The New York post today has a story ripping Godaddy.com process of charging customers $18.99 to “backorder” an expired domain and then placing the domain into auction once it “drops”.
First we have to note that absolutely nothing new is going on that the NY Post is complaining about.
Godaddy for years has had a program were you can backorder any domain, for which is now $18.99 per domain. If the domain was not at Godaddy or one of its affiliated registrars it would simply try to get the domain along with all other drop catchers when it dropped and In my experience with little success.
If the domain was registered by Godaddy or one of their affiliated registrars, then the domain goes into Godaddy.com drop auction with the backorder serving as the first bid.
But now the mainstream media has picked up on the story and guess what?
They don’t seem to think the whole process is fair.
“”GoDaddy.com, the No. 1 domain registry company, is getting rich in part by pitting its customers against each other in bidding wars for expiring Web addresses — instead of using hefty back order fees to simply purchase soon-to-expire domain names.””
“”The site…..charges customers $18.99 to acquire existing domain names whose registrations are about to expire. But the company does not tell those customers that it could be collecting the same fee from three or four or more rivals and that it is not working solely on their behalf.”
“When I paid my $18.99 back order fee in January, I thought GoDaddy would act as my agent to go out and buy the domain name,” one disgruntled customer told The Post last week. “But what I learned was that several other customers had also paid the fee and that we would all be pitted against one another in an auction.”
“There should be clear rules,” said Eric Goldman, a law professor at the University of California at Santa Clara and an expert on cyber-law. “It certainly raises questions about what the fees are buying.”
“I certainly see the customer’s point, and we will review the way we do the [back order business],” Chris Kennedy, the director of aftermarket services at GoDaddy, said in a phone interview on Friday. “There may be a case for improving the communications in these cases.” GoDaddy’s very profitable back order policy came to light last week when the disgruntled customer, who spoke on the condition of anonymity, said he was surprised to discover the premium fee didn’t deliver any real value.”
Other aspects of GoDaddy’s backorder business have also raised eyebrows, including:
“””* Customers of GoDaddy who pay the $18.99 back order fee and lose out on the domain name auction are told they can use the fee as a credit for another purchase, but cannot get a refund. This gives GoDaddy the use of the money from thousands of customers for weeks, months or years.
“GoDaddy has set regulations that start the auction at $10, not at zero dollars. That certainly makes it appear as though GoDaddy is acting on its own behalf and not the behalf of the customer.”
“Kennedy admits GoDaddy acts on its behalf when it sets the $10 opening bid, but said it did so to allow the market to set the true value of the domain name.”
Actually what the New York Post doesn’t even point out that if you have a backorder on a Godaddy domain, as soon as the domain goes to auction, because that backorder converts to the first bid, it then shows that bid on its system, alerting more people to bid on the domain. Although I suggested and got Godaddy to remove any domain with just one bid from the “most active list”, those domains are still shown on the “ending soon” list, still making the “backorder” bid obvious to all.
Of course if the NY Post wanted to dig deeper they can find all sorts of “unfairness” in the drop auction process, even registrars that just keep the domains they want to resell them for hundreds of thousands of dollars without sharing a dime with the original registrants (their customers).
Yes once our industry practice the see the light of day by the mainstream media they find out what all of us inside the industry have known for years, unfairness is a daily part of life for domainers.
While domain blogs, including mine, often complain and bitch about the drop process and other “industry practices”, Domain Companies are going to have a lot of explaining to do once the mainstream press starts asking questions, because the answers for the most part make no logical sense and defy the concept of fairness.
So true Mike.
So much is coming to light and it will start to snowball……everything from registrar practices, UDRP and NAF / WIPO operations, blatant domainer trademark infringers who intermingle among the clean-operating domainers, parking company methods and operations, CADNA interests, trademark lawyer connections to this industry, and lets not leave out mentioning of all of ICANN’s dirty little secrets.
It is going to be a media circus in a year or two from now. It’ll be crazy to watch unravel.
“When I paid my $18.99 back order fee in January, I thought GoDaddy would act as my agent to go out and buy the domain name,” one disgruntled customer told The Post last week. “But what I learned was that several other customers had also paid the fee and that we would all be pitted against one another in an auction.”
