question Why do domains sell for so much on auctions when there is no interest later on?

[domainhacks-931385]

Story goes like this

Domain sells for XXX+ on an auction platform with multiple bidders

Domain sits on Sedo with no offers for months after (sometimes no views either).

Why is there so much interest at the auction but no interest after?

 

[Domainace]

Godaddy has never been caught bidding against their own customers, as far as I know. They did have an issue where an employee was bidding on auctions to buy domains for himself. That was a conflict of interest, but it came up short of Godaddy, the organization itself, bidding against customers.

Snapnames, on the other hand, was exposed for shill bidding. It was a big deal, Snapnames paid out some money, and it has since been forgotten.

I have never heard of Namejet or Flippa bidding against their own customers.

Not saying there's no reason to be careful - but those are strong accusations...

 

[equity78]

At Flippa like when Adam was at Go Daddy, employees are allowed to bid on auctions for themselves, now some have said, and rightly so IMO, that there should be some way to denote that in the bidding, maybe you bidder 2 and it has a little f in a circle, that can denote employee bidder.

 

[hookbox]

Godaddy has never been caught bidding against their own customers, as far as I know. They did have an issue where an employee was bidding on auctions to buy domains for himself. That was a conflict of interest, but it came up short of Godaddy, the organization itself, bidding against customers.

Snapnames, on the other hand, was exposed for shill bidding. It was a big deal, Snapnames paid out some money, and it has since been forgotten.

I have never heard of Namejet or Flippa bidding against their own customers.

Not saying there's no reason to be careful - but those are strong accusations...

I wouldn't consider it an accusation but a logical opinion.

 

[DomainVP]

Let's not over-think this. Most of the time people bidding on names are domainers.

If you didn't win the auction, then there won't be interest in the name post-auction; as most investors battle it out right then and there.

A great percentage of the time, it is not the end users bidding on the names; it's domain investors.

When you are bidding on a name, after a certain price point you know who you are competing against. You may also recognize a playful 'bidding strategy' emerge; that kind of behavior does not come from end users who usually bid with 'blunt force trauma'.

An actual end user will pay far more for a name than most investors are willing to - depending on the name of course. If it is the end user bidding, and you win; expect your resale margins to be low in the immediate future. This may change 2 - 3 years down the road; but a quick flip it will not be.

We may all think one name is great, and it may have multiple variant registrations making our target name the premium version. We've all spotted it. If I see it, you know that many other have as well - depending on the niche.

If I win the name, I don't expect any bidders to come calling to pay more, and even if they did, their offers wont be anywhere near what I would accept for the name.

The only instance I have ever seen offers come in immediately after the acquisition of a name, are names that I acquired with absolutely no competition and it looked like it was someone who fell asleep on the auction/drop and wanted to own the name; or a registrant who didn't know they were about to lose their name.

I'm not saying quick flips don't happen without being proactive, but it's rare to have a name go to auction and then all of the sudden have an interested buyer come out of the blue.

In the end; I look at most GoDaddy registrations as long holds. I like the quality of names at registrar auctions better than drops; plus the retention of the registration date is helpful for resale. But I find that I have sold drops for a greater profit than I have any GD name.

With the spammer fleet at GoldStar and other domain spammers getting better at reaching end users, everyone with potential interest in a name at GD is well aware of its auction; unless the WhoIs info is off or the administrative contact is not reachable.

 

[NameOmnia]

Godaddy has never been caught bidding against their own customers, as far as I know. They did have an issue where an employee was bidding on auctions to buy domains for himself. That was a conflict of interest, but it came up short of Godaddy, the organization itself, bidding against customers.

Snapnames, on the other hand, was exposed for shill bidding. It was a big deal, Snapnames paid out some money, and it has since been forgotten.

I have never heard of Namejet or Flippa bidding against their own customers.

Not saying there's no reason to be careful - but those are strong accusations...

Equity has already explained it to you.
Caught because I am quite confident in saying that 90% of their customers didn't know about it. It is not an accusation shill bidding exists everywhere and it's my opinion that those entities also bid in the auction to some extent.

