I know that Go Daddy, NameJet, and Snapnames are well aware of domain investors who reach out to the owners of expired domain names in an effort to purchase them before they go to auction. This probably annoys the auction houses and it has spurred a debate about this practice on forums and in private discussions.
The rationale for domain investors doing this is simple. The domain owner may not have realized the domain name was worth anything, so a lowish offer could get the owner to renew the domain name and then re-sell it to the person who inquired about it. The buyer would then get to purchase a domain name in private before others had the opportunity to bid on it. If others pre-bid on the domain name, the buyer would know that there is interest from other parties.
There are a few downsides to this practice. For instance, it may cause the domain owner to renew the domain name after realizing there is value in his name. Additionally, the owner may not have even realized the domain name expired due to a variety of issues, but the email or phone call from the domain investor served as a reminder to renew the domain name, preventing it from going to auction. Oftentimes, more than one domain investor inquires about an expired name, and this makes the owner even more aware of the value in his domain name.
Obviously, if a buyer is able to get a domain owner to renew the domain name, it won’t go to auction, potentially taking money away from the auction house and domain registrar. Some domain investors get upset that this practice prevents them from having a chance to win a doman name at auction, or if the auction already completed, a renewal will prevent them from being able to transact.
As far as I can tell (with no legal background on my part), there’s nothing illegal about this practice, but it annoys the auction houses, registrars, and other domain investors.
What are your thoughts on doing this?
Let’s look at it from all angles.
First its not illegal, so trying to procure inventory from the rightful registrant of the domain is not illegal.
Second is it immoral ? Some will say yes,the dastardly domain owner knows the name has value and is preying on the poor,unsuspecting registrant who owned the domain for a hobby or small business that never went anywhere and they are not up on domain values. The flipside you could take the quote that Canada Bill Jones said “”It’s immoral to let a sucker keep his money” and flip it for Domaining “Its immoral for a registrant to not know what their domain is worth.”
Thirdly, for all those complaining about the auction ? Who the hell ever said these auction houses should have had the right to make money in this way in the first place ? Certainly not ICANN or the founders of the DNS.
We are not on a team, NameJet and Snap Names and Go Daddy are not your friends, they are a service provider and also a competitor, you owe them absolutely nothing except to make good on your bids.
Nothing illegal or immoral here, pure business. This happens every day, in almost every transaction; people buy things they believe are undervalued and then resell them. There is no obligation to inform sellers about the value of what they are selling.
I don’t see a problem with it IF you found the domain on your own.
However, if you use the auction houses to find expired inventory and then snipe them, yes it is wrong. You used them and their services to find that inventory. They got nothing from you.
GoDaddy will slap you with a lifetime ban against bidding on their platform if they catch you doing it. Go read their TOS.
I’ve had over ten people kicked off GoDaddy for doing this to me. Why do I do it? Because I am playing by their rules and if I have already spent the money (sometimes thousands) and you were a bidder against me and I find out you did it I’ll have you kicked out for wasting both my time and money.
Also, GoDaddy will kick you out if they see you worked the list and then snagged the domain, and they happen to catch you.
From what I was told a new system is going to be in place soon to stop this and if you get kicked out you’ll regret it for the rest of your domaining years since they have something coming that will revolutionize the entire domain industry and everyone will want to be a part of it. At least that’s how it was pitched to me by my account rep. who was one of the higher placed person’s in GoDaddy’s strategy team. We’ll see.
I call bullshit.
two years later and its unchanged.. Lifetime ban lol. Do you report speeders too?
Danny this can’t be stopped because people have access to other tools,they can get around the whois placed on the name.
Your over dramatic line of regretting your whole domaining life is so outrageous its not even funny, do you know how many people have two or three go daddy accounts. No one is getting an account banned that 1) doesn’t have other accounts or 2)will get back in with a new name and payment method, but keep believing that.
It’s nothing immoral here.