I think only one customer can backorder a given domain with GoDaddy at a given time.
Tony
That is what I thought as well but frankly I haven’t done one of these in years since they make no sense so I’m not sure what the current status of these are.
Actually, I’m glad Parson’s is getting called out on this. What Tony said USED to be true and the conflict did not exist.
Now, however, they not only collect the same upfront fee but then proceed to put the domain into a public auction and give that auction the most exposure they can to attract more bidders.
They should not be doing both methods… either eliminate the fee for signing up for a backorder and then hold an auction or go back to the system of first come, first served and charge a backorder fee. The illusion they create now is exactly as described in the article and is much more like a bait/switch scheme than a legitimate and fair process.
“I think only one customer can backorder a given domain with GoDaddy at a given time.”
Cartoonz is right that GD changed their backordering
system.
Andrew of DomainNameWire had covered it back in
April 2009.
The comments are also interesting as some thought GD
would eliminate the upfront fee.*
Link here:
http://snurl.com/BackorderChange
*Hey someone has to pay for the Super Bowl ads. 🙂
*
GoDaddy’s backordering system IS unfair, unethical, unclear, and a poor value.
GoDaddy’s policy of sending a backordered domain to auction is simply poor customer service. Why not simply be honest about it and charge nothing for a backorder and allow multiple backorders like Snap, Pool, and Namejet?
When you sign up for a backorder, they don’t tell you that unless a domain is registered with them that their likelihood of catching it is about nil. In fact, they couldn’t catch a cold during a raging epidemic!
Yeah, there’s a lot about the domain industry that will catch a lot of scornful eyes once the mainstream media catch wind of it.
*
Go Daddy implemented the process whereby multiple people can backorder the same domain at $18.99 in Spring of last year:
http://domainnamewire.com/2009/04/10/godaddy-changing-domain-name-backorder-rules/
I was pretty sure only 1 backorder could be placed for a specific domain… but doing a little more research.. most “good” pendingdelete domains in the past would show an X at Godaddy before showing a domain was already backordered, but I checked several “good” pendingdelete domains and I could have placed a backorder for each and every domain that I checked.
Since it is very likely there are at least 1 backorder on these domain (as this was always the case in the past with 1 backorder only), I am pretty sure that GoDaddy is allowing more than 1 backorder per domain.
Same goes with their PARKING program.
Let me charge you a fee to park your name and give you rev share. If you don’t want to pay a fee to participate in my parking program then I’ll keep all the cheddar, but if you want YOUR money, you need to pay me a fee to give it to you. Oh wait did I tell you Mr. Consumer that parking programs much more advanced then mine are free of any upfront charges. Ms. Consumer you were creative enough to think of a domain name that was available and gets some type in traffic but you need to give me the parking revenue after I’ve charged you for a registration fee.
Now you know how they pay for Super Bowl Commercials and sponsor NASCAR races all of which are egotistical business decisions.
If you don’t like them, don’t use them. They aren’t the only game in town 🙂
Sorry, but I’ve been losing sleep over what’s going on, so I have alot to say! Nice articles and comments!
@ Mike, You said:
“Yes once our industry practice the see the light of day by the mainstream media . . . unfairness is a daily part of life for domainers.”
This statement is misleading It’s time to draw the line between “domainers” and “Registrars.” Domainers are for the most part nice people, from what I have observed, interested in law and fairness, and make available valuable domains to highest bidders with the most development potential, and make small livings trading in domain names.
It the Registrars who are cybersquatters, unconcerned with security, malware distributers, loosely regulated, and set to trade in dot com and dot net owners’ livelihoods – their dot coms, (their brands, their domains, with ICANN paving the way by passing Verisign’s Bulk Transfer After Partial Portfolio Acquisition – BTAPPA for dot coms and dot nets: RecoverDomainName.com <<= Visit my site to view some details.
Please be careful to separate "domainers" from "registrars," which involvement in domains as speculators could be considered anti-trust. Go Daddy has 40 million domains registered, but only 2 million, or 7 or 8-millions customers? Who operates all those domains that account for the excess, outside a handful of portfolio holders, besides Go Daddy? Why did Ubid sue Go Daddy for cybersquatting? Because Go Daddy is the holder of the Ubid trademark-infringement domains.
