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Major shakeup: Tucows sending expired domain names to GoDaddy Auctions

Tucows shifts expired domain inventory to GoDaddy.

In a major shakeup in the expired domain name market, GoDaddy Auctions has begun auctioning off Tucows’ expired domain name inventory.

This is the first time GoDaddy has sold a third-party registrar’s expired domain name inventory.

I reached out to GoDaddy after noticing some of the inventory on GoDaddy today. Paul Nicks, VP of Aftermarket, issued this statement to Domain Name Wire:

We can confirm that GoDaddy has launched a new product line to assist partner registrars to monetize their expiring domain feed using our GoDaddy Auctions platform. We launched today with one partner and will continue to add new partners as we expand the program. We are very excited about this as it allows more choice for our domain investors that use GoDaddy Auctions and provides another choice for registrars as well. Any registrar interested in joining our new expiry platform should contact Bob Mountain bmountain (at) godaddy.com, VP of Business Development for our Aftermarket.

I also reached out to Tucows this afternoon, in part to see if they are sending all or just part of their inventory to GoDaddy. I have not heard back as of the time of posting.

Tucows had been sending its expired domain name inventory to SnapNames, which is now a Web.com company. Before that, it partnered with NameJet.

While a major blow to SnapNames, this also could be bad news for NameJet (a 50/50 partnership between Rightside and Web.com). Tucows clearly forecasts better revenue with GoDaddy, which means other registrars might soon defect from the two dominant expired domain name services.

This is despite the auctions on GoDaddy starting at $12 (plus renewal fees) compared to $69 or $79 on SnapNames.

To be clear, this inventory is direct-transfer inventory that is sold before it goes through the entire deletion cycle. Domain names that make it to pending delete can be picked up by any expired domain name service.

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  1. JZ says

    so these domains will appear in godaddy auctions just as any expired godaddy domain?

    i’ve been using snapnames to backorder tucows domains and i won’t be using godaddy auctions to do so as i don’t care for the open auction platform.

  2. Drewbert says

    Registrars taken possession of domain names prior to deletion should have never been allowed to happen.

    Another epic fail from ICANN

    I just don’t understand how the US DoC hasn’t cottoned onto this anti-competitive anti-consumer behaviour and taken action.

    • Samit says

      Yeah, I don’t get how this is even legal. Taking possession of a domain before it expires is highly unethical, if not downright illegal.

      • Joseph Peterson says

        @Samit,

        They’re not “taking possession of a domain before it expires”. Between expiration and deletion, there is a long period – roughly 2 months – during which the previous registrant has the option to renew the domain but (for whatever reason) doesn’t.

        Suppose you rent an apartment together with a room mate, but your room mate decides to vacate and stop paying. If you can’t find a new room mate, you yourself will be forced to leave. Naturally you’ll consider advertising for a new room mate to take over the gap in your lease.

        Same thing here. Registrars and registrants (i.e. domain owners) are in a room-mate relationship, and the registry is the landlord. When a registrar loses a customer who has been paying for a domain, they try to keep the domain active by finding a new buyer who will take possession of it. The new registrant pays the yearly fee just as a new occupant would pay the monthly rent.

        This is not unethical. And it’s certainly not illegal.

        • Drewbert says

          That’s a shocking analogy on so many levels.

          Why do Registrars exist? Because it was realised a long time ago that being a Registry is a monopoly, and Registrars were inserted between Registries and Registrants to add some pricing competition to the process.

          It certainly worked, didn’t it, considering the base price was US$35/year at the start.

          If Registrars take ownership of domain names after expiry instead of returning them to the freely available domain pool, competition is eliminated. Consumers cannot chose the Registrar, they are forced to use a certain Registrar and play whatever game the Registrar decides they have to play. Corruption is rife. Backdoor deals, etc.

          With the large increase of gTLD’s (and a move to thick registries) there could even be an argument to do away with Registrars entirely, because they’re not actually adding any value, they’re destroying consumer value by increasing costs. And they certainly don’t give a shit about their customers.

          • Joseph Peterson says

            @Drewbert,

            You’re mixing up 2 different scenarios:

            1. Registrar takes ownership of expired domains. In that case, the registrar IS the registrant and pays to maintain the domain in the future.

