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]

I’m sure there are regular human domain watchers that once they place that back order on the domain at 6 minutes, they spring into action bidding, and outbidding against the bots, who are just processing these min bids all day hoping to keep sniping human distraction. Unlike bots we take calls, lose focus, or can’t rebid, huge advantage here in that sense.

There is not much you can do to change your style of bidding here, the only solution is you must pay more.

Effectively if we can figure out the bot programming we can tax the bots also in our human ways, as a joint force, and maybe make the bot owners change their strategies to less
liberal means.

You can put a proxy bid and leave your PC surely ?

 

[pchip]

The scary thing about having a bidding bot like HD has is that it can be very easily used against you.

Since the HD Bot is a computer algorithm making decisions based on predefined rules, it's not difficult to figure out the patterns and thresholds. Once someone has that, they could develop there own bot and well, you know. You wouldn't even need a bot to mess around with them.

Someone could do this as a way to get them to spend more money on each domain. The more they spend, the less they buy. You get the idea.

This was definitely a top concern of my when I was interested in developing a bot of my own.

 

[Asfas1000]

They (HD) probably evaluate each domain they are interested in using their own algorithm and have an internal max bid per domain, based on that valuation.

Example , valuation=$200, bid up to $140.

 

[wwwweb]

The scary thing about having a bidding bot like HD has is that it can be very easily used against you.

Since the HD Bot is a computer algorithm making decisions based on predefined rules, it's not difficult to figure out the patterns and thresholds. Once someone has that, they could develop there own bot and well, you know. You wouldn't even need a bot to mess around with them.

Someone could do this as a way to get them to spend more money on each domain. The more they spend, the less they buy. You get the idea.

This was definitely a top concern of my when I was interested in developing a bot of my own.

The same rules they get you to spend more money, can be easily turned on them, turning that bot on with a credit account comes with risk, wasn't it not to long ago, someone's bot went crazy, and godaddy pulled back all those bids, going against their own TOS. Must have been HD, they will do anything to keep them happy.

 

[Ategy]

On my end I am tracking far fewer names today (the last few days I was tracking a vastly higher than average number of domains .. was a good 3-4 days in terms of names at auction) .. so that likely played into it as well ... on my end things are much calmer today .. but that could just be a result of the specific names I'm tracking .. curious if it's the same for any of you?

A bot having the advantage to see the number of watchers (1), 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 (2)?

1) That is my biggest question and concern as someone who actually spends a lot of time and energy going through the names myself.

2) To be fair .. there are plenty of reasons both for and against showing names/ID. Separate debate so I won't get into it here. I'd actually be in between .. not necessarily showing during auction .. but showing publicly after for transparency's sake.

...
I would imagine the bot owners did not expect to be maxed out (or close to) on each domain they bid on. They were playing a game of averages but when someone else is willing to push you on every bid it is going to greatly increase the cost of acquisition across the board.

So in this case I would imagine they will need to rework their bots to try to mitigate the bidding wars with other bots in some form or fashion. In other words I imagine they will have to lower their max bid on mediocre names to continue to be profitable.

(the bots will need to learn to be more conservative with their bidding structure and max bid)

So hopefully in time - bot competition will settle down some price-wise... But I can only imagine will continue to increase in volume.

Really great POV you shared there @Michael M .. We all assumed all this action was fully deliberate .. but you're right .. quite possibly the Huge Domains bot was caught offguard and cost them a pretty penny the last few days .. lol. Perfect storm of higher than average volume and quality of domains expiring combined with a new (or revamped) bot to compete against. I suppose it really depends on how much human intervention is going on with their bot. I personally assumed there is a human enhanced bot .. (Cyborg .. lol) .. but maybe it's a little simpler and exactly what you said. In the end I doubt we'll ever truly know .. would need more data points I'm guessing .. but kinda hard since there's not much public info/data available after auctions end.

 

[wwwweb]

On my end I am tracking far fewer names today (the last few days I was tracking a vastly higher than average number of domains .. was a good 3-4 days in terms of names at auction) .. so that likely played into it as well ... on my end things are much calmer today .. but that could just be a result of the specific names I'm tracking .. curious if it's the same for any of you?




1) That is my biggest question and concern as someone who actually spends a lot of time and energy going through the names myself.

2) To be fair .. there are plenty of reasons both for and against showing names/ID. Separate debate so I won't get into it here. I'd actually be in between .. not necessarily showing during auction .. but showing publicly after for transparency's sake.



Really great POV you shared there @Michael M .. We all assumed all this action was fully deliberate .. but you're right .. quite possibly the Huge Domains bot was caught offguard and cost them a pretty penny the last few days .. lol. Perfect storm of higher than average volume and quality of domains expiring combined with a new (or revamped) bot to compete against. I suppose it really depends on how much human intervention is going on with their bot. I personally assumed there is a human enhanced bot .. (Cyborg .. lol) .. but maybe it's a little simpler and exactly what you said. In the end I doubt we'll ever truly know .. would need more data points I'm guessing .. but kinda hard since there's not much public info/data available after auctions end.

