can take most of that money and reinvest it in the infrastructure of the US.
4. Setup a domain Judicial court similar to that of what IRS courts are.
5. Be transparent!!!!!!!!!!!!!!!!
Since you are talking about godaddy.com, I’ll also share my recent findings for Godaddy coupons. I am a Legal Research Site Developer, and these coupons come in very handy when purchasing or renewing a domain. Use Godaddy promo code ZINE3 for $7.49 .com domains and renewals. I save about $30 every time I purchase domains from godaddy. When I buy at least five domain names, I also get free private registration when I use ZINE3. For other Godaddy coupons, use ZINE1 for 10% off, ZINE2 for $5 off any $30+ purchase, and ZINE25 for $25 off any purchase of $100 or more, like hosting plans. These promo codes are current, working, and do not expire. Hope these Godaddy.com coupons save just as much dough for the other viewers as they have for my friends and I. Have a good one!
-Marci from Bailey, MI.
I have been a godaddy customer for about 5 years now and suddenly, I’ve noticed an unsettling trend. I search a domain on godaddy alone, nowhere else, its available, I come home that night to reserve the domain…suddenly in a matter of hours its now unavailable unless I want to pay THOUSANDS for it from a “godaddy partner”. When this first happened I just thought, “Well, just a coincidence” the second time it happened I was suspicious, the third time, I am now convinced that when I find a good domain name, it triggers a flag in the godaddy system and they sell this domain to their “partner” in hopes of making a fatter percentage off a ‘resale’ back to me, the customer they duped in the first place. Beware of this register company. I still have my domains registered with them but I’m now looking to transfer them to a more reputable register company (which I’m researching now). If this post saves one person from being ripped off, I will feel MUCH better.
i dont think this is shady at all. If you really wanted the domain you would register it for 10 years and would be damn sure not to let it expire.
I can’t tell you how I know this…but I can confirm the whole thing first-hand. :^) Standard Tactics is a locked account with no ability for any employees to see.
As far as domain warehousing you all got it wrong.
It was creative accounting to create a receivable for Godaddy of 64.000 X $ 9.00 WOW looks nice on the statement to the Wells Fargo bank to continue servicing the BIG loans, then even better when the ghost company was discovered it was then turned into another revenue when selling the domains thru TDNAM.. remember Scumbob Parsons is a creative accountant this reminds me of ENRON.
LOL
You all should know what GoDaddy(GD)
and Rookanalytics is doing these days. They are creating traffic on small bus. and prof. people’s names on the net via porn, hackers’ pgs,terrorizing them to prevent deterioration of their image and good prof. reputation & then getting one of their hackers to buy those domain names under false pretenses and keeping them for the small bus. or prof.s to beg to give them back. Even if you tell them a million times that the info given is false on whois, they will not delete the domain names and make it availablel. GD openly tries to sell the domain to these small bus/profs and at a hefty price. Extortion! You guys should all make complaints to the AZ Atty. Gen, and your own AG and the Bureaus of the various Main Law enforcement agencies in the states, the Secret Service which has a cyber crim unit and the FBI about GD. Do not expect ICANN to do anything about it. GD has to be stopped and invidividual law suits will not work. They need to be taught a lesson like MCI worldcom’s Bernie Ebbers and co. was. Read more about GD’s and Rook’s nefarious activities by researching Rookanalytics based in Pasadena, CA. They buy all the domain names you check out to see if avaible via wonderful GD!
scaring them
News: Sexual Harassment at GoDaddy
This story from DomainNameWire:
Rachel Pearson, a now ex-GoDaddy employee says she was subjected to sexual harassment while working at GoDaddy, with another employee staring at her and touching her. GoDaddy claims Pearson could not prove the events took place. When says when she complained she ended up the one being fired. She has now filed a case in the U.S. District Court.
Get the whole stoey at nodaddy.com
http://domainnamewire.com/2009.....imination/