If Go Daddy, NameJet, and Snapnames can take advantage of auctioning off expired domain names for profit, why can’t domain investors buy off direct from domain owners for cheap and flip it for profit?
Oh p.s. Danny Go Daddy doesn’t own the “LIST” of domains expiring.
@Deano: The domain was registered at GD, and GD makes it a habit of continually contacting the owner of the expired name. In this case, they were preserving their own contract with the old registrant, but the new registrant (me) had already made the winning bid to acquire the name. On the day I was to take possession of the name, the old registrant materialized and reacquired the name.
Now, to other comments about Sotheby’s and Christie’s, let’s keep in mind these are contracts for stewardship, not actual, outright ownership rights. Comparing paintings or vases or other valuable items to domains is not quite accuarate. 🙂
I didn’t notice the times of your post, Deano. I just realized you weren’t replying to me at all. Sorry about that.
*egg on face*
Sounds completely ethical to me. You don’t owe the registrars a living.
No, there’s nothing wrong with it.
The domain registrar, expired domain service, and domain investor are all trying to take advantage of the same situation. The situation is a person who either:
1. Underestimates the value of the domain he’s letting expire
2. Accidentally forgets to renew a domain
3. Has outdated contact information
4. Is indisposed
Whenever people have complained that registrars have an incentive to let certain domains expire so they can make more money in the auction than the renewal fee, the registrars snap back that they would much prefer the current owner to renew the domain. “It’s a long run customer service thing.”
So consider the situation when someone contacts the current registrant to buy the domain.
If the customer decides to sell you the domain, then the registrar makes its renewal fee and the customer is better off (he gets paid).
It’s all a game. It’s a game that was never designed to happen in the domain business, but it came to be. No one has an inherent right above and beyond another person in this made up game.
Where the auction houses really screw themselves is by auctioning off domains while the registrant still has a right to renew them. That’s when people can see how popular a domain is and reach out to the owner to renew it.
The registrar does not own the data about a domain expiring. We get that info from the zone file. The registrar does create additional data about a domain’s worthiness when it auctions it off early. If registrars really want to combat people buying domains out from under their auctions, they should change their timelines.
Very well put and said Andrew.
Good post Andrew and they throw that line out there you are right, about the long run customer service thing. Not sure they believe it, I am pretty sure Go Daddy was happier with 16 year old Shopster.com expiring and them pocketing $25,000. They were never getting a run that long from the previous registrant.
“…However, if you use the auction houses to find expired inventory and then snipe them, yes it is wrong. You used them and their services to find that inventory. They got nothing from you…”
I don’t think it’s wrong.
Just like in real estate business. You are entitled to buy directly from the house owner, instead of buying from auction through estate agent. If the negotiation price is right between owner and buyer, the house owner is happy to sell the house directly to buyer and to avoid all the real estate agency fees 2-3% of house value.
@Raymond, I forgot the domain name has a contract signed with the rar or auction platform just like a home seller. Oh wait a second, no they don’t.
In real estate, the agents will charge owners agent commission if the buyers who bought the property had already contacted or deal/negotiate with the agent directly before.
So, If the new buyer has never meet/negotiate with the agent before, and bought directly from owner, there will be no contract binding between owner and agent, hence no commission charge. I think.
In expired domain auction platform from GD etc… there is no contract clause which required domain owners to pay commission if owners sold domains directly to buyers during expired auction period……I think….
Seriously Elliot, I hope you wrote this tongue in cheek. I have NO ISSUES contacted the original owners of a domain name if it expires to see if I can buy it ahead of time of an auction. I’m sorry if Sedo, Namejet and any other register gets upset about it. They don’t have a lock on domain names as much as they believe they do.
I wrote an unbiased article without giving my opinion on the issue. I think it’s good to discuss this so those who have an issue with the practice can read other opinions. I was expecting more replies from people who have mentioned that they don’t think it’s right for people to do this.
No there is absolutely nothing unethical about it.
Buy low – sell high, it’s the nature of capitalism.