" An anonymous reader writes"A GoDaddy Vice President has been caught bidding against customers in their own domain name auctions. The employee Adam Dicker isn't just any GoDaddy employee; he's head of the GoDaddy subsidiary that controls the auctions. Dicker won some of the domains he bid for, and pushed up the bid price on auctions he didn't win. The conflict of interest is unethical, but could this practice also be illegal? Said a representative for a competitor, 'Even if controlled, that practice has bad news written all over it.' This comes hot on the heels of news that despite earlier promises to ICANN to end their 60-Day ban on transfers, GoDaddy quietly circumvented it by forcing customers to agree to the ban anyway. ICANN doesn't appear to be investigating or asking follow-up questions about this. What can be done to force ICANN to police the registrars for which it is responsible?" "

 

[Domainace]

Everyone can have an opinion. I am clarifying the comment that "GD was caught bidding against their own customers." That was an accusation, and a statement of something that didn't actually occur. Adam Dicker was not Godaddy, and it was never shown that he was acting on behalf of Godaddy. He was a domainer when he set up the auctions, and continued to bid on domains as he always had. To say it went beyond that is pure speculation. The case at Snapnames was far worse, as the intent was clearly to drive up auction prices.

There is plenty of dubious activity going around, and it starts right at the top with ICANN. All the more reason to be careful about unsupported accusations. It weakens the accusations that actually have substance.

 

[NameOmnia]

Everyone can have an opinion. I am clarifying the comment that "GD was caught bidding against their own customers." That was an accusation, and a statement of something that didn't actually occur. Adam Dicker was not Godaddy, and it was never shown that he was acting on behalf of Godaddy. He was a domainer when he set up the auctions, and continued to bid on domains as he always had. To say it went beyond that is pure speculation. The case at Snapnames was far worse, as the intent was clearly to drive up auction prices.

There is plenty of dubious activity going around, and it starts right at the top with ICANN. All the more reason to be careful about unsupported accusations. It weakens the accusations that actually have substance.

Please re-read. " A GoDaddy Vice President has been caught bidding against customers in their own domain name auctions. The employee Adam Dicker isn't just any GoDaddy employee; he's head of the GoDaddy subsidiary that controls the auctions."
If I vice president doesn't represent a company who does?
Anyway, you can keep calling it an accusation if that makes you happy but it is indeed a fact. A proved one.
I am not going to get into an argument about this what I say is substantiated and all over the internet; if it has happened once it can happen again and that was the main point of my comment in reply to what the OP said.
Any of the marketplaces can drive the auctions as much as the like because they know everything about the domains and how many people are watching or bidding.
Furthermore aftermarket domain auctions hosted by registrars can be subjected to even more doubts and questions as the registrar itself will keep all the profit of the sales and not only a percentage of the final price.
That said I still use GD as my main registrar, I buy and sell domains there and I don't think they are as bad as many people here state.

 

[Domainace]

 

[NameOmnia]

You are exactly right.

 

[Name Trader]

AD was not just any old employee. He was VP (of Auctions?). I think it just goes to show the moral fortitude of this industry when somebody like AD takes advantage of his position. What were GoDaddy thinking about with that appointment? I pretty much stopped reading DNF after that. Probably go their less than once a year these days.

Although there is a slight difference between a VP (of Auctions?) abusing his position of trust, and an entity systematically bidding on auctions to enrich their own pockets, it amounts to the same thing, bidders having to pay more, and/or losing auctions they might have otherwise have won. Also, I think GoDaddy didn't have enough security measures in place to prevent this abuse. So, imho, GoDaddy are as guilty as if they were lining their own pockets.

Anyhow. I'm glad that chapter is closed.

 

[equity78]

Wait, and I am not saying it was the way I would run a company, but let's be clear when Adam joined Go Daddy it was permissible for all Go Daddy employees to bid on auctions for themselves, not just Adam, just like it is permissible at Flippa. Go Daddy stopped the practice but Flippa still allows it.

Stub maybe if you lived in Arizona you would have gotten a job at Go Daddy years ago, if Go Daddy said Stub you are allowed to bid on auctions that you must pay for out of your own pocket and you retain ownership, you may have thought ok cool, I was a domainer before I started working here and I still want to buy a good name when I see one.

Transparency is the key, letting people know Bidder 1 is an employee, that tells me as bidder 2, hmm maybe this guy has access to internal stats, maybe he has information on this niche that is deeper than mine because he has access to the back end of Go Daddy.

Those are the things that are important, if Adam had been told when negotiating the job, "You are forbidden from bidding on auctions" Maybe he 1) Doesn't take the job or 2) Says ok, well since you are now putting my domain business at a disadvantage because I cannot participate in this market, I want more money.

I believe that companies need to stress the point that employees can bid, and that they are bidding for themselves not for the company. There should also be a clear sign in every auction so even a first timer will know, Ok bidder 3 is an employee.

