report Significantly Increased Auction Activity

[Ategy]

Wow .. I'm actually having a frustrating day at auction .. just about all the domains I'm watching (just about all the best on my personal list and quite a few from my shared public list are getting far above average number of bids and well above average prices.

Usually on my days off I manage to snag a few cheap .. and even turn down some really good ones .. it's almost as if instead of just one heavyweight (like HugeDomains) competing with the rest of us .. that there are now two heavy hitters battling it out for everything barely even leaving any scraps for the rest of us.

To the point where names of the type/quality I was getting at at $17, $12 or even closeout are hitting three figures .. and domains I'd grab mid-high $xx are hitting $250++ and up.

While this certainly sucks for auction buyers in the short term .. if it keeps up .. it could mean significantly better wholesale prices in the long term .. which could be either good or bad for domainers depending on the particulars of their portfolio.

I did notice patterns like this last year .. wish I tracked it better. Before the day even started and most bids began, I did notice it certainly was a big day in terms of number of good names .. maybe that was part of it?

Curious if I'm the only one seeing this?

 

[Ategy]

wow .. what a very big coincidence that as we discuss this post about bots possibly having an advantage .. GoDaddy as of today has removed "Watchers" from closeout pages. But the question remains .. is that data still available to those with API access? I just wrote up the following .. would very much like to have this question answered clearly ... and more specifically .. have a clear and public list of all data fields and information available to those with API access ...

https://www.namepros.com/threads/godaddy-hides-number-of-watchers-for-closeout-listings.1064428/

 

[krx]

It just makes me wonder how many domains do HD sell on an ongoing basis?

I've wondered this many times myself. If it wasn't such a well-funded and systematic venture I would speculate that their business plan is half-baked. They are clearly hoping to establish some kind of monopoly in the aftermarket, buying up everything that moves—and a lot of names that never should have existed in the first place. But I can't imagine that the business is profitable at present with such massive outlays of capital on names that will never sell for what they're paying for them. They are banking on being the only game in town (or one of only a few games in town that will work together to control the aftermarket and hold prices for names like smizz.com up to a premium of what they paid for it). They won't ever sell but a fraction of the names they're buying but they'll sell those at a premium. It will take many years for this plan to be truly profitable, which is why it seems crazy to me. Will domain names really be around that long? Things like the loss of net neutrality (which will raise the costs of doing business on the web and spur alternative technologies for all the small businesses that will find it hard to compete with the big boys dominating the fee-for-bandwidth model) and the emergence of blockchain technology are just two of known knowns that could seriously disrupt this industry. While I hope the domain name industry lasts forever, I wouldn't be sinking a fortune into a bet on it.

 

[Ategy]

... Bots don't really know what they're buying, they just go on indicators ...

I don't know why everyone assumes it's only bots. Seriously .. if I had an operation the size of them .. I'd definitely have a human manually interacting with their automated system ... I would never only have a bot .. domains are too unique and language is too complex for that to ever work ... however .. if you have a bot pulling tons of information and more importantly still pulling of names they think are good (but many obviously not) .. and then have a human also go over that list .. then you have a incredibly powerful hybrid system .. best of human and bot .. a cyborg! lol


It really bother me that the specifics of what I wrote here didn't cause more people to be a little more outspoken and suspicious. I was colossally disappointed that NamePros decided to remove it from news when it's probably one of the most important things that could ever pertain to domains who buy anything at auction!

https://www.namepros.com/threads/godaddy-hides-number-of-watchers-for-closeout-listings.1064428/


Give me someone who can make me an auction interface who I can direct how to build a bot with human interaction .. then give me some start up funding .. and enough marketing money to get people to my site .. and I'll destroy any "bot" only system. Seriously .. there is no way it's just a bot .. if it is .. then they are throwing money away ... or ... they have so many clients that they simply don't even care about being more efficient .. lol. How much human intervention is another thing .. but if hugenames were mine .. there would be significant human interaction .. heck .. i'd probably have 2-3 people staffed behind a screen the entire auction day.

