GoDaddy: the Odd Bob or two, and the Clickfraud Scandal

Around the globe the words 'domain' and 'cash parking' are synonymous with GoDaddy. So why are 70% of the reviews on the first page of Google so negative? TheBigRetort investigates... and finds the odd Bob or two. (Pictured left, Bob Parsnips, founder GoDaddy.)

Google GoDaddy along with Cashparking and it quickly becomes evident that all is not well in Elsinore. (That's Denmark for all our American readers.) Indeed... the praise once heaped on the largest domain name registrar in the world has now turned to opprobrium. There is a pestilence in the land and many a brave knight quickly stirs abroad, to other domains. (Oops. We quote a writer of plays born over here.) What we mean is, here's just one of many critiques...

"I like GoDaddy.com and I admire Bob Parsons, his 'bigger than life' personality and panache reflecting on GoDaddy, so it’s not personal, it’s business," one disgruntled critic wrote. He had invested in the GoDaddy Cashparking scheme but when he saw the cash disappear he realised something was not quite right. He was concerned by the lack of 'plain words' in GoDaddy's terms of service, such as the 'other similar methods' in relation to what type of traffic GoDaddy 'allowed'. A definition that could accommodate virtually anything; and was meant to.

GoDaddy's pays out in three monthly cycles and this can lead to abuse of the cashparking system - by the registrar itself. In the above case several thousand dollars had accumulated but was destined to remain in GoDaddy's deep pockets. The advertising revenue was invalidated by GoDaddy - 'siezed'. Or so he alleged. His advice: avoid Godaddy Cash Parking.

But can uncertainty be part of a Bob Parsons masterplan to even greater wealth?

After all, Parsons can recall his war service years with such startling clarity - thirty years on - that such an accusation must fail to impress. Here's just a few snippets of what the founder of GoDaddy has posted about his 'days' in Vietnam.

"I can remember arriving on that hill in the middle of nowhere. The night prior, the squad I was newly assigned to had been ambushed and most of them were killed. It wasn’t that moment I got afraid. Later that night I sat on this wall of an old French fort and looked into this valley and thought – this is it…I’m going to die here and I accepted that and from then on I was OK.... From the next day on, my only goal and I mean my only goal, was to simply make it to mail call. I figured that I would take small steps, tie them together, and it would get me to the finish line and that thought is what I use today to make GODADDY successful – simply get to the next day."

So that's it, in a nutshell... Or is it?

Bob Parsons enlisted in the US Marine Corps in 1968. He arrived in Vietnam, in his words, 'by late February 1969'. However, Delta Company rosters record that "Parsons, Bob, R" commenced his tour of duty at the 1st January 1969 - seven weeks before the date he claims. 

On February 22, four Delta Co marines were indeed killed and six more wounded.

If the rosters are correct then the 5-week stint followed a rather inactive period for Delta Company: and for Bob.

The events are said to have influenced Bob's life forever. He was apparently later medically evacuated from Hill 190 after being wounded at Quang Nam - in the buttocks - five weeks after arriving there.  Or should that be five weeks after he claims he arrived there?

Bob Parsons is unlikely to screw up his dates so there is probably another explanation for the discrepancy. The Delta Co. Marines killed in the vicinity of Hill 190 that day were, Woodrow W. Adams; LCpl. Michael Cruse; Cpl. Edward Gum and Cpl. Robert W. Topham, Jr. See "History of Delta 1/26" by Tom Howard at delta126.org for a full account. The Command Chronologies of 1st Battalion 26th Marines date from August 1966 to March 1970. [They are not available for the month that Parsons claims he was there.]

But TheBigRetort ventures too far into the enemy's paddy fields, on what is essentially a dark night, so back to domain basics.

TheBigRetort's first article in the GoDaddy Series was last seen comfortably sitting on the second page of Google, which is not too bad for a tiny English blog more accustomed to rocking the boat in Dear Old Blighty than across the Pond in the Americas (where it is also read).

But now, according to a recent Google search, it is almost rubbing shoulders with GoDaddy itself.

No mean feat...

