discuss Are expired domain auctions ethically inappropriate?

[keywordrichdomains]

I was wondering whether this expired domain auction is ethically sound? Because, every expired domain is a creative asset of the first person who registered it with a lot of ambition and optimism. Ethically, she/he is the original creator of that name, who actually got the creative right (copyrights?) on that name like any other creative assets in the literary/entertainment industry. Most investors or entrepreneurs leave their domain name without renewing it that when big difficulties in their life! But, others try to take advantage of their creatives in their difficult time, even without donating any of the money from the auction to the original creator! Do you not consider this to be an unethical business practice? In addition, I am confused about the rights of registrants who benefit from such unethical business practices because they do not own expired names legally.

Moreover, in my observation, many investors tend to ignore the original creators' market advertisements or auctions, even if they are affordable and cheap. But the same group of investors will compete to acquire those expired domains at a higher price from auction platforms! I was wondering whether domain investors have a mindset that they wouldn't help their fellow investors, but they are willing to give money to registrants?

I would like to hear your thoughts on that. I appreciate your response in advance.

 

[biggie]

I think you misunderstood my wording here. What I wanted to say here is about the rights of the auction platform that receive the entire amount based on the expired domain name. Are they temporarily getting ownership of the expired domain names?

I have just raised the subject of discussion with which I have long confused with without personally blaming anyone in the industry by keeping all the digital etiquette. But unfortunately, people vote against the point of debate? Wondering why it is?

Hi

basically, from the stages of registered to deleted, the registrar holds the domain.

if, you could take a time machine back to days before api and drop catching, then THAT's when registrars just "let" the domains drop to the available pool.

however..... when smart folks started creating scripts to catch premium drops, then services sprouted up like snapcheck, snapnames, clubdrop, etc to catch these names.

then... the registrars said, hey, why don't we just hold the names and auction them off to the highest bidder, that way it would be "fair" to all.

some of them did just that and others partnered with existing drop catchers to form "alliances".
like how netsol names are caught by namejet and snapnames and "dropcatch.com" tries to snatch from everywhere.

that "auction" idea carried over to the "new extensions", where registrars/registries held back premium names for higher registration fee.

and since there is nobody saying you can't do that or stopping what's going on... then we just have to deal with it or not be part of the game.

ya feel me -


imo...

 

[karmaco]

In addition, I am confused about the rights of registrants who benefit from such unethical business practices because they do not own expired names legally.


First of all who told you the first registrant owns a domain forever ? They don’t unless they pay their renewals.

A domain name is basically on perpetual rent. When a registrant drops it, there is nothing illegal or unethical about buying the domain on the drop or at expired auction.

If you believe what you have posted domaining is not for you. Rights are only extended to people who pay their renewals.

 

[hawkeye]

Most investors or entrepreneurs leave their domain name without renewing it that when big difficulties in their life! But, others try to take advantage of their creatives in their difficult time, even without donating any of the money from the auction to the original creator! Do you not consider this to be an unethical business practice?....

Isn't this the same scenario when someone can no longer afford to pay their mortgage on a home they've had for years and put money into remodeling etc., yet it goes into foreclosure due to lack of payments? Or not pay their car payments and the car is repossed? Should the new owner/investor or the lien holder, be expected to 'donate' some money to the original homeowner...just because?? Should that be considered an 'unethical business practice' also? Bottom line, if you don't pay your 'renewal' or 'mortgage' or 'loan payments' it is not the responsibility of anyone (investors, lien holders etc.) to compensate the non paying 'owner/creative' for their financial shortcomings. jmo.

 

[biggie]

Actually, that's an option that registrars can make (if I'm not wrong there are some that have this feature) and customers are all free to choose where to hold their names.

Hi

i've mentioned this before
yes, fabulous.com has this option
a few names i've dropped over the years have sold at namejet and i received a % of those sales.

imo....

 

[HotKey]

There is big business in domain purgatory. Depending on desirability, just as with the domains being in our hands during the lease term, the auction houses are an integral part of the life-death-rebirth process of them. They have capabilities to catch these domains and direct them to where we, as future holders, are enabling this process.

The domain are not public goods. I see you point about the amount of work that may have gone into a name thus enriching it's value when it does expire, but I don't see what this has to do with ethics. If an owner doesn't deem a domain worthwhile to renew, so be it. Let the next man have at it.

But the same group of investors will compete to acquire those expired domains at a higher price from auction platforms! I was wondering whether domain investors have a mindset that they wouldn't help their fellow investors, but they are willing to give money to registrants?

Great observation, I think this has to do with the amount of attention an expired domain can receive versus what it had during active role in development or on a 3rd party marketplace.

BTW, investors are registrants, we are all part of the cycle.

