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Does GoDaddy Have Too Much Power?

Posted on the 20 April 2018 by Worldwide @thedomains

Does GoDaddy have too much power?

It seems more and more domain owners are rebelling against the GoDaddy monopoly. Huge Domains also appears to be in the crosshairs of more angry domainers.

Over the last week three threads on Namepros have popped up that deal with different levels of disdain, and in one thread it has been suggested to give your names away to another Namepros domainer, rather than let GoDaddy and Huge Domains reap the benefits.

Namepros member 411Domains started a thread, Circumventing Godaddy Expiry Auctions

While the topic is not brand new it seems to be getting more coverage and upsetting more domain investors.

The initial post:

Someone has discovered a way to circumvent the regular expired auction process.

They appear to be using an API that places backorders within seconds of auction close. Thus eliminating all competition, auction extensions and closeout conversion times for the cost of a backorder. (In their case, thousands of backorders.)

Although the auctions are already closed, these after the fact backorders are being counted as bids.

In my opinion, any bid that comes in after the auction closes should be automatically canceled and refunded.

What are your thoughts?

BTW, this has been a known issue for awhile.

411Domains added context a little later in the thread:

It’s not about a bot snagging domains on the closeout, but rather the window of opportunity that one has, in the moments after an expired auction ends and the conversion to closeout begins, to immediately stake claim to the domain by slapping a backorder on it. No live bids…no purchase via closeout…no competition…no questions asked.
It doesn’t matter which registrar it’s coming from either, because they’re still counting the backorder as a regular auction bid.

Namepros member Stub replied:

If this is being done. I’d put my money on DropCatch/HugeDomains is doing this. I only have my intuition to go by. Plus as @Ategy said, some of the non-GoDaddy registrars may not be allowing their domains to go to closeouts. Which would look like somebody is gobbling them up. The same as
@CrocodileDundee hypothesis that some domains might take longer to arrive in closeouts, would have the same effect. And a very few might be gobbled up in the few seconds before you check the closeout manually.

Namepros member Arca posted:

I talked to GoDaddy about this and they confirmed that a backorder placed after the auction will NOT get you the domain before it reaches closeouts.

Namepros member MapleDots posted:

Yup, way too much power for one organization

Hey they also bought afternic that technically makes them two organizations and since they are in bed with huge domains we will count that as three.

Registrar, Marketplace, Afternic etc.

And as domainers we are still letting our godaddy domains expire for them to make money on.

REMEMBER IF YOU’RE GOING TO LET A DOMAIN EXPIRE THAT SITS AT GODADDY PLEASE GIVE IT AWAY TO A FELLOW DOMAINER SO IT DOES NOT END UP ON THEGODADDY EXPIRING AUCTIONS.

Let a fellow domainer make a sale attempt and we might be able to tame the godaddy machine.

Joe Styler gave a very long reply:

Good questions. There are multiple things happening here which have been stated in the thread already. There are times where domains are renewed by 3rd party registrars and pulled from the auction and do not make it to closeouts. There is also currently time where placing a backorder on a domain if timed right can grab that name before it hits closeouts. This is always how it has worked and it is by design and pretty well known by people who use the auction a lot as some have pointed out in the thread already. It is something we have always been very forthright on and something I have answered in PMs on here countless times. It is used by people who are savvy API and non API customers do it. HOWEVER this is changing within the next 7 days. So I will give you the run down of how it works today and how it will work.
The beginning of auctions to today work like this:
Expired auction day 26-36 of expiration.
Closeouts (BIN) are day 37-41.
Backorders can be placed any time before during or after the auctions.
Placed before or during the Expired auction they show up with a $10 opening bid. Multiple Backorders placed = first person to place it gets the $10 high bid.
Backorders placed during the Closeout BIN auction do nothing during the auction.
There are currently (and again this is changing) 4 times where we check for active backorders on the domain that is at auction.
1. Before the auction – we check to see if there are any and if so we place an opening bid for the first person to place the Backorder. All backorder holders on the domain are alerted that the domain is at auction. Only the 1rst Backorder (BO from now on) gets the bid.
2. BO placed during the expired auction. Auctions checks and applies BO in pretty close to real time for a $10 bid if there are no bids currently. If there are bids BO is still applied but you are not winning and you wont see that show up publicly.
3. BO is checked for after the expired auction ends and before the domain goes to Closeout Auctions. This was by design as a way to make certain if someone had a BO on the domain with no other bids they get the domain and someone else does not buy it from them.
4. Closeout auction ends – BO is checked after the closeout BIN auction is completed on day 41 of expiration. The BO is not checked for during any days of the closeout auction.

People who use our auction regularly know this and can try to place a backorder on a domain with seconds or so left on the expired auction hoping that the databases and calls etc do not act fast enough to place a bid and extend the auction for five minutes but do act fast enough to have that backorder showing as active when we check for any active BO before moving to closeout. So if you time it just right you can get a backorder in that the system awards the domain name to before moving to closeouts. But you’re not the only person doing this so it comes down to a race too early and you tip your hand the system sees it and extends the auction with a bid, too late and you are not the first person to place that backorder or you miss the window and the domain hits closeouts.

The system was designed like this not to give people a way to do this, this is a unintended consequence of a feature we have always had which is intended to be sure that anyone who wanted the domain and paid for a backorder on it got it. As we discovered more users taking advantage of this lately, even though we have always been very public about how the system worked when asked we felt that it was creating a harder time for people who do not use the auctions so much that they understand all the ins and outs as well as others who do.

So we decided to make a change. The system will no longer check for BO on step 3 above. This change is happening soon, within the next week. I was planning on announcing it in here then publicly because as I said a lot of people know how it works now and use it that way and it would be good for them to know the change. But since I was asked about it that’s the answer. Very soon we will no longer check for a BO before moving the domain from expired auction to closeout auction.

Do keep in mind though that as soon as it hits closeout anyone who is fast can buy it. Whoever clicks buy first will have the ability to check it out and it will disappear from anyone else seeing it. So yeah a bot can still grab it fast and that is also likely part of what is happening today and that will be unlikely to change in the future. Fastest buyer on BIN wins.

MapleDots started a thread which relates to his comment about giving away domains.

The thread is here

MapleDots also made a post in a thread that got the ire of GoDaddy’s own Joe Styler. This debate which I participated in, dealt with MapleDots posting that if he saw a domain listed at GoDaddy for $20,000 he might email the seller hoping to save 20% with 0 commission to the seller.

MapleDots said: ↑
I bought a few domains in the 1k range and they ended not hitting my account.
It was a joke.

Now I just contact owners via whois and make my offer directly. It gives me an advantage over auctions because the seller saves the 20% auction fees.

Nothing says you can’t look at auctions and make a few private deals with a couple of strategic whois inquiries.

As far as your situation goes….. if the domains have left the sellers hands there is very little you can do but move on. You have no recourse, godaddy has all the fine print stacked in their favor.

Joe Styler replied: Actually our terms of service say you cannot do that and if we find out we normally ban you for life so I wouldn’t recommend people try that.

That thread gets interesting from there.

So is the concentration of power getting out of hand? Will all expired domains belong to GoDaddy and Huge Domains?

If you bid on domains at GoDaddy these threads are worth reading in their entirety. As Joe Styler’s comment above points out, not everything is a conspiracy but some things do get complicated.

Many feel that closeouts are next to impossible to attain manually.

Give your thoughts.


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