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.