But "domainers" get all the flack. Please try to change public perception of who the culprits are, by carefully separating the Domainers and Registrars, drawing a clear distinction to the layman.
@ MsDomainer
That applies to you, too! You said:
"Yeah, there’s a lot about the domain industry that will catch a lot of scornful eyes once the mainstream media catch wind of it."
You could say, there's alot about Registrars that will catch a lot of scronful eyes once the mainstream media catch wind of it,"
being careful to not lump together domainers with Registrars under the umbrella of "domain industry."
“Domain Companies are going to have a lot of explaining to do once the mainstream press starts asking questions, because the answers for the most part make no logical sense and defy the concept of fairness.”
They sure are !
One of the biggest things that bugs me is when you’re waiting for a drop and the name gets siphoned off to the registrars own portfolio before it drops, that really sucks…nothing fair about that one.
“One of the biggest things that bugs me is when you’re waiting for a drop and the name gets siphoned off to the registrars own portfolio before it drops…”
Right, see Tucows’ YummyDomains.com.
Tucows is notorious for siphoning off domains.
“Tucows is notorious for siphoning off domains.”
Yes they are, for those that don’t know the Tucows story
Tucows commented,
“Our strategy to acquire expiring domain names differs from that of some other large Registrars who have focused on domain name auctions.
Tucows believes that there is substantial value in holding on to these domain names, both in terms of monetization through pay-per-click advertising, but also in terms of the resale or lease of high-value domains to individuals and businesses that understand the intrinsic value of a high-quality domain name.”
http://blog.domaintools.com/2008/02/tucows-portfolio/
Louise
“unfairness is a daily part of life for domainers.”
I mean what I said.
I’m not confusing or forgetting the difference between domainers and registrars.
What I’m simply saying is that domainer are used to the built in unfairness of the drop systems, the different treatment of drop domains by each registrar.
If the Post is going to get all upset about a $19 backorder they should hear some of the crap all of us domainer have to go through on a daily basis
Tricolor
Yummynames only exists to resell the domains that Tucows took ownership of from its customers
I was just on the phone with Chris this past week about the multiple backorder thing. I tried backordering some domains and the system said I couldn’t because there was an existing backorder, yet when I had a domain backordered and they caught it suddently it was a name with multiple backorders. I still can’t figure out how I can’t make them but others can. . .
All domains with backorders DO NOT go to auction btw. . . That’s been my experience as recent as a week or so ago
“I certainly see the customer’s point, and we will review the way we do the [back order business],” Chris Kennedy, the director of aftermarket services at GoDaddy”
whats crazy is if this story broke 6 months ago that would have had to be Adam Dicker making that ridiculous public statement which was probably written by the PR department.
Mike
The ridiculous part is that when confronted with the outrageous business practices these companies have no defense, no logically argument to support it, which is why all they can say, yes that’s a good point and we will take a look at it.
Like no one at Godaddy realized all of this on their own or like no domainer or blogger ever pointed it out to them
In the name of a Dollar.
Who rightfully/legally owns a domain after expires ?
Is it gray area and registrars are profiting from it or is it ICANN’s failure to policy established rules/policy?
Domo
Its “ICANN’s failure to policy established rules/policy?”
Thanks
(and I meant “police established rules/policy” , sorry)
There is so many “conflict of interests” in the whole process, when you have companies wearing to many hats all at once that are ” registrars drop-catchers auctioneers parkers brokers”…
And then there is the “privacy whois”just to muddy the waters so more ..
Perhaps this article might finally serve as a catalytic to open the ” can of worms”…
Best
Domo
@MHB, yes i couldnt agree more. what i meant was that Adam who I believe held the position of director of aftermarket till quite recently, and who is a very well liked and respected guy in the industry and who everyone knows, well Godaddy would have thrown him under the domainer bus had he been the one forced to issue a ridiculous statement like that. of course they are aware of whats going on, as you point out.
It’s just GoDaddy Snake Oil.
It doesn’t work any better than doing it yourself, probably works worse.