Maybe the bot has a daily spend allocated as a protection mechanism, if they used their entire budget yesterday, today it could be wound down, I am sure it is some amazing customization given they have been building it for the past 2 years.

As for calmer today, I saw in your post yesterday you went with .org's, could be extension specific, as outside of .com you are going to have less bidders.

 

[Ategy]

I think it was more than that .. for at least the last 2 days for me there was a significant increase in volume of names I was tracking .. some good names as well. Certainly a higher number of solid names Sunday there was a larger than average number of really good unique names. Then yesterday seemed to be a coffee anniversary .. at least 2 large batches of good coffee names (both aged .. but different years) went through the system.

Theoretically these are all names someone (or some company) registered during x-mas break during early 2000's ... sometimes names do come in waves .. and sometimes you can find a weird but logical explanation for it!? lol

If the bot did have a daily spend then it would have triggered their red flag on Sunday during the day .. then again Monday (have to go back .. think Fri and Sat could have been big days as well .. not sure though).

 

[Ategy]

Every single domain I've followed so far have gotten a $10 bid at about 5:50 ...

Maybe it doesn't help that I actually openly share about 80% of my personal list? lol
https://www.namepros.com/threads/at...n-auction-and-closeout-domains.1006428/page-8

About how many domains do you track a day? I usually have on average about 150 on my daily watchlist .. although last few days was high 200s. Today it's at 200 .. but also lower number of higher personal scoring (I usually highlight about 30% of names .. and of those I rank 1 to 4 .. if that makes any sense .. lol)

I have to admit to paying less attention today .. far fewer names that I marked as ones to get. I'm actually for 4 so far in getting the ones I really wanted so far (of the ones I though I'd have a chance ahead of time) .. with no competition!
(Admittedly there are others I'd LOVE to have had .. but the prebidding before the day started took them off my "great value" list .. that happens every day .. nothing unusual there)

FYI .. TerrorCow.com passed through to closeout untouched .. I'm going to be super generous and not take it in case any of you want it! lol
MooooooBoo

Also, that $10 bidder, presumably still HugeDomains, seem to have changed their strategy to bid in $10 increments today rather than use high proxy bids. So if you bid $50, they place a $10 proxy bid (1), outbid you leaving current bid at $55, and when you place another bid at $60 they by default outbid you at $60 (i.e. you both have a $60 bid, leading to their earlier bid to "win" both bidders at $60). So basically they will by default outbid you at the same amount as you bid on every other counter-bid if you make at the normal $5 increments. Went back and forth with them up to $XXX on several domains in this way already today (2)...

1) Haha .. I do this sometimes .. happened to me a couple of times lost ago I lost an auction with the top bid and I couldn't figure out why. Now I do it hoping to catch someone off-guard .. rarely works .. and the few times it does it's likely because the person couldn't go higher anyways. Again .. to be fair .. I'm mostly an extreme value buyer .. 90% of my buys in the last few months are $17 / $12 bids or $11 / $5 closeouts! Based on all the crazy hours I comment on their blog @Domain Shane and @ikehook claim that *I* am a Bot! lol

2) Did you win any of them? Was it only the 2 of you up until a certain point?

3) More importantly .. are you seeing counter bidding by a seemingly 2nd bot (or another buyer with massive pockets)?

 

[wwwweb]

"TerrorCow.com passed through to closeout untouched .. I'm going to be super generous and not take it in case any of you want it! lol
MooooooBoo

Usually I have gotten pretty good at seeing a name, and the industry behind it, but I can see how this one goes to closeout, untouched, what was your vision behind it, if I may ask?

 

[4better]

I guess it's more on the quality of domains and age that attract higher bids. All those that I've personally chosen always go for $x,xxx. Perhaps by choosing the mediocre ones, I thought I could get them lower but then bids still go for 3 figures. Before I used to get some for low, mid, high $xx only. This time maybe a harvest season?

 

[learie]

great information guys I am just loving it, but there must be other great wholesale platforms out there a pa3t from Godaddy?

 

[Ategy]

Wow .. I didn't really see it that much yesterday .. but right now some big action again at the start of today. I was hoping to pick up "PerfectPancake.com" .. but it just went for $0 with 6 minutes to go and blew past $200 in a couple of minutes and still climbing. 5L Smizz.com over $200? It's good .. but you could do better in 5L for that price .. that 2nd Z kill the radio test. lol

great information guys I am just loving it, but there must be other great wholesale platforms out there a pa3t from Godaddy?

@learie .. there are a few others (NameJet probably being #2) .. but GoDaddy really has a huge bulk of the names and most of the overall volume.

 

[BrandBoogie]

I've noticed this too. I'm getting out bid all the time now. And it just started happening within the past couple of days.

 

[Name Trader]

Most likely I would have come up against one of you in the auction battlefield on GoDaddy. So, despite there is a bot out there we are engaging each other either-or. So, won't we be contributing to the jacking up of the prices also?

Yep. But it's only a pin-prick compared to going up against the bots.We are all bidding against the bots every day. Whether your an idiot, or not Generally. I pass. But threads like this I find enthralling.

