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.
Comments
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I appreciate your call earlier to get the full backstory. That period in my life 11 years ago is painful to relive and see in print now, but like I told you - in the heat of that awful situation, I probably would have robbed a bank to help my daughter, had I not thought up the stupid “to catch a predator/cheater” idea. I did my time, got through it and found out who my real friends were, and have tried to do only good things since.
My dealings with Amazon over Alexaholic.com have in NO WAY been even close to extortion - and believe me, I know a thing or two about extortion law. To prove my point, I’m willing to post every single written communication I made to them since 2006, if they’re willing to do the same. I would also like them to rescind the NDA I’m under regarding the acquisition offer, so I can talk in more detail about that. Did they make me a reasonable offer to buy Alexaholic.com in the Fall of 2006? Yes. But before signing the contract, I decided not to sell and to continue developing Statsaholic, and never once did I ask them for more money. In fact, I offered many times to give them the alexaholic.com domain and to start paying them money for their graphs, if only they would let me keep operating Statsaholic and drop the lawsuit.
My history is what it is - I can’t change it, and I’m not sure I would change it. It has helped mold me into the person I am today, and I never would have met my beautiful wife or created the internet businesses I have if it had gone differently.
I wonder how many readers have some part of their history they wouldn’t want dug up and publicized by a $16B company?
Amazon: guilty. Now that Alexa is out of the woods, you’re suing a two man shop? Brand equity dilution doesn’t exist when it mentions your brand in their definition (or best case scenario, in the URL)
AOL users in 1996. Guilty and dumb
Insurance company. Guilty. You’re not going to cover a heart defect?! Oh is that why my policy is 75 pages.
Ron Hornbaker: guilty. sorry your past action(s) will now bite you. Karma is a bitch
The Devil: happy
Great article Mr Arrington!
@Larry,
A few clarifications: I’m a one-man shop on this. We did have insurance, but I was trying to operate a solo-practice vet clinic, and make extended trips to Children’s Hospital in Boston, and we got way, way behind on finances. I tried to make it up with a stupid shortcut in my desperation.
As far as paying for my past actions, I did that already. The 18 months at in the pen weren’t all that fun, and when I got out, I started from absolute zero to rebuild my life. Karma was evened up at that point, imho.
There has got to be sort form of settlement. This is obviously bad P.R. for Amazon and defending Statsaholic will cost at least a few pretty pennies. Is the only possible settlement to take down Statsaholic to make the lawsuit go away?
The thing that’s getting me tired in this is the constant implication that somehow Amazon complimenting a service is a legal approval in perpetuity. The David v Goliath angle is pretty stale too.
I see nothing more than Amazon offering to pay someone to shut down a service they had every right to shut down with zero notice or reason. That seems pretty magnanimous to me, and the last pertinent fact in the world is the relative size of the two organizations.
As for the past incidents, ostensibly the reason for this update, it has nothing to do with this situation in my opinion. But since it’s out there, I don’t care what the rationale, if you need money and the winning option you come up with is blackmail, you’ve got serious, long-term, mental problems.
And if his daughter turned out OK even though the blackmail failed and he got arrested, I have a hard time believing the situation was as dire as claimed.
And if you think I’m being insensitive, try paying cash out of pocket to ongoing Peutz/Jeghers treatment for a spouse before you talk.
Sad… This is really turning out to be uglier than I thought…
Everyone is getting their hands dirty…Although history is what it is already… I really dont admire Amazon`s act of digging up old dirt to prove they are angels in this case.
There is no reason for Amazon to bring up this guy’s past. What the man did in the past is his own business, specially if it has nothing to do with his current business practice. This is ridiculous. The only thing they have done so far is to make him more famous and more liked. Here we don’t judge your past, we judge your software, your web design and sometimes we talk trash ( just for the fun of it ), but by no ,means we are going to hang someone for something that happened 11 years ago. F**? out of here. Most people did not know of the internet 11 years ago.
Congrats to Pud on the Alexa win. I guess I can see the value of the BritePic thingy now.
Still it DOES NOT “redefine” the img tag. LOL.
I’m inclined to agree with Larry Chiang: this is a well-written piece. It would have been easy for mr Arrington to just make this into a “tasty” article about past sins. Now it is well-balanced, not going in either direction, but disclosing what is available in terms of information and claims.
