SnapNames employee bid in auctions, but the bigger news is how company is handling it.
You’ll probably read a lot today about how a SnapNames employee had been bidding on auctions for the past four years. In case you haven’t heard the story, here’s a brief recap:
-Employee opened account in another name and started bidding in 2005
-Participated in about 5% of auctions, mostly between 2005-2007
-S/He won about 1% of the auctions during this period (so about 20% of the auctions he participated in)
The employee’s actions violated SnapNames policy.
This is obviously bad news for SnapNames and Oversee.net. But how they have handled the situation shows the company’s commitment to professionalism and making things right.
It had a policy in place. First, it’s important to remember that SnapNames had a policy in place prohibiting employees from bidding in auctions, as the company told me after the GoDaddy flareup. That wasn’t the case at GoDaddy, although that has since been rectified.
After discovering the problem, SN did a full investigation. Based on material released from SnapNames, it’s clear that the company did an entire audit back to 2005 to figure out exactly which domain auctions were effected. Apparently the employee’s bidding accounted for about 1% of total SnapNames revenue. [Update: it appears that some people have speculated about the user involved for some time. Acro on DNForum even wrote back in 2006 “Some have speculated Halvarez is Snapnames, which I don’t believe.” Domain Name News has confirmed that username “Halvarez” was the associated employee.]
SnapNames released the story to its customers and media. Rather than push the issue under the rug, SnapNames sent a release to domain bloggers today informing them of the problem and what it is doing to resolve it.
The company is putting its money where its mouth is. Rather than just say “sorry”, SnapNames is going to pay –literally. The company will offer a rebate to customers who bid in auctions against the SnapNames employee, which would have caused them to pay more for the domain than if the employee had not bid. In addition to the rebate, it will pay interest.
To summarize, this is an unfortunate event for SnapNames and the domain industry. But the cleanup shows that the industry is growing up and becoming more professional. SnapNames is taking responsibility for its (employee’s) actions, and should be commended.
I also hope that other domain auction sites heed the warning and set up internal controls.