Domain Name Wire » Expired Domains

Nelson Brady on SnapNames Scandal

Andrew Allemann — Mon, 16 Nov 2009 19:00:07 +0000

Don’t expect an explanation from Nelson Brady any time soon.

When I cover a major domain industry event, I like to get both sides of the story. So when the news about the SnapNames insider bidding scandal broke, one of my first calls was to the man allegedly at the center of the controversy, former Snapnames VP Nelson Brady.

Instead of writing about the conversation then, I wanted to wait until I had a chance to have a more in-depth discussion with Brady or his attorney. I talked to Brady’s attorney last week, and he indicated that neither he nor his client will discuss the matter at this time.

In my brief conversation with Brady the day after the news broke, he indicated two things. First, he wouldn’t implicate others in the alleged scheme [Update: A number of people have interpreted this wording to mean that he is covering for other people. I didn't have a pen and paper when I talked to Brady, so this isn't a direct quote. Essentially, I asked him if other people were involved in the alleged activity and he said no.] Second, he said there’s more to the story.

What “more to the story” means isn’t something I’m willing to speculate about.

I’m personally trying to look forward more than backward, and would like to focus on what the industry can do to make sure this sort of thing never happens again. Alas, going forward will probably require understanding what happened in the past.

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A Peek Inside the SnapNames Lawsuit

Andrew Allemann — Fri, 13 Nov 2009 01:37:20 +0000

Lawyer filed claim on behalf of brother.

Earlier today I talked to Santiago A. Cueto, the first lawyer to file a lawsuit against Snapnames for the insider bidding scandal.

He was quick to the docket because lead plaintiff Carlos A. Cueto is his brother. While other firms were trying to find a lead plaintiff, Santiago’s brother was emailing him the details.

This is an interesting case because SnapNames has already admitted wrong doing and offered to compensate victims.

“That’s not going to cut it,” said S. Cueto. “We want to clean up the industry.”

Both brothers think insider bidding is pervasive in the industry, and they may expand their investigation to other companies as well.

The lawsuit was filed in the Cuetos’ home state of Florida, which Santiago notes has strong consumer protection laws. The lawsuit, available for viewing here (pdf), charges SnapNames with violating the Florida Deceptive and Unfair Trade Practices Act and and Unjust Enrichment. The lawsuit requests damages but does not name an amount.

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SnapNames Reinstates Auction History Back to 2004

Andrew Allemann — Sun, 08 Nov 2009 01:12:58 +0000

Full auction data now available.

Responding to requests from customers to show complete auction history in order to check for auctions against bidder halvarez, Snapnames has updated the system with complete data. Company spokesperson Mason Cole wrote:

There has been quite a bit of back-and-forth on your blog and other places about access to SnapNames bidding and order history. The truncated system, which limits view to the 24 months prior to whatever date the lookup is being performed, has been in place for the past four years, since June 2005. This was not changed recently or in response to the recent announcement.

That aside, to make sure no one thinks there’s an attempt to shield data, SnapNames technical staff has adjusted the existing system so order and bid histories are available back to August 2004, when auctioning began on the SnapNames system.

In other words, the bid history has only shown 24 months since the middle of June 2005. A number of people assumed this was a recent change, perhaps because they had never tried to look up data from so long ago.

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Arrington: Apologies Shouldn’t be Conditional

Andrew Allemann — Sat, 07 Nov 2009 21:57:38 +0000

TechCrunch article questions Snap’s rebate requirements.

Given the bad taste Michael Arrington’s has in his mouth from his time in the domain name industry, he’s laying down the heat on Snapnames and its bidding scandal. Today he wrote a second article about the scandal, saying that SnapNames’ request that customers sign a waiver to get their rebate is not right.

I understand where he’s coming from, but I also see why SnapNames is requesting this. When you are part of a class action you always agree that the rebate or other compensation you get as a result is your only settlement, and waive rights to sue. Granted, this isn’t a class action and all we have is SnapNames’ story. So you might want to think about what happens if more issues come to light after you’ve signed the agreement.

I also want to clarify a couple things that Arrington discusses in his article.

1. The deletion of account history doesn’t seem to be related to the scandal. A number of people have reported that their account history at SnapNames prior to 2007 has been deleted. This is true, but old account data was archived long before this scandal. Given the events of the past week, I do think SnapNames should re-enable it. I’ve sent them a note asking for their position on it. [Update: I missed this post on DNN, which links to a forum post in which SnapNames does say it will bring back the entire account history. As I suspected, only showing two years worth of data is not a recent change. According to the post, Snap has only showed two years worth of data for the past four years.]