The thing is, if you don’t know how you have to find somebody that knows how to do it. Hence the novices loose money and learn the hard way that NOBODY can guarantee to “get” a domain for you if someone else has it OR it drops. I personally have never seen a premium domain name drop.
2 cents worth
steve
Adam
“”All domains with backorders DO NOT go to auction btw. . . That’s been my experience as recent as a week or so ago”””
What is the cutoff line?
Which domains that are backordered do not go to auction?
Do they have to be backordered by a certain time before expiration?
I have no clue Mike . It’s very unclear. When Chris and I talked it didn’t sound like he was pleased about my experience. I suspect they’ll make some moves to be clearing this all up sooner than later now with the mainstream coverage.
I worked for GoDaddy for 4 years and know all the inside ins and outs. I made a conscious effort to not discuss them when I left, but it keeps getting harder. Anyway, in spring of 2009 they changed their backorder policy from only 1 per customer to multiple customers……but if a domain was backordered before that time, no one else could backorder it. Hence, if a domain shows backordered/not available, it was done before April 2009. The multiple backorders only effect domains that as of April 2009 did not have one already attached…so any first time BO’s after then can have unlimited $18.99 backorders on it. Then when it goes to auction, they all go to auction at GD, you are notified that you and however many so and so’s need to bid on it and may the richest one win!
@ MHB, you said:
“If the Post is going to get all upset about a $19 backorder they should hear some of the crap all of us domainer have to go through on a daily basis.”
Isn’t it the truth?
Not being a domainer, or being from your world I did go on a domain buying spree since November, and have to be philosophical that I learned exponentially along the way what you can’t pay to learn in college for the $$ I am down, I would like to say from a 3rd person-type perspective, that:
everyone here, including me, knows what you meant, but laypeople are getting the wrong message from ignorant media twisting facts, so be mindful of the layperson, since your blog is quoted and popular! Great blog!
For instance, Andrew A. said the papers always quote the ask price of domains on eBay that aren’t even bid on, like it’s the easy $$ for domainers! Total misconception. Plus, Michael Castello commented on one of your previous articles:
“Right now domainers have a big bulls-eye on them because of what they own . . . Right now they [laypeople] are the battle ship and most domainers are on a dingy with a treasure chest. Does not look good.”
Plus Harvard alumni Benjamin Edelman did this study and targeted domainers, instead of Registrars, the real big offenders, which blog interview I commented on:
“It’s sinister that domainers get the blame for all the wrong on the internet, when Registrars do exactly the same thing! Bob Parsons of Go Daddy admit in a 2007 CNN Money interview that parked pages earn Go Daddy $12,000/day (wonder what they earn now). All the Registrars earn from parked pages. Why are Domainers being singled out?”
Like Michael Castello said, above, the bulls-eye is on the domainers. Even as an outsider, it seems unfair and has repurcussions for small domainer owners and developers, like me, so I ask you do and say everything possible to emphasize the difference: Registrars are the large offenders who are to blame; “domainers” small business people who advance the interest of the internet. If there’s a few bad apples in the domainers category, I don’t know about them . . .
Here is the Edelman interview on the Cyveillance blog, with my comment:
http://www.cyveillanceblog.com/brand-protection/typosquatting-ben-edelman-tyler-moore
Louise
If you look in the appendix of the report where the author lists the servers with the the lowest incident of typo’s you will find our servers listed.
Mostwanteddomains.com
mike where’d you see the appendix to that report with your servers listed ?
link
Adam
http://www.benedelman.org/typosquatting/bottom25kns.html
Congratulations on that! It is a good list to be on.
Surprised Yahoo! and WordPress are also on that list – you’re in impressive company! 🙂
Louise
Thanks
With regard to Registrars “cherry-picking” premium & prime expired domains and “keeping” them for their own proprietary potfolios (rather than let customers have a shot at them)…… What Registrars above and beyond Tucows, have been the most prevelant (“guilty”) in this type of self-dealing and sweetheart deals over the past few years ?
Embee- very nice article. Another piece of truth that makes one thing apparent to ALL DOMAIN INVESTORS and the rest of the domain industry:
GoDaddy doesn’t spend very much in attending/sponsoring our domain conferences. Godaddy, however, loves us to take part in their CPA banners and affiliate programs.