Take a scenario where a type-in domain is lying completely unused.
So a domainer buys it and provides a service. Gr8! Sorry to the guy who sold the domain, but it’s not unfair, as they made no attempt to even park the domain.
What is, however, completely unethical imho is that snapnames/godaddy/namejet feel they have a right to auction off “their” expired domains.
Thank you! Please, the domain names are certainly NOT “theirs” (Registrars)!
How hard is it to “keep” your customers (here) while paying (disbursing auction funds) to your other customers (here) the money that they deserve for the now missing property? Which in fact was sold (here) at auction! Obviously, when you take away an owner’s rights to the domain name, they will no longer be your customer. You’re practically kicking them out of your (customer) database!
It’s simple, very simple: Registrars should provide a clean transaction service, Party A to Party B; not this grand thievery for profit business model. Expiring auctions are cool, let them be; stop stealing the original Owners’ lost profits!
Give the money to the People (Owners)!
And then there’s those other groups who spam you with their notifications of impending auctions of domains ‘similar to one you own’, attempting to get you to engage them in acquiring it for you.
Do I get banned from sale platforms if I follow those notifications with direct approaches to the domain owners ?
Or perhaps I’m just an avid follower of expiring domain lists.
How on earth could GoDaddy, Sedo etc. accurately ascertain where the expiring domain information was coming from ?
Domain ambulance-chasing isn’t one of my strategies, but if it was, it’s none of anyone’s business how I located the ambulance.
I didn’t read many comments here, (tipsy =P) but I think there is nothing wrong with contacting the original registrant for the domain. I feel the registrars only have a problem with it because you’re taking money out of their profits. Except for above.com, I heard they will compensate the original owners up to x%, all registrars should follow this suit or back off the resellers.
It can go either way, they’re bets that can be very rewarding, or not.
I’ve unfortunately saved a few great domains like relocating.com from godaddy auction by contacting the owner and making an offer, they did not thank me for notifying them of the expired auction, they renewed it, and offered it to me for 100,000
“The supreme art of war is to subdue the enemy without fighting.” ― Sun Tzu, The Art of War
I have bought several great generic .com names by contacting the owner directly and making a deal for the expired domain names. I probably would not have been able to afford the domains if it went to auction. Nothing wrong subduing the competition and making money.
It reminded me about the Select (d0t) com story where the domain investor contacted the domain owner and acquired the domain.
This scenario is like that Idiom which says “Is the glass half empty or half full”
The optimist (Domainers) said it’s half full – The pessimist (Registrars) said it’s half empty and the opportunist (Active Domainer) ‘drank the water’ in other words got away with the Domain.
By not having that domain in auction two things are affected.
1.Auction houses loses their margins
2.Other Domainers loses the opportunity to bid
In my opinion it must go to Auction house, so that the all optimist Domainers doesn’t get defeated by the opportunist Domainer.
I think is not prohibited, but it’s not an ethical behavior if the expiring domain is in auction in a dropping platform and you found it this way. It’s the same thing when one find a good name in a marketplace and instead of place an offer or bid he search the WHOIS for a direct contact to shortcut the marketplace. And these practices becomes horrible when they are done repeatedly and with automated tools. For me it’s like spamming.
This is the one of the lamest arguments I have ever heard, and I have heard it a lot over the years.
First off, everyone needs to understand that the Rinterested in NOTis the only one with actual rights to the domain. The Registrar actually has a duty to protect the Registrant rights, that is what they are paid by the registrant for. All this talk about “Registrars being upset when they do not get to auction a name” is complete bullshit. And spinning that even further claiming NameJet somehow had “rights” is absluely ludicrous! Seriously, people think that way?