            2. Registrar auctions off the expired domains, returning them to public pool of available options.

            Although you bring up #1, what’s under discussion here is only #2.

          • Joseph Peterson says

            @Drewbert,

            It’s also wrong to say:

            “Consumers cannot chose the Registrar, they are forced to use a certain Registrar and play whatever game the Registrar decides they have to play.”

            If I buy a domain in a GoDaddy auction, yes, it’s true that the domain will be registered at GoDaddy initially. But I’m free to transfer it away later on.

            This is exactly the same process as if I’d purchased the domain from its prior owner. He’d push the domain to my GoDaddy account typically. And then I’d have the option to transfer it away later.

            Really, there’s nothing to protest here. Save your energy for actual corruption. Public expiry auctions are your friend not your enemy.

  3. Joseph Peterson says

    GoDaddy Auctions now has a banner reading:

    “100,000 expiry domain names just for you!
    We’ve partnered with top registrars to bring you more domain name choices each and every month.”

    It’s an interesting change, to be sure. Personally, I’m not too excited about rewriting my algorithms to account for this. But that’s the way the cookie crumbles.

  4. Eric Lyon says

    Very interesting. Godaddy is setting itself up to dominate the industry with status of “King Pin” it appears. I’m looking forward to see how all this pans out and how many more companies will be sending their expiring domains to Godaddy for auction. Good job at securing that contract Godaddy!

  5. Bill Sweetman says

    Smart play by both companies. Some of the benefits to GoDaddy are that it increases their DUM (domains under management) for the domains that are sold and presumably the volume of domains they are parking since those tens of thousands of Tucows expired domains are also parked during the Grace period. Tucows was already selling a lot of portfolio domains via GoDaddy (a deal I proudly brokered during my time at Tucows) so this is a natural extension to that positive relationship. Congrats to all involved!

  6. todd says

    Since they are selling other companies inventory will the registration be under the old company or Godaddy after the auction ends?

    • Rubens Kuhl says

      Don’t know about GDA, but at least SnapNames keeps registrar drops at the same registrar they previously were, they do not transfers those domains to Web.com. Bought one these days.

  7. Bob Mountain says

    Hey Todd, all expiring domains purchased on GoDaddy Auctions including those from other registrars will be registered in your GoDaddy account.

  8. Nick says

    Surprised to see people complaining when the price went from $79 to $12. I’m happy about this move.

  9. Drewbert says

    Joseph Peterson says

    @Drewbert,

    You’re mixing up 2 different scenarios:

    1. Registrar takes ownership of expired domains. In that case, the registrar IS the registrant and pays to maintain the domain in the future.

    2. Registrar auctions off the expired domains, returning them to public pool of available options.

    Although you bring up #1, what’s under discussion here is only #2.

    ######

    Show me what legal authority allows the Registrar (as agent) to auction off something they don’t own, and pocket the proceeds?

    • Joseph Peterson says

      @Drewbert,

      The same authority that allows the registrar to sell unregistered domains (which they don’t own) in the first place. Or preorders for unreleased nTLD domains.

      There too the registrar pockets the price difference: registrant price – wholesale registry price. That’s what registrars do.

      • Drewbert says

        Registrars are agents.

        Agents who act on their own behalf in other industries are severely punished.

        Not here, obviously.

  10. Drewbert says

    @Drewbert,

    It’s also wrong to say:

    “Consumers cannot chose the Registrar, they are forced to use a certain Registrar and play whatever game the Registrar decides they have to play.”

    If I buy a domain in a GoDaddy auction, yes, it’s true that the domain will be registered at GoDaddy initially. But I’m free to transfer it away later on.

    #######

    Key phrase: “later on”.

    You are FORCED to use Godaddy as original registrar, due to the domain name being hijacked prior to deletion.

    This is as anti-competitive as it gets.

    • Joseph Peterson says

      @Drewbert,

      No, you are not forced to do anything.

      People who WANT to buy a domain and are satisfied to keep it at GoDaddy initially may choose to do so. That’s not anti-competitive. It’s simply a reflection of where the domain is currently registered.

      If nobody buys the domain while it’s at GoDaddy, then they can place backorders with various drop-catchers. Even then, the drop-catchers have arrangements to keep the domain at some registrar or other initially.