 

[NameBuyer.com]

I was wondering whether this expired domain auction is ethically sound? Because, every expired domain is a creative asset of the first person who registered it with a lot of ambition and optimism. Ethically, she/he is the original creator of that name, who actually got the creative right (copyrights?) on that name like any other creative assets in the literary/entertainment industry. Most investors or entrepreneurs leave their domain name without renewing it that when big difficulties in their life! But, others try to take advantage of their creatives in their difficult time, even without donating any of the money from the auction to the original creator! Do you not consider this to be an unethical business practice? In addition, I am confused about the rights of registrants who benefit from such unethical business practices because they do not own expired names legally.

Moreover, in my observation, many investors tend to ignore the original creators' market advertisements or auctions, even if they are affordable and cheap. But the same group of investors will compete to acquire those expired domains at a higher price from auction platforms! I was wondering whether domain investors have a mindset that they wouldn't help their fellow investors, but they are willing to give money to registrants?

I would like to hear your thoughts on that. I appreciate your response in advance.

In a perfect world, 50% would go back to the person that let the domain expire. Maybe only in cases where the end price is $200 or more.

But in reality, people are not able to be tracked down and people die with no backup plans. So what do they do in these cases? They can forward the money to the state like they do in other cases where accounts have a positive Balance.

But still, in my opinion from ethics only, is that the registrar shouldn’t be profiting off their customer and taking a 100% cut when an expired domain sells for $20,000. Personally, I wouldn’t feel right doing that to others.

But if it is a drop catch service, then they owe nothing to anyone. They’ve had to invest large amounts in the resources to recover domains and they’ve never had a relationship with the prior registrant anyway.

 

[Start]

I'm sorry, but your post is giving waaaaaay too much credit to the "first registrants" of domains.

Just because someone thinks of a name, it doesn't mean someone else won't also think of a name independently.

Also, look at how many names in different extensions are taken for a given name... in most cases, people thought of it themselves, and then found the .com was taken, so then buy the .co.uk or .com.au or whatever.

Domain names are basically like phone numbers. Yeah, everyone would like to have 1-800-800-8000, but just because one person thinks of it, it doesn't mean others won't.

I was wondering whether domain investors have a mindset that they wouldn't help their fellow investors, but they are willing to give money to registrants?

You mean registrars, not registrants?

Anyway, the reason I prefer expired auctions is because if an investor has their domain up for auction, there's a risk that they can bid against you to inflate the price.

In comparison, an employee at a huge registrar like GoDaddy has no incentive to bid against you, because the money isn't going to them.

And I also prefer it because I find the deals are usually better in expired auctions (or used to be anyway... I don't really participate in auctions anymore, because hugedomains takes everything).

 

[anunt]

What’s unethical is GoDaddy auctioning names that they don’t even own yet.

I just won the godaddy auction for the domain name Money123 . com for $2900.

I paid for the name.

2 days later…today
I get an email from GoDaddy saying
We are issuing you a refund…wtf

That’s all they said…no other explanation.

If the previous registrant renewed the domain, why is GoDaddy selling something they don’t even own yet?

That is unethical bs.

 

[NYJimbo]

I would like to hear your thoughts on that. I appreciate your response in advance.

LOL. Too much hand wringing about nothing. No, its not unethical.

 

[keywordrichdomains]

There's nothing on earth you can own forever, even our own bodies (unfortunately).

Moreover, if you don't let assets (any asset) switching hands they will end up being underutilized.
On the other end, there's a very strong evidence that assets used in the most efficient way implies more wealth for all.

Is wasting economic resources ethical?

Thank you so much.

The real point here is something else. Please understand this scenario.

A person named Mathew registered MiracleDreamWorld.com domain name for his business in 2000 or for the purpose of selling on the secondary domain market. He created this name after much research and creative thinking. He keeps this domain name alive till 2021. But he was not able to renew it for personal reasons due to the impact of a pandemic. The domain was dropped. As this domain has got a lot of backlinks and SEO scores, understanding the higher demand of the domain, the registrar of the domain put up for public auction. The domain fetched $58888 in the auction and the registrar is pleased to keep the whole amount without giving a single penny to the original creator of the domain, Mathew, even though he has spent a lot of money keeping the domain name for the past 11 years and increasing SEO ranking scores. The important thing here is that the value of the domain is increased solely because it has kept it alive for so many years and spent quite a bit to create the SEO score. In this case, do you think the registrar dealing with ethical business? Or, how does the Registrar have the right to auction it for their personal monetary benefit, since the expired domain is a public good?

Hope, I made that clear by explaining this scenario. Thank you.

Note: The domain name MiracleDreamWorld.com is available to register. If someone registers it and sells it for $50,000, please send me a donation

 

[AEProgram]

If it drops and someone registers it is it more ethical?

If the person who had it got it himself from an expired auction, is it now ethical because the chain was broken from that first person, unless they also got it at auction?

