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?

 

[Asfas1000]

It's not that complicated. You can have a person confirm a priori the max bid per domain and from there on bots can take over. Why would you need to pay someone to supervise the bidding ?

 

[Ategy]

It's not that complicated. You can have a person confirm a priori the max bid per domain and from there on bots can take over. Why would you need to pay someone to supervise the bidding ?

Because if you're already making millions you're probably sitting on a beach somewhere drinking something with an umbrella sticking out of it .. lol

But yes .. certainly could do it yourself .. particularly if you had an automated system cherry-picking lots of suspiciously good names with activity for you to check out.

Plus if the bot can pull out names being "watched" by the rest of us for the human to double check .. then that total package is an unstoppable machine!

 

[Kate]

It's not that complicated. You can have a person confirm a priori the max bid per domain and from there on bots can take over. Why would you need to pay someone to supervise the bidding ?

Piggybacking on the research of others and outbidding them is one thing.
But if you end up paying end user price, it's not such a good thing.
And just because there are lots of bids on a domain, it doesn't mean it's any good. Proof: https://www.namepros.com/threads/lnvestor-com-at-namejet.751224/
Bottom line: don't let the bots take over

Also, everybody is puzzled with the business model of HD and how they are even making money. Maybe we should stop assuming they are in the black.
After all, if you look at Godaddy afaik it's been a money-losing venture for more than a decade and they only recently became profitable. If I am correct. Twitter too. With adequate funding you can run at a loss for a long time. A good number of registries are also unprofitable. It can be normal and expected in the first years of operation, and part of the business plan. And broadly speaking, if you are not making profits then you are not taxed (on profits). You just have to cover operating expenses (and possibly salaries).
I think it's not so rare to have companies pursuing a business model that is not sustainable.

 

[Asfas1000]

Piggybacking on the research of others and outbidding them is one thing.
But if you end up paying end user price, it's not such a good thing.
And just because there are lots of bids on a domain, it doesn't mean it's any good. Proof: https://www.namepros.com/threads/lnvestor-com-at-namejet.751224/
Bottom line: don't let the bots take over

That's if you're piggybacking on other's work in a blind fashion. I never said that, instead I said you can have bots appraise domains in advance, select which ones to chase, have someone verify that the max bids and the domains are not stupid (bots will not always get an appraisal right), and then you can let the bots do the hard work.

 

[urljunky]

Huge domains is owned by GD they bump the prices up as high as they can if they win they just transfer to HD if someone else wins they collect money. Either way they win.

NOTE: I have no proof to back this up. Just makes since to me. HD where they getting all this $$ to buy 5 million domains? I dont think real investors would want as many sh%t domains as HD has bought.

 

[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.

 

[urljunky]

The cash flows in and out must be ginormous. Their tolerance to risk must be higher than that of most ordinary people.

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.

 

[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.

 

[Ategy]

The problem with all these conspiracy theories lies in the fact that GD can't really offer any discount to HD .. doesn't really make any sense. If you have a DDC discount then the bulk of the $8.29 renewal portion of the auction win price goes to Verisign (so effectively any further discount would lose GD money).

Then when it comes to auctions why would GD even offer them a discount when the very fact it's an auction means that somebody else was actually willing to pay $5 under when HD actually paid.

They certainly could offer them a few dollars less per domain .. probably the case with closeouts nobody else bid on .. but the reality is, GD doesn't need to offer them deals.

The only place would be if at the end of the day, HD has 100 domains that went to $11 closeout .. then I could see GD giving them a bulk discount .. but compared to what HD won at auction the amount is going to be relatively small.

You also need to factor in that not even all the domains were GoDaddy's ... there is no record as far as I know what $$ percentage of outside domains GoDaddy keeps, but I'm guessing the other registrars keep the bulk of the money because it's actually their domains .. which gives GD even less of a margin to give discounts.

Obviously if HD were able to tell which are GD domains and which are from other registrars, then maybe a discount on GD specific domains could be arranged .. but according to GD they aren't allowed to disclose what are and what aren't GD domains (although even without looking at WhoIs you can still often tell thanks to one of GD's many many bugs/issues .. lol)

 

[Name Trader]

Obviously if HD were able to tell which are GD domains and which are from other registrars, then maybe a discount on GD specific domains could be arranged .. but according to GD they aren't allowed to disclose what are and what aren't GD domains (although even without looking at WhoIs you can still often tell thanks to one of GD's many many bugs/issues .. lol)

Wouldn't a whois look for a domain in auction not show GoDaddy as the Registrar?

