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HUGE DOMAINS SNIPING GODADDY CLOSEOUTS

Located in Domain Marketplace Reviews started by wwwweb, May 6, 2019.

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  1. slobizman

    slobizman Established Member ★★★★★★★★★★

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    I'm not sure about the idea that they bid up to 9-12% of the GD value. I just looked back at names I've lost to them and, for example, last week they bid up to $234 (losing to a $239 bid), and the GD value is $607. That's 38%.

    Interesting note on VRStripper.com: I had purchased that name in 2006 for $7 (must have been hand-regged), and sold it 2017 for $2,079.
     
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  2. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    It looks like they are spending all their profits acquiring domains. You think headed toward owning 7 million domains, and verisign honing in on upping .com renewals, they would want to start moving a portion of their profits somewhere else. Otherwise dropcatch has so many crazies coming, and going, with every few months a new heavy hitter coming around for a few weeks then disappearing, take everything with a grain of salt.
     
    Last edited: Aug 21, 2019
  3. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    You can't, if it is on their radar, you cannot win.

    Not by hand, only with your own integrated api connection, and you will have to out engineer them.
     
    Last edited: Aug 21, 2019
  4. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    Looks like the bot is immune to backorder bids, the $10 ones, just for the sake of investigating, looks like some poor bastard put a backorder in with a few minutes to go, the bot did not respond with a counter bid, I bid $40 counter, and the price went to $15, about 30 seconds later that dreaded outbid indicator popped up, bidded huge domains up to $190 before I bailed on the auction, and left it to wait out the close, and sure enough it was bidder 91932.

    I have been agitating bids on various auctions all day, and huge domains bidder 91932 is in on all of them, like that movie where you make a sound, and the monsters come devour you. It is simply amazing, I would love to see their end of day cart totals.

    I can't see them having a thirst to pay such valuations when they are closing in on 7 million domains owned, you just can't, there has to be more to their over eager bidding tactics.
     
    Last edited: Aug 21, 2019
  5. Lord Antares

    Lord Antares Top Member VIP

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    Good job. You are doing batman's work bidding them up.
     
  6. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    I’m just trying to understand the scope of their bidding. It’s on everything, you can’t shake them. If I was a newbie bidder, I would think after a few auctions it’s some kind of scam. You can’t win closeouts,!/!: anything on their radar is going to be $1xx-$2xx for the roll the dice kind of names. So from an investor point of view, you can’t keep paying $200 for these kind of 1-2% sell thru names. My consensus is neither can Huge Domains, so what is the deal, how are they paying for all these auctions? What’s their incentive for all this bidding? Maybe 5 percent commission on their sold domains there, so many creative ways to blend incentives.
     
    Last edited: Aug 21, 2019
  7. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    FYI Huge Names is now using bidder id 913933, and yes they are still running up bids, and driving up prices.
     
    Last edited: Aug 26, 2019
  8. slobizman

    slobizman Established Member ★★★★★★★★★★

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    Good to know. Thanks.
     
  9. werty

    werty Established Member ★★★★★★★★★★

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    I think they have more than enough profits from all their businesses and can afford to reinvest a lot back into hugedomains. We domainers are looking for that 100% ROI. They might be happy with just 10-20%; better than the stock market in most cases.
     
  10. slobizman

    slobizman Established Member ★★★★★★★★★★

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    Yes, the big question: what's their game? What is the special deal they have with GD?

    Does anyone have any idea how many names they are buying everyday? Several hundred? If they buy 200 names a day at an average price of $100, that's $600,000 a month. Maybe that's small change for them.

    In the end, HD is going to get hosed. The domain market for average and less than average names is declining. They aren't going to sell many of them and will be left holding a lot of worthless names. And it seems to me the quality of names on Godaddy is declining. I haven't been giving it more than a cursory glance in the last few weeks (due to HD), but today I took some time and didn't see anything that I'd be willing to buy for the price.
     
  11. werty

    werty Established Member ★★★★★★★★★★

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    Not sure. Probably they have huge cash flow. I stopped bidding on godaddy 1-2 years ago because it's a waste of time because of huge domains. I have tried to bid a day or two this year to test and it's the same BS so why bother? I can't overpay like them. I at least hope there is an army of bidders bidding them up and making them pay top dollar. Godaddy used to allow API access to everyone before and there was software around you could buy to automate just like them but then they closed the doors to everyone that's not a very big spender.

    I would guess they are selling 140-150 million in huge domains alone a year. Lets say 70,000,000 in renewals. They still have 70-80 million to reinvest.... Break that into monthly and there you have the answer.

    IMO dropcatch doesn't make much profit. They simply get people to cover all their costs and in return get a free ride on the high performing drop catching machine for themselves. This is why snapnames can't really get to their level; snapnames needs the profit.

    Also I think they buy like 5-9k names each day on the drop. Some average others mediocre. So even if they buy 200-300 names a day in godaddy, they average down the price with all their reg fee purchases...
     
    Last edited: Aug 26, 2019
  12. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    I have noticed Huge Domains doesn’t win many of these auctions, but what they do best is drive the price up from $12 - to mid $xx up to $1xx-$3xx in causing a bidding war.

    So we know why Godaddy likes them, but what it Huge Domains angle?

