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HugeDomains.com is Buying 50%+ of Expiring Domains at GoDaddy.com

Discussion in 'Domain Expiration and Domain Drop Catching' started by Arca, Dec 9, 2016.

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  1. webquest

    webquest Established Member

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    They are setting themselves up to get bought out.
     
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  2. 168

    168 Active Member VIP

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    Or, buyers might be more inclined to look at alternatives.
    Cheers
     
  3. Doughmange

    Doughmange Established Member

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    With respect to that; have you actually attempted this lately? It was previously effective to time the closeout arrival, but now it's totally random.

    As of october, if you were watching a domain name that had 0 bids you could be assured that the domain would go to closeout within 85 -100 seconds.

    Now, that does not happen. It could be 5 - 30 minutes before a closeout shows up' it's totally random now.

    So if an auction has 0 bids heading into the last 6 minutes, I will gladly post a $12 bid in the hopes that I can get the DN for a fair price.

    So far I have only lost 1 auction to HD, and that was for "coffeeboys.com". It's such a crap name that they could have it for whatever price over $70 USD it finalized at.

    The interesting thing about HD is that they still are picking garbage over quality. As an investor I would not pay what they are paying for names on the GD platform that would likely never sell to an end user.

    They should stick to their model of paying almost nothing for drops and playing the averages; they aren't ready to handle this model.

    It's likely an experiment.
     
    Last edited: Dec 10, 2016
  4. Arca

    Arca Active Member VIP

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    I looked through a few more names, but the numbers are pretty much the same. HugeDomains.com is buying the majority of the names I've been bidding for recently. The percentage might actually be a bit higher, because I do not put any names on my GD watchlist that already have bids at the time I'm doing my research, as I actively try to avoid names that already have bidders. HugeDomains, on the other hand, actively seek out those, and they probably pick up a considerable amount of them, but those names are not part of my sample obviously. I've added a list of 100 names they recently won below. You might recognize a name or two you were bidding for. They're buying in all niches, VR, marijuana, BB-type brandables, etc. so pretty much everyone has to go up against them when buying at GD now.

    100 Domains Recently Bought by HugeDomains.com at GoDaddy.com Expiring Auctions:
    HDGD 100 1.jpg HDGD 100 2.jpg
     
  5. trelgor

    trelgor Established Member

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  6. Arca

    Arca Active Member VIP

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    They don't appear to be using any highly specific filters. Some domains they buy are aged, some were hand regged just a few years ago. Some have search volume, others don't. Some don't have any specific metrics that would make them stand out (to an automated system), and can only be discovered by a discerning domainer while browsing through thousands of names, yet since HD bid on those too, they probably take advantage of the ease of discovering domains by looking at the activity of other bidders. And since sorting by bids is so easy on GD auctions, why not just let domainers do the work for you, and jump in and outbid everyone in the last minute?

    That said, they probably do use some kind of filters too, as they apparently pick up a lot of names when they go to close-outs. But if we look at the hundreds if not thousands of mostly low-quality names they register on the drop every single day through dropcatch, their filters are probably pretty loose.
    Yes, competition across both pre-release and pending delete platforms is increasing drastically, even when compared with just half a year ago. The open nature of platforms like GoDaddy and DropCatch allow a small group of deep-pocketed companies and domainers to buy up most of the available names every day, often at prices that are not sustainable if you are running a smaller operation (e.g. new to the industry, part-time domainer, etc.). Simply getting a lot harder for all smaller domainers to grab stuff under the radar, since the platforms are making it hard by design, and since certain companies and domainers are willing to bid aggressively on anything half-decent.
    Buying a name for $500 and selling it for $2000, like what seems to be the case with many of these HD purchases at GD, would not be sustainable for anyone doing only that. As you point out, you need a sell through of 20% just to break even. But HD is not covering the cost of these names with sales of other GD purchases. They are covering their costs with names they bought for $7.XX through dropcatch, and sell for $1-3XXX at HugeDomains, so they can afford to pursue this strategy with lower margins and over a much longer time period than what is feasible for any small-time domainer.
     
