Domain Name Backordering

My attempt at grabbing a good domain name

The most hated industry on the Internet by far is the domain trade, and from what I have experienced, that isn't too surprising. Domain names are the center of our web, and a good one is vital to establishing an online presence that visitors will hold in decent regard. Unfortunately, pretty much every good domain name has been snatched up by squatters who seek to cash in on it's status as a word or term or something that doesn't sound completely fucked. Usually, names are snatched up by squatters who flip it for exorbitant amounts of money or put ads up to cash in on natural traffic. Very rarely can you type a dictionary word or term into your browser and be greeted with an actual site. With the popularity of the Internet and domains on the web, that, of course, is inevitable. But because so many good names are already snatched up, people are forced to be creative in their task of thinking up a name (not a bad thing). Sometimes, though, creativity isn't enough.

Suppose you want to set up a website centered around a specific product. You search for names with that word, you try different combinations of words, resort to terms vaguely descriptive of the product-- in many cases it just doesn't work. The best fit is always something with the product name in it. So you try variations of (X = product) Xplace.com, Xcenter.com, Xmania.com, or aboutX.com, etc. All of those are taken and you can't think of any decent alternative. So you look elsewhere: Sedo.com, AfterNIC.com, where you see all of your attempted possibilities for sale at ridiculous amounts of money. Those domains aren't worth as much to me what the sellers want for them, so I attempt another search.

One name I WHOIS turns up with the status "On-Hold Redemption Period." After a bit of searching, I learn that means it is in the process of being deleted. The standard expiration and renewal time has already passed, so it is likely the previous owner neglected the name and won't pay the required fee to save it for a last time. Once deleted from the global DNS records and domain registries, it will be available once again for registration. Awesome. I might just have a chance of snagging it. So I look a little more, venturing to domain websites, and all say that my chances are nonexistent because backorder companies will rush to register any good name as soon as it becomes available - usually within seconds of deletion. I learn that my best bet is signing up with a backorder company and having them acquire the name for me, for a fee, which is generally around $60. So I do a little searching, a bit of reading, and decide to sign up with SnapNames.com - the 'leader' in aftermarket domain names. SnapNames has a system that checks periodically if the domain has been dropped, and can register it in mere seconds. According to a SnapNames rep I spoke to, their position as leader in this market is because of their relationships with top registrars like GoDaddyand Enom. Both of those registrars have their own aftermarket domain trades, but they most often turn the names over to SnapNames, just because they are the market leader. Yeah, it's a strange cycle-- SnapNames is only the market leader because they have arrangements like this -- but this nonetheless solidifies SnapName's position as the backorder king. So I sign up for SnapNames and backorder a domain I know is about to expire. I wait it out, understanding it will expire rather soon because it is already in the deletion phase. A couple of weeks later I get an email:

Auctions for back-ordered domain names are starting which will end on Aug 10, 2009
The domain names you back-ordered have been acquired. As a result, a brief auction will take place for each domain name to determine to whom the domain name will be awarded. The end times for these auctions are listed below and are approximate. Be sure to check on the last day of the auction for the actual end time. Note that if multiple equal bids are received, the first bidder wins the opening bid.

What? An auction? I was first to sign up with SnapNames for this domain, as evidenced by the fact that I was the high bidder with the $59.00 initial bid. So I log in to SnapNames. It's a 3-day auction that has already started, and there are two participants: Me, and someone who goes by the alias 'beaker'. What the fuck. How did this person even know to go after this name on SnapNames? I call up SnapNames, and they explain to me that before a domain is acquired and it is in a deletion phase, it is marked as 'Available Soon'. Those domains appear on lists that are distributed to 'domainers' and are visible on parts of the SnapNames site. So they try and sell names at auction that other users approach them with. The name I was pursuing was already soon to be available, and if this other guy wanted it before that, he would have placed a backorder before I placed mine. I Googled 'SnapNames beaker' and saw logs of auctions on various message boards that indicated this particular user has been playing this game for years.

I knew my chances were pretty slim at that point, but I had my eye on the name nonetheless. I was watching the auction in the hours before it ended, but I was still the highest bidder. Until about 6 minutes before the auction was to end-- beaker was pulling a fast one on me. If you bid within the last 5 minutes of an auction, the time increases by 5 minutes to "prevent sniping" (in the words of a SnapNames employee), which really means to give SnapNames the opportunity to make more money, though it did give me a chance to hold out in the auction for a while longer. I had my cap for automatic bidding set at about $85, but was soon outbid. I countered quickly and raised my bid, but as soon as the auction reached 1 minute left I was outbid again. The 'anti-sniping mechanism' extended the auction by 5 minutes, so I decided to follow beaker's lead and snipe him back at one minute left, giving him as little time as possible to make a decision as he had done to me. This continued for a while, and at that point my nerves were sky-high. The name, by the way, is really good. Like the best you can get for this particular product. The auction quickly approached close to $1000, so I stopped there. This domain is worth much more than that in the domainer world, so beaker got a pretty great deal. Thanks to SnapNames' greedy handling of auctions and backorders, combined with their leading position which makes the most powerful of few options to catch an expired domain, beaker took the name from me. SnapNames stole my backorder, and put it up to resell for more. And they got more.

I called up SnapNames during the auction when I saw it wasn't going too well. I started speaking with a rep, and asked questions as to why and how this person was in line for this name (some of his responses are the basis for this post). I asked questions about this 'beaker' character in particular, most of which he said he was not allowed to answer. I told him that I saw beaker was pretty active on SnapNames due to his appearances in bidding logs (posted on forums and such) for various domains. He said that someone who has a presence like that and bids the way he was is probably pretty dead set on getting this name. He explained that users use SnapNames to buy good domains, and many people do it for a living. SnapNames presented beaker with an opportunity, and he took it as he should. But what SnapNames is doing is unfair-- they are exploiting users applications for backorders and flipping it in auctions to domain heavy users who are in the business of spending lots of money on domain names. That gives regular users little chance getting the domains they signed up to backorder, with no other way to get the names, period. My experience confirms the fear that I share with many others regarding looking up names on domain service sites. It's not so much the traders of names that make domain squatting such a reviled practice, but rather the platforms dominant in the industry -- sites like SnapNames -- that make you afraid to do a WHOIS or check a registration site for name availability. For someone like me with a domain like mine in mind on a site like SnapNames, if it's good enough, it's as good as gone.