Dutch auction will start at higher prices to deter closeout sniping.
GoDaddy is changing its closeout auction pricing structure in a move that will upset some domain investors and make others happy.
When a domain name on GoDaddy’s expired auction platform doesn’t sell by the end date, it moves to closeouts. Closeouts follow a Dutch auction format in which the domain is $11 (plus renewal) on the first day and decreases by one dollar per day to $5. The domain proceeds to deletion if no one buys it by the final day.
As expired domain auctions have become more popular, bidders have refrained from bidding on domains with no other bids at GoDaddy Auctions and hoped to snap them up the moment they went into closeout. This resulted in a sort of closeout drop catching process similar to when drop catching services ping the registry when domains delete.
People with access to GoDaddy’s legacy API have been able to take advantage of this opportunity, but bidders without API access and computing power/development resources have been left out. Smaller domain investors, in particular, have felt disadvantaged.
The new pricing structure should give domain investors without special access a better opportunity to get domains in closeouts. The new pricing (effective February 1) will be:
Day 1: $50
Day 2: $40
Day 3: $30
Day 4: $11
Day 5: $5
It may seem counterintuitive that the closeouts start at more than the starting bid price of regular auctions, but the reality is that if you place an $11 bid on GoDaddy Auctions, you’re likely to see the price quickly soar above $50.
It will be interesting to see how this changes behavior.
This looks to be a more fair set of procedures. When does it go into effect? Maybe it already has.
Small domain investors that chase these better get ready to have their budgets ready implode with at least 300-400% jump in expenses. Get ready for less domain investors overall.
Feb 1.
How is it fair hugenames will still snipe at $50, they spend millions per month they win everything
Kill hugenames and others API access they have ruined godaddy auctions, we are just peons there to hold the bids for them to come in, and snipe.
It’s a monopoly
You think they will not be able to pay $50-60 per name versus a smaller investor with a few hundred or maybe 1000/domains? Who goes bankrupt first? Won’t be the large players…..
It’s just a money-grab to pay for the Poynt acquisition, nothing more.
Pure cash grab. Just watch the API warriors snap up any domains with any hint of quality at the $50 price point just as quickly as they snapped them up at $11.
Guess we know who’s pocket the “deferred cash” are coming out of eh? Timing is everything right?
Huge Domains, Mike Mann and others will be paying for it. Solid move.
GoDaddy Inc. (NYSE: GDDY), the company that empowers everyday entrepreneurs, today announced it has entered into a definitive agreement to acquire Poynt.
Under the terms of the agreement, GoDaddy will pay $320 million in cash at closing and $45 million in deferred cash payments subject to certain performance and employment conditions over three years. The transaction is expected to close in the first quarter of 2021
I have to come clean and say that I suggested this idea publicly in 2018:
https://domainnamewire.com/2018/04/23/a-simple-way-to-make-godaddy-closeout-auctions-more-fair/
The thinking is it would make it more fair. I still think that’s the case…IF it changes behavior of the major buyers and gives smaller buyers more opportunity. I’m not sure if $50 will be enough to change behavior. We’ll have to see.
At the time, Paul Nicks commented that your proposal would be a price increase. So this seems to be a price increase at Godaddy, not a new way of doing things.
Btw, anyone remember when the lowest tier of Godaddy closeouts was $1?
Is funny to read the comments that are angry and this is a “money grab” . D’uh, of course it is why are you surprised.
GoDaddy is a business and their business is to make money , the more they take from your business and the more they put into their own pocket is their fiduciary duty to their shareholders.
As a domain investor , you are seeking your maximum return and would not hesitate to take as much money from the buyer as you possibly can , why do you expect GoDaddy to act any different.
Yes, of course it is, and people who think like you need a huge reality check.
The duty to shareholders includes not acting in ways that ALIENATE customers when one is trying to extract as much cash from people as possible.
And I can assure, the naked ugliness of GoDaddy in that regard has been so evident and so alienating for so many years now that is has cost them this early customer in a really huge way, no doubt many others.
Look up phrases like SHORT SIGHTED and LACKING VISION.
Fair and expected and perfectly understandable efforts to make profit are one thing; beyond extreme money grabbing and virtual shakedowns in a myriad of big and small ways is quite another.
Let’s take the cost of DBP alone as not even one of the worst examples – give me a break.
I would have gladly spent FAR MORE MONEY at GoDaddy in the last 5 to 10 years had it not been for the never ending snowball of that. Anyone get it? Apparently not GoDaddy, and happy to use better competition except on the rare occasion one finds oneself dealing with GoDaddy and its duty to shareholders.
I’m sure the private equity folks behind the scenes are doing just fine though.
Godaddy has unchecked market power in this space and is using it to extract money from its customers/the marketplace through higher prices.
This is a blunt exercise of that unrivaled market power.
Individual domainers do not have that type of power.
If you believe they have unchecked market power , there are mechanisms in place in the US to file a complaint and have it reviewed and then possibly adjudicated
While comments can be a great place to vent , nothing going to happen until it is brought to regulators attention and people will just have to take it
Oh you think so, ay Mo? That simple, ay? That’s right up there with “don’t like it, make your own platform,” even worse. You obviously haven’t been paying attention to what’s really been going on in this country the last few decades. But I’ll give you a hint:
“The Prospect and The Intercept have learned that Renata Hesse, a former Obama Justice Department official who then went on to work for Google and Amazon, is a leading contender to head up the DoJ Antitrust Division.” – Someone on Twitter I’ve never heard of today
Figure it out.
