Class Action Filed Against Godaddy For PPC Ads On Placeholder Pages

According to CourthouseNews.com, a class action lawsuit was filed in Phoenix and Arkansas federal courts, claiming that Go Daddy is “unlawfully generating and retaining revenue derived from these online advertisements each time an Internet user clicks an online advertisement appearing on plaintiff’s domain names.”

The class action claims GoDaddy.com is advertising on registered domain names without consent of the domain owners.

Of course Godaddy.com is just one of the registrars that place a placeholder page up on a domain when the domain owner has not specified servers.

These pages appear as opposed to non-resolving page, but contain PPC ads of which Godaddy according to the suit retains 100% of the revenue from, even though its customers has paid for the registration of the domain.

The class claims to have acquired the exclusive use of their purchased domain names when they registered the names through GoDaddy.com and paid the fees.

Class representative Matthew McBride says he registered 4 domain names with GoDaddy, which later placed “advertisements for products or services that they believe are contextually relevant” to the domain names to generate pay-per-click revenue.

McBride says he did not authorize Go Daddy to use his domain names, and the company did not disclose that it would use the domain names for ads to pad its bottom line when he bought the names from it.

The class action seeks to enjoin Go Daddy from “converting and using domain names registered by plaintiff and the other members of the class for defendants’ own benefit.”

It also wants Go Daddy enjoined from keeping any pay-per-click revenue from registered domain names, and from posting any ads without the parties’ agreement.

Reading through Godaddy.com terms of service, I don’t see anything that allows Godaddy to place PPC ads on domains registered by third parties and keep the revenue generated from those ads.

Should be interesting to see what happens here.

I’m sure with the tens of millions of domains under management, PPC earnings on the placeholders adds up to a pretty tidy profit for Godaddy.

Comments

  1. Tim says

    I’m surprised there is no language in their contract that allows for this. What an oversight. Or maybe, there is an underlying reason why they left it out.

    I’ve been wondering for years when this class action would begin.

    Next, I suppose will be the ISP’s hijacking user searches, but I am not sure how or who will tackle that one.

  2. says

    @ MHB, thanx for drawing attention to this case. From the look of the terms you linked to, those are general terms for viewing the GoDaddy website.

    The terms of domain registration state:

    “For every domain name registered, Go Daddy will provide the Parked Page service free to its customers . . .

    “If You are using Go Daddy’s Parked Page services, You agree that Go Daddy may point the domain name or DNS to one of Go Daddy’s or Go Daddy’s affiliates web pages, and that they may place advertising on Your web page and Go Daddy specifically reserves this right. Go Daddy also reserves the right to collect and retain all revenue obtained from such advertising.”

    The Registrars got wise, and all have agreements with regard to revenue from parked pages. In 2006 interview with Bob Parsons on money.cnn, Pasons admit to making $12,000/day from parking – nothing to sneeze at! Wonder what it is now . . . The title of that article is: Who’s Your Go Daddy? if you want to search for it.

    If you go to sitemap and click on “legal” on the GoDaddy homepage, under Policies and Agreements, click, “Domain Name Registration Agreement” to view the quote, above.

  3. says

    It’s about time someone sued GoDaddy. They have been screwing Domainers for years collecting money and not paying anything over to the registrant. Where do you think their money comes from for all of their T.V. advertising? From the domainers who just hand over their earnings without their consent.

  4. MHB says

    Louise

    What is that page showing for as the last update date?

    Have to wonder if that language was placed in the agreement after the suit was filed

  5. says

    @ Howard Neu, Hi! Did you get my email from last week? Would you author an article for my website about domain business taxes?

    @ MHB, The terms you linked to are the terms for accessing and viewing the Go Daddy website. You notice how websites often publish terms simply for visiting the website? You indemnify Go Daddy as soon as you view its homepage! LOL

  6. John Berryhill says

    This suit won’t go anywhere.

    The same suit was tried in 2001 – Zurakov v. Register.com –

    http://www.nycourts.gov/comdiv/Law%20Report%20Files/October%202001/zurakov.htm

    “Here, Register fully disclosed its practice of displaying a “Coming Soon Page” in both the “Frequently Asked Questions” Section and the “Help” Section of Register’s website. Moreover, the “Coming Soon Page” was not materially deceptive because it did not interfere with Zurakov’s use of the domain name “Laborzionist.org”. Rather, the “Coming Soon Page” provided an announcement of the domain name “Laborzionist.org” for Zurakov during the period between his registration of the domain name and his construction of the website. Finally, it is undisputed that Zurakov had the ability to delete the “Coming Soon Page” by following the instructions set forth in both the “FAQ” and “Help” sections.”

  7. John Berryhill says

    Yes, that’s in the first paragraph of the facts at the linked decision:

    “The “Coming Soon Page” also contains banner advertisements for Register’s services, as well as advertisements for some of Register’s corporate sponsors. Zurakov contends that Register’s failure to advise him that Register would link “Laborzionist.org” to Register’s “Coming Soon Page” violated both the implied covenant of good faith and fair dealing and General Business Law (“GBL”) Sections 349 and 350 (“Deceptive Acts and Practices”). Moreover, Zurakov claims that the “Coming Soon Page” allowed Register to profit unjustly from “Laborzionist.org”.”

    Ever since the Zurakov suit, registrars have had terms in their contracts addressing the issue of parking undeveloped domains.

    The court in Zurakov basically said, “If you don’t want them parking the page, then don’t point the domain name at their nameservers.” If the problem is “GoDaddy runs all junk traffic from its nameservers to a parking page”, and one is faced with two solutions:

    (a) point the name at something else, because you have complete control over it, or

    (b) file a lawsuit and screw around in court for a couple of years,

    then I guess some folks will go for option (b) there, but essentially the same argument has lost before.

  8. Larry says

    I have a website with go daddy and recently received and email stating I spammed one person from a 3rd party email. They want me to pay a $199 fine. The funny thing is I do not us other emails. So it couldn’t of been me. They do not want to here is and will suspend my account on a first offense that I didn’t even do. I guess they are not who I thought they were. Also if I want to transfer my domain it will cost me $75. What’s wrong with this picture? I tried calling them and they told me at the abuse number to just email us at abuse@godaddy.com. What a joke! I emailed them and they told me the same thing. They reply the same thing over and over demanding money. Like money will fix problems! I would never use them again. JaguarsPc has none of that non sense.

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