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  • Rick Latona Speaks His Mind About Domain Auction

    1. BY - Apr 05, 2009
    2. Domain Sales
    3. 39 Comments

    Latona explains what went wrong in live domain auction.

    Rick Latona’s adult domain name auction at The Phoenix Forum didn’t go as well as expected. In an e-mail interview with Domain Name Wire, Latona says what went wrong and his take on live domain auctions at non-domainer events.

    1. How do you think the results were? What were you shooting for?

    Latona: We think the results were terrible and completely unacceptable. I take full responsibility and know that the buck stops with me. For everyone that had a name sell in the live auction for less than $500 I am going to give them $300 out of my own pocket to help ease the pain.

    We had much higher hopes to say the least. We really had thought we had the right kind of inventory, the right software, the right audience and the right financing options but as you’ll read below, not all of that was true.

    On the audience front, we’ve learned over the weekend that the adult business is in worse shape than we thought. We had already known that they were reeling in pain from so many free tube sights out there but apparently in the last couple of months (I’m told since October) revenue has fallen off a cliff for most of them. The reason, I’m told, is that the IPSPs or Internet Payment Service Providers, whom process credit cards for adult sites, have doubled the amount of credit card transactions they aren’t accepting. I suppose due to bank pressures and non-paying card holders suffering from the economy that charge back ratios are at an all time high.

    2. There was an active bidder in the auction, Vertigogo, which is your handle at Afternic as well. Were you bidding in the auction?

    Latona: Yes and no. They were house bids, not shill bids. I had just returned from the Bahamas and I was unable to catch my flight to Phoenix in time for the auction. I rushed to my office and got online just like any other surfer would and watched the event. I was hustling to get everyone I knew on instant messenger and over the phone to solicit bids since the names were going for so cheap. I also had multiple people who couldn’t get the system to work but were watching it on domaining.com and telling me what they wanted to bid so I was placing the bids for them.

    Here’s the worst part. Proxibid sucks and I’ll never use them again. While I hate the way it turned out, I’m happy that I was able to experience first person the flaws in the system. It was very hard to follow the auction and I myself couldn’t even get it to work until the first 4 lots had already closed.

    One of the biggest problems was that I couldn’t enter a bid. If I clicked on bid I couldn’t bid more unless I was outbid. If you were watching you may have noticed a $300,000 bid on CamGirls.com. I had actually been told a $450,000 bid by one of my buyers but I was unable to enter it! My own auctioneer was only asking for $300,000 so that was all that I could bid.

    When webcam.com came up I had a buyer willing to pay $750,000 for it. I can’t remember what I bid for them but it was far less than that. I was screaming to myself in my office that I couldn’t enter a $750,000 bid because I knew David (my auction manager) had the seller on the phone and I was unable to make sure he knew there was a $750k bid on the table. I was furious to say the least. All I could do was watch my own auctioneer say 1, 2, 3 pass. What a miserable experience that was!

    On at least two other occasions I had people willing to pay reserve price on one of the cheaper names but I was unable to buy it at that price because on proxibid’s system I could only bid what the auctioneer was asking for which was less than the reserve. This is a big lesson learned and the hole will be plugged in our next auction.

    We will be going with new software and the next one and starting the bids at reserve.

    To any haters out there, I use Kabonga or Vertigogo as my username at all registrars and auction companies. Most players know this. Clearly I would have chosen something else if it was for another reason. They were house bids for absentee bidders. That I know well. I was just frantically trying to solicit bids for my sellers however possible to get something going for my guys in Phoenix.

    3. Do you plan to do more adult events in the future?

    Latona: No, I do not. That isn’t to say we are going to ignore the market. I’ll elaborate more in the next question but we’ve already told the Phoenix Forum we won’t be there next year.

    4. What do you think the key to success is for doing domain auctions at non-domainer events?

    Latona: I think the key is to not do them. It is too risky for our valued sellers. No reserve names end up selling at fire-sale prices because the audience simply doesn’t recognize the value.

    Here’s what we are going to be doing. We will be quadrupling our vertical brokering efforts. For the same amount of money that we lost in this auction I could of purchased a 2-page magazine spread in X-Biz, the industry’s largest trade publication and had it run for a full year! I’m going to do it. For everyone that has trusted me to market their names, I’m going to put the names in the ad and drum up sales at high-returns the old fashion way, with hard work and advertising.