Shows that Michael thinks his readers are smart enough to make up their own minds as more information is disclosed.
..and I write this, because I actually do think it is worth applause: 99% of journalists and bloggers would have gone for the headline-grabbing tasty article..
“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.”
sorry hornbaker, even a financially desperate man knows that extorting money from married hornballs at $500 a pop won’t pay for 3 major surgeries.
past character flaws are a good indicator of future character flaws.
Willie - I think the title and article are better this time because perhaps (not sure) Michael has changed a bit since that other person tried to sue him. I will agree that this post appears to be well written.
Actually that brings up a good point, what’s the status of that lawsuit Michael? You posted the suit information I guess to get links and traffic and so forth, why not give us an update? Use us and then leave us hanging? C’mon.
There seems to be some implication in the comments above that Amazon released the information about Mr Hornbaker. Can someone show this to be true? The matter seems to be one of public record.
Mr Hornbaker may not think that he has indulged in blackmail this time, but his out-of-control unwarranted negative PR campaign against Amazon has the same effect (gaining sympathy for himself at the expense of others).
Bob - I’m working with my lawyers on what I can post, but Rivals has backed down. The post was accurate.
Mark - I have no evidence that Amazon leaked this. They certainly did not do it formally in any event. I got this on two email tips from sources unrelated to Amazon. Also, the Amazon lawsuit makes no mention of it.
thanks
Congrats, Mike. One less headache to deal with.
Wow Mike, who needs reality TV when you have the TechCrunch Rivals thing and now this mini Amazon-Aholic-PseudoSex-Scandal
If a person has paid his dues to society, apologized and hasn’t done it again, and he isn’t running for public office (not that I’m sure we wanna know about them either, but you know there’s precedent and all that), why do we need to know this? It’s not like he’s a pedophile moving into a New Haven neighborhood or anything.
What does this have to do with anything? Why is this in the news? How does something that happened 11 years ago in his personal life have any weight in this issue at all?
Very classy, Amazon, very classy.
I believe Ron Hornbaker on this. You only have to look at the sheer stupidity of that scheme and compare it to someone clever enough to develop alexa/statsaholic to accept the emotional insanity plea. And either way, as he points out he has already been through our justice system on it. I don’t think something like this condemns one forever.
The thing with Hornbaker’s past is just that, the past. We all have something that we wish we could undo. Hornbaker cannot do that. He did his time and that should be the final word on this point. Any correlations between his past indescretions and the Alexa thing is just malicious supposition by everyone. But here we are on a VERY public blog putting them together like they belong. What is truly sad is that old wounds have to be reopened for the sake of fugging money. I have no doubt that there are soulless prigs reading this and enjoying what must be an intensely painful time for one man (and god forbid, his daughter.) I am sickened by this.
I think that amazon/alexa leaked this just to hurt Ron Hornbaker. That is the kind of dirty pool the big companies play.
Jeff Bezos –does it feel good to crush a man BECAUSE YOU CAN? Are you proud of your minions work?
Tell me again what this has to do with the Alexa thing? Eleven years ago, entirely unrelated, debt paid to society by any sane standard. And suddenly it’s a “twist” in this lawsuit?
Huh. Doubt it. Sounds like another attempt to blur the actual issues by smearing a guy with anything you can find. As someone else said, “classy”. Real classy, Amazon.
Nothing like a little drama on a tech blog! I feel like I’m reading wwtdd.com
I would caution everyone from saying Amazon leaked this without proof. We are on the information super highway after all, and the spotlight has just been turned on this poor fellow. Innocent until proven guilty, I say.
Amazon loses some serious points here. Bezos should run for President, these tactics are more accepted in that arena.
This old conviction has nothing to do with the current case, and it’s really unfortunate that it surfaced now.
But … but… Think for a minute. It is so ugly, so unfair, and so obviously would reflect negatively on Amazon, that I really seriously doubt they would not see it … which really leads me to believe they could not have released it. It would have been way too shortsided, stupid.
And Amazon blackmailing “the little guy” to pay $25K? C’mon, this has to be a joke…
Ignoring the past.