In the words of SEO guru David Viney in his book Get to the top on Google:

"84% of searchers never make it past the bottom of page two of search engine results. Just think about this for a moment. Imagine the web is one giant city, with stores scattered through it. Having your site in the top 10 is like having your store right on Main Street or near the entrance of the largest shopping mall in human history. Being outside the top 20 is like having a corner store on the outskirts of town."

But first, a gentle reminder from our sponsor...

Our previous expose revealed that GoDaddy founder B-O-B  P-A-R-S-O-N-S (the marine with the ring) pocketed $1.6 million in advertising revenue from parked pages - it beats working for a living - and many of the domains belonged to people who had purchased them from the Baltimore Bully himself. 

GoDaddy offered the opportunity for one and all to share in its revenue success via its new CashParking scheme - at a price, naturally.  TheBigRetort snook a little look at what Daddy was up to: and was not that impressed.

"Earn up to 80% of ad revenue" boasted its CashParking Plan. GoDaddy keeps the other 20%. Oh, and don't forget... you must also pay for the right to use the CashParking plan too.  Does the phrase MONEY FOR OLD DOMAINS spring to mind?

When TheBigRetort invested in the scheme the revenue generated from its rather sizeable portfolio remained no more than a trickle. And what cash did come our way suddenly - and inexplicably - disappeared. The domains had done a Houdini. Alongside approximately $20 that also vanished from the CashParking account. We decided to find out what had happened.

It usually takes GoDaddy's Sales & Support team 24 hours to respond to queries - even though the company boasts a '24/7' 'support, getting anwers from its media office and the 'Office of the President' were equally problematic, and 'vague'. We wondered if the PR department at GoDaddy was working overtime to 'bury' a certain story that had been hovering on Google's page two... until it moved up the Google ranks. (It's now in the top ten.)

To recap... GoDaddy previously accrued $1.6 million in advertising revenue from 'parked' domains: for itself.  It did not share this revenue with its customers. TheBigRetort wanted a few nuggets of wisdom from Bob Parsons himself. We wanted to know if any other customers were as lucky as he.

We also wanted to know what had happened to two domains and $20; GoDaddy initially claimed that the two domains were 'both correctly pointing' at its cash parking nameservers; only to add later 'But the domain names are set up to forward to external URLs. In order for these domains to properly resolve to the cash parking account, the forwarding will need to be removed.'

Double-Dutch. However, when GoDaddy then responded (eventually) that this was not in fact the real problem we wondered if we could smell 'vagueness'.

The two domains it transpired had been completely removed. GoDaddy was suddenly threatening to close down 'the entire' Cash Parking account. It explained why: "These determinations are not made based on the amount of traffic that comes to your domains. The amount of impressions to your domain(s) is not a determining factor by GoDaddy or Google. It is not permitted for you to routinely click on your own links in the Cash Parking system."

'Routinely click'? 'On our own links'? Apparently CashParking is designed to share the revenue generated on domains based on (i) Accidental Traffic; mistypes, etc., or, (ii) Residual Traffic; domains that have undergone a change of ownership. This usually happens when a registrant forgets to renew, and then the person who lifts the domain steals his traffic; which is a rather astonishing and immoral concept.

GoDaddy was confidently stating that it was okay to earn money out of other people making typing errors - accidental traffic - or by 'passing off' as the longstanding owner of a previous site.

Although many punters believe that the 'residual' traffic becomes theirs by default this is not always the case. Some purchasers suddenly encounter empty space with no old links to the domain name.

Surprisingly, with the above lofty ideal, GoDaddy Cash Parking does not allow the intentional generation of traffic to any of your domains via a link for instance (even with a warning) - so there appears to be very little way of gaining any income from the cash parking scheme. Something GoDaddy does not immediately point out at the point of purchase. (It's buried somewhere in its terms and conditions; the small print.)

Indeed TheBigRetort has so far concluded that much of GoDaddy's cashparking 'revenue' is based on the naivety of the purchaser (its customers), and is also  one-sided.

Conveniently allegations of clickfraud, often unsubstantiated, lead to expulsion; with retention by GODADDY of the revenue raised.

But what domains had been 'routinely clicked' in our portfolio and by whom?

