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

[Arca]

I've been wondering about the competition in auctions for expiring domains over at GoDaddy.com, because somebody is paying hundreds for seemingly every domain that gets a few bidders.

I’ve also noticed a clear pattern, with the last bidder (or one of the last bidders) entering the auction winning most of the time, which made me think that there is one large corporate buyer piggybacking of whatever domains other people find and bid on. Turns out that is the case: HugeDomains.com is buying most domains over at GoDaddy.com expired auctions. I looked up the WHOIS of the past 150 auctions I have lost at GoDaddy.com, and 84 of those are now owned by HugeDomains.com and listed for sale on HugeDomains.com.

While 50%+ may not be representative of overall domains bought at GoDaddy, they do seem to buy far more domains than anyone else. The 66 names not bought by HugeDomains.com were bought by a number of different individuals and companies (BuyDomains.com bought 6 of those 66, for example), so 50%+ were taken by HugeDomains, while "the rest" of the auction wins were by a number of different individual domainers and companies.

This might not be news to some, but I've never seen anyone mention that HugeDomains is this active over at GD expired auctions, so I thought it might be interesting for some people to know who is outbidding everyone in the lower range over at GoDaddy. I've read people mentioning that HugeDomains buy names in close-out status over at GoDaddy, but never that they buy most of the domains in auctions too.

HugeDomains absolutely dominates all auctions below $5XX, and they only picked up a single name above $5XX (cakemart.com) in my sample of 150 names, so $5XX seems to be a self-imposed limit for them. If I only checked domains sold below $5XX, the percentage bought by them would be even higher. I've been the second highest bidder in lots of auctions that HugeDomains.com won, and in my experience they will keep bidding until you give up or until the price passes $5XX. By outbidding most bidders in the lower end, and acquiring more than half of the domains other people also have interest, it leaves a far smaller pool of names for the rest of the domainers to compete for, so I guess that's part of the reason why the reseller prices for names keep increasing so much for names in this range.

The only way to buy cheap domains at GoDaddy auctions now seems to be to let domains expire with 0 bids, so that they go to close-out status, and then try to snipe them as soon as that happens. However, some domainers seem to think it's smart to bid $12 on any decent name when there is 1-15 minutes left, hoping that nobody else is going to place a bid, so fewer and fewer decent names are let to expire with 0 bids. However, that strategy never seems to work (I've tried it myself lots of names, and it did not work even one time), because there are always other people watching and waiting for the name to go to close-out, and they jump in and bid if you make a $12 bid, and most of those names are eventually won by HugeDomains.com. What experiences do other people have at GD recently? Anyone else have any good strategies for buying expiring domains @ GoDaddy.com these days?

Some examples of expired domains bought at GoDaddy.com auctions by HugeDomains:
Domain: skillsharing.com
Purchase price (at GoDaddy): $540
Asking price (at HugeDomains): $2995

Domain: ledmaster.com
Purchase price (at GoDaddy): $537
BIN price (at HugeDomains): $2195

Domain: cyberstrategies.com
Purchase price (at GoDaddy): $262
Asking price (at HugeDomains): $2895

Domain: crablab.com
Purchase price (at GoDaddy): $320
Asking price (at HugeDomains): $1895

Domain: dailyportal.com
Purchase price (at GoDaddy): $560
Asking price (at HugeDomains): $2895

Domain: fivesecondrule.com
Purchase price (at GoDaddy): $42
Asking price (at HugeDomains): $2695

Domain: deltacloud.com
Purchase price (at GoDaddy): $365
BIN price (at HugeDomains): $1795

Domain: itace.com
Purchase price (at GoDaddy): $499
BIN price (at HugeDomains): $2595

Domain: sunnykitchen.com
Purchase price (at GoDaddy): $200
BIN price (at HugeDomains): $2595

Domain: baristaschool.com
Purchase price (at GoDaddy): $449
BIN price (at HugeDomains): $2895

Domain: cakemart.com
Purchase price (at GoDaddy): $695
BIN price (at HugeDomains): $3495

Domain: visuala.com
Purchase price (at GoDaddy): $315
BIN price (at HugeDomains): $2795

Domain: massanalytics.com
Purchase price (at GoDaddy): $130
BIN price (at HugeDomains): $2095

Domain: edusport.com
Purchase price (at GoDaddy): $535
BIN price (at HugeDomains): $2995

Domain: acneguru.com
Purchase price (at GoDaddy): $52
Asking price (at HugeDomains): $2495

Domain: stylefolio.com
Purchase price (at GoDaddy): $195
Asking price (at HugeDomains): $1995

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Related: HUGE DOMAINS SNIPING GODADDY CLOSEOUTS

 

[slimjim270]

@dordomai - I agree. Masking profits via "implied value" assets (domains) that can be handled as an expense has merit, especially as a C-Corp.

