Sedo has strict policy on domain speculation, Pool outlines rules.
[If you have arrived on this article from Slashdot, NoDaddy, etc., you may wish to see how this all started with GoDaddy.]
Many people (63 comments and counting) have commented on Domain Name Wire’s article about GoDaddy letting its employees bid on domain name auctions on its site. Several readers e-mailed requests for information on other companies’ policies. Here’s what I’ve found:
Sedo – Sedo places perhaps the most restrictions on its employees of any domain company. Kate Donahue, Director of Marketing for Sedo, explained:
Each employee (even our founders) are required to sign an agreement that they will not speculate in the domain market in any form during the term of their employment with Sedo. They must also disclose any domains which they had owned prior to their employment with Sedo. We do have one exception which allows them to purchase domains including their name, children’s or family names so that they can use them for personal sites, etc.
When I inquired if that makes it difficult to attract qualified employees, Donahue continued:
We have not seen any difficulty in hiring or retaining employees with these restrictions. Our priority is to maintain a secure and trusted marketplace and it is fairly standard for employees to sign an agreement that they will not speculate in the market in which they work. I think most applicants and employees understand the need for such agreements.
That’s an important note — that many other industries have clear rules against doing this.
Pool – Pool allows employees to bid in auctions with restrictions, Pool.com CEO Richard Schreier tells Domain Name Wire. Employees can bid on an auction by either a) making a single, upfront proxy bid that can’t be changed or b) “bidding to win”. In the latter scenario the employee can’t back out of the bidding at any point. He or she has to win the auction they enter. This prevents them from pumping up the price only to stick a customer with the bill.
Follow up on Enom – In Domain Name Wire’s article about GoDaddy, I quoted an employee of NameJet saying that its employees, as well as those of partners Network Solutions and eNom, are allowed to bid in NameJet auctions. I clearly stated to this NameJet phone representative who I was and what I was writing about, and she immediately answered my question, and added that “employees are responsible for paying just like every one else”. When prompted, she also said they do not receive a discount and get no unfair advantages. Adam Strong of Domain Name News contacted a Senior VP at eNom who said (link to source removed because no longer online.) This is not the case. I have not personally heard from Enom yet. Until then, I’m assuming that the NameJet representative knows what she’s talking about. There may be a disconnect between NameJet and Enom proper. But the Enom representative’s comments (link to source removed because no longer online) sum up what many domainers feel about this topic: “Even if controlled, that practice has bad news written all over it.”
Updated 6/24/08 2:00 PM CDT: Enom informs me that “our employees need management sign off to purchase a domain from Namejet, however, we do have a strict policy against employees competing with customers in auction. Basically, the only way an employee can purchase a domain from Namejet is if no customer(s) backorder the domain and management signs off.” This applies to Enom and NameJet; not necessarily Network Solutions.
David J Castello says
Sedo’s policy should be applauded.
Does an employee have an unfair advantage over the public? You betcha.
where are state attorney generals on this matter? While I don’t know state by state laws, i assumed that bidding on your own auctions is shill bidding and also illegal.
Sedo are total hypocrites as long as they use secret staff ‘brokers’ to acquire domains whilst having full access to the seller’s private profile/details/history etc.
Their conflict of interest in this procedure borders on criminal and would not be tolerated in a regulated financial market.
Forget the assurances of staff buying bans etc., the potential for ‘rogue’ Sedo brokers working with outside collaborators is immense, and not without precedence in other fields.
Save me the plaudits for Sedo David until they eliminate this egregious prectice.