HOW REGISTRARS MAKE MONEY FROM EXPIRED DOMAINS
December 5th, 2008 Posted in Aftermarket, Bad Registrars, General Domain News, Go Daddy
[FOLLOW-UP TO DOMAINNAMEWIRE.COM GODADDY ARTICLE]
This is the way it works when a registrar gets an expired domain falling into their lap after a customer stupidly forgets to renew it:
1) On Expiration Date: Registrar disconnects expired domain from owner’s website DNS (previous owner’s use of the domain ceases, and the registrar now can play with it any way they want)
2) Registrar Testing: Registrar parks the expired domain with their selected parking services (PS’s), or their own ad link syndication system to test the domain during the expiry period.
3) Length of Time for Registrar to Test Expired Domain: For 28 days (approx), the registrar can watch the traffic/rev stats on the domain and determine the approximate value of the domain from these stats.
4) Registrar Profit Upgrade On Expired Domain: At the end of the 28 day expiry period, the registrar (if it likes the traffic stats on the domain) sets up the first step for obtaining significant profit on the expired domain if the previous owner hasn’t renewed it. The registrar’s first step for quick high profit — attempt to sell the previous owner a chance to repurchase their lost domain by asking for about $150 or more to “regain” the domain. This process lasts for a minimum of 15 days during the required RGP period, (RGP=Renewal Grace Period). The expired domain is probably now being promoted by the Registrar’s chosen “auction site”. Registrar keeps the domain name in “RGP pricing” mode if the domain name doesn’t get any auction interest. This is where the registrar has an dream advantage!
5) Registrar Acquisition of Expired Domain: If the previous owner doesn’t recover their expired domain within 28 days, including paying the registrar’s “enhanced pricing” during the RGP period, then the registrar analyzes the traffic/rev stats they have been following for the last 43 days (*minimum), and then they estimate the value of the domain to be worthy of “registrar acquisition”.
6) Registrar Acquired Domain: If the expired domain name, not renewed within 45 days by the previous owner, makes at least $.75 a month in PPC, the registrar will usually grab the domain and place it in their separate company’s holding account, different from their main corporate filing. This account can then do what they want with the domain. (Officially, we’d expect the domain has dropped, but it isn’t in the ‘wild’ because they’ve nabbed it already).
Andrew just found the proof of the largest registrar in the world, GoDaddy, doing this. However, many of the top registrars will also do this, except for those registrars who specifically work with domainers, such as Rebel.com, Moniker.com, and Fabulous.com. These three companies (and there may be more), will work hard with domainers and domain investors to recover their domains, even if the domainers are stupid enough to let their domains expire and drop. All of these registrars send email after email to warn you of your domain expiring, so if you get to the point that it has gone 45 days past its expiration date, then you’re the idiot, and it’s GAME ON for the registrar. If you fail to renew your domain after 60 days, then the domain is open season for anyone, including the registrar, to nab.
The tricky, unethical procedures of non-notification or late notifications of expiring domains by certain registrars (ItsYourDomain.com, Tucows.com, and other hideous resellers), is my main complaint. The worst culprits are most likely a reseller of GoDaddy (Wildwestdomains.com), Enom, or Tucows. Many of these resellers use the Directi Logicboxes domain management system. It seems that Directi is cracking down on these resellers lately… so I’ve heard. This may be a good sign for Directi’s attempt to do the right thing. This remains to be seen.
As far as GoDaddy is concerned, I think the amount of money they make while disregarding the general domain industry community, and the blatant practices they use to suck every cent from noobie domain buyers is what creeps me out. That and their clearly comfortable selling of TM domains on the GoDaddy aftermarket auction site, TDNAM. (TDNAM, which stands for “The Domain Name After Market”, and is actually a domain name, is the lamest, most counter-productive website domain name in our industry.) If any of GoDaddy domain buyers “thought about it”, they’d see the irony of a company making money off their buyers using an ill-thought, longtailed, and bloated domain name starting with “The”. However, this means nothing to a registrar that has enough money to promote this lame domain brand, and has enough cash left over for sleazy Super Bowl commercials and pay for endorsements from attractive celebrities (Danica Patrick) who have absolutely NO idea what a domain name is, and the intricacies of domain name investing.