      Not sure why you’re throwing a fit over something so benign.

      • Drewbert says

        You’re missing the whole point.

        Domain names are unique objects. A unique object which is supposed to be deleted (cease to exist) when the leasor stops paying the lease.

        Registrars are agents placed between leasee and leasor to inject competition into the marketplace.

        If Godaddy or anyone else withhold a domain from deletion they ARE forcing someone to register a domain through the rather than through ANY ONE of the thousands of ICANN accredited Registrars who would have been able to act as agent if the domain had been deleted as was intended by the system when it was devised.

        Registrars like Godaddy and Tucows have done an
        end-run around the domain registration system, destroying the competitive aspects of it. Registrants are paying for this through their wallets.

        Registrants cannot do a thing about it because they have no real voice in the ICANN process (even after all these years) and the industry is full of enablers who are getting their pockets stuffed with cash from the Registrars etc etc. ICANN are oblivious and too busy feathering their nest.

        To state that the destruction of competition in the Registry System is benign is mind-boggling.

        • Nick says

          What you are saying it true, but I am grateful for it. If it wasn’t for a low price auction I would never be able to get any domain I want. All these expensive drop catching services would get them all.

        • Andrew Allemann says

          @Drewbert, even if a domain name goes all the way to deletion, you don’t really get to pick which registrar to register it with. It will be picked up by one of the large drop catching services immediately upon deletion, so you’ll have to keep it at whatever registrar they catch it with for at least 60 days.

          • Drewbert says

            No. That’s the whole point. It MAY be picked up. But you might also register it through the Registrar_of_your_choice, the way it was originally designed to work. At least with true deletion, you have a choice.

            But now we’re getting into a whole different argument – Registrars that only really exist on paper to increase the number of Registry connections run by the drop catching companies – another area where ICANN failed to take action.

            That could be easily corrected as well (or at least the playing field leveled a bit), but ICANN is following the money as per usual instead of protecting consumers.

          • Andrew Allemann says

            Would it really make a difference?

            Domain good enough that someone buys it during direct transfer (before deletion): would have been picked up by dropcatching registrar at deletion.

            Domain not good enough that someone buys it during direct transfer: either picked up by dropcatching registrar or becomes available at registrar of your choice.

          • Drewbert says

            It would make a difference to competition and consumer choice.

            The way things are going, in the end Godadddy will be the only Registrar left. That’s going to be good for Registrants. Not.

            I can’t believe how you guys can’t see how wrong this whole un-level playing field is.

          • Joseph Peterson says

            @Drewbert,

            You’ve got this backwards.

            A public auction where anybody can bid or drop catchers where anybody can place a backorder – those models are what give us competition and consumer choice.

            What happens after expiry? Either (A) domain ownership is reassigned based on an auction / backorder process where everybody can participate on an equal footing; or (B) the domain is deleted without an auction, without backorders, and whoever pounces on it first gets it based purely on TIMING.

            Is that what you call consumer choice? In that case, please create a parallel universe where auctions and backorders are prohibited. You’ll be happy there. The rest of us will stay in this universe where auctions and backorders give us a fair chance.

  11. SV says

    I just purchased my first GD auction domain from one of their new partners, TuCows. Guess what? I got charged $32.42 in sales tax for a winning bid under $400. So it seems they are now charging sales tax on the bid amount vs just the renewal fee? I am kind of lost with this so I emailed them. Not happy about it.

  12. Tony says

    If I put a GoDaddy backorder on a “pending delete” domain and GoDaddy manages to catch it, will they auction it or do I get it? (Assuming I am the only person who backorders it with GoDaddy.)

    I’m using SnapNames but it will save me money if GoDaddy catches the domain, but not if it then goes to auction!!

    • George says

      My experience with GoDaddy backorders indicates, first of all, that GoDaddy is only able to “catch” pending deletes if the domain is already registered with GoDaddy (or Tucows, perhaps, now). In other words, destined to end up in GoDaddy auction (while still in its redemption period with the current registrant).

      But to answer your question, I had a backorder on a GoDaddy-registered domain, and they still auctioned it – however, they did apply my backorder fee as an opening bid in the auction. Only an opening bid – it was entirely left to me as to whether to increase my bid so as to address the likelihood of being outbid by someone else during the auction.

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