  7. Asfas1000

    Asfas1000 Business Member Business Account VIP

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    That's right. It's a losing strategy. Perhaps they are testing this system.

    Or, they are trying to discourage domainers from bidding against them (so in the future they will have less competition).
     
  8. domeen

    domeen Active Member VIP

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    I think you guys don`t know what you are talking about. They get a lot names for reg fee, then they buy some at $500, whats the avarege

    Belive me you don`t need to worry if they make profit :) They make, and a lot.
     
    Last edited: Dec 10, 2016
  9. trelgor

    trelgor Established Member

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    Who knows what HD sees. They probably see more than the average Joe though, and they probably try to avoid pissing cash away. I think it's a longterm play. Reinvestment. Buying 1 name for $500 and 100 for $8 can be a strategy if you have the data (and the means to analyze it.)
     
  10. Grego85

    Grego85 Quality.Domains NamePros Supporter

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    People should stop going through and putting early bids on domains, its stupid anyway. It brings more attention to the name for no reason. Stop rewarding those who have not done there homework!
     
  11. trelgor

    trelgor Established Member

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    Sidenote report: that is getting harder too. And now HD will come up with the ultimate closeout sniper. (They did it with drops.) You can go home now.
     
    Last edited: Dec 10, 2016
  12. Arca

    Arca Active Member VIP

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    I hope you are right, but I believe this is most likely just wishful thinking.

    In an attempt to make sense of the constant increases in reseller prices across all platforms, where occasionally names sell for what I and many others would consider to be close to end-user pricing, I have done some research to find out who is buying all these names, because their strategy is not viable at all for most people, especially if you are relatively new to the industry (you simply can't afford to put down $300, $500, $1000 on every decent name as a reinvestment, in order to build your portfolio, unless you hold and sell a ton of names already)

    I found that at major pre-release (godaddy, namejet) and dropcatching (dropcatch, namejet/snapnams) platforms, most (but certainly not all) names are bought up by a relatively small group of domainers and corporate buyers, who pick up nearly everything worth buying, particularly the better stuff at NJ pre-release and pending delete/dropped stuff. A bit more variety in the demographics of who is picking up names over at GD since prices start at $11-12, rather than $69-79, but as I pointed out, HD is already devouring 50% of those names, which drives prices for decent ones up a lot. Among the people who are paying hundreds, and often four figures even, for seemingly any decent name across all marketplaces, there appear to be very few people new to this industry. I matched bidding aliases from platforms that use it, with WHOIS info after they acquired names, and found that nearly all the people bidding aggressively on names every single day are mostly companies or people who have been doing this for 10-15+ years already, and most of them hold huge portfolios (many in the 5000-20000 range).

    Interestingly, I hardly recognized the names of any of the individual domainers, aside from Jason Newby of domain renewal fame, so they appear to not maintain any kind of public industry image (unlike certain veterans, bloggers, brokers, or people who have started or work for domain companies), but I'm sure everyone would recognize their bidding aliases at different platforms. These domainers, along with various privately held marketplaces, probably make a killing with the names they bought cheaply a long time ago, and now re-invest some of their earnings into new names. Of course there are lots of buyers who don't fit this profile, but in my own research into this (I didn't outline it in a very rigorous way, as it was only something I did to get a better view of the reseller market, rather than to post on NP, but as I recall I looked at something like 400-500 past auctions I bid in, none of them at GD), it was a surprisingly small number of people and companies that picked up most of the names I lost out on. When you got multiple individuals, along with corporate buyers/marketplaces, all with deep-pockets, and all aggressively trying to buy names from the finite pool of pre-release and pending delete names that become available each day, prices are just going to keep rising. I don't the people behind all these price increases are going to realize anything new about domaining anytime soon that would make them start paying less for names. And with the CHIP market seeming pretty lethargic these days (I don't actively follow it, so I don't know exactly how dead or active it is these days), and few people seeming to have any faith in the ngtlds as a viable investment, a lot of the money that would have gone into those two markets must not be returning to "regular" .com names again, also increasing prices.
     
