GoDaddy Catches Employee Participating in Auctions

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Paul Nicks, VP and GM of the Aftermarket at GoDaddy, published an article on the GoDaddy Blog this evening that is concerning to me as a GoDaddy customer, especially because I am an active bidder on GoDaddy Auctions. Paul tweeted a link to the article via his Twitter account a short while ago:

You should read the article in its entirety, but here is an excerpt that discusses what GoDaddy found after an investigation resulting from “serious allegations” made by a GoDaddy customer:

“We started investigating the activities of three employees. We were quickly able to rule out the involvement of one employee. As we investigated and interviewed the other two employees, it became clear that only one party violated our employee Code of Conduct. After a thorough review of the circumstances, we terminated the employment of this employee.

This employee created an account not associated with his legal name, and participated in auctions and expiry auctions as a bidder, which is a conflict of interest and a direct violation of our policy. To be clear, our investigation uncovered NO evidence that this employee used any confidential customer information for personal gain, or that he conducted shill-bidding on auctions.

While we believe the employee did not have malicious motivations, GoDaddy does not tolerate such violations of our Code of Conduct. Indeed, many provisions of our Code of Conduct are there specifically to protect our platform. We are very clear that no employee may participate in any auction that involves bidding against our customers. Employees are able to purchase buy now and closeout domains.”

Paul outlined some of the actions GoDaddy plans to take in light of this news. He wrote that GoDaddy will be “reviewing platform changes to make things even more transparent.” For starters, I think it is about time GoDaddy add bidder nicknames for auction participants. I am not sure if having bidder nicknames would have done anything with respect to this situation, but this kind of transparency is helpful.

This is not the first time a GoDaddy employee was reportedly bidding on auctions against customers. Wired published an article in 2008 with allegations about employee bidding. From what I understand, it does not appear that it was against the rules for employee bidding back then, but employees are no longer permitted to bid on auctions against customers.

As a longtime GoDaddy customer (they also advertise here, and I host this website there, FYI), I think it is important to note that GoDaddy is a very large publicly traded company with lots of honest employees who go above and beyond to serve their customers. The news is disappointing and upsetting, but so far, it seems to be isolated.

This is a developing story…

22 COMMENTS

  1. First off, Thank you Paul for your investigation and swift action, firing the bad guy who bidded on and influenced domain auctions.

    Secondly, I am an active bidder at GD and am very curious to your updates as soon as you find out which domain names were bidded on from the bad guy.

    Thirdly, I have saved search terms in my GD account. If he was a rep of mine, did he use our own search terms for his own bidding?

    Fourth, I get domain name auction lists sent to me from my Rep. I know most Premiere Reps do this for domainers w/Premiere accounts. Were any of those domains he bidded on listed on those GD emailed lists?

    Lastly, when and where will we be able to see that update/the domain names which he bidded on when you complete your investigation?

    • Hi Vito, thanks for asking, I’ll address each point as well as I can.

      1) This was not a “bad guy”. He was an employee that loved the space as much as any investor. What he did was against policy, but it was not done with malice. He did not believe that the way he was bidding was against policy, which I’ll cover in the next question.

      2) I won’t be able to list the exact domains, I can say the last domain bid on was on 3/27/2018, and the last domain this employee won via bids was on 10/10/2017. These bids, and all bids from this account, were placed as the first proxy bid on an auction. This employee believed that by putting the first bid as a proxy and then not engaging in the auction again was not against the spirit of the policy as he was not actively bidding against customers. Nevertheless, this activity is a violation of our policy, and in order to maintain the highest standards of integrity on our platform, we were compelled to take the actions we took.

      3) GoDaddy reps are not able to see anything on your auctions account such as proxy bid amounts or saved searches.

      4) I don’t believe so, but I don’t have records of those emails back to March of last year to cross-check.

      Our investigation is complete. While we want to be transparent, providing the domain names could potentially expose the name of the ex-employee. That’s not a risk we’re willing to take.

      • Paul,

        Thank you for taking the time to answer a few of my questions here.

        You are saying this was not a bad guy here and he was a domain lover, etc. Well actually this is your answer…
        ” He did not believe that the way he was bidding was against policy,”

        I have to disagree with that statement since in your blog you wrote that he created a different account w/out his legal name.
        “This employee created an account not associated with his legal name,…”

        Why would he do such a thing if he truly figured it was legal and ok in your TOS as an employee of yours? That makes no sense at all. I have made accounts at all the domain name marketplaces and didnt even think it was possible to create an account with a different name other than my own.

        As for not releasing the actual domain names he bid on to keep his name private, That sucks. If he was a real “bad guy” after creating this differently named account, I would assume he was smart enough to put all of his won domain names under privacy to not raise red flags with his GD customers unless he missed that little detail which I seriously doubt.

        I would still love to see the domain names, especially since he most likely put all GD won domain names under privacy.

        • We do believe he knowingly hid his identity against policy and that he also thought that the proxy bidding wasn’t against policy. He was obviously wrong, but these are not mutually exclusive ideas.

  2. I appreciate Paul Nicks addressing this, but Vito brings up some good points.
    GoDaddy is going to have to answer a lot more questions.

    We have no reference point if this was some person bidding on a $20 domain every month, or a much more active operation.