Amazon’s whole web services strategy is to let other people build services on their platform (AWS in general - web traffic, S3, EC2). Seems like they want to empower the web developers of the world (including dorms) to worry just about the app and take the infrastructure for granted. Nobel thought but hard to implement. Especially in case someone beats the living daylights out of their own product built on top of the same services. Amazon is setting a disastrous precedent by getting after Statsoholic. I would be weary of using S3/EC2 to build a digital book store.
This is just plain silly - to essentially threaten to surface something that happened in the past, that should be set to rest by virtue of Hornbaker having done time.
Sad of Amazon to use a card like this…
OK. If Amazon didn’t leak it at this time, then who did? And why?
Sorry, but the way I see it is that it’s a bunch of thugs in suits from Amazon slapping, kicking, punching the little guy. Any way they can.
If I had to steal to feed my family, I wouldn’t hesitate. What Ron Hornbaker did eleven years ago at what seems to have been a very precarious time in his life is in no way relevant to the current lawsuit. He’s admitted his crime, done the time, the slate is clean.
This muckraking by Amazon is a low act.
Forget the past? The past is often brought up, because it shows what kind of person you are. How’s this any different than what the Michael Crook guy did to craigslist users?
And in this case, first you use their name and grahps, an obvious illegal tactic, then drop their name and continue to use their copyrighted graphs? What do you expect them to do?
Obviously, you haven’t made the full switch from the DARK SIDE!
And we only have to take his word that there was actually a “sick infant girl”?
ummm.. hey guys.
unless i miss something, and i very well might have. where are the docs/proof of his daughter having this life threatening operation/illness…
i want proof dammit!!
also, why is this any different than the child molester with regards to knowing the guy’s past…
as a society, my gut is we either allow a person to do his time/pay his debt to society, and then he has the right to get on with his life. or else, we should keep the bastard in jail for ever…
i’ve never understood the approach that we have to pedophiles. we put them in jail.. we let them out.. we hound/harass them and scream when they want to live in our area… we don’t do the same to arsonists…
if we don’t want criminals who’ve done their time, paid their debts, and any other cliches, to be free… we should lock them up, toss the key…
peace..
Seems like a bullying tactic to me. This guy paid his dues and was already pulled through the court of public opinion once before, and the timing seems pretty convenient. No better way to stiff arm someone into getting what you want then dragging a skeleton out of the closet. How ironic they are using extortion tactics themselves.
Seems to me that is a classic “david vs. Goliath” story and AMZN is pulling out their $1,000/hr. lawyers to eviscerate David…how about focusing on your business Amazon….get a life?
-Scooter
Seems to me that Ron is the victim here and that Amazon is an 800 pound gorilla picking on the small guy. This happened like 10 plus years ago and has nothing to do with Alexaholic and Alexa. Just my 2 cents. -James
There is some major smearing of Amazon going on here. Looks like a concerted effort to make it look as if Amazon DID in fact leak the information about Hornbaker’s past.
Guys, think about it. Amazon has NO INTEREST whatsoever of dissing Hornbaker because Amazon is on firm legal ground here. All they have to do is to sue his ass off and that’s what they are doing.
Besides the info is out in the public anyways… anyone who did a search on Hornbaker’s name would find that article. I seriously think any leak of this sort was to damage Amazon and not Hornbaker.
And lastly, is Amazon being heavy handed? Well in a way, since they DID allow him to set this up in the first place. But at the same time, UNLIKE Mashups and API’s which the company offering the API has clear licences on terms of usage, in this case, Hornbaker clearly did not have permission to use Alexa’s data.
Does ANYONE even remember the John Mccain’s MySpace saga where a McCain staffer inadvertently used a template provided by the CEO of NewsVine? What were the reactions? Almost everyone was like, Oooh.. McCain’s campaigns are theives! They are stealing bandwidth! Blah blah blah.
I swear some of you really have split personalities here.
I think its important that we just focus on the current case - the Statsaholic one. Is the valuation of Statsaholic by Amazon correct or anywhere near reasonable - I think that is the issue here.
Its bad for both sides but at the end of the day - its Amazons data and therefore they have the right to with it what they want.
Trademark infringement - fair enough, you cant argue with that - its balantly obvious that Ron violated it. Get over that part and move on.
Statsaholic is another matter - better interface, better everthing. However what protection did Ron have over that bar creating the service. Amazon took parts of it and integrated into their service. Well its there data so not entirely sure whats the problem here? Happens with 1000’s of websites everyday.
