New SnapNames Policy? Keeping single-bid drops to sell at 'Buy It Now' prices.

[EffectiveNames.com]

Last night, I submitted an order for a prerelease domain on SnapNames and, as the deadline passed, mine was the only order. Usually, this would result in me receiving the domain or, at the very worst, if a last minute bidder did mysteriously appear, a two-person auction. I have been doing this regularly for years, I'm very familiar with how it should work and I know that I met the deadline correctly.

Just a few minutes ago, I received as email from SnapNames, pasted below, offering me the opportunity to buy the same domain at a 'Buy It Now' price of $1,812, urging me to hurry because of the "potential high demand".

I pick up quite a few domains on SnapNames, most of them low-demand ones that attract no other bidders. The domain in question certainly isn't worth $1,812, I actually hesitated quite a bid before placing the required order of $59 but I figured it was just about worth it.

If this represents a new SnapNames policy - that orders placed can no longer give us any expectation of acquiring the domain but, instead, just an email informing us that it is now publicly available on a 'Buy It Now' basis - why, exactly, should we waste our time trawling through their lists, looking for gems? All that our hard work now amounts to is pointing out the potentially valuable domains so that they know which ones to grab for themselves.

I would love to hear what members here think - does this represent a new policy? Or was it, perhaps, some sort of one-off glitch?

Here's their email:

Good news! xxxxxxxxxxxxxxx.com has become available for immediate purchase at SnapNames. Please note that this is not an auction, but is offered on a first come, first serve basis at a fixed 'Buy It Now' price.


xxxxxxxxxxxxxxx.com


Please click on the domain name above to go to SnapNames to purchase the domain name, or go to www.snapnames.com and search for the domain name directly.


Due to potential high demand by other interested parties, SnapNames cannot guarantee that the name will be for sale for long. In the event it is already sold, the domain name will appear as available for backorder when clicking on the link above.


Thank you for the opportunity to serve you.
Please do not reply — this is an automated email.


SnapNames is happy to assist you in any way possible. Our support team is available here:
On the web: http://www.snapnames.com/support.jsp
Questions: Please visit our support portal
By phone: +1 (866) 690-6279 (in the US and Canada) or +1 (503) 241-8547 (worldwide)

 

[DN BROKER]

Never mind

 

[EffectiveNames.com]

Yeah, I did actually get burned by that Halvarez thing :uhoh:

As I say, I am now questioning what the point is - I understand how SnapNames might think this is a good idea but, seriously, they are removing what little motivation we had to invest our time and money there. I am far from their biggest customer but I have certainly given them five figures over the years, I have a hunch that all of us small guys, who consistently feed the system with lots of small purchases, are probably a lot more important than they realize.

If they are now reviewing all domains to pick out the gems before allowing us to have the dregs, who is going to stick around?

Sure, someone might come along and buy that domain for $1,812 ... but I know this market, that is highly unlikely, just crazy unlikely. Actually, I would go so far as to say that it is almost impossible for any domain with that sort of potential to make it as far as dropping without attracting at least two orders. Single-order domains like mine in this case could usually be picked up eventually without a Snapnames order, the only reason to put down $59-$79 is to rule out the possibility of it being grabbed by Korean drop-catchers but SnapNames are removing that advantage, it now appears to be safer to just wait for such domains to drop.

This industry was created out of thin air but it consists of rules - rules that have been horrifically abused over the years but there was always, at least, some logic we could follow. If they stretch beyond that logic, they could find themselves holding a lot of domains with fantasy prices and no free army of list trawlers, digging up gems and pushing up auction bids.

 

[silentg]

I asked Snapnames about this before and they told me it was due to the partnership with Afternic. These expiring domains were listed at Afternic Premium Listing when they were expiring. So when the owner renews it, all those who had backorders on the domain at Snapnames will get an e-mail saying the domain is available to be purchased.

 

[EffectiveNames.com]

Thanks silentg, interesting to hear their explanation because they still haven't replied to my support query.

What seems wrong about that explanation is the timing: they are suggesting that private owners, who are astute enough in the first place to list their domains on Afternic, allow domains - domains that they still want - to slip beyond their expiry dates, then they wait precisely five weeks until the very last minutes of the redemption period before swooping in and renewing them, so that they can continue to be listed on Afternic and their business partner SnapNames.

I don't buy it, that simply isn't how private owners work - if someone accidentally allows domains to expire, sure, they might notice and they might then renew them at some point during the redemption period but, think about it: what are the chances that they are going to notice right before the end of the redemption period?

Sure, it's possible, but highly unlikely. It someone hasn't noticed during the first 4 weeks, the chances of them noticing at any point during the 5th week are tiny, and coincidentally noticing and reacting in the final few hours before the deadline? Far, far, far smaller chance again.

A much more likely explanation is this: SnapNames and their partner registrars know which dropping names are listed in the various marketplaces and, once the end of the redemption period rules out renewal by the previous owner, they hold these flagged domains back for human evaluation, regardless of how many people have placed orders for it. At that point, they still consider the domains "theirs" i.e. jointly owned by SnapNames and the registrar, and they calculate whether the best outcome would be to go ahead and run an auction or add it to their own inventory. It obviously helps a lot if the domain in question uses a WHOIS privacy service because, then, the actual transfer of ownership can remain hidden and, because the domain was already listed for sale, they can simply keep it listed at the same price, just as if the original owner had renewed it.