    GoDaddy needs to answer at least the following –

    1.) How many total auctions was this bidder involved in, over what time period.
    2.) How many auctions did they win.
    3.) How many auctions did they bid in but not win?
    4.) How many of these were they the 2nd bidder.
    5.) How much in total dollars was involved.

    If this bidder drove prices up on auctions, GoDaddy is going to have to issue refunds.

    Additionally GoDaddy has been needing to add bidder IDs for a decade now. It is long overdue.
    Why is it that every other popular venue has them but GoDaddy still doesn’t? It is not acceptable and allows easy gaming of the system.

    I have addressed many GoDaddy auction games and shenanigans in the past, over several years. There were/are issues with individual bidders or groups of bidders driving up prices, then not paying so the 2nd bidder can get the domain at a massive discount.

    This stuff need to be fixed once and for all so everyone is on a level playing field.

    Brad

    • Brad,

      Thanks for the questions. Hopefully this information will help answer your questions.

      1.) From 2014 – early 2018, the ex-employee was involved in 354 auctions.
      2.) They won 54 auctions .
      3.) Of the 300 completed auctions they did not win,
      • 154 were just the $12 initial bid
      • 74 had only two bids, with $25 dollars as the highest proxy bid, they were not the 2nd highest bidder on any of these
      • Of the remaining 72 where more than two bids were placed, the ex-employee never finished 2nd in an auction. Meaning even without them, the auction most likely would have sold for the price the actualized price.

      As far as bidder IDs go, we’re looking at all options right now. I hope to have more information in the coming weeks.

  3. Nice.. I also like the “lone gunman” theory.. NOT
    Well, as someone that participated in thousands of auctions over the last ten years this rather short statement by GD leaves me with more questions than answers. A few were already addressed by Vito & Brad but this story is indeed developing.

  4. GoDaddy needs to release a list of ALL auctions that were compromised. The amount that customers overpaid could easily add up to a very significant number and some people may want to have a chat with their legal counsel regarding possible claims.

  5. No big deal. If $25 was highest for proxy. Not an issue. Your just not going to get a decent name for @ $25. I mean if your in a auction and your proxy is $25 I fell bad because your buying crap anyway.

    Personally I could care less of an employee was bidding why can’t they. Unless they could see bidding live, well yes that would be a problem but it’s just a guy trying to pick up some low cost names. If this guy was bidding 2 or 4 or 6k for some names and had inside live proxy bidding info well then that would be an issue. I mean if you work for GD chances are you buy domains and to be cut off from buying at GD because your employee would suck but rules are rules I guess.

    What needs to be done is get rid of the estimated hits on each name that GD forecasts. New domain buyers actually believe these stats and are over paying for bot hits etc. Not cool. Also require 1k in deposit if you want to actually bid in these auctions. This way dead beat buyers and fake buyers will not bump up bids.

  6. Thanks for the info Paul. You’ve put way more out there already than most companies would.

    Doesn’t sound like he did any damage at all. He was just trying to grab low priced stuff that wouldnt get bid up much anyway.

    Add another vote for bidding handles from me.

  7. Sorry Paul but you would be clueless to know how often this happens with your employees. Absolutely positively impossible to know how many employees do this. One employee? Yeah right! Thousands of employees work there but none of them love domains like the rest of us? They choose to work for Godaddy but don’t like domains? Seriously? If you choose to work for Godaddy then chances are you are at least a part time domainer. Maybe not all employees but definitely at least a small percentage which equates into hundreds of employees participating in Godaddy auctions.

    • Thanks Todd. We deal with issues as we find them, the reward for domain investing and bidding at auction is far lower than the risk of losing your job and livelihood. Some people slip up and we have to act, but to say that hundreds of employees are participating and putting their jobs at risk is just not true.

  8. See my social media. This whole thing is a scam and they should all be fired. Paul should be ashamed in his cover up BS.

  9. If employees don’t have inside info, they should be allowed to bid.
    If employees are not allowed to bid, they can always have a friend or relative bid…
    so what’s the difference?
    If i was a godaddy employee and you had a rule saying no employees are allowed to bid, then i would just tell my brother to bid…
    How are u going to stop that?
    It makes no difference…let the employees bid…
    And i agree, we need to see bidder id’s.
    While i am in the ranting mood…
    why cant godaddy make a better website…
    it’s so hard to do stuff with a mobile phone…i have to jump on my laptop or desktop…it’s freaking 2019.
    With all the problems you guys have at GoDaddy…i still love GoDaddy the best!!!

  10. It’s refreshing to see a company admitting/owning up to their faults and trying to be more transparent. This is lacking big time in today’s world.

  11. So, this went on from 2014-2018 and GoDaddy never caught it? A customer discovered it? What other things is GoDaddy missing or overlooking?

    While I appreciate the information, I suspect the only reason GoDaddy is being “transparent” is because this was discovered by a customer. Had this been discovered internally, we probably never would have heard about it.

    If GoDaddy truly wants to be transparent, start with implement bidding aliases/handles ASAP. It’s not that difficult to do, so don’t blame it on legacy code — just get over the internal bureaucracy and the incentives to protect the identity of certain bidders.

    This needs to remain a squeaky wheel, or the “scoping” for implementing public bidding handles will take longer than it does for this scandal to blow over and be forgotten by domainers. Then we’ll just hear that after consideration, they’ve decided not to implement them.

    I really don’t like bidding against faceless bidders and bots, and that’s why my auction dollars rarely go to GoDaddy.

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