Godaddy likes to put millions into nationwide SuperBowl commercials, using the sleaziest of techniques to get notoriety and the people who just remember the name of the company. They put their brand even on a racecar – dirtying up a famous woman driver who could have rested on her driving laurels, but Bob got her to focus on something “more” important — her sexy body and face Go Women Power – Sponsored by Godaddy!
Godaddy doesn’t care to put up a million dollars to create an educational website for businesses and consumers to find out what a domain name does for their brand, their local, regional and worldwide sales, how it is extremely important to their online business marketing, and how a good domain name will most likely appreciate in value, so they aren’t wasting money by purchasing a good domain name. It works every second of every day, and it gains value. How perfect.
Godaddy seems to like everyone who knows nothing about domains to continue knowing nothing other how “edgy” the Godaddy commercials are to guide the guiless to their site, where Godaddy will educate them on the “upsell” process — and sell millions of dollars of “extras” that we all know that their customers might not need.
So again– for all you domainers that “like” Godaddy, realized they don’t have an aggressively strong budget to educate potential buyers that their investment in domains is a growing, powerful part of online marketing – which means, when you support Godaddy, why don’t you ask them to be more involved in supporting you?
I use Godaddy for a few domains I left their from portfolios I’ve purchased from domainers, but it’s down to under 50 domains, from I think about 350 at one time. I also have a reseller account I no longer pay for, but Godaddy keeps it up, they just don’t pay me for sales it receives. It’s interesting to watch how they work. I should ask more questions about that reseller site… gotta find the time!
*
Well, Louise, I stand by my comment.
Many domainers are very nice people, but our industry isn’t entirely blameless. The registrars do what they do because we buy into it and even nice domainers often make deals with the devils (registrars and auction platforms) because we have little choice.
*
Hi, This is nice article about tech startups choosing names hard to pronounce and that don’t mean anything includes the disturbing quote of a branding consultant:
“The world has gone back to a more dot-com sort of feel, out of necessity because everything normal is taken,” said Addis, referring to the despised “domain squatters” — folks who grab the best names, then pay a small fee to sit on them until a desperate buyer comes along. “There’s such hatred for these guys, because they just hijack these great URLs.’
Domainers have your head in the sand over what’s coming! Registrars and ICANN are capitalizing on this malignment of domainers to push that BTAPPA policy which is going to see the great dot coms and dot nets go to back to the Registrars, so they can profit instead of you!
Ms Domainer, it is simply a gulf as wide as an ocean between the Registrars and their poor ethics vs small domainers, who, for the most part, try to operate ethically, bad apples notwithstanding! Plus, they took risks on domains for the most part, that it’s subjective how valuable it really is, outside a small group of common, one-word domains.
Excuse me, here is the Mercury News article quoted from, above:
Tech startups seek fame and fortune with names we often can’t spell or pronounce
http://www.mercurynews.com/ci_14845932?source=most_emailed
Article by Patrick May.
How can there be 8 and 9 bids on one name for $59.00 at Snap?
http://www.buyexpiringdomains.com/Buy-Domains.html
@ Louise,
At Snapnames, and actually most domain auction sites, there can be as many “starting bids” as those who make them. So 100 people can bid $59 for one domain, but when the auction starts, someone has to move that price up, usually in set increments depending on the amount the domain price is at (the higher the domain value, the bigger increments to bid).
If nobody increases the bid, the first person bidding $59 wins the domain. Usually though, and this makes sense, if you have 8 people bidding on a domain, you can be certain the bidding will go up, even if it’s only 2 people fighting it out.
Snapnames is fun to watch to see how people value domains by their bidding.
hope this helps.
I just backordered a domain name with godaddy. I thought it had said that if somebody else backordered the domain, that it would go into an auction between whoever backordered it… but it turns out that today I found out that I am the only person who backordered it… and my reward is that I’m the first bid on a 10 day auction? It automatically put me down for $10 on this auction! So now I’m up to $30 if you include my $20 to backorder it… and this is assuming nobody else bids! I repeat, I’m the ONLY bid.