What was never said was that Adam Dicker ran up the prices of Go Daddy Auctions to make the prices go higher for Go Daddy or that he did not pay for auctions in which he participated.

Snapnames that was Fraud, you can hate Go Daddy, Adam Dicker and DNF but what Adam did was not what Halvarez did at Snapnames.

 

[Domainace]

I think it just goes to show the moral fortitude of this industry

I think you may be the first person ever to utter the words "moral fortitude" in a sentence about the domain industry And yet, people outside the industry would laugh to hear a "domain squatter" talk about ethics. We are the thieves to Joe Public.

Most of us want it cleaned up. But at the same time, the day the industry gets cleaned up is the day it goes mainstream and we all get priced out of it.

In the meantime, we have to conduct business somewhere...

 

[equity78]

The industry is trying to price domain investors out of it DomainAce, its why ICANN and their leader Fadi called domainers, squatters, created the New Gtlds, Uniregistry, Minds + Machines, Donuts are now the domainers except they get to call themselves a registry and create their own pricing, $60,000 for a premium never before registered domain name isn't squatting, its from the registry so you know its good, but if it is someone holding an LLL.com they bought in 1999 well that scumbag sob is a squatter.

 

[Domainace]

Amazing bit of footwork, isn't it? I see it as a net-positive for us. If it becomes common knowledge that a registry might want $60,000 for a name, then our prices will no longer be seen as out of line. No more "why do you want $15,000 for a name that probably cost you $10?"

 

[Name Trader]

I didn't know that AD was allowed to bid on GoDaddy Actions knowing the inside information that he had access to. I think his moral fortitude is in question if he took advantage of his privileged position. I know the temptation is strong, but it's still wrong. If not, then why is he still not a GoDaddy VP?

 

[hookbox]

From what I understand Adam owned more than 50,000 domains when he was hired by Godaddy. Anybody who owns that many domains and gets a job at Godaddy obviously knows that there is a lot to gain from being employed there and it's not because they needed the $75,000 annual salary.

 

[Nathan K]

Yes, you are right and GD was caught bidding against their own customers

Source?

 

[Adam Dicker]

From what I understand Adam owned more than 50,000 domains when he was hired by Godaddy. Anybody who owns that many domains and gets a job at Godaddy obviously knows that there is a lot to gain from being employed there and it's not because they needed the $75,000 annual salary.

This news is over 8 years old, instead of worrying about stuff almost a decade old, what have you done to improve your domain knowledge in the last 8 years? BTW all GD employees were bidding and were allowed to be bidding at the time. BTW, the salary was a hell of a lot more than 75k lol

Feel free to email directly at [email protected] if you have any questions.
Adam Dicker

 

[hookbox]

This news is over 8 years old, instead of worrying about stuff almost a decade old, what have you done to improve your domain knowledge in the last 8 years? BTW all GD employees were bidding and were allowed to be bidding at the time. BTW, the salary was a hell of a lot more than 75k lol

Feel free to email directly at [email protected] if you have any questions.
Adam Dicker

I'm not worried about it. I could care less actually.

 

[Name Trader]

So something which is morally wrong is ok if others are doing it?

 

[hookbox]

So something which is morally wrong is ok if others are doing it?

If I was in Adam's shoes I probably would have done exactly the same thing. If your employer gives you a green light to bid then who honestly in their right mind wouldn't bid. If the company didm't think it was morally wrong then why would the employee worry about it.

 

[Zombies]

BTW, the salary was a hell of a lot more than 75k
Adam Dicker

Hi Adam, I am more impressed with how you knew folks were talking about you? What tool do you use? Thanks ! You are my domaining hero!

 

[NameOmnia]

Hi Adam, I am more impressed with how you knew folks were talking about you? What tool do you use? Thanks ! You are my domaining hero!

I don't know if it is a tool or not but there are ways to know if your name is made anywhere on the internet. It is a way of protecting your reputation being sure no one defames you

 

[forge]

‘Those who cannot remember the past are condemned to repeat it.’ - George Santayana

 

[equity78]

I told Adam that I thought he should comment in the thread and he obliged.

Stub what was morally wrong unless you are thinking that when he would have saw a domain on auction, he had some extra info, like Go Daddy showed no traffic but that was a ruse and Adam knew it got 10,000 hits. Like I said before transparency is the key, employee bids should be marked as employee bids.

While we are on the topic of morally wrong, step outside the domain bubble, most people think it is morally wrong to own 100's or 1000's of domain names, some think its morally wrong to own just one that you are not doing something with.

Opinions are just that, there are billions of them.