DomainInvesting.com

I have no way of knowing what really happened with the Snapnames employee bidding scandal, but I do have a theory, and unlike other theories I’ve read, this doesn’t involve any real conspiracies.   Maybe this happened, and maybe it didn’t, but at least this is what I hope happened, since the implications would be far less reaching across the Oversee.net brands and the domain industry:

“Halvarez” was a domain auction bidding script that placed bids based on a variety of factors set up by its creator, a Snapnames employee. Since the creator worked for the company, he may have had access to domain data (I really don’t know here just guessing), giving him an advantage when buying domain names, as he could justify paying more than others based on assumed PPC revenues. In addition, perhaps there were revenue goals on the line or future compensation tied to company revenue that would have been directly impacted by a bidder of this magnitude, hence the reason he bid in so many auctions but didn’t win.

The creator of “Halvarez” could have established a company and separate bank accounts and credit cards in the company’s name to look more authentic. “Halvarez” probably always paid Snapnames on time, $xx,xxx   (or more) per month, further avoiding suspicion. Because of this, Snapnames looked at this mysterious bidder as one of their top customers, and as a courtesy, the company gave refunds on some names for whatever reason (or maybe they didn’t even know about the refunds).   This may sound shady, but if they are like most companies, the top tier of customers get special treatment when they ask, like returns, favorable payment terms, dinners, event invitations, and other benefits for bidding so much.

Since “Halvarez” was so private, Oversee.net executives would never get a hold of him (assuming they tried to meet with this VIP), but the guy paid on time so they left him alone. There has been at least one extremely private individual who was active in our business for a long time, so it’s not out of the realm of possibility that nobody knows who “Halvarez” really is. In addition, the trusted person who was fired may have told company officials that he had communicated with “Halvarez” in the past, and since the guy was trusted, they took him at his word.

“Halvarez” reached out to iREIT to sell a portfolio of names, and the prices were right for them. Since he was able to score good deals, he could also sell the names at great prices, recouping some of his investment. iREIT paid “Halvarez’s” company, knowing that Snapnames has confirmed that “Halvarez” is a real bidder while not thinking it was any different than any other deal.

I really have no idea if my theory happened, but I am hoping that it is what happened. Things seem so obvious now that this has been revealed, but at the time, there wasn’t much that could have been done. Perhaps someone did do something, and that caused the investigation that revealed the bidding. Only a few people probably know that, and we may find out in time.

I feel badly for the people who lost out on great domain names to “Halvarez,” and I don’t think the rebate offer does anything to compensate them. I think it would be impossible to remunerate them fairly for these potential losses.

I’ve seen a number of comments on my blog and other places criticizing Snapnames for not providing the auction history for bidders prior to 2007. According to the company, in June of 2005, Snapnames limited a person’s order history to 24 months prior to the date the look-up was being performed.

As a result of this order history truncation, many people have complained that they couldn’t gain access to their order histories to compare them to the rebate emails sent to many Snap customers on Friday.

As of this evening, I have been informed that the staff at Snapnames has adjusted the   system so order and bid histories are available back to August 2004, when auctioning began with the company. I have checked my auction history (dating back to 2006), and it appears that everything is there, although I have participated in less than 125 total auctions.

You will now be able to review all auctions in which you participated to cross-check the rebate offer with your results. You can also get an idea of the number of auctions of yours in which “halvarez” participated – both auctions that you won and lost (possibly even to “halvarez.”) I appreciate the transparency, and when I fully inspect the history sometime soon, I hope I don’t find   any domain auctions in which I lost to “halvarez” where I really wanted the name.

I also want to take a second to say that there are a number of good people who work for Snapnames and Oversee.net who probably had absolutely nothing to do with any of this mess. Keep this in mind if you need to speak with anyone at the company. I worked in AIG’s Accident Insurance direct marketing group before the meltdown, and I know that many of my former colleagues were treated poorly simply because they worked for the company, despite the fact that they had absolutely nothing to do with the company’s problems. While you might have every right to be pissed at the company and certain individuals at the company, there are plenty of good people who work there too, and this is tough on them as well.