    They can buy domainer portfolios for cheaper pricing if they are spending millions? Something just doesn’t add up, it’s baffling behaviour when they can secure better names on their own drop catch service, nobody can pay mid hundreds for tens of thousands of domains per month, the sell thru is not there.

    Even if you are selling thru their better inventory, it would be incredibly stupid to invest all your profits back into an industry where you own close to 7 million domains. Any downturn in the economy domain sales are going to get slaughtered in the after market.
     
    Last edited: Aug 26, 2019
  13. Recons.Com

    Recons.Com Top Member VIP

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    @wwwweb I think few pages back I did explain how the synergy works, how both companies benefit and how it is very profitable for HD.
     
  14. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    Anyone of us should be able to emulate those results, I can't see those absolutes hit so constantly. Inventory takes a long time to sell thru, I don't even think they move 1% of their inventory per year.

    I am going to assume their business was built on debt, there would be outstanding loans to pay back, it's not all profit. We can all buy the same names, and we all do, but the sell thru isn't their, sometimes you get lucky, and your ratios can spike, but they play a very tight BIN system, they don't get many of those 10K+ outliers that sometimes you need.

    I look at someone like Mike Mann you see his few sales, but is he really just raking it in, I think not, I think he has good stretches, then renewals, then dead periods, but it is not a runaway train of pure profit.

    Something feels off, about the level of bidding, if you have a bot you want to buy on value, can any one of us spending millions per year, buying domains at 10% of inflated appraisals, and expect to hold for a profit, even up against the odds of what versign is going to do to pricing, you would think you would want to take some money off the table?
     
    Last edited: Aug 27, 2019
  15. Windoms

    Windoms Established Member

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    Have you tried bidding with a new account new ip new everything.
    Maybe someone has placed your experienced account on watch list lol.
     
  16. Recons.Com

    Recons.Com Top Member VIP

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    Why 1% surprises you? Again, to breakeven with their opex, they need just 0.4%.

    1% should be an expected result for them, especially given that they have an installment option.

    Given that they have the first pick with closeouts and get to collect quality stuff, by willing to pay more than others, they might be doing even better.
     
  17. Lord Antares

    Lord Antares Top Member VIP

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    If you are referring to this:

    then explain why they don't bid on dynadot, namejet or other expired domains. Better yet, why don't they bid on user auctions or buy entire portfolios? GD should be the one with the highest competition, right?

    Also, am I missing something here or did you just do this equation with the premise that they pay $0 to own each domain? What if you factor in the average acquisition price, which should be at least $xx? Then the equation becomes very lopsided.
     
  18. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    No, they like quality, just like most of us like quality. They have programmed their bot to look for certain keywords, good appraisals, and .com. If they see a name on their hit list like netcoast.com, and if it shows a $3,500 appraisal, they are going to put their proxy bid in for $300, and they ended up wining it for $255 or something. They are able to minimize the risk of acquiring junk by using the variables in Godaddy's listing page, or I am sure they make their own lists with manual inputs also, and proxies. It is a business, and they are trying to corner the market for sure.

    Like I stated prior they tend to lose alot more than they win, but they make everybody pay, it's a daily toll, I am aware of it, you can feel when that bot latches your bid, and you know even more so when they stop bidding at around 10% of the appraised value. It just sucks every decent auction has to be bidded up by this bot.
     
  19. Recons.Com

    Recons.Com Top Member VIP

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    GD auctions are by far the biggest source for this activity, especially if you have certain arrangement (doesn't even have to be written one).

    The exercise above is to establish that there is positive contribution margin in this and for that the cost is irrelevant. If you want to see their IRR, assuming all equity and $50/name cost to acquire, then that is around $350MM invested for IRR of around 10%. If you assume that they used debt with around 6% interest, then, depending on leverage, the IRR could be in 12% to 20% range.
     
  20. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    That’s because they are using the past sale comp on it, another indicator they love to use to jack up prices.


    vrstripper.com$2,079 (USD)
     
  21. golan

    golan GolanMedia.com Gold Account VIP

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    Interesting, but questionable. There are no 5-9k even remotely good names each day on the drop. Even if you count GD domains in.
     
  22. werty

    werty Established Member ★★★★★★★★★★

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    They register a lot of domains that are garbage and don't mean anything... Could be much less than I stated on a daily basis (I've seen a few grand on random days) but if you look for domains registered everyday by dropcatch, you will see at least a few grand and most are for them not customers. Yesterday they caught 2800+ and I have seen much higher before. Here's the list I just got from expireddomains.net (attached):
     

    Attached Files:

    Last edited: Aug 27, 2019
  23. golan

    golan GolanMedia.com Gold Account VIP

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    Amazing. Who needs these? xjsfks.com wtf
     
  24. werty

    werty Established Member ★★★★★★★★★★

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    I think some in China buy short domains even if they don't mean anything. Please note that this list is, according to expireddomains.net, everything dropcatch caught yesterday. So that includes both for customers and huge domains. Although most will be for huge domains for sure...
     
  25. Dave

    Dave Top Member VIP ★★★★★★★★★★

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    I think I've single handedly cost Huge Domains 6 figures this year alone. At least $10k in the last month. I've been bidding on a lot of domains I like trying to win them and they outbid me 99% of the time to prices that I'm just not willing to pay.
     

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