Definitely check out this thread if you haven't already:
https://www.namepros.com/threads/godaddy-hides-number-of-watchers-for-closeout-listings.1064428/

 

[urljunky]

If they dont own them then they are at least sleeping together. IMO

 

[krx]

I don’t think they own them but I do think they are in bed together

 

[wwwweb]

So during that flurry of bidding period last week, what we all thought was Huge Domain turned out to be right, they are on the whois of all the did not win section, they are the ones who were churning away, others will probably discover the same results with their whois searches.

 

[Name Trader]

To sell 25,000 domains a year averages out at only 68.5 domains every single day. I have no inside information whether HD are selling that number of domains every day, or not. It seems quite a lot to sell every day, but it isn't beyond the realms of possibilities either. And remember. You won't find that number of sales all selling at the lowest price. I would guestimate their average selling price would be approx $3K+. I would also agree that they have significantly increased their buying of domains in the various aftermarkets. So they still have enough confidence that their "game plan" is working/will work. The cash flows in and out must be ginormous. Their tolerance to risk must be higher than that of most ordinary people. But if they've proved to themselves that their system is working. Then I see this playing out by them doubling down and entering the secondary markets. Like they have done. Are they making a profit? No idea. Will they succeed? No idea also. But their actions would indicate to me, that they will succeed. I take my hat off to them. They've succeeded in a Free Market, with some extremely large (some might say even risky) investments. I believe they know what they are doing.

 

[Name Trader]

@urljunky - That wouldn't surprise me at all to learn they have worked out a bulk deal with GoDaddy. I know if I had that buying power I'd negotiate a bulk purchase deal too. I suppose that GoDaddy would be the only company which could afford to buy DC/HD both as a going entity, or even if they should trip and stumble.

 

[wwwweb]

I don't think their risk is as high as it might look. I "think" (speculation only) that they have some kind of deal with GD. Why else would they let them in the backdoor to do their bidding? GD saw their profits skyrocket since they let them do that. IMO they give HD huge bulk discounts. They bid on all those domains bump the price higher and higher than at the end of the day they make a deal on all domains they won. Again all MHO
Look at my picture.

I think their average sale is under $3K, maybe closer to the $2K range overall.

Believe me I know buying a $2xx domain here, and there sounds alright, but when you are buying hundreds on a daily basis, it does tend to add up, but economies of scale right, when times are good, they are going to get the tail end of that, and when times are bad, they are going to eat the worst of that.

As they usually do they are causing disruption in the space. If they can edge prices up, they will profit the most.

 

[Name Trader]

@Ategy.com - It's impossible for GoDaddy to mask the correct registrar if they aren't the actual registrar. Using any reliable 3rd party whois like GWhois.org will always show the correct registrar. I'm sure I've seen this with Tucows registered domains for example, which pop up in GoDaddy's Expiring Auctions.

About 10 years ago, or so, I too used to also put in my recommendations to GoDaddy when I saw problems at the registrar end of things. I was surprised how many of my recommendations were actually implemented. I think they have a completely separate programming team for their auctions. I too never saw any of my recommendations implemented on the auction side of things. Problems drag on for years.

I also see that the auctions have grown faster than their programers can cope with. IMHO. It's a recipe for disaster. Which we seem to see pop-up regularly in reports on NP's. I don't pay them much attention any more, now my use of their auctions are now almost zero.

Things have changed a lot since HD started bidding on the auctions. I see no good or even moderately good 10 char or less 2 word domains anywhere in the closeouts anymore. Zip worth buying, at least. I would say that almost everything in the closeouts these days, is crap in the 10 chars 2 words category, at least. Almost without exception. And anything worth buying goes out of reach rather quickly once HD's and other bots start duking it out, in the Expiring Domains Auctions.

Another big change is the attitude of our Account Managers. At one point they at least gave us the impression they were on our side. And I think they were. But today, Account Managers jobs and attitudes have changed over the years. Nowadays their main job is to ensure us domainers toe GoDaddy's line of ToS, rather than actually trying to be helpful. And to deflect any criticism rather than make any serious attempt to right wrongs. At least that has been my experience since the time I first started using GoDaddy.

