People are Letting Their Domain Names Expire To Get An Idea of Its Value

Apr 20 2012

Sounds crazy but its being done.  The domain registrars almost all now auction names in their system that are about to expire. Presently they all auction the name prior to actual expiration in order to involve taking possession of the name.   I have recently heard a few stories lately of how owners are letting some of their better names get close to the expiry just to let them go to auction and see what kind of price they draw.

We’ve all lost a domain we won at auction because it was renewed in the time period between auction end and expiration date.  I had always assumed it was a domain investor that contacted them and they renewed and sold.  But that may not have been the case. It very well could have been an owner just getting a free domain appraisal.  A pretty good one at that.  One of the stories I’ll be talking about later wasn’t actually this exact scenario but similar.

I’ll give the details later but it was a name that the owner forgot to renew and went to auction and closed for a solid price.  A friend saw it and let the owner know and he got it renewed in time.  Now he knows its value and will put it back up for auction.  This time, he is keeping the money instead of Godaddy.  This could essentially be done for any name and I’m sure Godaddy would not be a fan nor would the auction participants.  It’s probably not even good that I put the idea in people’s heads but its happening.

The expiry auction is evolving and is a work in progress.  Godaddy is doing a good job with them but the “spread” is killing them.   The spread that opens up this whole can of worms I’ve discussed.  Somehow it will be fixed and that’s why I’ve even mentioned it because bringing things into the open makes things move a little faster.

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Outsmarting the Dumb, Outworking the Smart

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16 comments

  1. Acro

    I hate you 🙂 I was going to post exactly that yesterday, then got side-tracked. I agree 100% with this realization. I can confirm it by the number of WHOIS searches on expiring or expired domains in my Fabulous account.

  2. Tony

    And who says it’s OK that Godaddy gets all the proceeds from all these expiring domains that don’t get renewed?

  3. Anthony

    Is this only happening on g daddy or is this something that is also happening on name jet too?

  4. Anon

    It isn’t always registrant renewals.

    Often times (particularly on expiring names of unusual quality), it’s a result of domainers who’ve contacted the original owner, offered to buy it then walked them through a redemption and transfer. There’s a reason why the other drop houses conspired with the partner-registrars to mask whois during the expiry process. It’s to prevent redemptions on premium names, facilitated by domain buyers using whois. When that happens, they don’t get to chop up the money resulting from an expiring, high quality domain.

    Godaddy doesn’t mask whois during the drop process, thus their aftermarket names are vulnerable to this happening.

    In other cases, it appears that GD just keeps the name. For example, I won a very good expiring .com via GD Auctions for a shockingly low price (One minimum bid. Even I was shocked).

    I receive the “Sorry, you ain’t getting this domain” email, which was then immediately shifted to privacy and listed on the aftermarket for $5K.

    It was not a redemption.
    It was not a drop-shark who clawed it out of the original registrant.

    The whole hullabaloo with Adam Dicker caused Godaddy to claim that they’d re-instituted some integrity in their aftermarket drop process (as far as no internal involvement), but I can reference at least one domain name where it appears that isn’t the case.

  5. Ron

    With any auction there is always risk, which equals reward, that is why we are all drawn to them.

    Auto auction, you could buy a lemon, you are discounting the cost, in order to make that purchase, the marketplace will decide the true value, if the car does not meet it’s reserve the seller takes it back.

    Storage auctions, you could be bidding on a locker full of garbage bags, so you cannot expect 100% of what you want in an auction setting.

    I think for the volume godaddy processes they have done a great job with their auctions, and they are very credible, what Anon stated above is not believable to any degree. In regards to the employee bidding in house, they took swift action, and corrected it.

    If people are letting their names drop to test the price so be it, godaddy charges $100 to redeem the domain, so it is a win win for them. The team has done a great job over in the auction department, and you all would not be using it, if it wasn’t up to par.


    1. Post author
      ShaneCultra

      Ron,

      I love Godaddy Auctions. It’s an asset to our industry . I never said it was anything but. I say good things in many articles as well as pointing out opportunities. So relax

  6. J

    None of it is kosher. It’s all done behind the scenes. A name I’ve purchased at GD has literally been taken away months after it was in my possession (with a refund). Bargain BIN names I’ve purchased at Sedo have been cancelled because the buyer claims to have already sold the name. Domains won at auction at NJ get renewed at odd times and then go into privacy (same with GoDaddy TDNAM).