Bottom Line: The position that domain owners give to their registrars by not registering their domains in time is something all registrars relish. Best way to protect yourself? RENEW YOUR DOMAINS ON TIME, AND IF POSSIBLE, RENEW THE DOMAIN FOR FIVE YEARS AHEAD.
If you’re a domainer, buy your domains from a domainer industry “friendly” registrar:
Fabulous.com
Moniker.com
Rebel.com
If there are other great domainer friendly registrars, let me know their names, and why you think they’re great. I’ll gladly post them here.
Credit for indepth reporting on Godaddy goes to Andrew Allemann of Domainnamewire.com
9 Responses to “HOW REGISTRARS MAKE MONEY FROM EXPIRED DOMAINS”
By Helder on Dec 5, 2008
Good advice Stephen, i don’t like godaddy, i only have one domain with them, but there are too many bad stories with them, and very serious ones. Check a site called nodaddy, i think it’s org extension, you’ll see a lot of stories to make you run from godaddy.
About those 3 registrars you mentioned, i still haven’t worked with them, but for someone with a tight budget like mine, Fabulous is too expensive, almost $30 for a hand reg dot com. While all others sell under $10
With Moniker i tried to sign up once, but they were not accepting the way my phone number is writen, it seems they were only accepting the america format, i emailed them about it, and they never replied, later on a forum i read they stopped having costumer suport, if that’s true is a serious problem i believe.
With Rebel i haven’t tried them yet.
Kind regards
XXXXXX Stephen Douglas Responds:
You need to contact Fabulous and let them know you are a domainer ready to buy or transfer a minimum of 100 domains to them. They have the lowest prices for any registrar that has the best support and domain management, but you have to first let them know you’re a domainer. I’d contact support at Fabulous, and ask for the best domain sales director, Michael Robertson. Tell Mikey you’re a friend of mine. You’ll get the under $10 pricing. Right now, Fabulous.com has transfer prices at $7.06 if you wire money to fund your account with them ahead of time. KILLER!
As a domain consultant, I first advise anyone who isn’t a domainer to go to Rebel.com, to avoid being suckered into using GoDaddy. I also advise domainers to use Rebel.com for topnotch services and prices. Rebel.com is a purely domain name focused company, so they won’t give you ten pages of upsell when you try to buy a domain. Their prices are around $8.95 a domain for new registrations. Check with them for specials. For larger portfolios and lower pricing, ask for the always helpful Jason Lavigne…
By Vickie on Dec 6, 2008
Hi there,
I’m a reporter with the OC Weekly, and I’m trying to track down a Stephen “Big Red” Douglas that was based in Dana Point/Salt Creek in the ’70s and ’80s for a report on the not-so-secret secret history of skateboarding in Orange County, after reading a story written by Douglas on skurfboards.com.
I’m not quite sure if this is the same Stephen Douglas (if not, my deepest apologies for invading your blog!) but if it is, please contact me if you are interested in being a part of my story!
Thank you for your time!
XXXXXX Stephen Douglas Responds:
Hi Vicki! Thanks for your interest. I replied to you by email with some archival “photo proof”. However, there are better contacts than me to give you more info on the Orange County skateboarding historical contributions. For my readers, I did write a story about my experience with the skateboarding innovators and champions in Orange County, Calif. back in the 70’s. http://www.skurfboards.com/longboard-skateboard/skurfboards-exclusive-truth-about-the-dogtown-skateboard-story.htm#comments.
This story was in response to the movie “Lords of Dogtown” by Stacy Peralta, based in Los Angeles. The real growth of skateboarding was started in OC, Calif, on all the levels: skateboard champions, skateboard publications, surfing/skating comparisons, and skateboard manufacturers/designers. Stay tuned for Vicki’s article— Hope it’s a good one, and if so, I’ll post here.
By Helder on Dec 6, 2008
Hi Stephen
Thanks for the tips, when my portfolio grows i’ll surelly contact Fabulous.
By jeff schneider on Dec 9, 2008
THE sad truth is that Go-Daddy is conducting business within ICANNS Bylaws. Until ICANN and registrars feet are held to the fire, lawlessness will prevail in Domainer land. Its about time that the whole Domain leasing landscape be seriously overhauled.