 

[wwwweb]

@Ategy.com - It's impossible for GoDaddy to mask the correct registrar if they aren't the actual registrar. Using any reliable 3rd party whois like GWhois.org will always show the correct registrar. I'm sure I've seen this with Tucows registered domains for example, which pop up in GoDaddy's Expiring Auctions.

About 10 years ago, or so, I too used to also put in my recommendations to GoDaddy when I saw problems at the registrar end of things. I was surprised how many of my recommendations were actually implemented. I think they have a completely separate programming team for their auctions. I too never saw any of my recommendations implemented on the auction side of things. Problems drag on for years.

I also see that the auctions have grown faster than their programers can cope with. IMHO. It's a recipe for disaster. Which we seem to see pop-up regularly in reports on NP's. I don't pay them much attention any more, now my use of their auctions are now almost zero.

Things have changed a lot since HD started bidding on the auctions. I see no good or even moderately good 10 char or less 2 word domains anywhere in the closeouts anymore. Zip worth buying, at least. I would say that almost everything in the closeouts these days, is crap in the 10 chars 2 words category, at least. Almost without exception. And anything worth buying goes out of reach rather quickly once HD's and other bots start duking it out, in the Expiring Domains Auctions.


Another big change is the attitude of our Account Managers. At one point they at least gave us the impression they were on our side. And I think they were. But today, Account Managers jobs and attitudes have changed over the years. Nowadays their main job is to ensure us domainers toe GoDaddy's line of ToS, rather than actually trying to be helpful. And to deflect any criticism rather than make any serious attempt to right wrongs.

I would agree with everything you stated, except the last part. If you are a significant client to them, they will go out of their way to help you, and make things right. Otherwise if you get a front line employee, they have a bit of flex, but mostly it’s whatever their handbook states as to how they proceed.

Godaddy has grown a lot, they are a learning curve, especially when integrating afternic, along with their own godaddy auction, and the premium stream to somehow function in a proper channel. They have a $200M+ acquired private portfolio of great names, they see value in such a space.

It can be a bit of Wild West over there, so newbies have to be smart as domainers we know paying $500-$5000 for domains daily that inventory can pile up quick, and before you know it, there is inventory on dead inventory, and all those non liquid assets are tied up for a large investment which does not provide any interest if it does not sell thru, which is harder to do when you pay more.

If you look at the people who are actually making money in the industry, the domains they are selling they acquired between early 2000 into 2012, those are the caliber of names that are selling thru now. Yes, I know odd brandable, and hand reg does sell here, and there, but I am talking about the people making real constant returns. It is the inventory they been holding for 5-10 years that has finally matured, and grown to start paying it’s self back. So people who are paying top dollar; and think they are going to flip thru to 10x, you might have to wait a few years.

Godaddy is going to start seeing a lot of regular customers just drop from the frey, as they will be sick of wasting auctions that bots are timing, and min bidding every 5 mins, for endless amounts of time etc, it is a big exercise of waste of time. They need these bidders in the eco systems to extend auctions, and increase prices. Godaddy should not turn its back on the human element, as HD will take it’s inventory and leave as they run their own register, and auction platform, they just want the cream; I hope godaddy is smart enough to know they alienate existing clients by allowing such actions.

Auction platforms need to be very careful within the legal framework of things if they choose to incentivize any single, or group of bidders, as any sort of unfair advantage can be seen as collusion, and there are many state level laws against such actions. That is why we saw NameJet constantly call themselves Not an auction platform.

 

[Name Trader]

@wwwweb - Thank you. I was expressing my own experiences only about the changing responsibilities of our Account Managers at GoDaddy over the last 10-15 years. YMMV. And I truely hope it has.

 

[Name Trader]

I meant to favorite / biggest selected clients, exclusively.

Who knows how deep the rabbit hole goes...

