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How Social Media Can Cost You Big

Posted by Michael Bloch in ecommerce (Wednesday December 28, 2011 )

Social media can be a dream for online business, or a nightmare as the world’s largest domain name registrar recently discovered.

A single posting on Reddit has caused quite an exodus of domain name registrants from GoDaddy.

A user named selfprodigy posted he was transferring 51 domain names from GoDaddy because of the company’s support of SOPA, the controversial proposed Stop Online Piracy Act.

GoDaddy was a supporter of the Act (and still supports the concept according to some reports); legislation that many believe would infringe on freedom of speech and possibly even “break the Internet”.

Anyhow, the pros (?) and cons of SOPA aside, that post had an incredible effect. From what I can tell, GoDaddy has lost tens of thousands of domain names as a result of the revelation and subsequent revolt – and the “official” action day for transferring from GoDaddy isn’t until the 29th.

Even Wikipedia’s Jimmy Wales is reported to have transferred Wiki’s domain name from the company.

Who is right, wrong or whatever in this scenario is not the point of this post – there are hundreds of other posts out there talking about the politics of SOPA and GoDaddy’s involvement with it.

The point I am making is it just goes to show that it’s not just poor products or bad customer service that can have a severe impact on an online business, it can be who or what your business is associated with. Are your affiliations and alliances generally in sync with your customer base?

Something that concerns me with this sort of action though is what if someone has an axe to grind and starts a false rumor? Maybe the unjustified outrage will only last a day or two before the record is set straight; but the damage that can be done in that time could have catastrophic effects.

It’s another reason to keep a bit of an eye on what is being said about your business on social media sites as unlike the GoDaddy situation, sometimes you’ll get enough warning to act before an exodus of customers occurs or potential customers turn their backs on you.


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