The current leasing bylaws are a disgrace to our industry. Instead of drawing our attention to the next hot new extension how about nourishing the hand that feeds it! SURPRISE ? yes the lease holders NOT the registrars, which by the way also happen to be resellers, HOW COZY.
By Sathees Navaratnam on Mar 10, 2009
I use moniker for my Domain registration. They are very
good up to date. I didn’t receive any promotion mail from them.
I had no problem with them to test their customer service!
But they have very low price $8.02 for .com, .org and .info
$6.64 for .net
Might be due to the lack of customer service they can offer the best price. (?)
I am very satisfied with Moniker and recommend them!
Keep it up Moniker!
By Louise on Feb 5, 2010
Hi Stephen, Did I see you at TRAFFIC when I pitched on the last day and made a fool of myself? There were some faces I recognized – it was quite exciting! Some I researched since then to put faces to names.
Would you check my rant on RecoverDomainName.com? You seem keen on picking up the nuances of ICANN bylaws, and it seems they slid something by the internet world in general which may have far-reaching consequences! ICANN is aware of me and sent a letter, which I published to RecoverDomainName with permission. This is my most recent correspondence to them:
January 28th, 2010
Mr. Rod Beckstrom, President & CEO
Mr. Patrick Jones, Senior Manager of Continuity & Risk Management
Mr. David Giza, Senior Director, Contractual Compliance
ICANN
4676 Admiralty Way, Suite 330
Marina del Rey, CA 90292-6601
Dear Mr. Beckstrom, Mr. Jones, and Mr. Giza,
Forgive me because I say something nice and mean well, and have trouble censoring myself and let it all fly out over matters I take issue with.
It is a mistake to adopt a “wait and see” attitude over BTAPPA for dot coms since there is 10% unemployment and some may depend on their domains for income. These are ones, like myself, without limitless disposable income to wait until policy changes correct matters, or even to draft a complaint to ICANN or hire an attorney. Was Verisign, or do you count on that some domain owners would not have the wherewithall to mount a defense? Defense of what, you ask? Defense of transferring to a Registrar not of the Registrant’s choice. Notice of pending transfer and ability to transfer prior is good, if expiration dates, or recent registrations and transfers didn’t limit the Registrant from transferring out. Expiration, registration, and change of domain name hosting dates are publicly available and could influence a speculating Registrar in his portfolio choice of the Losing Registrar in acquisition. That is, the Registrar could narrow its choices to those domains set to expire within 30 days of the sale, so that Registants can’t transfer out. The Winning Registrar in conjunction with public information available – which Verisign offers to filter and optimize – would be hugely advantaged to transfer domains regardless of choice of Registrants, based on expiration date!
It would end choice. The Winning Registrar’s ability to filter targeted domains based on expiration date would cause domains to be transferred, even with 15 days notice. Personally, I value choice in selecting a Registrar, and base my choice on the Registrar’s reputation: Are there online complaints about it? Is the Registrar on Symantec’s short list of malware distributors? What is BBB rating? Etc. With Verisign’s BTAPPA process, my choice is not the final word of who hosts my domain name. Verisign’s BTAPPA gives the Winning Registrar the final say.
(2) No limit of transferred domain name renewal [fee] hikes. Right now, the wording of the new gTLD Guidebook is not specific regarding fee hikes of transferred domains; that is, it doesn’t limit them. Feasibly, the domain that is transferred against the Registrant’s wishes because a BTAPPA took place within 30-60 days of expiration/transfer/registration, may be lost to the Registrant if the Winning Registrar hikes the renewal fee beyond his affordibility. There is not cap on transferred domain renewal fee hikes. This could happen.
(3) BTAPPA allows speculation of personal/finanacial records which are only public because WhosIs is publicly available. My SeawardPeep.com , a hobby site, is not valuable except a Winning Registrar might target it because he sees I am a good credit risk, having paid consistently since I registered SeawardPeep in 2000, and it has not changed Registrars or hosting, unless I paid late (effected when the hosting server switches to a parked page). All this translates to personal financial information I would prefer 3rd parties to not know and definitely not trade on! Until Verisign’s BTAPPA, Registrars couldn’t take advantage of my personal financial info to speculate. Now they can.
