According to the suit and Network Solutions internal policies, after a customer searches for a .com domain on Network Solutions’ web site, the domain would be "purchased" by Network Solutions. The Internet Corporation for Assigned Names and Numbers (ICANN) established a grace period, whereby consumers could purchase a top level domain name (TLD), and return the domain within five days fo purchase, establishing a domain name purchase grace period.
This grace period has been exploited by registrars, who purchase TLDs to measure their profitablity, only to return the ones that are less profitable.
Network Solution calls its policy a “consumer protection measure,” and claims it is necessary to prevent customers from losing prospective domains to “front-runners,” who monitor domain search logs and quickly buy up searched domain names for themselves, hoping to sell them back to their original searchers.
Once purchased by Network Solutions, the domains can then cost as much as $34.99, or any price Network Solutions deems appropriate. The temporary purchasing of the domain forces users, for a period of four days, to purchase their domain through Network Solutions and at the inflated price..
Earlier this week Microsoft made a public bid to purchase Yahoo, now Yahoo (NSDQ: YHOO ) shareholders have filed suit – objecting to Yahoo's rejection of the $44.6 billion bid. The first lawsuit filed has been on behalf of the Wayne County Employee's Retirement System of Michigan, owner of approximately 13,600 shares.
Yahoo's rejection of Microsoft's (NSDQ: MSFT ) offer, using language that indicated an encouragement of higher offers from the software giant, is little more than a play for a better deal. That, coupled with Yahoo being seen in talks with News Corp on Wednesday, has lead some analysts to believe Yahoo is on the auction block.
This entire deal can be viewed as a power-play to create a Google Adsense competitor in the online advertising market. However, both Yahoo and Microsoft are competitors in the search engine market, and their services overlap in several other smaller areas. Microsoft is still reeling from their much-anticipated but largely disappointing release of the newest version of their Windows operating system, Vista, with some believing nothing short of a full-scale recall is imminent. Likewise, Yahoo reported a drop in profits 23% last quarter, and has been acquiring "Web 2.0" companies that are seen as having no readily apparent revenue generating business models. Flickr alone, the search giants online photo hosting service, is said to cost the company $1m monthly in bandwidth.
Yahoo, appearing desperate to avoid a takeover, is said to have reached out to its chief competitor Google in hopes of forming an alliance to withstand the takeover bid from Microsoft. Google has issued no public statement, but insiders have said the company has no interest in any sort of partnership, fearing such actions would attract antitrust attention in the U.S. and EU.
After an unsolicited $44.6 billion bid by Microsoft to purchase outstanding Yahoo shares on February 1th, Chairman of the House Energy and Commerce Subcommittee on Commerce, Trade, and Consumer Protection House, Rep. Bobby L. Rush (D-IL) has stated that a confidential briefing will be held with his panel in the coming weeks.
Additionally House Judiciary Committee Chairman John Conyers (D-Mich.) and chairman of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, Sen. Herb Kohl (D-Wis.) are holding a February 8th hearing on internet competition.
Microsoft and Yahoo both operate in essentially the same arena: Google’s shadow. A merger between the two companies could bring Google its first real competition in the internet advertising market.
Yahoo is said to still be undecided as to how to proceed forward, CEO Jerry Yang sent a letter to his 14,300 employees stating that "There's obviously been a lot of talk about Yahoo in recent days, and we won't let it distract us from pursuing our transformation strategy" and assuring them that the board is working in "a complex and evolving landscape", with the help of outside advisors. The letter goes on to mention “strategic alternatives”, leading some to believe Yang’s Yahoo is not for sale – voluntarily, anyway.