Go Daddy Sues Verisign Over Site Finder Service, Claims Misuse Of Registry Position [22nd September 2003]

SCOTTSDALE, Ariz., Sept. 22, 2003 – Go Daddy Software, Inc. has filed a lawsuit in Federal District Court in Arizona against VeriSign Inc. (NASDAQ: VRSN), seeking a temporary restraining order against VeriSign’s new Site Finder service, a paid-advertising page VeriSign has established on the Internet to which the traffic associated with mistyped, and other, domain names will be directed.

Go Daddy’s lawsuit claims that VeriSign is misusing its position as the .com and .net domain registry to gain an unfair competitive advantage by intercepting (and profiting from) internet traffic resulting from the scores of invalid domain names that are typed into users’ browsers on a daily basis.

Previously, when an Internet user mistyped a domain name, the browser (e.g. Internet Explorer, Netscape) would generate an informational page advising that the address didn’t have a website associated with it and suggest alternatives. The user had the option of turning this function off. Now, when a user types an invalid .com or .net address, they will instead be directed to a paid-advertising page supplied by VeriSign.

“VeriSign has hijacked this entire process,” said Bob Parsons, president of Go Daddy. “When the user is sent to VeriSign’s advertising page, VeriSign gets paid by the advertiser when the user clicks a link to get off the page – to the tune of $150 million annually, as estimated by VeriSign.”

According to Parsons, in many cases VeriSign’s Site Finder service also hijacks traffic from domain names that do exist. For example, when a registrar is notified of a domain name dispute, quite often the registrar is required to deactivate that domain name. The intention in doing this is that the name doesn’t resolve to anything until the dispute is settled. Now anyone typing the disputed name into their browser will receive VeriSign’s advertising.

There are also other damaging implications to VeriSign’s Site Finder service, Parsons continues, including the way advertising is provided to users who mistype domain names. VeriSign’s service looks at the name the user mistyped, then guesses which name the user intended to type, or what the user may be interested in. Site Finder then suggests alternatives. Thus a user who intended to go to a website selling, for example, “hats,” might receive suggestions to go to competitive sites that also sell “hats.” To prevent this hijacking of their customers, website owners will be forced to register every misspelled variation of their domain name. And it is VeriSign who directly benefits from all these additional forced registrations, because VeriSign operates the registry from which the names must be purchased.

“It’s important to understand,” says Parsons, “that VeriSign’s charter to act as the .com and .net registry was never intended to let them manipulate the domain name routing system for their own profit. This misuse certainly violates the fiduciary responsibility placed upon VeriSign by Congress to manage the .com and .net registries for the public good. Site Finder is being introduced by VeriSign solely for VeriSign’s own profit without regard for the hardships it places upon others. Site Finder will set a dangerous precedent if it is not stopped.”

Go Daddy and many other registrars are also currently at odds with VeriSign over VeriSign’s new “Wait Listing Service” (WLS) VeriSign intends to launch in late October. The Domain Justice Coalition, of which Go Daddy is a member, has a lawsuit pending against ICANN intended to force ICANN to prevent VeriSign from offering this service. Go Daddy believes that WLS, if allowed to happen, will result in significantly higher consumer prices, and will destroy the existing market operated by many registrars around back ordering domain names.

ICANN accredited GoDaddy.com is the No. 1 registrar of net new domains and provider of complementary software products and services. Other companies within The Go Daddy Group, Inc. family include Starfield Technologies, Inc., developer of software systems and services; Wild West Domains, Inc., ICANN accredited reseller provider; and Domains By Proxy, a private registration service. GoDaddy.com, together with its sister companies, enables individuals and businesses to acquire, create and safeguard their unique identities and brands on the Internet.