HUGE DOMAINS SNIPING GODADDY CLOSEOUTS

[wwwweb]

So annoying Godaddy hasn't stopped Huge Domains from sniping Godaddy Closeouts with their automated tools, no way a human bidder can win a even closeout.

First they were sniping with the backorders, now you cut that out, and you are letting them snipe via automated tools.

So what do you say @Joe Styler , you want to even the playing field a bit, as your partners are bidding everything in a split second, from $12, to $11, and bidding everything else into the hundreds from a simple bid. I would rather pay a Huge Domains surcharge at checkout.


Huge Domains has an unfair advantage on the auction platform, essentially taxing every user for using it with their automated access advantages given to them thru the house.

 

[Lord Antares]

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

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.

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

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.

 

[wwwweb]

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.

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.

 

[Recons.Com]

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.

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.

 

[Lord Antares]

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.

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.

 

[Recons.Com]

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.

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.

 

[wwwweb]

The closeouts aren’t a big cash draw, sure the good $11 ones are being gamed by their API advantage.

The big score is getting those $12 domains into the hundreds, that is the big score for the house.

I don’t know their current ownership count, but it looks like their headed to holding 7 million domains, at this point would be be wise to continue to spend $15-20M a year acquiring names via another platform.

I saw domaining in 2007-2008 when the markets crashed, and things dried up pretty bad, it was probably the best time to acquire premium names as people had to balance other debts, and had to sell fast. So of such a day came, the cost to carry huge domains portfolio, alongside slowing sales will be a huge cash burn. A lot of their payment plans would default also.

I can’t see a company owning 7 million domains, continue to spend so heavily into one space, without hedging for some kind of downturn. There has to be something more there for them.

It wasn’t so bad when they came in late 2015, but at this point I’m ok taking a step back, and playing their bidding strategy and letting them have it, but as I saw today they were heavily involved in pushing prices into mid hundreds, but did not win even 1 of the 8 auctions I saw. So effectively from the house point of view they must have made about an extra $2000, that the eventual winner had to pay based on their particpation.

 

[Recons.Com]

7 million names means 56$MM in renewals, plus $4MM, let's say, in admin and overhead. Total $60MM.

At average $2,000 price, they need to sell 30,000 names a year to cover those or 0.43% to break even. Not hard to achieve even in crisis time. And if they are anywhere near 1%, then that is over $30-35 MM in profit annually that they are probably trying to reinvest.

 

[hookbox]

.

7 million names means 56$MM in renewals, plus $4MM, let's say, in admin and overhead. Total $60MM.

At average $2,000 price, they need to sell 30,000 names a year to cover those or 0.43% to break even. Not hard to achieve even in crisis time. And if they are anywhere near 1%, then that is over $30-35 MM in profit annually that they are probably trying to reinvest.

Personally I think the sell through rate is much higher than 1% when the majority of names are priced at the very sweet spot of $2,500.

 

[D Haynes]

HD bid on so many of the names I go for (and are usually the only other bidded) that when I go for a name and get if for 12 bucks, instead of being happy I think "oh no it's not as good a name as I thought" lol.

 

[wwwweb]

It's pretty obvious now when the Huge Domains bot comes into the picture.

I noticed one pattern, if there is a last second bid, and I guess it's not on their radar, and it another bidder comes in that is not Huge Domains, it will alert something, and they will put a proxy of 10-12% of the godaddy appraised value.

So take a $50-60 small $5 bidding war, BANG, it will just swoop in, and put a $201 proxy, on a domain appraised at roughly $2K, and it's game over for those guys, or maybe one of them will chase it.

I think most of the regulars here kind of know when huge domains is on the other side of the bid, with that proxy wall that swoops in late to the party.

 

[wwwweb]

Huge Names very active in Godaddy auctions today winning, many mid to high $xxx auctions, and sniping a lot of closeouts within 1 second of them opening up.

Godaddy has still not closed the closeout advantage for them.

 

[Brian L.]

Not much point using G̶̶o̶̶d̶̶a̶̶d̶̶d̶̶y̶̶ ̶̶A̶̶u̶̶c̶̶t̶̶i̶̶o̶̶n̶̶s̶ Huge Domain auctions anymore.

 

[wwwweb]

Not much point using G̶̶o̶̶d̶̶a̶̶d̶̶d̶̶y̶̶ ̶̶A̶̶u̶̶c̶̶t̶̶i̶̶o̶̶n̶̶s̶ Huge Domain auctions anymore.

You pretty much said it, just playing into their bids. It is basically a proxy wall, either you pay thru the nose breaking it down, or otherwise you lay down, and let them have it.

 

[Lord Antares]

Godaddy has still not closed the closeout advantage for them.

They don't necessarily have an advantage. I've been investigating a little bit.

First thing I needed to find out whether 60 calls per minute meant 1 call per second or no. If it did, hugedomains should absolutely not have an advantage due to the entire second of delay if they fail their millisecond, during which time someone else should snatch it.

However, I contacted godaddy auctions and asked them that question. They said that one can fire off as many requests as they like, then they need to cool down until the next minute.

Then I remembered your post where you said that they share offices in the same building. Theoretically, if they had servers close to each other, no one should have a chance, due to HD having the least lag out of anyone competing.

