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.