I believe in capitalism 100%

 

[likemike]

As they say in domaining Stuff Happens!

 

[zomainhacks]

Thank you so much.

The real point here is something else. Please understand this scenario.

A person named Mathew registered MiracleDreamWorld.com domain name for his business in 2000 or for the purpose of selling on the secondary domain market. He created this name after much research and creative thinking. He keeps this domain name alive till 2021. But he was not able to renew it for personal reasons due to the impact of a pandemic. The domain was dropped. As this domain has got a lot of backlinks and SEO scores, understanding the higher demand of the domain, the registrar of the domain put up for public auction. The domain fetched $58888 in the auction and the registrar is pleased to keep the whole amount without giving a single penny to the original creator of the domain, Mathew, even though he has spent a lot of money keeping the domain name for the past 11 years and increasing SEO ranking scores. The important thing here is that the value of the domain is increased solely because it has kept it alive for so many years and spent quite a bit to create the SEO score. In this case, do you think the registrar dealing with ethical business? Or, how does the Registrar have the right to auction it for their personal monetary benefit, since the expired domain is a public good?

Hope, I made that clear by explaining this scenario. Thank you.

Note: The domain name MiracleDreamWorld.com is available to register. If someone registers it and sells it for $50,000, please send me a donation

Well, in this scenario there is a domain that has much value and a man that let it drop (no matter for what reason), the registrar making the auction is the enabler of the change of hands (without the expiry process and the auction nothing would have happened most probably) .

Does the registrar make the auction for egoistic interests? For sure. But it's how the market works, this is what make stuff being produced, asset to flow and people to thirve.

Now the issue might be why not sharing part of the auction profit with the expired domains' customers?
Actually, that's an option that registrars can make (if I'm not wrong there are some that have this feature) and customers are all free to choose where to hold their names.
If registrars are not doing so is becouse probably customers prefer cheaper renewals and/or other services instead of this "fair" auction process scheme.

So I think it's ethical becouse it's the result of free agreements among free individuals and most probably it works in this way becouse so it maximizes market participants profits.

 

[Sutruk]

I am confused about the rights of registrants who benefit from such unethical business practices because they do not own expired names legally.

When you say "the rights of registrants" you mean "the rights of Registrars".

How did you come to that conclusion?
Once a domain name is expired, the registrant loses the ownership of that domain. It passes into the hands of the Registrar for a few days, and the Registrar can let it expire, or make an auction for that domain.

What happens is that they benefit from the fact that they have (or are associated with) an auction "house" that has a lot of people looking for expired domains.

The registrant could have sold their domain before it expires, but the registrant usually doesn't have an auction "house" with hundreds of people looking to bid on their domains. As soon as the domain expires, the registrant loses ownership of that domain, and it enters the Registrar's "realm" with a large stream of people looking for those expired domains.

 

[Bob Hawkes]

It does seem to me wrong when a name ends up selling for a huge amount in an expired auction after being created and held for a long period by someone that 100% goes to the registrar.

There is one way to justify that the registrar should get something however. Not only does the registrar have the auction costs, but also ICANN require them to registrar during the initial post expiration period every single domain name they hold. They pay real money to renew the name. Now if the owner does not come back and register it late, they can indeed let it go and apply to get their money back, but for 40 days or something near that they have paid out of pocket to keep the domain name alive. Even if it is pure junk they are required to do this. It is a real cost to operating a business, so they have some right to compensation from the names that later get auctioned.

Ideally I would like to see some split of expired auction proceeds. Maybe when the name sells for less than $25 it should all go to the registrar. Beyond that some sort of split. Re not being able to find the registrant, if the registrant email is notified of the funds, and no claim on the portion of funds made within a certain period, then registrar could keep it all, or perhaps submit to some nonprofit that supports domain investors.

Registrants do of course have options to auction prior to expiration themselves, or at NL even at expiration for most TLDs.

Re your final point, yes it amazes me that exactly the same name no one would pay anything for here, or if in a user auction, will go for sometimes a lot in an expired auction. I don't think it has anything to do with them not wanting domainers to make anything, though. There is a really ingrained attitude in many investors (or maybe partly just a habit) that they only look at expired auctions. The system of promotion of expired auctions get helps eyes to get on them. Also when the bots come in some names get bid up. Still it is perplexing and somewhat illogical.

Thanks for starting the discussion @LoveCatchyDomains , and to all of the views that have been presented by the many who responded.

Bob

 

[biggie]

Looks like their price on the .COM is $29.95.

Hi

That price is for retail customers
they also have tier pricing for domainers who own lots of domains, which is much lower.

imo...