"The most common problem leading to a determination such as this is the Click Through Rate (CTR), or the percentage of clicks vs. total impressions to your domain. This is a fairly accurate way to determine if the behavior of the impressions to your domain is consistent with what Google would determine as "natural behavior". We find that natural human traffic will result in Click Through Rates (CTR) of no more than 40% on sites with more than 1 or 2 visitors. CTR's significantly or consistently higher than that are usually indicative of incentivized clicks, click groups, or software programs designed to simulate click traffic."

What 'click groups'? Could we see a report?

"We are unable to provide full reports on the statistics that caused these traffic patterns. Unnatural traffic is defined as traffic that any given domain may see when not advertised, or targeted. Normal traffic does not generally cause the amounts of traffic we see on your domain name, thus is considered to be unnatural and provoked. Residual Traffic tends to taper off after a period of time where as incidental traffic traditionally does not have high click through rates. In this instance the domain does not fit into either category as the traffic appears to be steady and excessively high."

Twenty dollars...?

According to GoDaddy rival competitors can also click on a competitors ads in order to undermine his or her campaign and exhaust their budget.

In addition, you may not generate traffic to your website or Go Daddy's links by any 'listings on newsgroups, bulk e-mailing, icq postings, chatroom postings, iframes, zero pixel frames, hitbots, clickbots, spiders, cgi-scripts, JavaScript, click farms or any other similar method'.

So, no advertising at all - which means no BIG bucks.

"This includes clicking on your own links. As a result, your Cash Parking service has been permanently suspended. Our regulations are in line with those of Google. As Google will not be providing revenue to us for what has been deemed to be unnatural traffic, we will not have any revenue to share with you."

But hadn't Google already paid GoDaddy a bundle of cash?

We attempted to open a dialogue with Bob Parsons, ex-marine, founder of Godaddy and its chairman. We wanted to know how he managed to make $1.6 million from cashparking... and we also wanted a copy of the report in order that we could conduct our own investigation into the 'click fraud scandal'. But it wasn't that easy. GODADDY responded:

"Please be aware that our founder and CEO, Mr. Parsons, is extremely busy with his vast array of duties and thus is not able to personally reply to emails sent to our office given the amount of correspondence. As you may already know our President and COO is Mr. Adelman. Mr. Adelman reviews all messages delivered to this address; due to the volume he is unable to reply personally. However, at his discretion he may opt to do so or add to the comments of our office." It added, "Unfortunately for security purposes we cannot discuss the methods used to monitor this traffic, and this includes the information found on the domain names in question."

Sent to Guantanamo; without trial. Beaten by the 'evidence'. The GoDaddy jury had finally reached its verdict; however vague. Meanwhile, in the Cashparking pages themselves, the message could not have been more clear: "Domains not allowed due to fraudulent activity".

 

 

Coming soon... TheBigRetort.com

GoDaddy, Cashparking, and Click fraud...The Big Retort

GoDaddy is the largest domain name registrar in the 'electric universe'. During the final six months of 2005 approximately one-third of all domain names (the top five) were registered via this registrar. By the end of May 2006, it managed approximately 14.2 million domain names. As a 'best-of-breed' it is also North America’s largest shared website hosting provider. But when TheBigRetort tried to put a series of questions to its founder it met with a wall of silence - unusual considering its founder's usual retort: "If GoDaddy.com is anything, it is an outspoken company and I am an outspoken CEO." So why was Daddy being so evasive? First, a bit of blurb on founder B-o-b P-a-r-s-o-n-s.

Robert Parsons is the CEO and Chairman of GoDaddy. Prior to founding the company in 1997, he also founded Parsons technology. Bob and his then wife grew the software company out a basement kitchen. A decade later the pair sold it for many millions of dollars. Retirement did not sit well... Bob soon turned his attention to domain name registration. He had noted how expensive it was... And the entrepreneur was if anything the archangel of the low priced deal. He founded GoDaddy - a name that came out of the aether - and quickly established him (through dogged determination and chutzpah it must be acknowledged) as the Wizard of cut-price domains. At the age 19 he was a rifleman in the U.S. Marine Corps (1968 - 1970) and the recipient of several medals. He is also a Certified Public Accountant. He remains the titular head of GoDaddy. He and also wears an earring. He likes bikes as much as girls. (Godaddy girls that is. And if you saw them you would understand why.) But, to the nub of our Go Daddy rub...
......