    I don’t want to sound like a conspiracy nut, but you just have to accept that the domain name industry is all digital and highly unregulated. Unless you want to initiate an actual lawsuit you’ll never find out what really happened. You won’t survive if you don’t accept this fact and grow thicker skin.

  7. Ron

    Shane,

    I am relaxed, I don’t think I made any statements to show any aggressive tones…

    Everyone seems like bash on Godaddy, seems they are doing more right within the industry than any other company, good promotions, low pricing, with more clients, come more issues, just stating the facts.

  8. CloudDomainers

    Domainers overlook good domains. Many would prefer to keep the domain age intact rather than allow the domain to expire.

    In the GD auction, good domains can be won for cheap. There are many diamonds in the rough. However, such domains can end up dropping and thus expiring.

    Would you rather own a 8 year old domain at a decent price? Or would you want to renew at the cost of registration to wipe out the domain age?

    A recent registration involved an 8 year old site that now has no age. Should you wait to let the domain expire or purchase at minimum price in an auction?

    It is up to domainers to make that decision. Aged domains or new domain?

  9. Poor Uncle

    Shane,

    You mean that people would bid on a name if it is expiring, but won’t if it’s a regular auction?

    Maybe it has to do with the length of auction. I mean why bother bidding on a name in an auction that won’t end for another week or months???

  10. JNet

    Yep…I’ve noticed that activity for a few years now on expired but pre pending delete stage names.
    Similar thing can be seen at SnapNames on some expired pre-release names of Snap partner registrars…but different from GoDaddy’s TDNAM, at Snap you can often see the total number of bidders/backorderers (but not price) on the “roster” before such domain goes in to 3 day auction.
    Sure, most times the registrant is not aware that name has expired or let it go intentionally….but “sometimes” it is a calculating registrant doing it willingly & knowingly to gage interest & value by the total number of bidders lining up….Furtheremore, some times they are actually “baiting” buyers/bidders by getting the name up on the “radar screens” by letting it expire… then renewing it at the upteenth hour, while hoping an interested buyer/bidder then attemtps to buy such name directly from registrant at an acceoptable price.

  11. Ms Domainer

    *

    You mean you guys are just figuring this out?

    Wow…

    This crap has been going on for years.

    It also happens at Namejet with their “pre-release” names. Two years ago I lost a domain in that manner: the original registrant reclaimed the name.

    Godaddy is actually upfront about this–not that I agree with the practice.

    I think that Godaddy should do some rethinking about the way they auction expiring names, while retaining the original applicant’s ability to reclaim the domain. For example, base the redemption price on the auction realized price. That would definitely cut back on the vultures…

    Another option: when the domain goes to auction, move the contact info an “expired domain” account. The original owner could still redeem it, but that would cut down on those creeps who circumvent the bonafide winner. However, I do see some transparency problems with this idea.

    Perhaps a transfer lock could be placed on expired domains.

    Having said this, I have acquired some nice domains from Godaddy, $XXX domains that I was sure would be redeemed but were not. However, it’s been the low to mid $XX domains that have been mysteriously redeemed.

    The truth is: everytime you guys release your Namejet and Godaddy lists, you attract eyeballs, some of them under handed.

    *

  12. ImageAuthors

    Very interesting post and discussion from everybody above.

    If domain owners willingly let their domains expire (or almost expire) simply in order to gauge market interest, then that means the normal sales platforms in the domain marketplace are deficient in comparison to the drop auctions. I mean that drop auctions are outperforming the regular marketplaces in terms of publicizing their merchandise. And that must be why these domain owners choose to gauge market demand by means of expiring domain auctions rather than any of the counteroffer / auction platforms for registered domains. The normal sales platforms simply do not command the same level of focused attention from domainers.

    Conclusion? Regular sales platforms should improve their publicity game and learn to be competitive with drop sites like Namejet.

  13. Lance

    I find this silly but not unbelievable. Many of the people looking foro drops are typically domainers no? That would give no proper evaluation of a true value of a domain. Never known domainers to pay retail.

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