  13. krx

    krx Business Member Business Account VIP

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    So what is their business plan? That to me is the important question. If they had been doing this all along it would be one thing, but the fact that it's a relatively recent development makes you wonder, why now? Maybe it's to offload revenue for end of year tax lightening, or they're plumping up to be bought out. But there are better - or at least simpler - ways to achieve those ends. Plus the buying pattern is so indiscriminate and aggressive that there must be something else driving it. Not only does picking up reg fee drops offset the average price of their GD domain acquisitions, but given their volume of sales they can afford to sell at a smaller margin.

    This makes me reflect on the fate of small "mom and pop" grocery and hardware stores, a business model that by and large is no longer sustainable due to competition with Whole Foods, Walmart, and Home Depot.

    Of course we are the moms and pops in this analogy and HD is the Walmart.
     
    Last edited: Dec 10, 2016
  14. Arca

    Arca Active Member VIP

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    What exactly do people not know about? As you said in another post, you have been buying names since 2000. Your portfolio built up over 17 years provides you with the cashflow needed to easily drop $32000 on some new names. It's not that most people here don't know what they are talking about, it's just that they are in a very different situation from you. Don't you see how having the cashflow of a portfolio built up over 17 years makes it a lot easier for you to keep up with the competition now, compared with how people who just started out in recent years are finding it hard to keep up with these price increases?
     
  15. Asfas1000

    Asfas1000 Business Member Business Account VIP

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    Just a clarification about HG's business plan ....
    there is no need to mix up their 2 activities (ie. the reg fee dropcatching activity and their GD bidding activity) and find averages etc.

    Better to consider each separately.

    One could be winning a lot, and the other could be losing money , and combined they would still be making money, but this doesn't make the lsoing activity a winner.

    Hopefully I didn't confuse you :xf.smile:
     
  16. wwwweb

    wwwweb Top Member VIP

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    Huge Domains did they same crap last year, they had a script where if you placed a bid in the last 5 mins, it would auto bid $101, and you would need to put $102 to get your so called close out domain.

    The thread should be indexed here.

    The little guys don't stand a chance, because these kinds of sub $100 names need to be held for many years, and have no guarantee of selling. If they are willing to pay $100 plus for each of these domains, all I can say is bid them up.

    They did well with the Chinese run up, things have levelled off, and GTLDs do hurt the $500-$1000 end user market, when hobbyists, or bootstrapped startups go reg fee GTLD instead of $1000 or less .com from domainer.

    I feel for guys starting out because if they start paying such prices they will be capped out in a month. I can easily spend $5k in a single day, and have to waste time responding to $500 offers for such domain for years on end, and maybe it becomes an invalid term after X many years.

    They are effectively raising aftermarket prices higher, restricting more supply, maybe causing a bit of demand between aftermarket bidders. It can't be sustained because domains just do not sell that quickly.

    Sometimes a sale can take 3-4 months of back, and forth. These days many people go back, and forth, agree on a price, you send them an invoice, and they say hold on a minute, I need to talk to my partner who is away on holidays, and we will get back to you next month.

    You just got to be smart, and with every bid, you add risk to their investment, so make them pay up for them.

    As for being acquired, they would want a very high premium, and their portfolio is a massive undertaking at over 1M domains. I don't think Godaddy would pay them what they would want, there might be 1 or 2 players out there, but they would need discounting which they would not get.
     
  17. Arca

    Arca Active Member VIP

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    Absolutely. Price increases are also a result of numerous domainers going about their business in self-sabotaging ways. Due to the open nature of most platforms these days, you can buy a ton of names every day without having to do any research yourself, because these platforms are designed to facilitate piggybacking on other domainers research. However, people are not doing anything to prevent it (even though it is preventable a lot of the time).