    For those of your readers that follow my newsletter they know I purchased a full page ad in Black Belt magazine recently just to promote our portfolio of martial arts related names. I have someone in my office full-time now assembling a database of top trade magazines in various markets and ad rates at each of them.

    We will be doing much more of this. If the audience isn’t full of domainers, I believe in my heart – better late than never – that the best way to approach the sales is to put buy-it-now prices on the names and court the buyers. Between utilizing my call center in the Philippines and a strong trade magazine ad campaign, my current thought is that this new approach is the best approach. Wish me luck because I’m taking a big financial risk on this and if it works it’ll benefit us all.

39 Comments
  • The closing paragraph is all the juice; something that Bido needs to do as well.

  • I’d still say congrat’s…..you did fine on some of the auctions.

    I’ll also say you’ve done a lot for the industry by making the outside aware. I just saw your ad in Internet Retailer. That is probably getting some developers thinking for sure. They are not used to thinking domains are important. :)

    Good luck.

  • Congrats to Rick for being refreshingly honest – quite a difference from when other auctions do badly. And props for having the guts to try out new things – not everything is going to work.

    Are the results of the auction posted anywhere?

  • Is the extended auction going to happen.

  • Tim Davids says:

    April 5, 2009 at 9:18 pm

    Kudos for laying out there for everyone to see Rick…the efforts you make with all your advertising help everyone of us.

    BIG wow giving 300 out of pocket to peeps you think got too low amounts!

  • Acro,

    Appreciate the feedback, we are working on many interesting things here, including getting the word out to end users.

    I didn’t pay much attention to the auction as we are not much into adult domains. The Proxibid platform looked weak since I first saw it few months ago. Hopefully the next one Rick chooses will do a better job.

    As for the auction and audience, it is all trial and error, we’re all learning as we go. Every failed attempt is a learning opportunity.

    Cheers

    Sahar

  • It was quite the mess. Online bidders really got the shaft as we could not only not up our bid but the auctioneer often didn’t give time to respond and/or the audio would bug out and you’d have no idea what was going on. I had two auctions that I wanted to bid higher on that I couldn’t get in or couldn’t raise.

    But I don’t think all the blame is on the tech – I had questions sent in to two different email addresses about the one lot I did win and one I wanted to offer the reserve for but couldn’t. I haven’t heard anything back. I hate being completely out of touch like this so Monday I’ll be making phone calls I guess.

    I don’t blame Rick directly as he wasn’t the one who messed up the audio or anything like that but I’m glad he’s taking it seriously and is going to improve the process in the future… though I kinda liked the no reserves going at fire sale prices. If only I had more to spend! Stupid taxes :(

  • Great interview Andrew.

    Rick, thanks for being honest and acknowledging the auction was flawed. It certainly was not the best auction I’ve watched. Because it is you, I’ll be watching the next one. Anyone else would have lost their business on this.

  • oh, and while it’s great Rick is compensating sellers, some of those names were not worth the reg fee IMO. There were some admittedly great names too, but when you put up a 3 word name like some of those listed, it kills the “atmosphere”

    I would have preferred an auction with several of the worst names taken out and more time spent on each of the higher quality names to hype it up and really get the “non domainer” buyers into it. It’s kinda like the art show auctions on cruise ships – you’ve gotta explain who Picasso was and what you’re investing in to make people open their wallets. Hope that helps.

  • KD, yes, the extended auction is most certainly still going to happen.

  • Actually, I’ve just been told that the extended auction is live now. I’ll be announcing it tomorrow.

  • Thanks Rick I look forward to it.

  • I did not know about the auction at all.

  • Rick goes on and on about how soft the adult market is. The problem is that he didn’t have any quality names for sale. The few names he had like xxx.com had an insane reserve and certainly were not marketed well. (I am always looking for 6 figure names adult names, and I was never informed of this auction)

    Coed.com seems like it’s listed in every live auction since the beginning of time, and nobody ever meets the reserve.

    And the techincal packages and bundled names for sale were a mess. (Nobody could figure out what the true value of any package or how good the company is)

    Rick’s after thought about how soft the adult domain market sounds like sour grapes.. This was amatuer hour at best.

