HUGE DOMAINS SNIPING GODADDY CLOSEOUTS

wwwweb said:

It was all BS to hush everyone up, all these pros wouldn’t be speaking up if it wasn’t a level playing field.

Either someone isn’t being honest, or they have figured a way around it, and have not been questioned, or stopped, but it’s total bs for both scenarios. Another black eye for Godaddy.

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I have followed your posts and opinions in the thread. I believe you speak the truth and that there is a certain ''understanding'' between GD and HD.

However, it still may be possible that HD know how to use the API better. I believe, that if all closeouts start at the same exact time after an auction has ended, it is possible to be faster than everyone using 1 API call per second IF 60 calls per minute means that you can distribute those 60 calls whichever way you like (instead of once every second). This needs testing.

If the tests prove that this is impossible, then you have a very strong case.

Lord Antares said:

I have followed your posts and opinions in the thread. I believe you speak the truth and that there is a certain ''understanding'' between GD and HD.

However, it still may be possible that HD know how to use the API better. I believe, that if all closeouts start at the same exact time after an auction has ended, it is possible to be faster than everyone using 1 API call per second IF 60 calls per minute means that you can distribute those 60 calls whichever way you like (instead of once every second). This needs testing.

If the tests prove that this is impossible, then you have a very strong case.

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I agree with what your saying it makes perfect sense, in that sense godaddy has an obligation to protect the integrity of their system from one party being able to game it. The closeouts have been more consistent in dropping than previous years, this theory could make sense, but it would prove it isn’t a level playing field.

I have seen the protection Godaddy provides Huge Names first hand, it is a very lucrative business relationship, and they don’t want to rock the boat with it. Would you if you had a party who bid on the majority of active bidder auctions, and turned $20 bills into $200 bills day in, day out.

Lord Antares said:

So you get 1 API call per second, which is more or less standard with registrars. HD seems to operate at speeds far exceeding 1 call per second. Something doesn't add up there.

Unless 60 requests per minute doesn't mean 1 request per second. Maybe HD fire off 60 requests instantly at a time their bot knows is right. Do all expired domains take exactly the same amount of time to enter closeouts? Because that would make sense then.
Hmm...

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I doubt 60 per minutes also means one per second. If that's what they meant, I think they would have written that instead. I think it means just what it says, 60 per minute. Which would mean fire them off as often as you like, as long as you don't do over 60 in a rolling one-minute period.

wwwweb said:

I agree with what your saying it makes perfect sense, in that sense godaddy has an obligation to protect the integrity of their system from one party being able to game it. The closeouts have been more consistent in dropping than previous years, this theory could make sense, but it would prove it isn’t a level playing field.

I have seen the protection Godaddy provides Huge Names first hand, it is a very lucrative business relationship, and they don’t want to rock the boat with it. Would you if you had a party who bid on the majority of active bidder auctions, and turned $20 bills into $200 bills day in, day out.

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Yes, that's my point. It would protect GD's integrity. If this was something that everyone was able to do (just didn't know exactly how to), godaddy would not be in the wrong and would not be giving HD preferential treatment, yet HD would know how to do this and the average Joe would not.

That would be a lot smarter on GD's part as opposed to letting HD cheat.

slobizman said:

I doubt 60 per minutes also means one per second. If that's what they meant, I think they would have written that instead. I think it means just what it says, 60 per minute. Which would mean fire them off as often as you like, as long as you don't do over 60 in a rolling one-minute period.

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Yeah but that means that if multiple people do this (which they really should; very hard to believe that they wouldn't try), the snipes should be roughly evenly distributed among all the snipers, which they are not. There's possibly something that HD know that others don't.

Lord Antares said:

Yeah but that means that if multiple people do this (which they really should; very hard to believe that they wouldn't try), the snipes should be roughly evenly distributed among all the snipers, which they are not. There's possibly something that HD know that others don't.

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HD may have their multiple computers doing this simultaneously (all using same API account still), overpowering others. But who knows.

slobizman said:

HD may have their multiple computers doing this simultaneously (all using same API account still), overpowering others. But who knows.

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I believe API limitation is per account, not per device.

I have seen from the backorder loophole, godaddy knew for the longest time what was going on, but refused to change it, even after the fact it took a month to implement. Albeit the poor bastards were sitting at their computers for hours on end hitting refresh wondering why the domain didn’t drop to closeouts.

All you had to do was place a backorder on the domain at the second the auction closed. Albeit you could beat huge names with a human bidder doing it with about 3 seconds left given delays in the system. They didn’t close the loophole right away because they wanted to provide them an opportunity to spend those thousands of worthless backorders. Probably why they created that $5 backorder rebate program after the fact.

It is a very slippery slope, and a complicated one to have partnerships when dealing with live auctions, and such. We will see how long godaddy stays silent, but the bot grows smarter, and as more domainers start noticing a pattern of the bidder id bidding them up, we may hear more about it.