As to the history part - that wasnt so cool. Sure history is history, but if your going to court and your a convicted Fellon………well its relevant to any law case. Its like releasing a murder, who then does a crime in the future and going “oh well lets ignore that past history.” It just doesnt happen
Either way - good on you Ron for creating a service. But bad luck for creating it on the back of someone else’s data you dont own.
Good luck in the case
So what happens when somebody builds a service ontop of S3 or EC2 which is better than the original, and it eventually threatens Amazon themselves? Ahah, no thanks Amazon, you can have your damn web services if this is how you behave..
I don’t get it… Alexa offer Alexa API for developers now they are suing developers.
What kind of company is that?
I don’t understand why amazon are asking for the site and $25,000? What are they going to do with $25,000? Provide a crappy lunch for some of their staff or something?
Also if you go to jail for a crime you committed and you do your time then feel some type of remorse for what you did, your in the clear. (As long as you didn’t kill somebody or hurt them real bad. In which case you are still a bad person and should give lots of blood to make up for it. Oh and your organs when you die too.)
The only thing I have a problem with is the whole daughter story, I am not sure I buy it. Saying a family member has an illness is an easy out, I’d like some more proof about that. As long as you aren’t lying about that, Ron, you are OK in my book. (If you are lying about that, you got some serious issues.)
2nd that William Ryall
There must be some more out of this
Amazon should give a public speech about this matter
i am pretty sure there is more into this rather than 25k crap
Michael, you should really create a post again explaining exactly what Hornbaker was doing. It seems that most of your readers don’t understand the case and think that he was just using the Alexa APIs that Alexa/Amazon was making available to developers.
He wasn’t, he was leeching images from their site and stealing bandwidth. Seems like he still hasn’t given up his thieving ways, so can’t say I’m too quick to believe anything that comes out of his mouth now.
This whole business saddens me. The only people that will gain anything are the lawyers, leaving both Hornbaker and Amazon’s names as having been dragged through mud.
Really the only sensible way for Amazon to have dealt with this would have been repeated job/acquisition offers followed by a “if you don’t join us we’ll have to charge you for those graphs”. Now what’s happened there’s enough bad blood that such a sensible resolution couldn’t be achieved.
Re@ William Ryal.
Amazon apprently offered him 100K for the site, I guess as a token gesture of “OK we f’d up by letting you use our graphs and not go after you at the beginning”.
Now I guess Amazon is just basically asking for $25K to pay for the lawyers’ fees to file the lawsuit… so Amazon can say that they’re not benefitting from the lawsuit and at the same time can show their shareholders that they’re not wasting their money either.
trevo - its not about split personalities…basically people will side with the underdogs…clearly, in this case the underdog is Mr.Hornbaker…Amazon is going to loose some respect with this debacle…
I think it’s good idea to stop using ALEXA API.
maybe switch to compete
Let’s not have a Web 2.0 love fest here. I don’t care about all the drama here. The David vs. Goliath thing is way overdone. Guess what? That’s life.
You cannot build a real business by stealing other people’s content/technology/data and then go cry like a baby when the rightful owner says “the party is over kiddies.”
When will people grow up? Everyone on TechCrunch seems to have such a deep-seated hate for copyright owners and anyone who actually produces content. Everyything should be free! Just support it with advertising!
Guess what? That doesn’t always work. If we remove all the incentives for people to produce good content, we’ll be left with what the vlogging world is already turning into - a bunch of people with low production skills, low levels of humor, who pat each other on the back, watch their own sites, Twitter each other, myspace friend each other, and realize “whoops, we don’t actually buy anything and no one outside of our world watches us.”
As Thomas Friedman said, “I’m afraid we may all be selling hamburgers to each other one day.” Thank God there are people who do real work in America and not everyone is busy lifecasting themsleves and creating “neat” sites that allow you to steal content in 1000 new ways! Tag it, podcast it, rip it, bookmark it, share it with your friends, Twitter it, wohoo!
I have sympathy for Ron. He made a mistake, did his time, and is not running from it.
I’ll reserve judgement on whether I should relate his past crime to the issue of Amazon until they prove otherwise.
Wow, what an amazing story!
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