Also, what about Verisign? Of course renewals of a big portfolio always form a big part of spending. Now, if somebody has a bunch of registrars and at the same time a bunch of own domains - most of which are acquired using bot-powered filtering and, accordingly, are of lower quality and many TMs. This somebody may well go to Verisign and ask them for registration / renewal / transfer discounts. He may explain that he will either pay $2 per domain per year or drop 90% of his portfolio, as anything else would not be profitable. Verisign may well agree to give such a discount, why not? They will gain even less $$$ should such a customer start dropping his portfolio. And it is not about cost of running a registry - wasn't it Bob Parsons (GoDaddy) who publicly offered to run .com registry charging $2 per domain/year, some time ago, when verisigns .com registry contract was due to expire? The costs to run a registry are not that big - and become cheaper each year (hardware, internet connections etc etc)

Absolutely true about the rabbit hole I don't think playing hardball with a registry is going to work. They have their basic costs to survive. Losing money on every domain on a portfolio is not a practical proposition, IMHO. Nobody has a clear idea how much profit the .com registry makes for Verisign. But it probably makes "a lot". I know they signed a continually recurring contract with ICANN. And so it's going to be very messy to transfer .com Registry to somebody else. And Verisign are also making noises about putting .com prices up again.

Yes it was good old Bob, who proposed to take over the .com registry for $2 a domain. Was this a good faith proposition? Or was it designed to put pressure on Verisign? We will never know. And Verisign countered that by signing and automatically recurring renewal of the .com Registry contract. There is something sounding not quite right about having and automatically renewing contract for the .com Registry. So it must be very profitable. Would be my guess

 

[wwwweb]

\

Seeing exactly the same thing on my end. HugeDomains show up in the WHOIS record for the vast majority of auctions I've bid in recently. They've actually been winning a lot more auctions than I had anticipated.

Bot bidding seemed to cool down a bit during Feb 11-14. But today and yesterday automated bidding activity was intense again. Looks like they are still testing out how to run their bots, as there has been a lot of variation in bidding patterns over the past week. I've been bidding up bots tens of thousands extra on low quality names over the past few weeks, in the hopes that they'll set up their bots to bid more conservatively. No idea if it has any impact. Doesn't seem like it so far.

I have seen that also, some days they are just grabbing everything, then they ease up a bit, I wonder if it goes with their bank roll, and a %, nice haul on the ebike.com, that should buy them a few days of dominance.

 

[Arca]

some days they are just grabbing everything, then they ease up a bit

With their bidding activity recently it's looking more like they are testing things out and tweaking bot settings, rather than taking budget restraints into consideration.

 

[Arca]

nice haul on the ebike.com, that should buy them a few days of dominance.

End user sales have noticeably increased recently, and I'm sure HD are seeing that with their 4 million portfolio. Add sales like the ebike.com one on DC, and it all adds up to a significant amount. So if they want to dominate I'm sure they don't lack the funds to do so these days.

HD's growth have moved in tandem with the economic recovery and growth both globally and in the US over the past few years, which surely has played part in making their quick growth from 2.4 mill to 4 mill domains viable. They're still riding that wave. I wonder whether their model can be sustained if the economic winds change and we enter a more serious financial downturn or recession again.

 

[wwwweb]

End user sales have noticeably increased recently, and I'm sure HD are seeing that with their 4 million portfolio. Add sales like the ebike.com one on DC, and it all adds up to a significant amount. So if they want to dominate I'm sure they don't lack the funds to do so these days.

HD's growth have moved in tandem with the economic recovery and growth both globally and in the US over the past few years, which surely has played part in making their quick growth from 2.4 mill to 4 mill domains viable. They're still riding that wave. I wonder whether their model can be sustained if the economic winds change and we enter a more serious financial downturn or recession again.

You make a good point there, they do have that attractive price point that you can take a flyer on their domains. They are ramping up big, the president likes to keep the economy moving, and probably will do whatever it takes so it will keep moving no matter what the consequences are during his presidency.

 

[drewwash]

GoDaddy is very hit or miss. I see domains go for much cheaper than they should sometimes. Works out frequently.

Occasionally we run up against another party. However, I still think that many of the domains go for less than they are worth.

Just be thankful for the cheap days.

 

[theunique]

When people set a proxy bid, and you bid against them, their automated higher bid is marked with "automatic bid" in the "comment" field. I just noticed that when I'm auto outbid by what appears to be bot bidding the comment field is empty (there is no "automatic bid" indication"). I've seen the same thing in other auctions too. Anyone know why/what this means?

