SubscribeGo Daddy: King of Cyber Squatting?
Last month, Go Daddy decided to try and hit us for $180 to reregister two domains that we had let lapse for several weeks. Cybersquatting at its best if you ask me, considering the usual price for registering a dot com domain at Go Daddy is $9.99.
According to the Anti-Cybersquatting Consumer Protection Act, cybersquatting, on a basic level, is using a domain name with bad-faith intent to profit.
From the ACPA report to congress ( PDF):
Registration by another person as a domain name for the purposes of profiting from the sale or transfer of the domain name
The moral of this story; pay on time and don’t let them squat your name.
Here’s what happened.
We’ve got two kids, so we thought we’d get a domain name for each. The plan was not to do anything with them until our little people are old enough to choose whether they wanted to use them.
Originally we paid Go Daddy their standard domain name registration fee (about 8 bucks a pop) and let the domains just sit.
In all fairness, when the renewal came up this year, Go Daddy sent us a reminder. Life got in the way, we forgot, no big drama.
They give you a 30 day grace period.
After the grace period had expired (by a few days), we logged into Go Daddy and tried to renew the domains - but it wasn’t an available option. We could not repurchase them, because the domain names were already in use.
According to Whois, we were listed as the domain owners.
So we contacted Go Daddy support with the ‘what gives’ question.
Their reply was that the domain names were in a 30 day redemption period and “your [credit] card will be charged 90.19(USD) per domain” to renew.
A 941% premium.
Click here if you want to read the entire e-mail.
While we admit we were remiss in not registering on time, it just doesn’t seem right.
Who would want the domain names of our children except those wanting to make a buck on it?
We ended up forgoing the original domain names and purchased new domains (that the kids chose) at $10 a year.
It just seems that the fair thing would be to put the names back into the pool of available domain names. It will be interesting to see what happens at the end of the ‘redemption period.’
Does that make Go Daddy the king of cybersquatters? It ain’t valuable until someone wants it.
Lesson: Don’t let your domain name expire.
PS. Go Daddy hosts this blog; wish us luck. 
Recent and Related posts on the Web about Go Daddy:
From Tom Espiner, ZD Net: Caught in the Go Daddy Red Tape
From Prof. Marc Randazza: Is Godaddy a Mass Cybersqatter?
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I wonder if this would be a violation of 15 USC Sect. 1129.
Sounds like one to me.
Thanks for stopping by Marc, and thanks for your thoughts.
Yes it possibly is. But therein lies the problem; for the $180, is it worth our time pursuing this? No.
Personally, I just think the whole thing is wrong. It would be nice though, if enough people rallied and said - hey stop. Alas, this too is unlikely…although, sometimes the power of social media is pretty decent.
No, for $180, it isn’t worth it.
But, if you really feel strongly about standing up about the matter, you could ask a lawyer to get involved. The statute provides for the prevailing party to get their fees back. Given that you are in the silicon valley area, there is probably no shortage of tech lawyers in your area.
However, if the initial outlay to bring in experienced counsel proved overwhelming, you could simply act as your own lawyer. I could direct you to some resources where someone with your writing ability could get what they needed to do that.
Feel free to contact me privately if you would like me to direct you to some materials. I love it when pro se litigants kick the big guys who think they can abuse their customers because “what are you gonna do? Hire a lawyer?” syndrome kicks in.
If the domains do, indeed, correspond to the names of your kids, and Godaddy has taken them with an intent to profit, you’ve likely stumbled upon a really nasty business practice here that someone should stop. It may as well be you!
Sure it’s a bummer that you have to pay the extra cash if you want the domains back. However, it’s not just GoDaddy.com who uses this practice. I previously held an account with Register.com who charges a hefty $120 per domain name if you let them expire.
There are plenty of options out there to keep your domain(s) from expiring such as Auto-Renew where your credit card is automatically charged a renewal fee.
Additionally, if a domain is of value to you, you need to protect it like virtual real estate. I know that life gets in the way sometimes, but like any other bill, sooner or later you have to pay the premium.
I’ve learned this lesson the hard way myself, but in the long run, GoDaddy was very clear about their policy. You knew you had to renew the name if you want to keep it. This is pretty standard for all domain registrars and it factors heavily into several other products that they offer (domain back-ordering for example).
I say tough luck. Lesson learned. Move on!
@Marc
Yes, the domains were, for my son - first name last name dot com, for my little girl, first name middle name dot com, so I expect they are valid. I think it is true, people think that for the sake of 180 it isn’t worth it so nothing ever happens. Maybe it’s time.
@Phillip,
Thanks for your comment. I do realize that Go Daddy are not the only group in the world that practice this, and yes, I do realize that I should have paid on time. However, my question remains: why wasn’t the name put back in the pool of domain names?
I think the entire ‘tough luck’ philosophy kind of sucks - and - I also think that most domainers know that the majority of people won’t do anything; as a result, they can get away with way too much.
I’ve got to believe TOS become invalid if they lean toward the unethical/illegal - it just isn’t right.
I think you’ve actually inspired me to check this out further. Thanks!