This could have been the reason to noppise bidder id numbers as it is giving us a good indication of bidding patterns by a single party. Godaddys system only works with active users, and with completion so high got the fre premium, it has caused more to look harder thru lower tier. Some would have had success, until that door is now shut on them as the platform is being games by a single party cornering this market, and other parties are unable to fairly compete.

Lord Antares said:

I believe API limitation is per account, not per device.

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Yes, that's what I was thinking as I wrote what I wrote.

My prediction: Godaddy will stop showing the bidder id's when looking at the "Didn't Win" auctions. Then we will have no proof of who is winning the auctions. That would have the result of shutting us up.

slobizman said:

My prediction: Godaddy will stop showing the bidder id's when looking at the "Didn't Win" auctions. Then we will have no proof of who is winning the auctions. That would have the result of shutting us up.

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It’s hard to take things away once presented, plus the way their coders work that would take about 4 years to implement. This was probably the initial hesitation give. one party wins a large percentage of auctions /closeouts. I mean many domainers are not going to fall into their proxy traps, newbies, and one off bidders are another story.

Godaddy was actually the only auction house to not show any sort of bidder identification going into 2019.

slobizman said:

My prediction: Godaddy will stop showing the bidder id's when looking at the "Didn't Win" auctions. Then we will have no proof of who is winning the auctions. That would have the result of shutting us up.

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I don't think that will happen - As long as no one can prove how they game the system, then nothing will happen and if someone calls GD out Joe Styler will appear here to make a comment and call people conspiracy theorists

wwwulff said:

I don't think that will happen - As long as no one can prove how they game the system, then nothing will happen and if someone calls GD out Joe Styler will appear here to make a comment and call people conspiracy theorists

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Well Godaddy employees, especially executive management are stakeholders, their salary, and bonuses are tiered into the performance of their departments.

I wouldn’t expect much out of them, they constantly need ways to make sure the bottomline shows growth, and huge domains is that partner. However they can’t absorb all those proxy bids that don’t take out their max bids, so I would assume the closeouts help level the burn.

Godaddys new theme song:

Participated in 7 random auctions today at Godaddy today, Huge Names bidder 91932 was active in ALL those auctions, bidding aggressively, but losing all 7 of them in the end. Majority were a 2 way bidding war, sometimes 3, but with them being in it, they doubled, and tripled, and sometimes x 5 the prices.

Godaddy continues to show higher valuations on the auction page, compared to their appraisal page, not sure where the disconnect is there, but obviously having a higher appraisal value on the bidding page would yield higher bids. Only for people to win the domain, and see the appraisal is now lower on their appraisal page.

Bid carefully, and do your homework. Know your bottomline, and don’t let outside factors affect it, otherwise you will end up overpaying.

I don’t see how Huge Names can afford to keep over paying for 100’s of domains a week. They seem to be buying in bulk above resale prices. They buy a bunch of decent, but not great domains and then list them for under $3k.

They’d have to be selling 15% or more of their domains a year to make a profit. The math just doesn’t add up. GoDaddy must give them a steep discount off the final auction price.

onni said:

I don’t see how Huge Names can afford to keep over paying for 100’s of domains a week. They seem to be buying in bulk above resale prices. They buy a bunch of decent, but not great domains and then list them for under $3k.

They’d have to be selling 15% or more of their domains a year to make a profit. The math just doesn’t add up. GoDaddy must give them a steep discount off the final auction price.

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Here in lies the question are they bidding to win, or bidding to push prices high, or engage bidding wars, or newbie bidders to push their max proxies?

As you said they would need a very high sell thru rate to sustain that spend, and their annual renewals. I just don’t know how the formula adds up? If you own like over 6 million domains at such a low cost point, why would you be spending your capital buying more names in the hundreds to thousands, and not spending that money to sell your existing inventory.

Also huge names continues to have a monopoly on the closeouts, godaddy has not restricted their advantage yet.

Also eighth auction of the day bidder 91932 was active in taking it from $2xx to $4xx, which they lost also.

So in all 8 auctions i participated in today, bidder 91932 was active, and lost all. This random sample just for myself shows me how active they are, and how responsible they are for pushing up aftermarket prices, artificially, or legitimately I have no idea.

wwwweb said:

Here in lies the question are they bidding to win, or bidding to push prices high, or engage bidding wars, or newbie bidders to push their max proxies?

As you said they would need a very high sell thru rate to sustain that spend, and their annual renewals. I just don’t know how the formula adds up? If you own like over 6 million domains at such a low cost point, why would you be spending your capital buying more names in the hundreds to thousands, and not spending that money to sell your existing inventory.

Also huge names continues to have a monopoly on the closeouts, godaddy has not restricted their advantage yet.

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It's like they're buying dollar bills for two dollars each. There must be something we're missing here. It just can't be sustainable.

onni said:

It's like they're buying dollar bills for two dollars each. There must be something we're missing here. It just can't be sustainable.

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Well depends if they are bidding to win, or bidding to keep prices high. They didn’t win any of the 8, I participated in, but they pushed prices significantly in their participation. Your right it doesn’t make sense.