I need a diagram here, how does this help the frugal investor again? If they were sniping at $11, what stops them from sniping at $50? If you bid at the auction, the market just runs it up. It appears to just decrease the availability of the less expensive domains with any quality at the lower prices.
Changing the pricing like that is bad, but sadly not so shocking, and wouldn’t be as bad without the spin.
Trying to sell it and spin it as being for the sake of the little guy, however, is beyond disgrace.
Excellent move which should (time will tell, and you can be sure GoD will be closely monitoring) better level the playing field. Only change I’d suggest is to start at a higher price; say $99.
Good for pending delete hunters. More will get thru. Closeout pricing is very elastic.
Does Godaddy negotiate discounts/rebates for high-volume customers such as Huge Domains? If so, they might still pay the old prices after the change and only retail closeout auction customers (i.e. everyone else) will pay the new higher prices. Just saying.
They have been API sniping the best closeouts for years, you think they didn’t consult them first. Before they left the backdoor open for them with the backorder loophole, so what is it this time?
Domains are dead.
No comments from Joe Styler at all after 22 comments.
Seems his Godaddy team is excited about this new initiative of exploiting medium/small domainers.
Hugedomains and the bigger players will benefit and wipeout the closeouts!!!!
I interviewed Paul Nicks for this story but didn’t end up quoting him directly. One thing he mentioned is that they chose the $50 start price, in part, because they wanted to keep it below the competition’s standard price.
As far as what HugeDomains will do (continue to suck everything up on the first day or wait for subsequent days), I think we’ll see them test a few things. It’s worth noting that on its own platform it lets lots of domains go to domainers for under $50. We might see them not change their strategy at first, but they’re smart people. They’ll surely test what happens if they wait until the second and third day, and prime their API to pick up things when they drop to $11.
It must be nice to be the registrar, profiting off other people’s efforts.
These registrars act like it is their God given right to insert themselves as the middle men and make profits on “pre-release” domains.
They did nothing but be the registrar. They did not come up with the idea, they did not registrar the domain, they did not pay renewals. It is pretty unreasonable in my view that they are the ones keeping all the profits.
I have almost my entire portfolio at GoDaddy, but what I consider their greedy moves lately are concerning to me. This includes their high retail registration rates, doubling the cost of DDC, doubling the cost of buy service, now this.
Brad
Epik and Dynadot is what we use Brad.
A lot of people simply won’t have the budget to purchase and speculate on the same number and quality of domains from the closeouts that they usually would.
A lot more is going to be dropped, a lot less renewal fees to be collected, a lot of business moving/backordering/registering elsewhere.
That doesn’t make sense to me. You can still buy them for $11 or $5 a few days later. The only people this will negatively impact are the people using the API to snap domains up the moment they go to closeout. It is nearly impossible to buy a decent domain on the first day for $11.
“It is nearly impossible to buy a decent domain on the first day for $11.”
Not true at all. Plenty of “decent domains” become available after an expired auction closes without a bid, including ones that get missed by the privileged API users black hole. Domainers don’t always know what a “decent domain” is because they are domainers and not also end users with a broader perspective. I wouldn’t even have commented here if this were not so.
“The only people this will negatively impact are the people using the API to snap domains up the moment they go to closeout.”
Got it all figured out, ay Andrew? Not so at all either. It will negatively impact those for whom it is worth it to take a shot at $11 or less, but for whom min. $50 can be a more serious issue especially over time and many domains. And people have already had years and years to know this is so. Their choice becomes either pay the $50 now or risk the name will get noticed and someone else gets it if they wait.
You appear to be in denial. This is not rocket science and it’s plainly just another cash grab by GoDaddy for their precious private equity shareholders. After at least the third ones, extra yachts, mansions and other luxury properties and assets don’t exactly grow on trees. And some of them may not even have their first private jet yet, either.
If they really wanted to do something for the little guy and the next Googles, Apples and Facebooks of the world who might still be working from their bedroom or garage, there’s no rocket science here either. Just end the “unfair advantage” of those with special access to snipe ahead of others and level the playing field. That’s called a “no-brainer.”
It makes the logistics of buying closeout domains much harder. Instead of watching what goes into closeout you have to wait x amount of days…uh which day is 11 bucks? it makes it confusing and convoluted. As someone who buys closeout domains every single day of the year, I think my days are done. Time to find another method of getting domains “cheap”. at 50 bucks (plus reg fee!), its not so much worth the risk of buying “second hand” domains that didn’t sell at auction. 20 bucks for a domain made the risk make much more sense.
also what will be left at 11 bucks? who knows. could be something, could be nothing.
“The new pricing structure should give domain investors without special access a better opportunity to get domains in closeouts.” Sorry but I call BS. The big API buyers can still snipe it at $50. And given there huge budgets because of their high volume sales the price increase is less of a big deal for them than for a smaller individual investor. This is nothing more than a cash grab by GD that dosen’t do a thing for us but take more of our money!
The whole thing is a scam really, I’m really surprised the SEC or Attorney General hasn’t stepped in here. (Not that that would be a good or bad thing). I mean there’s like to transparency, in fact I often think that GoDaddy is bidding on the domains themselves because it is pure profit for them and in their best interest.
Six months forward, any change in the “behaviour”? Strangely, one can buy the expired names at the auction for $12. Then price goes to $50, $40, $30, $11, $5. Do not see much logic in there.
In fact, we also use godaddy to find suitable domains for our clients’ websites. But these back-to-back website domain auctions seem a bit confusing. We get it, but it seems confusing for customers who want to build a website. Thanks for the explanation.