I’m not saying that the ‘tough luck’ philosophy doesn’t suck. All I’m getting at is that I don’t believe it to be unethical to charge you a premium once you’ve had fair warning and ample time to renew your domain.
The reason that your name is not put back into the general “pool” of available domain names is simple. Once a domain name has been registered, it becomes obvious to both the registrar and to any other interested parties that that particular domain has a value… at least to someone.
Domains that are not renewed during the “redemption period” (for the ultra-high fee) are generally sent to auction using a service similar to “The Domain Name Aftermarket” (http://www.tdnam.com/). Domains are typically given a 3 week to 6 months redemption period before they are eligible to be auctioned. From there, anyone can bid on buying your domain from GoDaddy.com. You may look into purchasing them back there, but it’s generally a crapshoot; and you’ll be required to repay your normal registration fee(s) in addition to what your winning bid was on the auction.
You’ve got to look at the big picture here, Lid. If GoDaddy.com had just put your domains back into the general pool, they would have immediately been purchased by a bot. That bot would have registered your name for 10 years (the maximum time you can register a domain for), the moment that your domain expired.
There are hundreds of internet bots that are programmed to purchase expired domains - especially those that already have good search engine rankings. Furthermore, if the domains were very valuable to you (ie you already had an established customer base using the domains) you would be forced to pay the new owner’s fee - regardless of what they charged - to get the domains back. Some automatic bots specifically search out domains that they see as being a person’s name, as these are generally valuable internet real estate.
Is this an imperfect policy? Most certainly! However, GoDaddy.com (and most other registrars) actually offers this redemption period as a service to you. Most businesses zealously protect their domains, understanding that they are just as important as their storefront signage!
You’re right… The “tough luck” message that I’m writing sucks. There’s no other way to look at it. Conversely, there is a “tougher luck” scenario out there!
If the domains are valuable property you should have renewed them. 90 smackers is really not that much in the grand scheme of things. GoDaddy.com is selling you a premium service that would cost you much more if you had to deal directly with someone who registered your domain after it expired.
In rambling conclusion, I’ve been right where you are. I’ve vowed never to let another domain name expire just for this reason! At the same time, I was actually glad to recover my domain for such a “reasonable price”!
Also, the other point I wanted to make is this:
Phillip, if you can show me any other company that charges a 941% ‘premium’ - I’ll be happy to back off
I won’t debate the price that GoDaddy has assigned to this service, because to me it’s a moot point.
It would likely cost you much more to get the domain back from anyone else. It would likely cost you even more to pursue legal action.
Register.com charges $120.00
eNom charges $160.00
Netsol charges $150.00
According to supportpro:
The redemption fee is the cost to obtain a domain from redemption. The fee is to cover the costs of the paperwork that the registrar must file to recover the domain. ICANN (Internet Corporation for Assigned Names and Numbers) provided no guidelines on how much the registrar should charge to recover a domain from redemption, so these fees vary from under $100 to over $300.
Another interesting article on fighting cyber-squatters.
Article on the domain expiration process.
According to DomainMonster.com:
“Even if it is a little known name, there are literally thousands of companies and individuals that may grab your expired domain the second it’s available, preventing you from re-registering it. Companies that offer to send targeted visitor traffic to your web site often do so by purchasing other expired Domain Names. Companies that resell domain names may snag your expired domain in hopes of selling it back to you at a premium or selling it to another party. Someone else may have just really wanted the domain name you had and placed a back-order for it (a request to purchase if the name becomes available). Most organizations and individuals that purchase expired domains do so using automated software, and therefore have a much higher likelihood of obtaining the name than an individual attempting to monitor availability by hand.“
@Phillip - Would you mind disclosing whether you have any form of association, current or previous, formal or informal, with Go Daddy or other company offering domain name registration? Ours are in our about page.
You claim that Go Daddy is protecting us from bots registering our expired domain, using the same tools provided by Go Daddy to maximize their profits, namely automated. Protection for which they charge a 941% premium. I would have no problems with a 50% premium to cover their minimal expenses; however, 941% is utter extortion.
Also, you mention the domain being put up for auction, however, Go Daddy is both the facilitator of the auction, and the initial bidder using prior knowledge that the names are of continued interest to us. A huge conflict of interest.
There is a lot of justification shrouded in ‘GoDaddy is but one company who does this’, but the whole process is immoral, irrespective of the company.
At the end of the day we are talking about an entry in a Domain Name Server database, for which Go Daddy charges $9.99 to ensure this is maintained during the year of contract.
It would be nice to have Go Daddy break down the $90.19 into expenses, their own and 3rd party (ICANN or other), and profit. That would certainly help clear a few things up.
I have no association, formal, informal or otherwise with any company offering domain name registration.
I am a small business owner who develops and maintains websites. You can learn more about Manifest Creative by visiting our Bozeman, MT web design and web development firm.
I guess that we’ll just have to agree to disagree on this discussion!
