Boise firm helps big ones keep their Web sites safe

January 7, 2003

MarkMonitor targets dark side of Internet

Whenever 20th Century Fox releases a new movie, sports show or TV series, Crecia Mathalia thanks her lucky stars for the Boise-based company that makes her job easier as Fox´s manager of domain name administration.

Julie Howard The Idaho Statesman

Mathalia logs onto the Web site for MarkMonitor and uses her password to access functions that allow her to immediately register a new domain name. It also lets the giant Fox empire find those who have been playing fast and loose with its corporate trademarks and domain names.

“We have a few thousand domain names,” said Mathalia, based at Fox´s Los Angeles headquarters. “If there´s a cybersquatter out there with one of our movie titles, this program helps us pinpoint what they are planning to do with it.”

Yeah, she said “cybersquatter.”

In the world of MarkMonitor, the 4-year-old company that recently caught the eye — and a $7 million investment — of Silicon Valley´s Foundation Capital venture capital firm, there´s a raft of terms like that. Most have to do with the dank underbelly of the Internet and are terms that corporate America is grimly getting to know.

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Company facts

Name: MarkMonitor

Founded: 1998

Headquarters: Boise

Employees: 42

What they do: Provide an Internet-based service that allows corporations to find trademark infringements, do domain registration and protect intellectual property.

Customers: 1,000 companies such as Sony Pictures, Dell Computers, 20th Century Fox and Caterpillar.

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Cybersquatting refers to someone who has registered a domain name that is similar to or uses a company´s trademark with the intention of withholding it from, selling it to, or doing damage to the company.

There´s also “spamdexing,” which involves repeatedly using certain keywords — registered trademarks, brand names or famous names — in one´s Web page. Doing this can make a Web site move to the top of a search engine list, drawing higher traffic to that site — even if the site has nothing to do with the search request.

“What will happen is you´ll do a search for Bank of America and you could be diverted to a third-party cloned site that could steal your personal and confidential information,” said MarkMonitor CEO Faisal Shah, explaining that in this example, cyber criminals could embed the Bank of America name in hidden areas of their site to make this occur.

Cybersquatting and spamdexing were among the new online perils that led to the launch of MarkMonitor in 1998.

Shah was general counsel for Richardson Labs Inc. in Meridian, working alongside owner Ed Priddy and chief technical officer James Hepworth — all founders of MarkMonitor — when by happenstance he did an Internet search for Chroma Slim, Richardson Labs´ premier weight-loss product.

“This company in Australia came up first in the search for selling Chroma Slim, and we didn´t even have an agreement with them to sell it,” said Shah.

The Richardson Labs management team didn´t pursue the Australian firm because the Meridian company was in the midst of selling to Rexall Sundown Inc.

Priddy, who owned the company with brothers Mark and John, sold it for about $75 million.

The Meridian plant was shut down soon afterward, and Shah, Priddy and Hepworth pursued the idea of trademark infringement instead, starting MarkMonitor that same year.

“Our goal after selling Richardson Labs was to launch other Idaho-based businesses,” said Priddy said. “This is the first.”

The Priddy brothers made good on that goal by investing $6 million between 1999 and 2002 through their company, Sterling Business Development Co.

Foundation Capital, a Silicon Valley venture firm that has $1.3 billion in investments under management, invested $7 million in the company last month.

“The protection of the digital asset over the Internet, such as trademarks and domain names, and overall protection of brands is a critical issue over the Internet,” said Warren Weiss, executive partner for Foundation Capital. “Having protection is critical to revenue and the integrity of one´s brand. MarkMonitor offers a great product.”

The funding was Foundation Capital´s first investment in Idaho, Weiss said.

“What was exciting for us is the quality of the work force there allowed us an interesting opportunity to grow a business in Boise at a much-reduced cost than in Silicon Valley,” he said.

MarkMonitor has attracted customers that include KeyBank, Sony Pictures, Caterpillar and Dell Computers. They pay a monthly subscription fee that allows them into a password-protected Web site containing the search software. Companies take control of their own searches, being able to keep track of their own trademarks — or even peek at how their competitors are protecting theirs.

At 20th Century Fox, MarkMonitor products also are used for intellectual property protection.

“We can gather information that assists us in litigation,” Mathalia said.

The product lets customers do searches in more than 200 countries, aiding domain registration in those countries with a staff that speaks more than 15 languages.

“We´re only one of four or five companies in the world that can do this,” said Chris Bounds, senior vice president and chief operating officer of MarkMonitor.

“The Internet has been the wild, wild West,” Bounds said. “One individual who has the technical skills can take famous names and use them to sell counterfeit items. They can create pornography site links. Companies need a solution.”

To offer story ideas or comments, contact Julie Howard jhoward@idahostatesman.com or 373-6618

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