 

[Ategy]

How are you regular seeing things today? I had a good number of domains on my list today .. but not too many I was value targeting so haven't been looking too much. I actually missed one I really wanted not because I was out bit .. but because I was typing too long in another thread .. lol

 

[Asfas1000]

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.

Don't forget that they have some decisive advantages over you and me :

1. Massive data from millions of domains, history, negotiations, user searches.
2. *Possibly* special deals with registrars to get better promotion for their domains (see how many HD domains show up in a registrar search)
3. Wide network of existing clients (end users and domainers alike)

I find it very hard for any company to increase their losing business and go from a total of 2.4M domains to 4M domains in 1-2 years. Although it is not unlikely.

Will domain names really be around that long?

That's a great question. I am using a 3-year horizon in my estimations. ie, I assume nothing totally damaging will occur in the next 3 years. Actually, there are many reasons why domain values may depreciate: Regulatory, Technolgical, Market-related and more.

 

[Ategy]

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.....

That's the thing .. They could still be profitable despite only selling a fraction. Don't forget we only see/notice the names they drive up to $200-400 .. but how many do they grab at $20 .. and then resell at $2000? I'm thinking the bulk of their names are much cheaper than we think. If they only sell 2% of their inventory a year they are filthy stinking rich .. lol. Because while they might pay a bit more for some .. the costs of their older domains are just $8/year.

That being said .. there were a couple of names they had I was eyeing years ago when I was thinking more development .. they never sold .. but again ... it's impossible to say given such a small sampling size.

 

[Ategy]

Does anyone regularly using NameJet notice if there have been more bidding there as well over the past week?

 

[krx]

That's the thing .. They could still be profitable despite only selling a fraction. Don't forget we only see/notice the names they drive up to $200-400 .. but how many do they grab at $20 .. and then resell at $2000? I'm thinking the bulk of their names are much cheaper than we think. If they only sell 2% of their inventory a year they are filthy stinking rich .. lol. Because while they might pay a bit more for some .. the costs of their older domains are just $8/year.

But times that by 4,000,000 domains and you've got $32,000,000 annual renewal. Then add in the multi-million budget for new domain acquisitions, then add in a million or two for standard business overhead costs. That's got to add up to $50 to $100,000,000 outlay per year. They would have to sell 25,000 to 50,000 domains at $2000 each just to break even. Could they be selling that many names?

 

[Ategy]

But times that by 4,000,000 domains and you've got $32,000,000 annual renewal. Then add in the multi-million budget for new domain acquisitions, then add in a million or two for standard business overhead costs. That's got to add up to $50 to $100,000,000 outlay per year. They would have to sell 25,000 to 50,000 domains at $2000 each just to break even. Could they be selling that many names?

Just 1% of 4M is 40,000 domains. The supposed industry average is 2% .. so that's 80,000 domains. Then add to that all the things @Asfas1000 mentioned above and I'd say it's quite possible they hit their 2%. Plus some domains sell for far more than $2k.

The only problem I see is that at some point with such a huge inventory .. you're simply competing against yourself. Meaning that there really is not point in buying PurplePopcornPosse.com if you've already got PinkPopcornPosse.com if you know what I mean. The hard part is getting customers to come to your site .. but in many cases, if they were going to buy one .. they were going to buy the other. I would have thought that would have happened after 100,000 names .. lol .. but I guess not given the fact they are buying en masse.

 

[krx]

Just 1% of 4M is 40,000 domains. The supposed industry average is 2% .. so that's 80,000 domains. Then add to that all the things @Asfas1000 mentioned above and I'd say it's quite possible they hit their 2%. Plus some domains sell for far more than $2k.

Right. If they are selling in the 1% to 2% range they are probably doing fine. Those percentages are of course based on the presumption of decent-to-good names, which judging by their inventory I'm not sure I would grant. Total-and-complete-absurdly-ridiculous-crap to good names would closer fit the bill.

The only problem I see is that at some point with such a huge inventory .. you're simply competing against yourself. Meaning that there really is not point in buying PurplePopcornPosse.com if you've already got PinkPopcornPosse.com if you know what I mean. The hard part is getting customers to come to your site .. but in many cases, if they were going to buy one .. they were going to buy the other. I would have thought that would have happened after 100,000 names .. lol .. but I guess not given the fact they are buying en masse.

I suspect these types of purchases (on the lower end of the very low end of names they buy) has to be a liability of automating the purchase process. Bots don't really know what they're buying, they just go on indicators. The funny thing is that they go ahead and list this stuff on their site, and pay renewal fees on it. Who knows maybe it works to make the okay names seem that much better.

 

[Asfas1000]

I think it's working the other way...if an end user can live with either PurplePopcornPosse or PinkPopcornPosse, and one is taken and the other is available to reg, they will go for the regfee option.

So if you don't have both, effectively applying some kind of monopoly, it is almost as good as having none of them.

 

[krx]

Does anyone regularly using NameJet notice if there have been more bidding there as well over the past week?

I don't watch it closely enough to know. However I know they are winding up the NamesCon auctions so that would have brought in a considerable spike in traffic I would think.

I am wondering if the increased action on expired GD auctions has any affect on the public GD auctions? Anyone have a read on that?

 

[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!