2. SnapNames did disclose the exact amount of revenue it gained from the nefarious bidding.

In today’s article, Arrington wrote:

SnapNames said only about 5% of total auctions were affected, but this is misleading. The top domains make up a substantial proportion of total revenue. So that 5% could easily have accounted for, say, much more than 50% of revenue. SnapNames was careful not to disclose the total dollar amounts involved, or even what percentage of overall auction revenue was affected.

In fact, they did release the actual amount of revenue, stating “The incremental revenue from the bidding represented approximately one percent of SnapNames auction revenues since 2005.”

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Poll: How SnapNames Scandal Affects You

Andrew Allemann — Thu, 05 Nov 2009 16:29:41 +0000

It’s clear that a lot of people lost trust yesterday. Here are a few poll questions to see how the Snapnames bidding scandal will change your behavior.

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll. Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

Also, if you’ve already received notice of your rebate, please leave a comment with the amount.

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Nominet Releases Goldmine of Domain Renewal Statistics

Andrew Allemann — Thu, 05 Nov 2009 15:29:29 +0000

Report provides insight into expired domain names.

Nominet, the registry for the .uk country code, has released its 2009 Domain Name Industry Report (pdf). It includes in-depth stats about domain renewal rates and the reasons people let domains expire. This data should be useful to the ICANN Working Group examining the issue of expiring domains.

As way of background, there are a couple differences between .uk and most other domains. First, registrations are for two years. Second, Nominet sends renewal reminders to customers (in addition to the registrar sending reminders).

For those people renewing their domains, Nominet found:

- 60% renewed due to a reminder from their registrar (same figure as similar research from 2007)
- 25% believe their domain names renew automatically (2007: 22%)
- 7.3% renewed after receiving reminders from Nominet (2007: 8.6%)

Fully 98.2% of those surveyed recall receiving reminders about renewing their domain name. This isn’t too surprising. After all, if Nominet was able to reach people for its study, those people likely have up-to-date contact information on their domain names. As I’ve said before, the number one reason someone neglects to renew an important domain name is because they have outdated or false whois data.

This graph explains the reasons people decided to not renew their domains:

This chart shows something we all know, but it’s still interesting: if you get someone to renew a domain once, odds are they’ll keep renewing it:

The Nominet report has lots of other renewal and registration data, and is worth reviewing.

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In SnapNames Scandal, Conspiracy Theorists Were (Sort of) Right

Andrew Allemann — Wed, 04 Nov 2009 19:01:26 +0000

Conspiracy theorists were right about Snapnames bidder.

Domain Name News has confirmed that the bidder at the center of the SnapNames employee bidding controversy used the handle “Halvarez”. Domainers have questioned Halvarez’s bidding patterns for years, as DNN discovered.

Domainers are particularly adept at online research. But a lot of times they cook up bogus conspiracy theories. Like the guy who swore NameJet was shill bidding, until I quickly pointed out that the person who kept beating him at auction was Frank Schilling.

But this time rampant speculation about Halvarez at SnapNames was actually warranted. Many people speculated that Halvarez was SnapNames, which was incorrect. But the connection was certainly there.

On December 12, 2007, DNForum member Seraphim wrote:

I believe halvarez is SnapNames, regardless of the fact that he/she bids on domains, or even wins auctions. A year ago, I could spot which domains in my drop list would not have competitive bidders, I would obviously delete these names from my account, and pick them up at reg fee once they dropped. However, for a solid 8 months now I cannot do this, as halvarez bids on every single domain that I enter into my SnapNames drop list. I could enter the shittiest name possible up for drops, and there is a 100% chance halvarez will be there. The kicker is however, if I don’t enter the name into my SnapNames auction list, you guessed it, it drops with no bids and I pick it up at reg fee. Anyone from SnapNames care to explain this phenomenon?

Other forum members also speculated about some sort of connection, but some pointed out that what Halvarez was doing didn’t require inside access to SnapNames.

Now the next question on everyone’s mind is, “shouldn’t SnapNames have discovered this earlier”?

Perhaps. Keep in mind the problem began in 2005, before Oversee.net bought SnapNames. A lot of changes have happened since then. And over the summer, Craig Snyder took over management of SnapNames and Moniker. That meant a fresh pair of eyes was looking over the books. Surely the issue of who this prolific bidder was came up then if it hadn’t before.

The SnapNames employee “stole” money from the company be refunding part of his purchases. I doubt senior management at SnapNames would let that happen. But I’m sure more will be dug up soon, so stay tuned.

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