 

[Ategy]

Wouldn't a whois look for a domain in auction not show GoDaddy as the Registrar?

GoDaddy changes and masks the WhoIs info on most domains once they hit auction (I haven't poked and prodded enough to really know if you can tell by WhoIs or not ... but I'm thinking their agreement was more for on the actual platform itself.

The big issue was about a year ago .. the $5 discount on closeout domains didn't apply to non-Go-Daddy based names .. so it really was a nightmare if you wanted to optimize your spending in batches of 5 closeouts to get your discount.

That issue isn't there anymore simply because of the fact now all closeout domains qualify for the discount .. regardless as to if the names were sourced from GoDaddy or another registrar.

Also .. this obviously isn't a bug, but another way to know (only after the fact though) after you buy a domain that was from another registrar you can sometimes tell as well because it's sometimes treated as a "transfer" in their system (I'm not sure if they are all like this or if it's only some registrars .. but I know some of my closeout/auction wins are treated as transfers. For auctions it could mean a reseller /domainer simply sold it via the GD platform .. but as far as I know closeouts are only expired domains .. so if a domain ends up being a transfer then you know it was an expired domain from another registrar.

 

[Name Trader]

@Ategy.com - You miss my point. I think. Domains in the Auctions which are not at GoDaddy, will not show GoDaddy as the Registrar because the domains are only transferred to GoDaddy after the domain has been won at auction. We know this already because of threads here on NP when the original owner renewed the domain. When GoDaddy mistakenly transferred to the Auction Winner's GoDaddy Account. And had to take the domain back. Because it was never transferred to them.

 

[forge]

The big issue was about a year ago .. the $5 discount on closeout domains didn't apply to non-Go-Daddy based names .. so it really was a nightmare if you wanted to optimize your spending in batches of 5 closeouts to get your discount.

What discount are you even talking about here? Are you saying GD offers a special discount on a batch of 5 or more closeout domains purchased?

Is this automatic?

 

[Ategy]

What discount are you even talking about here? Are you saying GD offers a special discount on a batch of 5 or more closeout domains purchased?
Is this automatic?

Yes and yes ... You get a $5 discount (applied as $1 per domain) for every multiple of 5 closeouts in your cart. If you have a 6th domain in your cart you'll see it's a dollar more.

@Ategy.com - You miss my point. I think. Domains in the Auctions which are not at GoDaddy, will not show GoDaddy as the Registrar because the domains are only transferred to GoDaddy after the domain has been won at auction. We know this already because of threads here on NP when the original owner renewed the domain. When GoDaddy mistakenly transferred to the Auction Winner's GoDaddy Account. And had to take the domain back. Because it was never transferred to them.

I know GD masks a lot of info on domains at auction .. but honestly not sure what they do with domains from other registrars .. I seem to recall seeing one masked once .. but can't be sure because it never really mattered to me before until now. Now it's very important because domains from other registrars can still be pulled back far beyond the new 30 (theoretical) limit with GD originating names. (Why you should still never celebrate an auction win until the domain is actually in your account).


There are some things I just can't go into further details because it involves bugs/problems on the GD platform. I've reported tons of bugs/issues/unclarities/etc to GD time and time again .. nothing ever gets done .. I always get the "your feedback is always very helpful" routine .. but never any real return of information .. and quite obviously .. 4 times out of 5 nothing changes. It's to the point where my emails to my rep start with an apology because I know I'm turning his day into a mess ... lol.

I still use their platform because they have all the domains and relatively good prices for expiring domains .. I certainly have to give them props for that, on the front end they're much better than on the back end .. lol. So because I use the system, I don't openly post or even privately share details of these bugs/glitches .. I complain to them when they affect me, but they always find an excuse and just dismiss it .. but if you're a regular there and explore all the nooks and cracks of their system you'll find plenty of bugs all over their entire platform.