When I’ve had a domain name expire due to my own negligence, I didn’t feel that it was “extortion” to pay less than $100 to protect my brand and my online identity. Especially when a competitor could have snatched it up…
You can look at it in a pure dollars-and-cents perspective if you wish. I just think that you’re missing the bigger picture! The damage that this could cause to a brand is much larger than the ninety-bucks you’re worrying about.
• What about the cost of printing new business cards, letterhead, thank you notes, brochures? Easily $3,000 dollars for any legitimate company…
• What about the potential for lost income for print marketing that is already in circulation? I pay about $2,000 annually for my yellow pages ad, not to mention other periodicals.
• What about the time that I will have to spend redirecting online marketing efforts? If I was billing a client for this time it could easily reach $1,000.
• What about the lost time and revenue associated with my search engine optimization? This has taken months and years to get to where I want to be.
• What about the potential lost revenue from people who have bookmarked my URL or have the brand awareness associated with the address? You can’t put a definitive value on that!
Mad, a low-ball estimate of what it would cost my company to lose a valuable domain could easily reach $6,000. I’m sorry that I don’t see $90 as being that big of an expense.
Now that I’ve said my piece, I do agree that the markup percentage itself is high. However, it is a very simple concept that any business will charge what the market will bear for their services. In this case the market will easily bear the $90 fee - certainly when the full cost is factored in.
GoDaddy.com’s service of auctioning domains through the “Domain Aftermarket” can be seen by some as dodgy… However it does provide domain resellers a legitimate market to sell domains. I’ve even purchased several myself at very reasonable prices!
There are companies out there who have a less restrictive policy in regards to expired domains. I suggest you do your research here before painting the entire industry process with broad strokes. Do a Google search and I’m sure you’ll read all about other people’s horror stories with their particular domain registrar. You’ll also find links to a handful of companies that people seem to actually be satisfied with.
We can spend our time debating whether or not GoDaddy’s domain redemption policy is “extortion” or “unethical” or “exorbitant” or “immoral”… But let’s face the obvious truth. Many business owners, including myself, are not repugnant to the idea of paying a premium to protect their online brand - especially when it would cost them much more to recover from losing the domain.
@Phillip - I must admit I do like reading your posts (I mean comments :-)). I agree, we should agree to disagree on our views regarding the redemption payment requested by Go Daddy. Thanks for the discussion.
[...] were reports in recent months that GoDaddy was registering domains that people researched on their site (you see if a name is available, if it is and you don’t register it immediately, SURPRISE [...]
Hello, I ‘m discovering your blog just today.
)
Fact is : (sorry to be tough
You sign the contract with Godaddy, and those fees are mentionned in the contract.
You got warning email, you didn’t pay attention to those.
That’s it…
Plus (and not least
)
It is not all about marketing.
technically “putting back the domain name in the pool” takes a lot of time, and cost (believe it or not) lots of money. Whois, DNS etc has to be synchronise. It’s quiet bigger than what it looks like.
Have a nice day !
GoDaddy is shaddy all around lately..
Although domain registrar are shaddy company in general.. remember network solutions and their frontrunning practices? There was an ICAAN inquiry or something but I think they still do it..Anyways back on godaddy..
Recently their VC is caught bidding against their own customer in the domain name auctions.. http://forums.nodaddy.com/index.php?topic=272.msg1172
This isn’t so bad if it’s just one of their normal employees bidding.. but sinces he is the VC of TDNAM he is privy to sensetive info like your max bid amount etc etc.. and so have an upper hand to win the auction.. or just to drive the prices up…
Claire
Thanks for your comment. You’re right; GoDaddy does mention all of this, we got a warning e-mail and, yes, we did not pay attention.
However, I’m sorry, but I cannot believe it takes a lot of time and money. Synchronise Whois - interesting concept.
If you can point me to some evidence of this; I’ll be happy to admit defeat. Until then, I still think what GoDaddy is doing is a tad shady.
Paan
Thanks for the link; I can’t believe I missed this on Digg, (3000+ votes)! Seems I need to pay better attention.
Funny though, even though GoDaddy got involved with the Digg story and left comments trying to justify what it did, it still smacks of ‘not quite right’ to me; sort of the same feeling I got with what happened to us.
“GoDaddy does mention all of this, we got a warning e-mail and, yes, we did not pay attention.”
I’ll be intersted if you can find a firm selling the same service that doesn’t do the same…
“However, I’m sorry, but I cannot believe it takes a lot of time and money. Synchronise Whois - interesting concept.”
WHOIS are indeed just lots of whois server. Then, when it is about different server supposed to give the same informations, it is always about synchronisation.
As you probably know, computer needs expensive things like service, electricity etc.
By the way, I forgot the problem of DNS synchronisation. Quiet the same here.
“If you can point me to some evidence of this; I’ll be happy to admit defeat. Until then, I still think what GoDaddy is doing is a tad shady.”
This is your understanding, and well, you can think whatever you want.
The point is, as all the provider I know do exactly the same, this is certainly because their are kind of fed up with people who doesn’t read the contract, doesn’t pay attention to warning emails, and think computer science is only about pushing a button, and whaom ! everything is fix the way they want as a magic thing.
Automatisation doesn’t mean magic.
First, it means always time and money.