This may be an idea from left field, but...

- Does HD carry their domains on their books as "assets"?
- Or do they carry them as "inventory"?
- Or do they handle them as "operating expenses"?

The reason I ask, is an "asset" can be depreciated over 3 years for tax purposes.
An "inventory" item has a shelf-life and can be written off as "obsolete" (spoiled goods).
Whereas, an "operating expense" is a one time expense at the time of payment. Renewals being an "operating expense".

There is a huge tax implication based on your accounting approach... HD might be using their domain "inventory" as a tax shelter, where they are "hiding" (masking) their operating profits from their other operating units via domain "inventory" purchases whose value is (on the books) zero, but in actuality carries a much larger value while they pay the paltry renewal fees as "operating expenses" each year.

Yes, out in left field... but hey... I know a couple friends of mine who buy real-estate and hold it in a real-estate trust and then run their operating businesses as separate entities "renting" from their real-estate holdings... meanwhile... their real-estate assets have appreciated significantly while they pay off the mortgage and use depreciation on the real-estate as a tax shelter.

On a corporate level... not that far out in left field...

-Jim

 

[Asfas1000]

Jim, why don't they buy a few short domains of equal cost instead ?

 

[urlurl]

They would be considered inventory - they would only write it off after they let the name expire
operating expenses would be the renewal fee
domains are non depreciateable

im not sure how they are set up but i think they are trying to balance their portfolio with some better names to offset their crappy ones

 

[slimjim270]

Jim, why don't they buy a few short domains of equal cost instead ?

@Asfas1000 - great question. My 1st thought is that 4L's would (typically) have a higher initial purchase price over $500 and would put each unit in a different (unit cost) category.

But @urlurl has a good point... each domain "asset" would be considered inventory... but then again... domains are more like lease hold agreements (something that can have "value" as local rents rise you can sublet for income generation).

While domains have risen in value over time... I certainly don't claim "appreciation" on my balance sheet.

-Jim

 

[ValleyRock]

@dordomai - I agree. Masking profits via "implied value" assets (domains) that can be handled as an expense has merit, especially as a C-Corp.

This may be an idea from left field, but...

- Does HD carry their domains on their books as "assets"?
- Or do they carry them as "inventory"?
- Or do they handle them as "operating expenses"?

The reason I ask, is an "asset" can be depreciated over 3 years for tax purposes.
An "inventory" item has a shelf-life and can be written off as "obsolete" (spoiled goods).
Whereas, an "operating expense" is a one time expense at the time of payment. Renewals being an "operating expense".

There is a huge tax implication based on your accounting approach... HD might be using their domain "inventory" as a tax shelter, where they are "hiding" (masking) their operating profits from their other operating units via domain "inventory" purchases whose value is (on the books) zero, but in actuality carries a much larger value while they pay the paltry renewal fees as "operating expenses" each year.

Yes, out in left field... but hey... I know a couple friends of mine who buy real-estate and hold it in a real-estate trust and then run their operating businesses as separate entities "renting" from their real-estate holdings... meanwhile... their real-estate assets have appreciated significantly while they pay off the mortgage and use depreciation on the real-estate as a tax shelter.

On a corporate level... not that far out in left field...

-Jim

Not logical becuase
Canadian EPC - 0 tax
Ireland corporate tax @ 12%

 

[campout]

In the US, I don't think you can expense inventory at the moment of purchase (cash accounting) unless your annual revenue is under $1 million (like mine is ).

 

[urlurl]

oopsy.com

at GD auction, ends for over $3,500!

 

[buywebsites.biz]

maybe they don't want to make money. they want to hide some of their assets in domains.