    At GoDaddy, a ton of people (or maybe just one guy, we'll never know until they implement bidding aliases) place a $12 bid 3 days, or even 6 days ahead of the auction ending time. So instead of putting the name on their watchlist, they use bidding as a way of putting the name on their watchlist, so apparently they don't understand that bidding is alerting everyone to the fact that they intend to buy the name. Names with bids are highlighted at expireddomains.net and they also tend to show up in the list of domainshane and others, so they will get a ton of eyeballs, and subsequently bidders, and whoever is buying the name is almost guaranteed to overpay. Bidding in order to put names on your watchlist, instead of just using the built-in watchlist function and starting to bid later, is like asking to lose or overpay for a name. Yet a ton of domainers do it. It is probably going to make less of a difference now that HD is jumping in on everything with bids though. I wonder why not more people take their chances and try to snipe names as close-out bargains instead, because the chances of winning a name this way is likely higher than being able to win a GD bidding war these days.

    Also: GoDaddy Auctions smartphone app works fine (at least the android version). If you can't be on your computer and bid, there is no need to place a proxy bid in advance, just bid later on your smartphone wherever your are.

    Similarly, on Namejet, if everyone could wait until the last minute to place a backorder for most pre-release names at NameJet, there would be 50-95% less bidders in auctions. Most people there are clearly just piggybacking of other people research/orders, but still some people place bids days and even weeks in advance, alerting everyone else to the name, making sure there are 20-80 other bidders eventually. Due to the way the NameJet system works, if everyone just waited until the last minute to order pre-release names, there would be far less bidders in all the private auctions for these names, and prices would be far lower, because many of the deep-pocket bidders who are usually in these auctions would simply not be participating in many of them.
     
  18. wwwweb

    wwwweb Top Member VIP

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    There is also one person, or a group who will keep bidding $5 until they push the top bidders floor price to the max, and then just stop bidding, I have seen this in the past year quite a bit at godaddy. Without usernames, it is very hard to self police awkward bidding patterns. You can't be naive when it comes to such procedures. We saw it with snapnames, with dicker on godaddy as an employee, dropcatch I have seen many non payment wins, you really have to be self aware.
     
  19. Arca

    Arca Active Member VIP

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    Isn't that hard to do at GD without ending up holding the hot potato a lot of the time?

    I agree that there is a lot of really strange bidding going on over at GD though... much more so than any other marketplace.
     
  20. urlurl

    urlurl Active Member VIP

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    I have my own filters and price points i stick too, I may not win all the auctions, but i'm not going to overpay for a name either.
     
  21. barefooted

    barefooted Established Member

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    Hi!
    I have some lists of past won GD expired auctions with full data, so I did a quick research and want to share my results with you.

    First: For October - I took a list of 950 .com names (without numbers and hyphens) that have some Estibot value (between 15 and 5000+.)
    • 150 are private
    • an Indian domainer took 36 names
    • HD are at third place with 35 - that makes 3.6%
    There are a lot of individuals who won one or two names.
    • 214 of those 950 domains are auctioned at the moment on GD, with average min bid of $2,566.
    • 139 are on Sedo - average $3,243.
    Second: My list for November GD expired auctions is almost double - 1706 names with Estibot.
    I noticed an increace of people getting more than 2 domains.
    Also, there are some individuals with 20-30-50 domains.
    • the Indian domainer has got 194 names
    • private registrations from that list are 134
    • HD is again at third place with 132 names - 7.7%
    374 names are auctioned on GD, and 465 - on Sedo. /never know how is correct to say - 'at GD' or 'on GD' /

    HD dont't bid on every auction, IMO.

    If I have more time, I will check the lists without Estibot later.
     
    Last edited: Dec 10, 2016
  22. Doughmange

    Doughmange Established Member

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    Yep, just happened to me. Had a $1200 offer that I agreed to after some back and forth, and now they just plain stalled.

    Guilty of that myself. Did that today on a domain that ended at $585. I was in until about $450, the rest was punitive.

    I've watched them for a long time. At these price points their buying strategy can not stay viable.

    HD's strategy has always been buy drops for pennies on the dollar and then list them for thousands. Buying GD expired domains at and then listing them for the same price just isn't going to float.