  • Wow, at first I laughed. Not going to get me on an Aprils Fools joke. But the date shows the 5th.

    Reading that is painful. Bidders not being able to bid. Is there something in the contract to enable a re-auction like what happened with toys.com?

    I don’t know, I’m just throwing ideas out.

  • Hello Rick if the auction is live now where do I go check it out.Thanks.

  • I myself had a names in the auction and it was a shame to see one sell below domainer resale prices but thats life.

    I dont blame Rick for this and I think these things happen – We need to move on and learn from our lessons and I still have 100% Faith in Rick Latona and has Team.

    Regards,

    Robbie

  • Sorry to hear about the problems Rick. Better luck next time. Let us know how your trade publication marketing goes, wish you the best of luck.

  • Dluzional says:

    April 6, 2009 at 5:56 am

    Thanks Rick for being up front, and for the explanation, it will cement your reptuation even futher for being up front, and on the level, and not being afraid of putting yourself out there.

    My feed was delayed, so could just sit back and watch…

    I have a query though, ….here you have an auction of Domain names from Domain owners, basically selling to Domain owners….sort of similar to just regurgitating the names isn’t it? passing from one to the other within a very small group of domainers?

    It’s like one of the big three auto makers, selling off inventory to corner store dealers.

    Wouldn’t it be better to campaign the importance of a domain name to people that really don’t understand it? Create some ad campaign for non domainers, showing them why it’s important for presence, instead of recycling the names to people that are already established?

    Really… there’s relatively few people that can afford to play in that sort of market.

  • I know everyone thinks that getting domains in front of end users is the holy grail of a domain sale. While that is certainly true in some cases, in most cases you have to understand that most end users still don’t appreciated a great generic domain or even a city+industry.com domain that IS EXACTLY their business.

    You always get the most money for a domain when the buyer comes to you OR if it’s a great domain with a reasonable reserve in a high profile auction.

    So…

    1. Limit auctions to have only GREAT domains with low reserves. No likes to waste time with crappy domains or high reserves. It’s called MARKET PRICE. Just because the domain owner thinks their domain should have a $100k reserve, it doesn’t mean that Rick, TRAFFIC, Bido or other respected auctions should have to force that reserve on the audience. The audience IS the market and they set the market price.

    2. To see my selling to end users process, go to http://SellingToEndUsers.com . If anyone has any tips they would like to add or comments, send me an email from there and let’s see if we can all benefit from the process.

  • I definitely wish you luck and I thought it was a real “stand up” thing to do to write what you did here. Very refreshing to see such a critique. And as people say, all of you who handle auctions are learning what works and what doesn’t as you go along and everybody will benefit from this over time.

  • D, it is sad that you didn’t know about the auction. Neither this website, or the other major domain news sites reported on it. I guess they thought domainers couldn’t handle seeing names like xxx.com. That is sad indeed. It was only news to them after the fact when we only did 120k at the live auction.

  • Packers, thanks for your comments. I will take them into serious consideration.

  • “End user pricing” is an ambiguous term which means nothing. While it’s true that an “end user” often pays a higher price than a “domainer”, this is more often NOT the case due to the end user’s relative lack of awareness of domain name valuation (e.g. actual prices realized in past sales/auctions).

    My suggestion to Rick and others who deliver domain name auctions: EDUCATE THE MARKET.

    We need to better educate our market about the product we are selling/auctioning — domain names. Most people who are not in this business, who are NOT “domainers”, have little or no idea what domains actually sell for, so I believe they are simply not willing to pay what you and I expect the domains SHOULD sell for.

    If more people in our target market had more of an awareness of past domain sales information, I believe more of our domains would likely sell for higher prices, especially to those buyers we refer to as “end users”.

  • Looks like the extended auction is up on Proxibid.com and I hope that these domains do well unlike the other poor souls who had their domains sell for virtually nothing.

    A lot of domainers entrusted their valuable domains to Rick because of his reputation in this industry and the fact that he was in charge of the auction. What will really upset them is the fact that Rick wasn’t even at Phoenix. Unforeseen circumstances and all that but something this big needs to be planned better the next time round.

    It is magnanimous of Rick to come out and say that he will make it up to all those who got shafted, just hope it wasn’t just said in the heat of the moment.

