The New York post today has a story ripping Godaddy.com process of charging customers $18.99 to “backorder” an expired domain and then placing the domain into auction once it “drops”.
First we have to note that absolutely nothing new is going on that the NY Post is complaining about.
Godaddy for years has had a program were you can backorder any domain, for which is now $18.99 per domain. If the domain was not at Godaddy or one of its affiliated registrars it would simply try to get the domain along with all other drop catchers when it dropped and In my experience with little success.
If the domain was registered by Godaddy or one of their affiliated registrars, then the domain goes into Godaddy.com drop auction with the backorder serving as the first bid.
But now the mainstream media has picked up on the story and guess what?
They don’t seem to think the whole process is fair.
“”GoDaddy.com, the No. 1 domain registry company, is getting rich in part by pitting its customers against each other in bidding wars for expiring Web addresses — instead of using hefty back order fees to simply purchase soon-to-expire domain names.””
“”The site…..charges customers $18.99 to acquire existing domain names whose registrations are about to expire. But the company does not tell those customers that it could be collecting the same fee from three or four or more rivals and that it is not working solely on their behalf.”
“When I paid my $18.99 back order fee in January, I thought GoDaddy would act as my agent to go out and buy the domain name,” one disgruntled customer told The Post last week. “But what I learned was that several other customers had also paid the fee and that we would all be pitted against one another in an auction.”
“There should be clear rules,” said Eric Goldman, a law professor at the University of California at Santa Clara and an expert on cyber-law. “It certainly raises questions about what the fees are buying.”
“I certainly see the customer’s point, and we will review the way we do the [back order business],” Chris Kennedy, the director of aftermarket services at GoDaddy, said in a phone interview on Friday. “There may be a case for improving the communications in these cases.” GoDaddy’s very profitable back order policy came to light last week when the disgruntled customer, who spoke on the condition of anonymity, said he was surprised to discover the premium fee didn’t deliver any real value.”
Other aspects of GoDaddy’s backorder business have also raised eyebrows, including:
“””* Customers of GoDaddy who pay the $18.99 back order fee and lose out on the domain name auction are told they can use the fee as a credit for another purchase, but cannot get a refund. This gives GoDaddy the use of the money from thousands of customers for weeks, months or years.
“GoDaddy has set regulations that start the auction at $10, not at zero dollars. That certainly makes it appear as though GoDaddy is acting on its own behalf and not the behalf of the customer.”
“Kennedy admits GoDaddy acts on its behalf when it sets the $10 opening bid, but said it did so to allow the market to set the true value of the domain name.”
Actually what the New York Post doesn’t even point out that if you have a backorder on a Godaddy domain, as soon as the domain goes to auction, because that backorder converts to the first bid, it then shows that bid on its system, alerting more people to bid on the domain. Although I suggested and got Godaddy to remove any domain with just one bid from the “most active list”, those domains are still shown on the “ending soon” list, still making the “backorder” bid obvious to all.
Of course if the NY Post wanted to dig deeper they can find all sorts of “unfairness” in the drop auction process, even registrars that just keep the domains they want to resell them for hundreds of thousands of dollars without sharing a dime with the original registrants (their customers).
Yes once our industry practice the see the light of day by the mainstream media they find out what all of us inside the industry have known for years, unfairness is a daily part of life for domainers.
While domain blogs, including mine, often complain and bitch about the drop process and other “industry practices”, Domain Companies are going to have a lot of explaining to do once the mainstream press starts asking questions, because the answers for the most part make no logical sense and defy the concept of fairness.