I had to learn this the hard way, so I’m happy to share the knowledge to help you avoid the same issue!
I am in the middle of starting up a new company. We came up with a creative name, and I checked the domains before we decided to incorporate, and the domain was free and clear. The price was less than $15. All is great, right?
Well, we incorporated the company on March 29 (filed for a C corp in Delaware and Tennessee). Because of personal reasons, I was delayed in getting the domain reserved. But a week later, I go into GoDaddy to reserve my domain, and guess what? They tell me (and I quote): “Congratulations! Your domain is available at GoDaddy Auctions for $750!” Start-ups cannot afford that kind of pricing!
Needless to say, I was livid. Stupid me for not reserving it when I checked it. I can’t prove it, but my hypothesis is that GoDaddy monitors incorporation filings and then snaps up the domain. That is just plain sneaky and crosses the ethics line, as far as I am concerned. I’m sure pure capitalists would say that is smart business.
The end result was that I tacked “tn” on the end of my domain name and got the domain for less than $15 (I didn’t want to reserve through them but my IT resource said they have the best customer service). They had a survey at the end of the domain registration process. Needless to say, I rated them the absolute lowest on trustworthiness and a being a business partner.