It isn´t an "automatic bid" like a proxy bid which goes up if someone makes a lower bid. It´s a "normal" bid done via Auctions API. That´s the reason they are so fast and it seems that it was a proxy.

 

[Name Trader]

I'm glad I found this thread as I have been meaning to post about this for awhile. It seems that since late last year, the minimum price to win a domain auction at GD, NJ and DC has shot up dramatically. What could be had for <$100 now goes for $400+ on average. I attribute that in large part to players like HD and Afternic increasing their maximum bids, the increasing use of bots/automated software to bid domains up and surreptitious activities by known parties in plain view of auction houses. This is not good for the majority of domains. In fact, I'm believing there will be a big shake-out of average domainers in our industry this year due to the reasons above. All I ask is for is honest, transparent and fair auctions. I brought some of these issues to the attention of GoDaddy, for example, but I get no traction. They know what's going on. Not hard to fix.

GD are hardly likely to bite the hand that feeds them. They are more likely to do the opposite. Which is what actually has happened. They stopped the use of their API to regular customers, and at the same time refined it, for their biggest customers.

 

[Name Trader]

Ategy not how you just noticed this now, but you will see it day in, and day out, and you can watch huge names inventory rise in correlation with it. The game has changed, and it costs a lot of money to play against these bots. They come with the attitude if we are not going to win it, we are going to make you pay a price where you will never profit from it.

Although I agree with most of what you said in your post. But I disagree with this part. Bots are bots. They don't have any attitude. Also if we will never profit from winning it, it's unlikely that they won't profit from it if they won the domain either. That doesn't make any sense.

These bots are programmed with a top price in mind. Which they use the same price for all the domains. They might have a tiered structure depending on the domain value. They might, although I suspect not, have some human intervention, as prices in the auction rise. But that probably doesn't make them bots, but apps.

 

[DomainVP]

Wow off topic just saw bitcoin go under $6500

Bitcoin collapse and an increase in domain spending... you don't say.

Predictions

 

[wwwweb]

My only concern with Bots is *IF* they have more information than we get. Otherwise I just bid on domains as I normally would. It's not the fact they are bots that bugs me .. it's the fact the volume and prices were so high I couldn't be my usual stingy self by grabbing what I considered to be my usual steals (was too good to last I guess)! lol

But who knows if the bots API access have more info or not? I asked Joe and Nick (GoDaddy) in another thread (https://www.namepros.com/posts/6458702/) the full list of what exactly the data fields they had access to were. And Joe seemed rather annoyed claiming he thought he already answered twice in another thread (which he actually didn't at all .. lol), and then only answered the question in part without specifying what EXACT datafields APIs have access to, other than just saying they don't have access to Proxy bid amounts.



I found it a little odd that he felt it was appropriate to ignore such a serious and straight forward question when he only "believed" he answered it in another thread? lol .. In fairness to him .. it did seem like the most important thing I wanted to know was if they could see proxy amounts .. but I also clearly said I wanted a list of every datafield .. that list was never given .. and is what's most important to me as I rarely proxy anyways.

But my main concern is if they can see number of watchers .. because I rarely ever place proxy bids except if I'm work. I'm concerned about this because new closeout pages now show how many people are "watching" a domain .. if bots see that data field at all times (even before auction) then they have a HUGE advantage. I spend hours a marking domains to watch, and then they just come in and only need to scan the domains I and other domainers are watching. Otherwise bots are simply quicker to bid and I don't mind competing against them since we do get 5 minutes to raise our bid.

One other gripe would be more with the closeout snipping .. but on domains I really want, I often just place a $12 bid 6 minutes before an auction ends (sometimes if I'm at "work" I'll have to place a bid an hour or two in advance and cross my fingers .. lol). GD has randomized the closeout times a bit .. but obviously a bot can just refresh every second automatically .. which is their only real advantage (although be it a HUGE one).

