Move back to GoDaddy suggests that GoDaddy generates substantially more revenue per domain for registrars.
Domain name registrar Tucows has moved its expired domain name inventory back to GoDaddy Auctions, Domain Name Wire has discovered.
In September 2016, Tucows became the first third-party registrar to send its expired domain inventory to GoDaddy Auctions, switching from SnapNames. But Tucows acquired a 50% stake in competing expired domain service NameJet this year as part of its acquisition of Enom. Tucows subsequently moved its inventory to NameJet.
When Tucows moved its inventory to NameJet this year, GoDaddy VP Paul Nicks told Domain Name Wire, “…We believe Tucows saw great results and we feel confident that GoDaddy’s performance will speak for itself and that we’ll earn the opportunity to win back that business.”
That was a bold statement to make after a company moved its inventory to a platform it co-owned. But apparently, it was accurate.
The only reason I can think for Tucows to move back to GoDaddy is if the performance was indeed significantly higher.
Registrars typically evaluate expiry stream auction revenue on the basis of sell-through rate and average sales price. These two factors lead to an average amount of revenue per expired domain.
GoDaddy has a lower starting price for expired domain auctions than its rivals. Auctions begin at $12 plus a one-year renewal fee. NameJet generally charges $69.
The lower starting price appears to have two effects. First, it results in a higher sell-through rate because people buy domain names that otherwise wouldn’t sell for $69. Second, the lower starting price pulls bidders in and results in higher ending prices.
Much like an eBay auction that starts at a penny versus one that starts for $50, getting people to place an initial bid on a domain can lead to better results.
NameJet tested lowering the bid amount for Tucows domains to $39. Even at this reduced price, it seems that GoDaddy outperformed it.
GoDaddy has some other advantages. Its large customer base means there are lots of bidders. It can also promote the domains when someone searches for an expired domain on GoDaddy.com. Also, it lets people bid on domains without placing a backorder, which leads to lots of last-minute interest.
Nicks provided this statement to GoDaddy when DNW inquired this morning:
We can confirm we have added domain names from another registrar into domain name expiry auction. We think this is a great benefit to our customers, as more selection equals better results for everyone involved.
Tucows did not immediately respond to a request for comment.
This is a bigger win for GoDaddy than its original pickup of Tucows’ domains. Winning a competitor back from its own platform is a testimonial to GoDaddy’s results.
It appears that Enom domain names are still being sent to NameJet. NameJet was created as a partnership between Enom and NetworkSolutions. Even though NetworkSolutions is now part of a company that owns another expired domain service, SnapNames, it still sends its domains to NameJet. It’s likely that both registrars have a contractual obligation to continue to send their expired domains to NameJet.
Prices of auctions at Godaddy are way higher than Namejet. It’s a no brainer. People seem to just go bid crazy at Godaddy.
I find that domains I bid on rarely end for <100. If it gets two bidders, it usually ends up at $150+
Right. Domains I usually can get via $59/69 backorders at NJ etc go for $200-300 at Godaddy. It’s just crazy for mediocre names.
I wonder if the fraud happening at NJ had anything to do with it.
More registrar’s should send their expired .Com & .Net domains to GoDaddy Auctions.
Especially if Verisign eventually changes how their domains drop and are backordered.
If GoDaddy gain too much “market share” of expiring pre-release inventory it’s also risky for domainers. Who knows what kind of system tweaks GoDaddy will make, i.e. the recently highlighted watchlist-made-public example highlighted in another post here, to make bidding unfavorable for us on their platform. GoDaddy’s system is working for Huge Domains, and pending delete is dominated by Huge Domains’ 1000+ registrars. These two companies are working in concert to funnel as many domains as possible into Huge Domains portfolio. Average Joe Domainer can hardly compete anymore.
GoDaddy controlling such a large part of the pre-release inventory is inherently bad as long as they keep working against domainers in order to tweak their system to the API bidder’s bots. Rather than an “open” auction platform, they are becoming an unfair platform where the interests of the few are put above the interests of everyone else. Bots reign supreme. And regular users are not allowed API access, so it’s incredibly hard to compete when the playing field is so uneven.
After seeing how GoDaddy is planning to transform their system for the worse, I really wish Tucows would have stayed with NameJet…
I always want alternative to godaddy auctions, because godaddy sells customers domains without their notice sometimes I have lost my names when I forgot to renew and later they did not even offer to buy again.