 

[HotKey]

Re your final point, yes it amazes me that exactly the same name no one would pay anything for here, or if in a user auction, will go for sometimes a lot in an expired auction. I don't think it has anything to do with them not wanting domainers to make anything, though. There is a really ingrained attitude in many investors (or maybe partly just a habit) that they only look at expired auctions. The system of promotion of expired auctions get helps eyes to get on them. Also when the bots come in some names get bid up. Still it is perplexing and somewhat illogical.

I think a bit of fomo, and the anonymity of not knowing whom is bidding, or whom is selling, adds to the competitive nature of the expired auctions thus driving up the interest and higher prices we may not see here.

 

[zomainhacks]

There's nothing on earth you can own forever, even our own bodies (unfortunately).

Moreover, if you don't let assets (any asset) switching hands they will end up being underutilized.
On the other end, there's a very strong evidence that assets used in the most efficient way implies more wealth for all.

Is wasting economic resources ethical?

 

[keywordrichdomains]

In addition, I am confused about the rights of registrants who benefit from such unethical business practices because they do not own expired names legally.


First of all who told you the first registrant owns a domain forever ? They don’t unless they pay their renewals.

A domain name is basically on perpetual rent. When a registrant drops it, there is nothing illegal or unethical about buying the domain on the drop or at expired auction.

If you believe what you have posted domaining is not for you. Rights are only extended to people who pay their renewals.

I think you misunderstood my wording here. What I wanted to say here is about the rights of the auction platform that receive the entire amount based on the expired domain name. Are they temporarily getting ownership of the expired domain names?

I have just raised the subject of discussion with which I have long confused with without personally blaming anyone in the industry by keeping all the digital etiquette. But unfortunately, people vote against the point of debate? Wondering why it is?

 

[AEProgram]

What’s unethical is GoDaddy auctioning names that they don’t even own yet.

I just won the godaddy auction for the domain name Money123.com for $2900.

I paid for the name.

2 days later…today
I get an email from GoDaddy saying
We are issuing you a refund…wtf

That’s all they said…no other explanation.

If the previous registrant renewed the domain, why is GoDaddy selling something they don’t even own yet?

That is unethical bs.

Sorry, I made them a way bigger offer than your 2900 cheap offer and they gave me the name.

Obviously I am joking, it looks like the name was being transferred as the auction was happening?

This happens on gd, namesilo and other markets.

 

[karmaco]

Really valuable input. Thank you so much.

I assume that the secondary market in domain names will soon be subject to major regulation and that the existing market structure will be transformed into a new system both in terms of technology and regulatory measures.

Why do you think anything is going to change? GoDaddy in large part owns this rodeo and they aren’t letting anything get in the way of their profit. There is zero reason to change what allready works whether you like it or not.

 

[LoveCatchyDomains]

Moreover, in my observation, many investors tend to ignore the original creators' market advertisements or auctions, even if they are affordable and cheap. But the same group of investors will compete to acquire those expired domains at a higher price from auction platforms!

Thanks for being frank about this concern. You wonder how many domain investors end up paying as much or even more for a domain from the registrar's expired domain auction, compared to the original owner's price?
Yes, it's a free market, but the registrars have great power and responsibility. Do they provide ample support for the domain owner to sell their domain while they own it? Do they make those sales a priority, or instead put the focus on selling their newly-owned expired domains?
What if there were regulations stating that the registrar is obligated to provide a portion of proceeds from the expired domains to the previous owner? Would we see a higher sale rates for actual, current owners of the domain, before they expire?
Thanks for bringing these concerns to our attention.

 

[keywordrichdomains]

Hi

i've mentioned this before
yes, fabulous.com has this option
a few names i've dropped over the years have sold at namejet and i received a % of those sales.

imo....

I think they do a greedy business. They charge a disproportionately high price for domain names. Looks like their price on the .COM is $29.95. How many registers can afford such a pricing method from an investment perspective? Besides, I don't understand the logic of paying more to enjoy normal rights!

Nearly every government in the world is now vigilant in the case of unproductive investment practices in digital asset markets and their speculation. If well understood, the global economy China has already begun to regulate such non-productive speculative markets. Its peer group economy India is also developing regulatory policies in this line. European economies also frame various policies to regulate digital investment markets. ICANN is also undergoing policy changes. Also, to my knowledge, domain registrars do not have a legal right to function as an investment market platform. Unethical business practices can only go until their consumers are ignorant about their rights and privileges, not forever! If domain investment markets and domain registrars do not undergo a transformation from pure speculation to creative and productive structure, I am not much optimistic with respect to its existence and future growth. Many innocent investors think that everything will go as it is for hundred years!

 

[LoveCatchyDomains]

I have another honest question: Is it ethical to buy a domain name for $1 and then sell it for $100,000?

OK, what is your point here?
Registrars have sales for $1 for new domain registrations, and some of them could potentially yield $100K. A really sharp domainer could make it happen, although probably most of the top ones are already taken.