Given how they can manipulate bid pricing, and snipe closeouts before any human bidder, bidding at godaddy right now does not make a lot of fiscal sense. You are going to get stuck with overpriced inventory with sell thru rates of 1-3%, it’s not good overall environment for turning any kind of profit.

You have better potential in taking a break, at this point, and saving your funds if the economy turns negative at which point you will have better buying opportunities.

*puts tinfoil hat on* HugeDomains is actually godaddy; they pay themselves for auctions and bid up all names.

onni said:

I don’t see how Huge Names can afford to keep over paying for 100’s of domains a week. They seem to be buying in bulk above resale prices. They buy a bunch of decent, but not great domains and then list them for under $3k.

They’d have to be selling 15% or more of their domains a year to make a profit. The math just doesn’t add up. GoDaddy must give them a steep discount off the final auction price.

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AT the emboldened, well you spoke my mind. This is strong JV

You don't need to provide discount for the alleged partnership to work.

1. GD makes much more via HN bidding up the names to low-mid $xxx that otherwise could have sold at $12-22 range.

2. NH pays more on occasional auctions that it ends up as a winner and pays more than it would like, but makes up much much more than that by a) discouraging competition (I for one have stopped bidding on ok names that I'd be willing to pay high $xx-low $xxx) and getting names at fraction of what they would have paid max; b) by getting names at $11 with the preferential treatment via API (I know anyone can get it, but to me actions speak louder than words and if NH is a winner every time at milli-second sniped names, it means they are getting around the 60 call/minute limit just fine) c) they also had the backorder loophole that is now closed, but advantage b) still is apparently enough.

Recons.Com said:

NH pays more on occasional auctions that it ends up as a winner and pays more than it would like, but makes up much much more than that by a) discouraging competition

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Yeah but that implies that they are still making a good profit overall by overpaying for domains, which is suspicious.They do buy a high amount of trash.

Recons.Com said:

b) by getting names at $11 with the preferential treatment via API

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Yes, this. As Styler said, plenty of people have asked for and have been given access to the API. Logically, then the snipes should be evenly distibuted between HD and everyone else using the API for the same purpose. But they aren't.

I'm actually looking into this a bit. Trying to see if anything can be discerned mathematically.

Lord Antares said:

Yeah but that implies that they are still making a good profit overall by overpaying for domains, which is suspicious.They do buy a high amount of trash.



Yes, this. As Styler said, plenty of people have asked for and have been given access to the API. Logically, then the snipes should be evenly distibuted between HD and everyone else using the API for the same purpose. But they aren't.

I'm actually looking into this a bit. Trying to see if anything can be discerned mathematically.

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There is a lot more at play here, that is beyond all of us. We are talking tens of millions of dollars, people have gone to war for such sums of money. You have to be smart yourself, don’t except anything to change from this point on, it’s all about dollars, and sense at this point.

Lord Antares said:

Yeah but that implies that they are still making a good profit overall by overpaying for domains, which is suspicious.They do buy a high amount of trash.



Yes, this. As Styler said, plenty of people have asked for and have been given access to the API. Logically, then the snipes should be evenly distibuted between HD and everyone else using the API for the same purpose. But they aren't.

I'm actually looking into this a bit. Trying to see if anything can be discerned mathematically.

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Forget their overall business. Let's say they have budget of $50 per good name that they can resell at $1500-3000 range.

With the above arrangement, they might be even getting their average below that, because for every auction they had to pay $200-300, they get tens where they pay $11 to 22.

And if they buy 300,000 names a year, that is $15MM in investment that will generate 300,000*1%*2000$= $6MM annually, minus $2.4MM renewals, for net of $3.6MM or over 20% IRR.

So, it makes sense for them, while increasing the cost for competition and creating barriers for entry.

Recons.Com said:

Forget their overall business. Let's say they have budget of $50 per good name that they can resell at $1500-3000 range.

With the above arrangement, they might be even getting their average below that, because for every auction they had to pay $200-300, they get tens where they pay $11 to 22.

And if they buy 300,000 names a year, that is $15MM in investment that will generate 300,000*1%*2000$= $6MM annually, minus $2.4MM renewals, for net of $3.6MM or over 20% IRR.

So, it makes sense for them, while increasing the cost for competition and creating barriers for entry.

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But there is a line. If they eliminate too much competition, then godaddy starts earning LESS because there are less people bidding on domains. People are already starting to get turned off of closeouts.There is a balance in here, and HD having a monopoly over GD's marketplace does not do any favors for GD.

Lord Antares said:

But there is a line. If they eliminate too much competition, then godaddy starts earning LESS because there are less people bidding on domains. People are already starting to get turned off of closeouts.There is a balance in here, and HD having a monopoly over GD's marketplace does not do any favors for GD.

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Apparently, they either manage to grow the pie for both this way (remember, GD benefits greatly on those auctions where HN either reveals the max a bidder is willing to pay or they pay themselves) or it improves KPIs for decision makers or relevant departments, even if the company or both suffer in the long term. And don't underestimate the flow of fresh sheep regularly arriving into domain investment world.