  • As a competitor of Proxibid I feel compelled to defend their unfair treatment here. With the scant information provided here is my view from the perspective of nearly 30 yrs and 7000 auction events.

    It is illeagal and unethical to let bidders bid against themselves. All online auction software must prevent this.It is the responsibility of the auctioneer to manage and communicate reserves.It would be wrong for a software provider to take that controll from the auctioneer.

    Unless I misunderstand, the auctioneer in this case was Mr Latona, who did not even attend his own event. The bid caller in this case is a hired gun acting under the direction of someone who was busy in the Carribean rather than tending to business.

    Online auction webcasters are only as good as the auction companies using them. It seems very wrong to me to throw Proxibid under the bus here.

  • HT, it wasn’t said in the heat of the moment. People wil be taken care of.

    Jeff, I was with my daughter from a previous marriage that I rarely see during her Spring Break. The flight back to Atlanta was delayed and I couldn’t get on the flight to Phoenix. On hindsight, I’m glad because I was able to see flaws in the system.

    Also, I’m taking ownership of anything that went wrong but this is not over. We are still working on closing deals from interested parties and we have the extended auction starting.

    I am not conceeding defeat, mearly explaining my point of view.

  • hmm, thus domainer pay more than real people?

    It might mean that domainer aren’t better educated, but in a bubble.

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  • Dave Bhatia says:

    April 6, 2009 at 3:29 pm

    Rick,

    I had a pair of domains with no reserve . It sold for $75 . I was shocked !!!

    I am glad that you stood up like a Man and said “The buck stops here”.

    Thanks for your offer of $300. I would
    respecfully decline it. I accepted the suggestion of no reserve. So I will face the consequence.

  • The other issue that may have impacted sales was the timing of the auction. Some of the ballers at the show left already, and it was the weekend. The inventory was pretty good. The tube issue and credit crunch are tough issues to cope with for the adult domain market. Kudo’s to Rick for his efforts, notwithstanding the lite results.

  • Boratagogo says:

    April 6, 2009 at 5:50 pm

    Rick, For those of us who like to keep record of historical auction data,and the sake of transparency, would you confirm which of these was for you and which bids where for others who were unable to get through:

    Vertigogo bid on:
    Camgirls.com 300k
    Webcam.com 600k
    xxx.com $1m
    Bangedup.com $50k
    StripClubs.com Can’t recall bid amount????
    Sexshows.com $30k

    None of the those met reserve but I think I only saw vertigogo bidding

    These vertigogo won:
    Sexmuseums.com $300
    Nudiebars.com $500
    Big[edit]pornos.com $600

    ***Disclaimer*** I “think” my records are correct on the vertigogo stuff listed above but i’m not quiet sure.

  • Boratagogo,

    We have offers in excess of these amounts you mentioned and none of them are from me directly. That is except for StripClubs which sold. I was clear up to 100k on that one so had to stop when it passed it.

    Camgirls.com 300k
    Webcam.com 600k
    xxx.com $1m
    Bangedup.com $50k
    StripClubs.com Can’t recall bid amount????
    Sexshows.com $30k

    As for the others, I’ll report all of the sales when our extended auction closes on Sunday.

    The names above could still sell. I certainly hope at least one of them does. We are actively negotiating on all of them now as I type this.

    The fat lady isn’t singing yet.

  • Uh, if Proxy bid is charging top dollar then it is 80% their responsibility to ensure everything is setup, tested and working. To hold the client to the fire is stupid because they don’t know your system. And during the system they should have hotlines for trouble.
    If Proxy bid is a discount auction then I can’t blame them. I would need to look at how Proxy bid brands themselves. I could audit them, that is my job. When a client says I got hung up but this “let me see the flaws in the system” that is the #1 sign, the #1 sign!!!!! that the company didn’t do proper testing. Five companies refused my results, and didn’t pay me, and today all five are bankrupt and one has done so many illegal things to stay in business it makes me sick.

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  • Sounds like the wild west. It sounds like there were massive conflicts of interest. If Rick Latona the auctioneer was bidding at his own auction, who the heck was he representing? The sellers, who pay his commissions? The buyers, who expect a level playing field? Himself? It sounds very very shady.

  • I found all informations I was looking for

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