    We're all in the same pool, and I've been able to pick up some fine $xx, and low $xxx domains for normal prices that I know I can sell for low-mid $x,xxx. So I'm not worried by them at all.

    In fact looking at their name selection over that sample I am not impressed. So if they keep that up I can guarantee that they will stop this little experiment promptly.
     
  23. Doughmange

    Doughmange Established Member

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    Would that be a person with "TLD" in their business name?
     
  24. Arca

    Arca Active Member VIP

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    About 30-35,000 .COM names expire at GoDaddy com every day. Most of these have no resale value, and HugeDomains obviously do not buy 15,000+ names or anywhere near that from GD every day. As mentioned in my first post, they bought 50%+ of the names I tried to buy myself, not 50%+ of all .COM names that expire at GD in general.

    An Estibot appraisal is a useless indicator of value, so even though Huge Domains did not pick up a lot of the low-quality expiring names that were highly appraised by Estibot, that doesn’t really mean anything. I highly doubt they place any value on Estibot appraisals either, so it’s not valid to consider the amount of highly appraised Estibot domains HugeDomains pick up as indicative of how many quality domains they pick up in general.

    I manually go through lists of thousands of expiring GoDaddy expiring domains every day, using various filter settings to seek out decent names, and watchlist those I see some resale value in. The domains in my sample are names I watchlisted, and later bid on because other domainers started placing bids (so close-out sniping was not an option), and among those names, that both myself and several other domainers saw value in, 50%+ were picked up by HugeDomains. There is no doubt that they actively bid aggressively on auctions that are getting bids from other domainers. However, there is no correlation between that, and whether or not they bid on most domains that have high Estibot appraisals, because Estibot appraisals are simply not an accurate indicator of domain value.
     
  25. tonyk2000

    tonyk2000 Established Member

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    Well, if they want to bid up to $500 (as noticed in the beginning of the thread) on domains that - in many cases - may be resold to endusers (with a reasonable annual sell through rate of course) only in the same price range ($400-...-$1000 in the best case, if resold at all) - they are very welcome to do so.

    I recently started to optimize my own GoDaddy portfolio by not renewing a number of (originally) intended-to-be-sold domains that no more fit my quality criterias. In particular those that were not sold for a reasonably long time even @ "internal closeout" funny prices ~$100-$200 as premium listings also visible and linked-to on domain landing pages. If I mark the domain for non-renewal (long before expiration) - it would be the only case for such funny prices to appear. HugeDomains is now proud owner of most of these and listed them in 4-figures range. Best of luck to them, seriously. I will drop even more domains and I am sure most will end up in the same HugeDomains hands. Moreover, the "madness" discussed in this thread only makes me drop more and more lower quality domains and make my "renew or not" criterias even more strict. If this makes more $$$ to GoDaddy (to whom else?) as the result of HugeDomains actions - then I'm completely satisfied, as my business noticeably depends on GoDaddy and so their stable and financially healthy situation is what I can only appreciate.

    HugeDomains is either spending their own $$$ or credit $$$ (which is of course not uncommon for business in their country of origin - U.S., even GoDaddy has bank debts if we check public shareholders info). If they spend their own $$$ - it is one thing, if they spend somebody else's money - then I think I am sorry for those who gave them $$$ (credits, etc) as that funds are likely not used in optimal way.

    The only problem I see in the whole story is the following: HugeDomains is actively using Afternic and SedoMLS to distribute their portfolio. If they add a noticeable number of domains they are currently purchasing AND at the prices they are intending to resell these for - THEN both afternic and sedomls will become overwhelmed with domains that are - lets say - not optimal in Quality-VS-Price criteria. What will endusers see? To begin with, a number of trademarked domains for $2595 (yes, the hugedomains bot is unaware of too many trademarks), etc, etc, etc... This may, and WILL, affect both distribution networks and of course will affect our domains that are distributed (space in search results of each participating registrar is limited, and this limited space will more and more be used for overpriced lower quality domains).
     
    Last edited: Dec 10, 2016

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