MysteryDomainAuction ... check this

Hi REECE,

The mathematics are deceptive as bidding progresses. The amount of money made at $2.76 (current bid as I write this) is but $380.88 (not sure why his site reports higher, I don't think my math is wrong...).

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This anomaly that you speak of is explained on the front page, on the buy page (in terms and conditions) and in the faq.

Here is a quote from the front page:

( * If by coincidence two or more bids are bought at the exact same time for the same amount, bids will be ordered by time of purchase. )

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Here is rule 3 from the terms and conditions:

Every time a new bid is purchased the bid amount is incremented by $0.01. But, because controlling time and space is beyond my capabilities, if by coincidence two or more people bid at the same time for the same bid amount, the bids will be sorted based on bid time, down to the millisecond, with the latest bid declared higher. This criteria will also be used to determine the winner of this all-pay auction in said scenario. If at the end of the auction two or more bids are highest with the same amount, the bid that arrived last will be pronounced highest!

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I also say at the top of the terms and conditions:

To buy a bid in the mystery domain auction you must agree to abide by the following terms and conditions. Please read this agreement carefully before bidding.

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And I will repeat here - please read the terms and conditions carefully before you bid. If you do not agree to the terms and conditions PLEASE do not bid. By ticking the "Agree to terms and conditions" you are agreeing to the terms and conditions!

Finally, for your other statement:

Sites like this prey on the stupid -- nothing wrong with that, government does the same with something called the lottery, which is exactly what this is. Someone will end up $10,000 richer. Anyone bidding before the last day for any reason but a backlink is a fool.

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Do you really believe that people are currently bidding to win the auction or are they bidding for the link on the center page? People are smarter then what you give them credit for.

John

I hope not John. At the same time, I question how bidding should ever get much over the $5 or so point unless you're able to continuously drive traffic to the site -- most traffic is currently being generated by hype created here + on domain blogs, something which won't be sustainable, so you'll need a new source of traffic.

I think listing the whole $1 million dollar thing on the site is a mistake -- it'll turn anyone off who's interested in bidding for anything other than the link when they see your goal and what the prize amount is. I don't see the mainstream media (which I presume is the reason the $1M goal is stated) picking this up either.

The whole part on the right hand side listing how much money has been made at certain prices is basically saying "this is how much people who have place bids have so far lost" at those prices. As a businessman, this is not what I would want to share with potential customers. I don't tell endusers and other domainers how much I will profit off of them if they buy one of my domains at a certain price -- it's bad for business.

The thing about Million Dollar Homepage is that not only did it receive likely 1000 times the traffic MysteryDomainAuction.com is currently receiving, the pixels were also prominently displayed on the page. Nobody is going to scroll through hundreds of links -- the only ones of long term value are the ones in the top 50. Being up 5 years isn't going to make any difference for someone who's link is on page 200.

geronimo said:

Do you really believe that people are currently bidding to win the auction or are they bidding for the link on the center page? People are smarter then what you give them credit for.
John

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I respect your opinion REECE, but my opinion does not match yours.

This is not a SCAM or a GAMBLING scheme - people are willfully bidding with the aim of getting traffic from the links.

All I ask is for people to wait 100 days to pass to see who was right about the traffic rather than make harsh judgments which are based on opinion alone. If you don't like the idea, don't bid. In fact, stay away from the page altogether if it won't let you sleep at night .

John

I have read a couple blogs that seem to hate the idea.
personally I think there may be some jealousy going around.

I think its a great fun idea and maybe a way to get a few visitors to your site.

Would be easy enough to copy if someone wanted to: http://www.swoopoclone.com/

I'm not jealous, I like the idea but don't agree with the way it's being promoted. People aren't going to pay $100+ for a link -- it's obviously gambling. I have no problem with that, just wish it was promoted for what it is, not pretending $1MM worth of bids are going to be placed for links.

deet said:

I have read a couple blogs that seem to hate the idea.
personally I think there may be some jealousy going around.

I think its a great fun idea and maybe a way to get a few visitors to your site.

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it's all about link exposure.
your right buying a link for anything else would be a gamble.

pretty simple. if you don't wanna play then don't pay.

At the very least, this adds variety to a sagging domaining industry. Anything new will get extreme reviews both for and against. But the old adage about any exposure is good exposure may be in play here: People who don't like the idea for whatever reason are still spending their time blogging and posting about it, which means more publicity.

Still, no matter how much someone dislikes the idea, it's bit much to second guess a person's reason for participating and call them stupid. That sort of blanket value judgement seems a little over the top.

As for the domain, I'm curious as to how the value was attached. I hope it's an LLL.com or something of time-proven value. Even so, many, if not most, will be after the cash (which brings up interesting cyberlaw implications).

If the earlier posts about the end of the auction are correct, and there's no minute or two extension for bids in the last minute or two, it seems a weird way to end it, as most bidders will try to snipe, and it will be a chaotic ending. Plus, the owner will give up the an opportunity to get a lot of bids at the end.

There is no way the bidding will ever end because of two weeks of no bids. Think about it.

I've had 2 enquires about some names i own (my link was to a portfolio page and 1buyer said he came from this site)

i had a xxxx offer straight on a 2 word .us name

for a $1.?? link it's not to bad

I think he'll find it hard to get link buyers at $20.00 + but that will give him almost $20,000

James B said:

I think its a shame comments like this are made.

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Ok then, you tell me how this is different than a ponzi/pyramid scheme or at best a lottery (which some people like myself consider a "stupid tax") disguised as a domain auction? Tons of people will pay in money, only 1 will get anything of remote value, and at this point we're not even sure it really is of value (which again like I said in my post, it would do HIM a world of good to have said what the domain is at the very beginning). Only 1 person + affiliates will get money - again he would have been better served doing something like giving half or maybe more of the proceeds to charity just so it looks like he's doing anything other than something completely selfish and schemish.