No matter how fast your bot is, if you've got 5 ms lag and HD have below 1 ms lag, they will snatch any name they like within that 5 ms before you even start firing off requests. It's like racing 1 ferrari vs 1000 golf carts. Doesn't matter how many golf carts are racing, the ferrari will always win.

Now, I can't verify that this is what's happening but it would be the most reasonable explanation to me at this point. GD and HD would have a perfectly symbiotic relationship in this scenario.

I'm no expert on servers and this may not be how it works, but I DO KNOW that proximity to servers plays a large role in auction sniping bots, for example. It's still an open question tho.

The only way to get a better understanding would be if I built a sniping bot myself but that would require too much time and resources for a cause that's lost anyway.

So, if my theory is true, HugeDomains have a perfect setup and it's all fair and square. Godaddy are not cheating anyone and they do give everyone equal opportunity; it's just that HD have grabbed that opportunity long ago.

One thing that's weird tho: Joe Styler, when asked how HD are able to snipe all the names before other botters, said that ''maybe HD are using multiple computers'' earlier in this thread.

However, I messaged him and asked whether API allocation was limited per account or per device. He gave a strict ''per account'' reply, which would mean that using multiple computers would not increase your chances in the slightest. So he gave two conflicting answers there.
It might just be due to the fact that he is just a GD representative and doesn't have a clue how the auctions work from a technical perspective.

 

[wwwweb]

I can attest to any any closeout I go for, they always win, others have said the same.

I don’t know the technical side of it, but they do have an advantage, because they win everytime I try.

 

[EASYPICKINGS]

I hate Huge Domains they took my name hydrocoats.com

 

[wwwweb]

I have not participated in one auction today where bidder 91932 Huge Domains did not have a bid in. In 90% of the auctions they were top, or second bidder.

 

[wwwweb]

I hate Huge Domains they took my name hydrocoats.com

Is that from the closeouts? Or one you forgot to renew?

 

[Recons.Com]

I doubt that. They are not targeting one or two, they are targeting tens/hundreds and those auctions are all ending close to each other.

But even if that was true, then GD changed their closeout structure to benefit them. Because, it used to be that you couldn't predict at what second the name will drop into closeouts. From few seconds to few minutes a name would reside in no-where-land after no one would bid at $12. So, you'd fire your 60 requests effectively for nothing, if you were targeting the first seconds.

GD apparently has moved away from that, probably at HD's request, as they'd be the only party benefitting HUGELY (pun intended) from this.

They don't necessarily have an advantage. I've been investigating a little bit.

First thing I needed to find out whether 60 calls per minute meant 1 call per second or no. If it did, hugedomains should absolutely not have an advantage due to the entire second of delay if they fail their millisecond, during which time someone else should snatch it.

However, I contacted godaddy auctions and asked them that question. They said that one can fire off as many requests as they like, then they need to cool down until the next minute.

Then I remembered your post where you said that they share offices in the same building. Theoretically, if they had servers close to each other, no one should have a chance, due to HD having the least lag out of anyone competing.

No matter how fast your bot is, if you've got 5 ms lag and HD have below 1 ms lag, they will snatch any name they like within that 5 ms before you even start firing off requests. It's like racing 1 ferrari vs 1000 golf carts. Doesn't matter how many golf carts are racing, the ferrari will always win.

Now, I can't verify that this is what's happening but it would be the most reasonable explanation to me at this point. GD and HD would have a perfectly symbiotic relationship in this scenario.

I'm no expert on servers and this may not be how it works, but I DO KNOW that proximity to servers plays a large role in auction sniping bots, for example. It's still an open question tho.

The only way to get a better understanding would be if I built a sniping bot myself but that would require too much time and resources for a cause that's lost anyway.

So, if my theory is true, HugeDomains have a perfect setup and it's all fair and square. Godaddy are not cheating anyone and they do give everyone equal opportunity; it's just that HD have grabbed that opportunity long ago.

One thing that's weird tho: Joe Styler, when asked how HD are able to snipe all the names before other botters, said that ''maybe HD are using multiple computers'' earlier in this thread.

However, I messaged him and asked whether API allocation was limited per account or per device. He gave a strict ''per account'' reply, which would mean that using multiple computers would not increase your chances in the slightest. So he gave two conflicting answers there.
It might just be due to the fact that he is just a GD representative and doesn't have a clue how the auctions work from a technical perspective.

 

[D Haynes]

I doubt that. They are not targeting one or two, they are targeting tens/hundreds and those auctions are all ending close to each other.

But even if that was true, then GD changed their closeout structure to benefit them. Because, it used to be that you couldn't predict at what second the name will drop into closeouts. From few seconds to few minutes a name would reside in no-where-land after no one would bid at $12. So, you'd fire your 60 requests effectively for nothing, if you were targeting the first seconds.

GD apparently has moved away from that, probably at HD's request, as they'd be the only party benefitting HUGELY (pun intended) from this.

I'd totally forgotten about this! You're quite right, I remember that some names would go to closeout instantly and some would take 15 mins or so.

I'm not one for conspiracy theories but it's pretty obvious to me there's some sort of collusion here. If it's true that they share office blocks with their biggest customer I find it incredible that they are not under any kind of investigation. I'm sure they wouldn't get away with it here as it must break all kinds of monopoly rules and conflict of interest rules.