Dan.com

discuss Are expired domain auctions ethically inappropriate?

NameSilo

keywordrichdomains

Established Member
Impact
221
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.
 
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LoveCatchyDomains

Established Member
Impact
478
If you want to surrender or at least convince your self you can look at this expired domains as ( unclaimed luggage ) !!
in many countries the government do auctions for the thousands of unclaimed luggage found in airports/borders and this luggage passed the grace period of waiting the original owner to take it back .
As long as they didn't help you lose the luggage.....

Do the registrar auctions favor exposure for the expired domains, over the individual registrant's attempt to sell them?
My experience was that frequently high valuations were available readily and posted for expiring auctions, but not provided in the listings for an individual seller (even if their domain had comparabe valuations).
When doing category or even name searches for my domains for sale on a registrar auction, there were frequently issues about being unable to find them.
Wouldn't it be great, to see registrars help improve sales before a domain expires?
 
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.
 
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Impact
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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...
 

LoveCatchyDomains

Established Member
Impact
478
a few names i've dropped over the years have sold at namejet and i received a % of those sales.

imo....
That's great to know, that certain registrars, such as Fabulous and Namejet provided some of the profit for your expired domains. Good for them.
 

URLU

Top Member
Impact
2,688
I have another honest question: Is it ethical to buy a domain name for $1 and then sell it for $100,000?
 

Sutruk

Top Contributor
Impact
10,266
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.
 
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Start

Established Member
Impact
293
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).
 
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LoveCatchyDomains

Established Member
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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.
 
Impact
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>I have about 7,000 names in my portfolio,
>but until the date I couldn't have a single inbound sale through Dan's platform,

So what you really have are 7000 liabilities that no-one wants to take on the burden/costs of ;)
 
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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
 

HotKey

Made in Canada
Impact
10,035
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.
 

topdom

Top Contributor
Impact
1,400
Someone has a great domain which was not renewed yet, and you are good at dropcatching, so what do you do, k*ll that person, so he can't renew (if there is no autorenew).. But if registrars are allowed to grab/auction domains in extended grace, then a life is saved. (And we assume here all registrars are good enough).

Of course this is an extreme and ugly example, but it is not an unrealistic scenario at all. It happens all the time (different versions, and in organized manner). 100 trillion stolen "in this way" (according to RDS).

Registrars, registries, and owners are given some power over this process. Can it be made more fair (but also more complicated): maybe.
 

WNC HOLDINGS

wnc.holdings
Impact
-1,415
Greetings! We hope all is well. Before proceeding, it’s important to note that we agree with the sentiment of your post. Unfortunately, the present domain investing culture favors “hard metrics”, “profits” and “notable domains”. It’s not a culture that factors ethical sentiment and creative value. Domains are typically viewed by most investors as nothing more than a store of monetary value. Hence, some of this thread’s responses.

Needless to say, domains are an extension of digital identity. As time goes on, and more use-cases for them arise, they’ll become evermore valuable. However, this increased value will extend far beyond how much a domain is purchased and sold for. Foresight suggests that domains will be soon be pegged to different facets of value. (Sentimental included.) Domains will be passed down in wills, gifted as birthday gifts and so much more.

To your point, there’s an emerging duty related to how investors go about purchasing domains that are expired. Some argue that failure to pay automatically renders a domain free game regardless of what it was pegged to. This is similar to how some landlords view evicting tenants who are unable to pay for reasons outside of their control. Ironically enough, each domain investor is technically a domain renter themselves.

In closing, the context of your post suggests that you’re thinking beyond “the bubble that is today’s way of domain investing”. You realize that domain value can be pegged to more than character count and extension. You value the fact people have attachment to the digital assets that represent their hopes, dreams and efforts. As unpopular as your viewpoint may be in this thread, may you find solace in knowing you have our support.

Best Regards,

Chris
WNC HOLDINGS
 
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