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Dana Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
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February 02, 2006

Corruption On The Web

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Posted by Dana Blankenhorn

sclavos.gifVerisign CEO Stratton Sclavos is a big investor in incumbency. And he gets value for money.

OpenSecrets.Org reports that he gave $84,000 in political contributions during the 2004 cycle, and has (with his wife) given another $24,700 in 2005. The Verisign PAC, meanwhile, has spent another $36,200 this cycle, in hard money contributions.

That’s not all. The same Web site reports Verisign put out $124,000 in “soft money” contributions during 2002, and $88,600 in the 2000 cycle. While some of the money (about 15%) goes to Democratic incumbents, the vast majority goes to Republicans.

That's just the money I found searching OpenSecrets under Verisign and Sclavos. It doesn't count other money that may have been sent from Verisign executives, or their families, or third parties under Verisign's direction.

What does Verisign get for this money? It gets the full legal authority to rob the Internet, to take you, for everything it can grab.

And it's grabbing with both hands.

Verisign used political pressure to retain rights as register for .com and .net names, overruling ICANN through raw political pressure. Its management of .com remains open to question and despite the true worthlessness of a name, the price for getting into the Verisign database is due to rise over the next several years. This despite well-documented attempts to rip-off Internet consumers in its so-called “Waiting List Service” and Sitefinder.

Sclavos talks openly of building a conglomerate that will last 100 years. Well, the Mafia lasted a long time, too. Sclavos’ most recent acquisition is Weblogs.Com, which handles RSS “ping” traffic. Before that he bought Moreover, the largest news aggregator. He also owns the gateways that handle SMS traffic between cellular carriers.

But his biggest consumer rip-off to date is Jamba, which does business here as Jamster. Amazing how the major media never attached Verisign to the “Crazy Frog” scandal, which cost European teenagers millions-upon-millions through a bait-and-switch scheme that turned looking at a ringtone into a “subscription” for costly SMS spam messages.

And now that rip-off has hit the U.S. I was shocked recently to find my daughter’s most recent Cingular bill had five “subscriptions” to Jamster, all purchased within three days when, she says, she was off the phone. Cingular refused to even consider refunds, claiming “Jamster is a third party” and thus I’m subject to more rip-offs at any time. (Said daughter has promised not to touch the ringtone feature of her phone again, but what assurance do I now have she won’t still be charged?)

The game is simple, and frankly disgusting. Kid gets attracted by ads for a “Free Ringtone.” Kid not only gets charged $5.99 subscription fee, but then then has to pay for SMS spam sent advertising more ringtones.

This is the Verisign business model in action. This is how Stratton Sclavos makes his money. This is what he pays political protection for.

This is highway robbery aimed at children, and authorities are doing nothing about it. Why? Because Stratton Sclavos gets value for money, that’s why.

Stratton Sclavos is the Ken Lay of the Internet.


Comments (1) + TrackBacks (0) | Category: Business Models | Business Strategy | Internet | Journalism | Politics | e-commerce | ethics | law | online advertising | personal


COMMENTS

1. Jesse Kopelman on February 2, 2006 03:47 PM writes...

Verisign is a very interesting company and they have their fingers in all the right pies. I believe they have world-wide dominace of the SS7 networks that allow mobile networks to talk to each other. These networks are not only important for voice roaming, they also allow intercarrier SMS. Now Verisign is trying to become a major plaer in fixed-mobile convergence (WiFi/Cellular handoffs). I'd love to see Business 2.0 or the Wall Street Journal do an indepth article on them. People would be surprised at what they do and I have a feeling that Jamba is the tip of the iceburg.

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