I also went to pool.com, snapnames, etc. so that I would improve my chances of winning, because everybody told me godaddy backorder doesn’t work… so my next question is that by winning this auction, does that mean I would win the domain? It is weird because everywhere I read, it said pool.com and other sites always beat godaddy… but now there is an auction for this domain?
You won’t be charged anymore then the initial $18.99 for the backorder unless you up your GoDaddy bid. They include your $10.00 bid in the backorder charge.
Pissed off
Yes this is now what happens with backorders on Godaddy (or affiliated company) registered domains.
It becomes the first bid in the auction and once there is a second bid it hits the most active list.
Now if it was a non-godaddy registered domain and you were the only backorder you would get the domain without an auction.
Your $10 bid like Patrisha said is covered in your backorder fee but once your outbid the backorder is meaningless and it just another auction.
You can move your backorder to another domain however you will not get a refund.
And, now, six months later, has GoDaddy corrected the situation? No? Huh.
In my experience, GoDaddy does not care about their customers at all. They just run expensive ads to get new customers. I was one of them. Now, as a customer I repeatedly have had horrible experiences with them. I am going to transfer all of my business away from them.
@ Susie
WAIT! WAIT! Don’t run from GoDaddy yet! Consider that they sponsor NASCAR and Country Music events, and Danica Patrick! (She’s a talented female racer who has been positioned as a “shower scene” sex star). Are you saying this doesn’t make you want to stay with GoDaddy?
If you leave GoDaddy, you will be sending them a message that their sponsorship of Danica Patrick and their manipulation of her recognized achievements that earned her a real place as a race car driver is really just a “chick in the shower” for GoDaddy purposes. 😉
But if this doesn’t impress you, you can always try Rebel.com or Fabulous.com
THIS JUST happened to me they took my back ordered name!
what can I do to complain.??
@Dean,
Stop your crying. Godiddy has to pay for their 60-seconds on Sunday – be glad you were there to chip in 🙂
– TBC
@squatvestor
Called them and they didn’t seem to know what is going on she said they are still in the process of acquiring the domain on my behalf .. but I said it shows in the who is that you already own it … she didn’t have an answer and told me to read the help on back ordering to see the procedure.. I will post here to let people know if thier f*ked me over or I got the domain.. stay tuned 😉
I just wish I had the $$$$ backed up on my end to write further inside details of how Godaddy and several prominent registrars work with your d0mains…
Give it to EmBee to write this article about registrar shenanigans, then … *sigh* no comment.
I bought an Backorder from Godaddy MONTHS ago and Godaddy was always unsuccessful. I moved the Backorder from one domain to another. I think i did this for 30 Domains. Always Unsuccessful. Now few days ago Godaddy was successfull (with Wild West Domains), i was happy, i thought ok, now after such a long time, i will get one domain at least. This Domain is not even that good. Just a B Quality Domain. And what happened? Now my Domain is in Godaddy Auction with 1 Bid starting 10 Dollars. I have to wait 5 Days till auction ends and hope that no one bids more.
This procedure SUCKS. I waisted my time for all the unsuccessfull atempts and now after such a long time, i have to waiste my time and my nerves again, because of this Auction.
I purchased a back order and Go Daddy outbid me for the domain name I placed on back order! So here’s a company I have all my services with & they took the domain name I put on back order. No one else bid….SCAM!!!!!!!!!!!!! GoDaddy sucks ass
I lost my domain. Last week I forgot to renew and someone bought that! Please suggest me how to backorder that?
In past I use godaddy but since they spam my email almost every day, so I stop using them! anyway about expired domain on godaddy, actually its not their fault, because the question is why you let your domain expired, cause they already gave 30day + 24day warning, I am sure almost everyday you will got email from Go dad! before your domain go to auction, so the qeustion is why you bid your domain, why not renewal from the first place ? to be honest I am not fan godaddy, Its just make a question from, why someone bid their own domain! that’s weird I guess
To me something even worst happen. I backed order a domain that never went to action wen it expired. One day received a e-mail from another company to sell it as a prime domain, but imagine, the reply e-mail was a godaddy.com official e-mail. IT MADE ME WONDER IF GODADDY IS JUST A SCAM?