No, the ONLY party that has actual rights to the domain is the Registrant. YOU certainly do not. So, go ahead and throw a tantrum because you didn’t get to bid in some auction on a domain that was renewed beforehand. That’s just childish. Look, you have to understand that there is an owner of that domain. Things sometimes happen and renewals do not get done. So, if somebody contacts the Registered Owner of the domain and strikes a deal, the Registrant gets value for their own domain… you really want to argue that’s not “fair”? If you do, you’re an idiot and I hope you never find yourself on the other side of this and lose one of you names because your credit card expired while you were recovering from a car accident, or cancer. Maybe you think that just because a Registrant dies, his domain should too? No, you’re wrong. His widow or heirs inherit those rights. Company goes bankrupt? The Bankruptcy Trust should lose the asset? Really, are you insane?
Gonna huff and puff about someone tipping off the Legal Owner of a property that he was about to lose it, only to see that Registrant renew it and be grateful for the tip? If so, you are the worst kind of jackal, and also completely wrong.
Think really hard about this part… What if YOU were that Registrant?
Do you really want your chosen Registrar to be more interested in NOT renewing your domain than doing what it is that you contracted them to do in the first place? Really?
…and if you think the above scenarios do not happen, you don’t get out of the house enough. I’ve added substantial value to several bankruptcy trusts, made 1/2 dozen widows very happy, and brought unexpected windfalls to hundreds of registrants that did not realize the value.
Sure, I’ve also seen thousands of registrants renew their domains and have no interest in ever parting with those names as well. That is fine, THEY own the names. Not the Registrar. Not Namejet. And most certainly NOT You.
Auctioning off domains through the Registrar invented “lateral transfer” scheme used to push expired names to auction is an a egregious violation of the Registrar’s duty to the Registrants anyway. ICANN never intended this to happen, but they know to keep a blind eye for it because VeriSign will do something much worse if all expired domains are actually required to delete – which is a shame, because actual deletion is the ONLY true way to resolve the conflict for the Registrars.
Well put Cartoonz, I completely agree!
Seems to me that some smart attorney needs to start a class action suite against all the auction houses on behalf of all the prior domain owners who lost their domains AND the auction house made a ton of money off of their property! It was still the legal property of the loosing domain owner when the auction was going on.
“First off, everyone needs to understand that the Registrant is the only one with actual rights to the domain.”
Sorry, I did that on a phone and it got a bit scrambled.
> expired domains are actually required to
> delete –which is a shame, because actual
> deletion is the ONLY true way to resolve
> the conflict for the Registrars.
Sounds fine, but short memory may add a false sheen.
The last era of ‘everything drops’ was when Frank Schilling, Ham etc. built their astonishing portfolios. How ?
Simply, they wrote the best algorithms for flooding the registrars with buy requests at the dropping times.
No one else had a chance of picking up the drops.
Is that what you want again ?
The auction process may be deeply flawed, but at least you have a chance.
I kinda doubt you have superior knowledge just how it worked.
Those portfolios were built by participating in… wait for it… auctions!
A wolf believes there’s nothing wrong with being a predator. A sheep believes there’s nothing right about being a predator. What’s more important than either belief is knowing whether you are a wolf or a sheep.
Unethical? No more unethical then the prices “domain owners” post for false sales on DNJournal! Think about it. As long as “quotesaboutlife.com” brings 125 THOUSAND DOLLARS we should have no problem claiming ANYTHING works in this TOTALLY PROPPED UP INDUSTRY!!!!!People let’s not try to keep this bullshit going who’s going to stand up against !!!!FALSE SALES REPORTS!!!!!?????????
I’ve had only one situtation that falls into this category, and it so happens it occured this year. The domain owner had let the domain expire and I was trying to snatch it on a backorder at GD. I had tried to contact the domain owner during previous years, to no avail, so the fact the domain was in redemption was making me giddy.
Well, I won the backorder and the auction at GD, only to have the domain owner decide, on the LAST DAY before I took possession of the name, to renew the name for herself.
I was thoroughly annoyed, mostly at the domain owner, but I would want the same option, myself. But, uh, don’t ask me what I think of this woman. LOL!
Yes, and we all can be proud that our auction houses selling domains have the ability to nab our assets, and also have hundreds of thousands of assets of their own.
