Amazon/Statsaholic Dispute Just Got A Lot More Complicated

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The Amazon/Statsaholic dispute went from a simple UDRP domain name dispute to a full blown lawsuit last week (pdf of lawsuit is here).

Statsaholic, formerly called Alexaholic, offered Alexa traffic data graphs to users with a much better interface than Alexa did themselves. Despite the fact that Amazon complimented the service early on, they eventually moved to shut it down based on trademark infringement and unauthorized use of Alexa intellectual property (data graphs). Before resorting to legal action, Amazon reportedly offered $100,000 to simply buy the service outright. Hornbaker refused the offer.

Over the last few days, however, the drama factor has increased exponentially. It has become known that Ron Hornbaker, the founder of Alexaholic, was convicted of extortion in 1996 when he attempted to blackmail AOL users into giving him money. Hornbaker spent 18 months at Leavenworth Federal Penitentiary as part of his sentence.

Hornbaker frequented an AOL chat room called “Married but Looking,” posing as the flirtatious “Rita.” When Rita’s online admirers started talking dirty, Hornbaker then pretended to be her jealous policeman husband and threatened the men with bodily harm unless they paid up. None of the ten men that Hornbaker threatened gave him any money.

A Rockford, Illinois, man eventually turned Hornbaker in to the FBI.

To carry out his blackmail scheme, Hornbaker as the ribald Rita would troll chat rooms. Once he hooked his prey, Hornbaker would offer to show erotic photos of his Rita alter-ego in private rooms. But instead, the men would get threatening messages from the husband alter-ego saying he would track them down and hurt them unless they paid–usually between $500 and $2,000.

I spoke to Hornbaker this morning about the incident. He says that he was led to his actions out of desperation. His infant daughter was born with multiple heart defects, he says, and three major surgeries led Hornbaker and his wife to the brink of bankruptcy. His desperation led to stupidity, he says, and he chose to blackmail men who were willing to cheat on their wives with his fictional AOL user, Rita. He says the first time he went to his P.O. box to pick up checks from these men, the FBI confronted him and he was eventually indicted.

Amazon won’t return calls or emails on any aspect of the Statsaholic dispute. There are a number of rumors floating around that Hornbaker threatened Amazon with a PR smear campaign if they refused to increase their acquisition offer to well above $100,000, something Hornbaker flatly denies.

Hornbaker also says that Amazon is using his conviction as leverage in the case, threatening to disclose it publicly if he doesn’t settle immediately by paying $25,000 and transferring all Statsaholic assets to Amazon.

While Hornbaker will not give us a copy of the letter that Amazon allegedly sent him making these demands, he is offering to post all written communications between himself and Amazon since 2006 if Amazon agrees to do the same. I believe Amazon is very unlikely to agree to this, given that the case is now in litigation.

Hornbaker also said in an email this afternoon:

I’ve been to the bottom, and never again will I even go near the edge. If Amazon thinks they can sway public opinion of this case by dredging up old news, and making unfair comparisons of my behavior, then they should put their email communications where their mouth is, and post everything they’ve written to me, too – so I don’t have to. Let’s let the public decide the truth. I, for one, have absolutely nothing to hide.

The dispute is clearly as much a PR battle at this point as a legal one. Bloggers have largely come out on Hornbakers side in recent weeks, which is understandable given the classic “David v. Goliath” situation. These new facts are going to hurt his position substantially, however.

The only good news coming from this mess is that Hornbaker’s daughter lived through the ordeal and is now a “happy and healthy” thirteen year old.

Update: Alexa now offers graphs as a service. Previously only the data was available. The graphs are free but contain an advertisement.

Update: U.S. v. Hornbaker pdf is here.

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