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?

 

[learie]

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?

 

[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.

 

[imadoer]

Its really hard to win anymore at expired auction. Unless your over paying. Nothing you can do about it if thats where your bidding.

 

[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

 

[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.

 

[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?

 

[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/

 

[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.