So, do Christies and Sotheby’s, two respected “real” auction companies also own thousands of valuable paintings and other rare items that they put up to compete with their auction clients items? Just think, let Sotheby’s introduce their own personal ability to snatch up their clients’ assets and resell them. Actually, they probably secretly are envious of the freedom of major domain auction listing sites, which all of them own secret or not so secret registrar in order to build their own auction “assets” …
Ummm… oops, I forgot. This is the domain industry. The wild wild west. Excellent business opportunities if your lucky enough to be a part of that corporation, but based on unethical knowledge and “positioning”. They own you. And good on them… renew your domains, but please, registrars that are partners with auctions sites… give your customers at least 30 days before you make them ‘disappear’ from their regular “expired domains” section in their account. *cough*… no names need to be mentioned.
Making money the American way!
Absolutely nothing wrong with it.
Simply one domaines doing business with another domainer.
If the auction houses are annoyed with this practice then they are simply hypocrites. We are all taking advantage of opportunities. If the domainer a contact info is available thru the Whois then contacting them about the domain is perfectly legitimate.
Last time I contacted a owner of an expired domain they informed me that I was the 16th person to contact them in the last 48 hours.
She was not selling, was renewing and considered it rude that I had contacted her.
When I asked her if she had realized that the name was expired, prior to being informed buy the domain investors she said no.
Talk about ungrateful!
I have found contacting the owners to be a complete waste of time. They either renew and will not sell or renew and ask for a price higher than you would have had to pay in auction.
So now on I just bid in the auctions.
Let’s see… If you (hypothetical) are bidding on a Go Daddy auction and you end losing the auction and then you contact the owner trying to buy the domain for peanuts… Then yes you’ve guessed it: You are an asshole. And you don’t need me to tell you that.
Because the only thing that you are going to accomplish is ruin the auction for the winning bidder that has already paid for the auction.
If you support Go Daddy great, not everyone believes in their decision to auction domains they have no lawful right too.
I support go daddy?
What you should really start a blog about it is how SPAMMING end users is acceptable behavior in our industry BUT receiving SPAM from domainers isn’t.
I created a thread about this on NP, exposing how hypocritical it is.
I don’t think a day goes by that I don’t see a domainer whine on domain forums about SPAMMERS, but it’s OK for them or their buddies to SPAM end users as a means of making a sale, It’s also OK to belong to a Domain FORUM where SPAMMING end users is TAUGHT, posting a “How to Guide” on SPAMMING.
Theirs sending a personalized letter to a business and offering a domain and then theirs SPAMMING, where mass mailings are send to end users with a generic letter, that’s SPAM no matter how much you sugar coat it.
I don’t think spamming anyone is acceptable behavior.
When I want to sell a domain name, I send individual emails to prospective buyers, and I only send a single email to each prospect, unless they respond and inquire about purchasing the domain name. When possible, I address the recipient individually.
Elliot this Raider Girls non stop hobby of bashing Adam Dicker it was not directed toward you I am sure.
@konstantinos – if godaddy puts a domain into auction while a domain owner still has the opportunity to renew it then that’s completely unethical. No domain should be put into auction unless it is free and clear of the previous owner. You can’t auction off something that you don’t own. Or at least shouldn’t be allowed to.
Yes, I understand that. That is why I said it “shouldn’t” be allowed. It’s complete BS that they’re allowed to do that.
I agree with Raider in the sense that sending out a mass email to tons of domain owners is indeed spamming.
I’m talking about sending out a single, personalized email to a business in regards to a domain. There is absolutely nothing wrong with that and that is NOT spam.
@ Elliot and KJG
I’m glad we both agree on this point, I don’t see anything wrong with sending out personalized letters to end users either, What I have a problem with is mass mailings to end users, and where some teach other domainers on the methods of contacting end users using mass SPAM software to do it;
There are many things people do that I wouldn’t personally do.