A few weeks ago when I was on vacation I lost a domain because of a perfect storm involving THREE separate bug/glitch/misinformation issues .. it's pretty sad .. I don't complain for nothing .. lol .. that's why when everyone says GoDaddy is evil and out to get people I always say I don't agree .. it's just that they're too big .. lots of cross sector/platform issues .. more importantly it's quite obvious those working on their system aren't power users .. it's also very obvious it a big box where more often them not the left hand is completely clueless as to what the right hand is doing and vice versa. All the people I've dealt with at GoDaddy are actually really nice people .. most are quite competent in what they do .. the big problem is that they have a huge missing but crucial piece of the pie in getting everything to work together .. bugs and issues likely simply get pushed from one desk to the next and just lost at some point.

 

[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.

 

[wwwweb]

@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.

Understood, do you still have an active account executive over there in recent times?

 

[tonyk2000]

It is hard (and impossible) to calculate - or to reasonably predict - what financial outcome may hugedomains bidding style really have.

Indeed, even though discounts on winning bid amount are less likely, the history shows us the following - ICANN auctions for new strings. "Higher" level. Most problems with our industry are starting at ICANN, but it is another story. What really happened in a number of new-gtld auctions is: losing bidders received a portion of the highest (winning) bid. If Donuts/Uniregistrar/etc/etc are(were) bidding against each other to run a particular new gtld - the highest bidder won, others were "rewarded" with a share of their bid. At least with some of the string auctioned by ICANN.

Is it possible to apply similar scheme to "lower-level" expiring auctions? Yes, why not. What if some big client of a big auction house is rewarded if they do not win? If it is possible with ICANN, why not here?

So, if they place two $90 bids on two different domains, they may win one (for $90), and may be overbid with $100 on another one. Fine. At the end of the day, auction house rewards them as a losing bidder with for example 80% ($80) of a winning bid amount on an auction they lost. So the customer at the end of the day sends to an auction house just the difference, which in this hypothetical example would be $10 (being $90 they owe for a won auction less $80 they were given for losing the 2nd auction). In other words, an outcome would be: one domain got and $10 spent.

Do we have any evidence that this happens or happened in any auction we the domainers are participating in? Of course there is no proof. Can it be considered by an auction house and a big client as a commercially acceptable and legitimate scheme? Likely yes, even ICANN was doing this. Just sign NDA and all is fine.

 

[Name Trader]

It is hard (and impossible) to calculate - or to reasonably predict - what financial outcome may hugedomains bidding style really have.

Indeed, even though discounts on winning bid amount are less likely, the history shows us the following - ICANN auctions for new strings. "Higher" level. Most problems with our industry are starting at ICANN, but it is another story. What really happened in a number of new-gtld auctions is: losing bidders received a portion of the highest (winning) bid. If Donuts/Uniregistrar/etc/etc are(were) bidding against each other to run a particular new gtld - the highest bidder won, others were "rewarded" with a share of their bid. At least with some of the string auctioned by ICANN.

Is it possible to apply similar scheme to "lower-level" expiring auctions? Yes, why not. What if some big client of a big auction house is rewarded if they do not win? If it is possible with ICANN, why not here?

So, if they place two $90 bids on two different domains, they may win one (for $90), and may be overbid with $100 on another one. Fine. At the end of the day, auction house rewards them as a losing bidder with for example 80% ($80) of a winning bid amount on an auction they lost. So the customer at the end of the day sends to an auction house just the difference, which in this hypothetical example would be $10 (being $90 they owe for a won auction less $80 they were given for losing the 2nd auction). In other words, an outcome would be: one domain got and $10 spent.

Do we have any evidence that this happens or happened in any auction we the domainers are participating in? Of course there is no proof. Can it be considered by an auction house and a big client as a commercially acceptable and legitimate scheme? Likely yes, even ICANN was doing this. Just sign NDA and all is fine.

I think you are talking in the vaguest of possibilities here. I don't see the auction houses agreeing to give back 80%, or even any percentage, to the losing bidders on every domain which gets sold at auction. ICANN is a non-profit organization. They could do that. But these auction houses are looking for the highest profit possible. If there is any refund at all, it should be to the previous owner who each registrar has effectively force-ably taken the domain from for $0, trampling all over the rights given to them by ICANN (being able to renew the domain right up to the time it goes into Pending Delete).

 

[tonyk2000]

I think you are talking in the vaguest of possibilities here. I don't see the auction houses agreeing to give back 80%, or even any percentage, to the losing bidders

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)