Domain company Oversee.net buys expired domain leader SnapNames.
Just a few short years ago SnapNames was selling expired domains for $60 each. As it pushed for the domain wait listing service it would have been a political problem to use competitors’ auction models. It has since matched their model, auctioning off domains to the highest bidder while also forging exclusive arrangements with registrars to auction their domains. SnapNames has grown rapidly as a result and domain company Oversee.net just announced that it is acquiring the company.
Oversee.net is best known as the parent company of domain parking company DomainSponsor. It also runs mortgage lead generation site Low.com, advertising service Revenue.net, and owns a large portfolio of domain names.
Judging from SnapNames’ F.A.Q.s about the acquisition, the main concern for SnapNames’ customers is a conflict of interest. Oversee.net bids on domains at SnapNames. Now that they own the company will they have an unfair advantage?
At a simple level, yes. Oversee.net can afford to bid more on domains because it will now earn its subsidiary’s standard commission on sales. That is unavoidable and can’t be debated. But the greater concern is twofold:
1. SnapNames could divert some domains from auctions directly into Oversee’s portfolio rather than offering them to the public. Hopefully the registrars’ contracts with SnapNames prevent this.
2. Oversee.net could obtain additional intelligence about domains prior to the auctions (e.g. traffic levels). This would give the company an unfair advantage.
Oversee.net needs to build a deep firewall between its acquisition operations and SnapNames to prevent any appearance of a conflict.
Mason Cole says
Thanks for the coverage, but your speculation about unfair advantage is exactly that: speculation. It is entirely unwarranted.
As spelled out — clearly and precisely — in the FAQs to which you refer, there will be NO unfair advantage to any bidder. This always has been the case with SnapNames, and will continue to be the case, Oversee included.
ANY customer or anyone covering or interested in this industry can contact us if there’s a concern about the hypotheticals you came up with here. We’ll be glad to clarify again our very firm stance on fairness and transparency.
We don’t take those issues lightly, and neither does Oversee. We built our reputation on fairness and have no intention of letting that reputation be damaged. I hope your coverage will accurately reflect this.
Mason Cole
SnapNames.com, Inc.
Editor says
As the article clearly points out, these are only potential conflicts. Both Oversee and SnapNames know there are potential conflicts, and it\’s good that you are addressing these.
No one can argue that Oversee will not benefit from the revenue generated on any sales, including the ones they buy.
The second group of potential conflicts are just that: potential. As I mention, there needs to a firewall between Oversee and SnapNames, much like an investment bank between i-banking and research (at least now, not necessarily five years ago).
SnapNames is clearly committed to establishing this firewall, and I have know doubt you can do this. But it\’s fairand warranted to point out the ways that any acquisition could be harmful or beneficial, regardless of the track record of the companies involved.
Domainer's Gazette says
another interesting angle to consider is this:
what type of traffic data will Oversee.net now have access to, in regards to individual domains auctioning each day? Sedo and TDNAM are kind enough to provide rough estimates to us prior to auction, but snapnames shares nothing. If Oversee is granted access to this treasure trove of data, it might be more of a concern than cherry-picking, as they’ll be able to mine ‘lower-hanging-fruit’ domains, and outbid competitors to acquire (since they’ll know how many visitors land on those domains each day – and what rate typically click as well)
Adam says
As I am aware it is illegal in most states for the auction house or owners to bid on the inventory they are charged to sell. It’s called shilling.
This is actually good news for anyone involved as it eliminates oversee as a competitor in bidding.