That's my theory but I think it rings true, so, keep your eyes open and if a domain you are tracking uses WHOIS privacy and is already listed on marketplaces, don't be surprised if it is mysteriously "renewed" after you've already placed your order and the deadline has passed.

SnapNames do not guarantee to deliver these domains, the renewal period is part of the equation .... but ... if they are doing this it is definitely a form of fraud and, because it is arranged between two companies to the detriment of consumers, it would qualify as criminal conspiracy.

 

[DN BROKER]

Someone needs to investigate this and report it to the FBI internet division!

 

[silentg]

Here's few names I got in e-mail from Snapnames with BIN:

rcp.org
ptw.org
nmw.org
rlo.org
kus.org
lif.org
wln.org
iig.org
igd.org
onk.org

These domains are not listed at Afternic. Registered with Moniker and under privacy. It could be a domainer who owns these domains and listed it with a bin on SnapNames.

 

[EffectiveNames.com]

@silentg - But those domains weren't coming up for a prerelease or a drop on SnapNames, were they?

I've got no problem with domain owners selling their domains via SnapNames, I just think that they might be abusing their power in certain, very specific situations.

@CureCancer - I am sure that the entire domain industry will be federally investigated at some point, but probably years after most of the big money has been sucked out of it.

 

[DN BROKER]

Never mind

 

[eeedc]

I'm still surprised the FBI has not made any arrest or filed any charges against snapnames for shill bidding. Where is the law when you need it?

Off the top of my head, I think both local law enforcement and the FBI have jurisdiction over auction fraud. In the past before the Internet, auction fraud was mostly a local crime handled by state law enforcement. And if the shill bidder have more to do with the people selling or just buyers backing out, the crime, unfortunately not be serious enough to warrent the allocation of law enforcement.

---------- Post added at 11:47 PM ---------- Previous post was at 11:38 PM ----------

I understand how SnapNames might think this is a good idea .

I don't see how SnapNames could think it's a good idea. It looks to me if you described the situation correctly, that SnapNames just is too bloody stupid to understand what they are doing.

Auction theory has long been studed by economics and business professors and government economists, such as at the FED who auctions government bonds. The government has money to hire dozens of Ph.D. economists and people who know what they are doing and how to run an auction. Google and eBay also run auctions and hire the best and experiment.

If you described what Snapnames is doing correctly and an email was provided, it sounds like Snapnames thinks, dreams, that it can design a better auction system than anyone, the government, any government, Google or eBay has ever done before.

But through trial and error, even idiots learn they are doing something wrong after they lose money.

 

[fischermx]

I'm sure at some point in the future, this event will become another situation similar to "halvarez" affair.

 

[chipmeade]

What you are forgetting is that the auctions (outside of the owner sponsored ones) at Pool, Namejet etc... for pre-release names are ALL for Names they do not own! This is how the industry is able to make money RISK-FREE. The auction site has an exclusive relationship with a registrar (Enom/NetSol with NameJet) The registrar has the ability to pluck any of their expiring names and transfer to a new owner before they have to drop them into the registry pending delete. The thing is, until they do the transfer, They do not own the name, the past registrant does. They are selling something they don't own. Imagine if domain owners had to be notified every time someone offered to buy their name via one of these auction houses? even after expiration. Until the name is in pending delete at the registry (noone owns it) it can be renewed by the previous owner. That is why the registrars instantly put the names into privacy upon expiration. They don't want buyers to contact the owners directly, cutting them out when in fact they have every right to. The fact that they put it into privacy might be considered illegal if you look at it closely. Registrars are not allowed to warehouse names via their registry agreements. If they could, they would be subject to the same non-refundable registration costs (The anti-tasting regulation) everyone else is subject to. As it stands now, registars pay for the registration upon expiration, but are given a full refund by the registry if the name is not renewed in the redemption period. Check out the language in the Network Solutions agreement that provides for this ability...

Should you not renew the domain name during any applicable grace period, you agree that unless you notify us to the contrary we may, in our sole discretion, renew and transfer the domain name to Network Solutions or a third party on your behalf (such a transaction is hereinafter referred to as a "Direct Transfer"), and your failure to so notify us after the domain name expiration date shall constitute your consent to such a Direct Transfer. In the event we are able to identify such a third party (the "Direct Transfer Customer") and effectuate such a Direct Transfer, we will notify you via email after the transaction is completed ("Direct Transfer Notification"). You acknowledge and agree that the Direct Transfer process may be facilitated through a single Direct Transfer Customer, or through a brief auction involving multiple parties who are interested in the domain name. You agree that we shall have no obligation to pay you, and you shall have no right to receive, proceeds, if any, in connection with the Direct Transfer process.

 

[BostonDomainer]

they are suggesting that private owners, who are astute enough in the first place to list their domains on Afternic, allow domains - domains that they still want - to slip beyond their expiry dates, then they wait precisely five weeks until the very last minutes of the redemption period before swooping in and renewing them, so that they can continue to be listed on Afternic and their business partner SnapNames.

Their are many domainers who do this and here is the rational behind it.

1) Much more exposure as the name gets placed on many expiring domains list and websites
but
2) Some end users do not know that the name has a redemption period so they wait and wait. I have seen folks go register the .net and .org waiting for my .com to drop and I renew. Then it's negotiation time.

@chipmeade good post

Now back to your original topic k:

 

[stewie]

section 3.2:

all names that are expiring will be auctioned off and sold to the highest bidder, all pre-backorders will have a equally fair chance to win any domain (except for the names that Halvarez wants or spikes a bid on). We wish everyone the best of luck

sorry thats the old policy