In 2006 it was reported that GoDaddy planned to go public. Lehman Brothers was hired to handle the IPO. Prior to that date not much was known about the company's profitability. Go Daddy was a private company and its business was its business, however the S-1 filing was the first public scrutiny of its financial health... it revealed considerable net losses. With the books out in the open it became public knowledge that this had happened every year since the year of its inception. Under "Risks related to our Business" the filing also stated, '.... and may not be able to operate profitably or sustain positive cash flow in future periods.' As investors in GoDaddy's success, it was this that concerned us most. There were others...

GoDaddy planned to use the net proceeds received from the offering to repay approximately $7.2 million indebtedness (in addition to working capital etc). However, although the company was making year on year losses, it was, its founder later emphasised, also experiencing rapid growth.

At that time many wondered if Parsons himself might 'subdue his expressions' once the company went public. "He's one of the most outspoken CEOs in the industry, whose personal and professional leanings are never in doubt. That sort of divisive, outspoken approach may not gel quite as well with Wall Street investment bankers as it does with his blog audience," one online critic remarked. The offering hoped to raise more than 100 million dollars and value Go Daddy at 250 million dollars or more. But the IPO was abruptly pulled.

Dominic Jones later reported that a scrapped IPO is rarely a good thing. "It suggests the company being shopped is a lemon. Companies that pull their IPOs traditionally go off to some dark corner with their tails between their legs ... many observers might well have interpreted the news as Wall Street kicking another dog out to the curb."

However Parsons was never one for hiding in dark corners. (Unless it was in the rice fields of Nam, where it was thought wise to adopt such a position.) He later blogged that the submission was 'approved' by the SEC itself and that this assumption was wrong. There were three main reasons that he decided to pull the plug; (i) the Middle East conflict, interest rate jitters and tech stock weakness; (ii) lack of appreciation for GoDaddy’s cash generating power and, calling the financial media stupid, because none had studied the company's cash flow statements, he claimed (iii) that Daddy was not desperate and had generated significant operating cash flow during each reporting period.

Surprisingly Parsons claims that the submission had been 'approved' by the SEC. However, the S1 actually states: 'Neither the Securities and Exchange Commission nor any state securities regulator has approved or disapproved these securities or determined if this prospectus is truthful or complete.'

Oh Daddy... Bob may not realise it but any representation that suggests otherwise is actually 'criminal' and may make any claimant subject to a long stay at Guantanamo. (Mind you, as this is place he apparently approves of it may be most welcome.)

And that brings us to Cashparking...
.....

"EARN UP TO 80% REVENUE" "CASH PARKING - TURN YOUR PARKED DOMAINS INTO CASH"

According to the GoDaddy blurb it's easy with CashParking. 'Whether you have one domain or a growing portfolio, CashParking can turn those domains into a cash generator!' The offer is made via a number of Cashparking plans from which anyone buying a domain can

'get ready to share in parked domain revenue'. Really?

Bob Parsons himself, blind to any faults, directly boasts, ''Go Daddy is putting its reputation in the domain name industry to work for our customers so CashParking can provide the highest revenue share payouts, making for quick and easy income potential for domain holders from their parked domain names.'' Which leads to another... really?

GoDaddy itself earned $1.6 million from its own cashparking 'scheme'. But this was prior to sharing it with the persons who owned those domains. Now things are different and B-o-b wants to share his success... So why is it that when TheBigRetort invested in a portfolio of domains 'connoting the top five' we saw the dollars flooding out - not in? (In place of the two domains, TheBaseRate.com and LoanAiduk.com, was a little Sherlock Holmes sign, complete with magnifying glass, saying: This site is currently NOT available. (Emphasis GoDaddy's.)

What oh what had taken place? We wrote to find out....

Coming soon in TheBigRetort... the answer. (Visit NamePros for domain discussion and advice. NoDaddy.com for informed views on the company.)



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