I read about a policy change at Go Daddy’s TDNAM auction house that was implemented as result of domain investors circumventing the system to acquire domain names that had been previously auctioned. The company described the problem in this way:

Domain investors often watch Go Daddy Auctions ® for expired domain names of value. When they find domain names they want, they use the public Whois records to harass the current registrant into redeeming the domain name and selling it directly to the investor. Based on customer complaints, many investors participate in this practice, and some even hire outsourced teams.

Although I think losing out on sales was more of a problem rather than Go Daddy’s concern about domain investors harassing their customers, I think this “fix” will probably bring additional business DomainTools rather than solving any problem. The Whois History tool is a powerful tool that can essentially circumvent privacy and allow people to see the prior Whois information, enabling them to contact domain registrants as they have been doing.

With that said, I don’t see why Go Daddy doesn’t have the same sort of system employed by other registrars that prevent customers from re-registering domain names after the grace period. I suppose it would be a potential customer service issue if a registrar is auctioning its clients domain names rather than using a partner like Net Sol does with NameJet).

In my opinion, the solution won’t really work for Go Daddy because anyone who is buying names like this will sign up for a DomainTools account and continue as usual (if they don’t already have one). I think the way to stop the problem is to change the timing of the auctions.