A link back for bidding is nice and all but how much will the traffic from there really be worth given it's all about the domain auction? I wouldn't be going there to browse other people's sites and once there's hundreds or thousands of links there, how much of them will really benefit at all? The worst part about that is that the more people will be paying later on, the LESS their link will be worth because there will have been that many more links.

I'm not saying it's not an inventive idea, but I'm saying it's a scheme...not a business model, not providing anything of value to the community, essentially nothing but lining his/affiliates pockets. If that's how he prefers his reputation to be and how he wants to make his money, by all means it's his choice. None of us have to like it though or say "good for him" or say it's a benefit to the community.

I meant exactly what I said - I hope it ends up making less than $10,000 just so we can see if he'd put his money where his mouth is. It would probably be better for HIM if that was the case...because while people that have paid $1 or $2 thus far to get nothing but a worthless linkback amongst hundreds or thousands of other linkbacks might not be too upset, wait til it gets higher.

NY Times article on it may help you understand: http://freakonomics.blogs.nytimes.com/2008/12/16/an-all-pay-auction/

bidding will stall to only a few bids per day in one week. it will get down to the last minute and anyone around the computer can take a shot at the prize for a good price.

i predict money will be lost on the auction itself.

To my knowledge, KingOfTheBill.com was the real first version of this - but without a domain or a cash prize. It was a gimmick that showed how long the current bidder stayed on the top. Never bought a link, but it was fun to watch - until people stopped buying when the bids got a little over $100.00. After that, it died. This idea looks very similar.

I see NamePros bidding at $1.84.

Ok then, you tell me how this is different than a ponzi/pyramid scheme or at best a lottery

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This enterprise seems carefully laid out to avoid being designated a game of chance or skill...raffle, lottery, etc. In MysteryDomainAuction, it's right up front that (unless you are the last bidder,) you get a type of consideration for your bid/investment--a link for five years; in essence, your "bid" bought a link. (That in itself would make it not a game of chance.) The domain is almost like a bonus prize to the last person who buys a link.

Notice how cash is not offered as part of the event: it is not an "option" in lieu of the domain, but available as a private offer to purchase the domain after it's awarded. (Does that mean you may be double-taxed for the domain and the sale of it?)

The seller is profiting from this event, so how it is categorized (game of skill, game of chance, lottery, raffle, regular business, etc.) would be important.

verbster said:

This enterprise seems carefully laid out to avoid being designated a game of chance or skill

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Of course, because if it were it'd be illegal in most if not all states. Likewise I'm sure there are things CLOSE to ponzi schemes that would be carefully laid out to be legal but would in effect do the same thing. The question is whether to applaud such behavior or not.

Consider this: No one knows what the domain is, only that if they win they are promised to be paid $10,000 for it if they want to sell it. So - what makes this different than a gambling/lottery "game" laid out like an all-bid auction where the prize is $10,000? What chance is there really that the domain in question is actually worth more than $10,000? The links sugar-coat the issue.

The article I posted is about Swoopo, which believe it or not is not allowed in all US states (they don't operate in all US states and the only reason why not would be it being illegal in those states). I don't know the exact laws outlining the illegality of it, but this isn't that far from that. Giving people the hope of getting a name for far cheaper than its worth when in reality only 1 out of potentially 10,000+ will. That's not a lottery why? Oh right, because it's the 9,999+'s fault they didn't get the "last bid". Just like it's the bottom of the pyramid's fault for not getting enough people to buy into the pyramid...their fate is in their hands too!

To answer the lottery question: I'm not the only one that's ever referred to it as a stupid tax - you can search online and see the reasons people give. It probably IS a misnomer though because it more preys on people's hopefulness of winning vs. necessarily "stupidity". The sad thing is that most people that win the lottery don't exactly live a happy life afterwards, and yet that's the assumption that people make - winning the lottery would above all make them happy because life would be easier.

To answer the lottery question: I'm not the only one that's ever referred to it as a stupid tax - you can search online and see the reasons people give. It probably IS a misnomer though because it more preys on people's hopefulness of winning vs. necessarily "stupidity". The sad thing is that most people that win the lottery don't exactly live a happy life afterwards, and yet that's the assumption that people make - winning the lottery would above all make them happy because life would be easier.

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Irony makes life interesting. Today's news: http://www.msnbc.msn.com/id/28485679/?GT1=43001

Being real here... If bids get to $147 (what John needs for his million), that'd mean 14700 bids have been placed. I think it's a bit of an exaggeration to suggest that people have any chance of winning. Lotteries are a stupid tax because only fools buy them actually thinking they're going to win.

As Steve said, it seems like it was modified just enough to maybe make it legal (depending on where you reside). If the domain wasn't involved, this would clearly be considered gambling in many places and would be illegal. As some of have mentioned, unless the domain is worth a whole lot more than $10,000 or is in a category such as LLL.com (eg. triple premium) where anyone can roughly approximate it's value, I have a very hard time believing everyone will consider the domain to be worth $10,000 -- hence why we have the cash element.

Million Dollar Homepage wasn't the same at all -- there was no prize for people buying pixels -- merely advertising. If you take out the contest here and just make it about purchasing links (something John is claiming is the reason people are buying links), then it's perfectly legal and does resemble Million Dollar Homepage... But it's not about selling links. It's about selling false hope.

I don't think anyone plays the lottery hoping notto win. If someone wanted to donate to charity, they'd donate it to a charity, not to some likely corrupt lottery organization.