Also very curious if they can actually see the actual amount of proxy bids. I know Joe said no. And I totally believe that's what he believes to be true. But let's be honest in saying the GoDaddy platform is a colossal mess full of bugs, glitches and inefficiencies .. I'm not sure anybody truly knows for sure! lol

A couple of weeks ago I lost a solid domain because of a perfect storm of THREE separate bugs/issues! It was very clear I had a much better understanding of the ins and outs of their platform than even my rep. I feel really bad for him .. he's always trying to be helpful .. but there are just too many bugs they aren't aware of on the platform .. it's almost impossible for them to really know more than power users like ourselves who go into every nook and cranny of their platform.


On a far more serious note ... There was a bug I found and reported a few times a few years ago (before I was really domaining) where you could get a backdoor mini-page that showed ALL bids .. including proxy bids. This bug was present for many months if not longer (probably even more going back until I discovered it). Even after I reported it it wasn't fixed. The only reason that hole eventually got closed was because they revamped the platform themes at one point and the link was no longer accessible directly (although if someone knew the direct link it's entirely possible they still had access far longer .. and if it was openly available on a webpage .. it certainly was available to Bots).

That effectively would have allowed anybody listing an auction to shill and drive up the price if their domains to right below someone's supposedly secret proxy bid. I really wasn't buying much back then .. I was buying with intend to develop (which I never ended up doing in the years after my big site from 199 to the mid 2000's). I never bid on anything but expiration auctions. I personally used it to extend auctions hoping the other person would be long offline by the time I actually passed their bid. Or simply to keep bidding below the proxy to give me more time to think about if I really wanted the domain at the proxy price. Looking back I also guess I could have used that bug to save up to $4 by bidding just $1 over the proxy so as not be paying the $5 spread.

However .. I genuinely believe there is nobody at GD out to get us .. and I really believe they are genuine when saying they want to have a fair platform ... just about every person I've talked to at GD has been super nice and friendly and go as far as they can to help. But each and every time I report problems/issues/errors, things rarely change and I rarely hear back .. it all just gets swept under the rug and forgotten. It wouldn't surprise me if there were things about API access even the upper levels of GD just simply aren't aware of.

It would be great to get a clear straight answer of every single data field available to the APIs/Bots. But I've asked too many times and think the likely reason I never get an answer is because the people I ask quite simply don't even know themselves!

A bot having the advantage to see the number of watchers, married with their new appraisal formula could be the reason why you started this thread today, out of frustration. I have no idea, and I am sure nobody will ever tell us.

Well I guess it could really be summed up in one line of code to show a user id, or bidder number, only exchange to this day that does not provide that transparency, not sure why?

 

[wwwweb]

Bitcoin collapse and an increase in domain spending... you don't say.

Predictions

Stock market got slammed also today.

 

[Arca]

If you think about the only real change is the addition of a new big player (@Frank.Schilling 's Uniregistry maybe? Or others some have mentioned) .. here's why I think that ...

We all know that Huge Domains is buying a ton of names .. but because there was no monster counterpart player bidding against them .. they kept snagging a large bulk of names super cheap. Sure the rest of us human domainers bit up a good portion of them to some degree, but still far from everything.

Enter a new big player / bot to the game. Now they are playing off of each other. What Huge domains used to get with one bid now triggers the new player to bid as well .. and where in the past Huge Domains got a name for $12-$50 that they were prepared to spend $500 .. now because of a single other player .. most of their domains get driven way up.

Realistically when there is only one player in the game prices are just rock bottom .. and all it takes is one major player and every domain get challenged and driven up (theoretically to what they should have sold for).

With 2+ bots playing against each other we're going to see a lot more patterns .. it actually perfectly understandable and expected .. almost definitely not some big conspiracy.

I think this is a nice summary of what seem to be the change in dynamic at GD. Humans drop out of the bidding when prices get too crazy. But these automated bids don't "discern" the quality/value of a domain in the same way, and neither side drops out of the bidding. HugeDomains have often used the strategy of high proxy bids, and similarly, Frank's taryn bot always uses the high proxy bid strategy at NameJet. When two (or more) parties use this strategy with automated bids, either side is going to get maxed out, hence the sudden increase in prices.