There was a time last year where the price of Chinese premium 4L .com's were tracking the price of 1 Bitcoin, and premium 4L .net's the price of 1 Litecoin. BTC has since taken off 100+% higher while Chinese premiums have dropped roughly 50%, so the math supports your hypothesis.

 

[campout]

There was a time last year where the price of Chinese premium 4L .com's were tracking the price of 1 Bitcoin, and premium 4L .net's the price of 1 Litecoin. BTC has since taken off 100+% higher while Chinese premiums have dropped roughly 50%, so the math supports your hypothesis.

I don't see the connection.

 

[urlurl]

maybe they are pulling funds out of 4L in favour of BTC

BTC = where pirates hide their gold

 

[buywebsites.biz]

I don't see the connection.

4L domains compete as an asset class against art, fine wine, cryptocurrencies, overseas real estate for Chinese investor dollars. These assets all go in cycles of popularity, but when one goes up it does so at the expense of the others (there's only so much money to go around).

 

[Recons.Com]

so btc going up is killing da Vinci paintings price?

 

[ABABAB]

Does anyone know? How long do they(HugeDomains) keep the domain name?

Is there any chance that the domain name is released again?

 

[ercan]

Does anyone know? How long do they(HugeDomains) keep the domain name?

Is there any chance that the domain name is released again?

Tested 1 week ago dropping domains were taken 16.6% (14650)
Namebright.com taken 47.4% of this.

Last year 75% of the domains taken over NameBright.com have been renewed.
The number of domains I use for this statistic is 34480.

 

[ABABAB]

Tested 1 week ago dropping domains were taken 16.6% (14650)
Namebright.com taken 47.4% of this.

Last year 75% of the domains taken over NameBright.com have been renewed.
The number of domains I use for this statistic is 34480.

How do they pay all this?

 

[domeen]

How do they pay all this?

I think with real money. I don`t belive they use bitcoin

 

[ercan]

How do they pay all this?

Really big figures

 

[urlurl]

Tested 1 week ago dropping domains were taken 16.6% (14650)
Namebright.com taken 47.4% of this.

Last year 75% of the domains taken over NameBright.com have been renewed.
The number of domains I use for this statistic is 34480.

so you are estimating HD is dropping 25% of caught names from a year ago?

 

[ercan]

so you are estimating HD is dropping 25% of caught names from a year ago?

I do not know how many HDs are, but they are all domain names taken over NameBright.
I can give you the list if you want to review 2016.05 (49k)

 

[ABABAB]

I do not know how many HDs are, but they are all domain names taken over NameBright.
I can give you the list if you want to review 2016.05 (49k)

i think No matter for them what that domain means or not!

 

[anantj]

I do not know how many HDs are, but they are all domain names taken over NameBright.
I can give you the list if you want to review 2016.05 (49k)

Backorders on Dropcatch are also registered with Namebright. Your number might not be directly reflective of what HD drops. Also, personally, I tend to transfer out of NB near expiry. Does your number factor transfer-outs as well?

 

[ercan]

Backorders on Dropcatch are also registered with Namebright. Your number might not be directly reflective of what HD drops. Also, personally, I tend to transfer out of NB near expiry. Does your number factor transfer-outs as well?

Yes how much of HD or Backorders this is unclear I reviewed again registered over Namebright on april 2016
Total number 43415
Renewed 29115
Transfer 4044
Dropped 10244
Free 4839
Reregistered 5405

 

[domeen]

I HANG UP.

Yes how much of HD or Backorders this is unclear I reviewed again registered over Namebright on april 2016
Total number 43415
Renewed 29115
Transfer 4044
Dropped 10244
Free 4839

Reregistered 5405

Dose this Transfer 4044, means SOLD? 4044 ?Or what means transfer?

 

[ercan]

Dose this Transfer 4044, means SOLD? 4044 ?Or what means transfer?

Transferred another registrars from Namebright probably most backorder domains.

Transferred registrars

 

[UXela]

what is godaddy "auctionMerge"?
some of my won auction he/she placed bid three times extend the listing for extra 15 min!

I don't think this was answered and I'm also interested what this is.
It looks like every time an auction start at $10 (instead of $12) this is the comment - check out the screenshoot.
And this shows up for domains for which I'm sure the starting bid is $12.

Anyone know what it is?