I agree with you both. I don’t see the point in spamming a bunch of domain owners. a personalized email to an owner showing clear intent about acquiring a domain is clearly going to succeed over a blanket spam email any day.
What I don’t like on domain forums is having to read people’s personal political views as some on here love to do but that is life. Raider you are banned from that forum correct ?
I don’t like reading political commentary anywhere.
I agree Elliot, I automatically block, unfollow and defriend once I have to hear your political views.
When domainers like Deano have no answer for the obvious, they either detract or resort to attacking the messenger… In this case the messenger does not encourage Spamming, and did not create a thread on how to SPAM, the guy that Deano wants to protect DID.
When it’s one of our own, we defend unethical practices like this, and when it’s not, we bash him.
Gotta love the intellectual dishonesty.
Alas, fair maiden, there is no intellectual dishonesty, it is rather you should be transparent about your riff, this blog post has nothing to do in any way,shape or form with your comment. You came here to post about someone you have a personal riff with, you did not disclose that. I wonder why ? Secondly please in an intellectually honest way explain how your comment was on topic ?
I don’t know Adam Dicker other than that he runs DN Forum and I don’t spam anyone. Spamming is wrong so is underage drinking should someone leave a comment on that topic in this post ?
Welcome to the wolf pack, Raider.
@ Tyger Gilbert
Thank you, I knew it going in, Some domainers don’t want to believe the industry leaders they put on pedestals can do any wrong, so they attack whoever brings it out.
“this blog post has nothing to do in any way,shape or form with your comment.”
And your comments about Politics do?.. LMAO.
Contacting domain owners about expiring domains, hmmm, you cant see domainers doing that on a mass scale?, or the software they would use?, or envision the letter they would write?, not that much different than domainers contacting end users on a mass scale…
And for the record, I have no “riff” as you call it with Adam or anyone else, a little pissed maybe for the chicken shit reason given, but that’s about it.. I’m much more happier at NP where members are way cooler, Far away from the egomaniacs and bullies who have run that forum into the ground.
Yaaawn. Digging deep to the bottom of the barrel today, are we?
Domain investing is all about speculation, pure capitalism and profit. There’s not even an argument here.
Next topic, please…
Of course its fine, these auction houses never had the right to do what they do in the first place.
And I’m all for capitalism and profit, it’s the methods we use to obtain it.
Personally I don’t see anything wrong with contacting domain owners about their domain when it’s expired, some of the time it’s a oversight and they renew, and many times its a domainer who intentionally allows it to pass expiration for the purpose of receiving inquiries from other domainers, and then you have owners with outdated email address, so you snail mail them a letter in hopes of buying it, I bought a few this way when it was a domain I really wanted, that I knew if it went to auction, I’d be paying a lot more money.
I think a lot of us do that.. We wouldn’t be domainers if we didn’t.
As far as Godaddy and other registrars pushing expiring domains to auction, don’t domainers consider this when choosing their primary registrar? I moved my entire portfolio out of Enom and Godaddy for this very reason.. If something unfortunate happens and you cant renew, you want as much time possible to renew your domains, Igal L. is the poster child for what happens when you choose registrars that profit from auctions.
Well that goes both ways Raider with the registrar choice. Sometimes it makes no difference, Go Daddy gives you to the full 45th day to renew, I have domains at Name.com when they are expired they don’t give me a longer time to renew even though they have no auction venue.
Fabulous is excellent and share their revenue with the previous registrant their names go to NameJet.
Valuable names should probably have 3 to 5 years registration on them, names that have a four figure wholesale value I am talking about.
What is wrong is the registrars grabbing these names for themselves and taking MASSIVE profits. . . Suck it registrars!
oh wait that’s what domainers do when we buy it from the previous owners. . . . At least the previous owner gets some money though and not some leech .
Play the game… . .work the angles.
Why do we need to have registration time periods anyway ? Anyone ever question that ? Why not let people own them indefinitely and then they can determine when they want to stop paying for them.