It is unthinkable, unDemocratic, and preferential to defend a process that interferes with customer choice in favor of big business. What may have satisfied a need for disappointed investors in dot biz, overseen by the standard which is the highest: Neustar, doesn’t have an application for dot com. Verisign’s BTAPPA makes it too easy for the greedy ambition of Verisign and the Registrars who wish to speculate, to manipulate domains. If Verisign’s BTAPPA were to only enable transfers of large portfolios of willing resellers, it would be advantageous. But that is not how the BTAPPA is written. “Partial portfolio” process allows Registrars to target any domains they want!
For purposes of disclosure, I request you tell me whether the policy-makers who passed Verisign’s BTAPPA process owned Verisign stock in 2009. That includes you three. It may be legal and fine, but it would be hard to distinguish in the public eye – maybe I myself would be tempted – for humans keep separate their private interests when they are so influencial on policies which govern the outcome of those investments. Did anyone on ICANN’s board own stock in Verisign in 2009?
Thank you for your consideration.
Sincerely,
XXXXXX Stephen Douglas Responds:
Louise, thanks for writing. I’m not sure of the angle you’re going for in the letter, but it sounds like you have some balls in writing it. Keep us updated on the responses.
My experience in the last five years working with registrars is that they have the ultimate positioning to nab any domain that is expiring, and see the good/bad data on it for consideration. ICANN rules this. Without me knowing your full issue, I can’t comment on it, but I’d be glad to post your emails to ICANN and their responses.
Cheers!
By Louise on Feb 6, 2010
Hi! Thanx for posting my comment – thought you’d review it as an email, so I got a chuckle! This is an explanation about BTAPPA from a letter I sent Jason Goldberg / Ashton Kutcher:
On November 16th, an amendment to Verisign’s Bulk Transfer After Partial Portfolio Aquisition became final after a month of public comment. The comments are unanimous that 15 days advance notice of transfer to a new Registrar is not enough time for us, the Registrant. Please view the announcement here:
Public Comment: Amendment for Partial Bulk Transfer in dot-COM & dot-NET
http://www.icann.com/en/announcements/announcement-16oct09-en.htm
Comments are linked to from above.
The history is: Neustar, which is the leader in security and has a tight grip on dot biz and dot us, applied for a BTAPPA process in 2006. Since dot biz fizzled as a new extension -that is – it’s #8 – it’s strong, but didn’t take off the way Neustar and investors had hoped, BTAPPA is a provision where the dot biz and dot us Registrars could trade domains, that is, aquire domains among themselves to soften the hit their investment took. Neustar oversaw it. Dot Biz represents some 2 million domains, dot com is some 80 million – they’re not the same! Yet . . .
Verisign got the brainchild, it would do the same for dot com and dot net! As someone posted on my blog, “This is beyond terrible.” BTAPPA doesn’t cover Registrars who go out of business and need a safe landing for their domains. It doesn’t cover Registrars that are de-accredited by ICANN: Those are covered by Part B of Policy on Transfer of Registrations between Registrars: B. ICANN-Approved Transfers (http://www.icann.org/en/transfers/policy-en.htm ). Verisign’s BTAPPA is not just about users with large domain portfolios who want to switch Registrars – there would be no concern on my part, in that case! That would be beneficial to the large portfolio resellers.
It’s about Registrars targeting domains they think are valuable, and acquiring them in a bulk transfer with only 15 days notice to the Registrant! If your domain is set to expire, newly transferred, or registered within the 15 days, you’re stuck. It would affect the small user, the little guy.
Network Solutions Alert!!!
Network Solutions slipped a disclaimer into the user agreement, in preparation for BTAPPA:
“Furthermore, you acknowledge and agree that pursuant to applicable policies adopted by the Internet Corporation for Assigned Names and Numbers (“ICANN”) related to the transfer of domain names it is possible for your domain name to be transferred to another registrar even though the transfer has not actually been approved by you, and you agree that we shall not be liable to you for any such unauthorized transfers.”
- third sentence of item 12 under section A of Network Solutions Service Agreement, updated in October (click on Domain Names on the left): http://www.networksolutions.com/legal/static-service-agreement.jsp
A few other Registrars have also inserted the dislaimer.
Thanx again for publishing, go ahead and publish the above, if you like. It’s hard to wrap our minds around, I get, we already suffer from fatigue from the Bernie Madoff’s and Wall Street white collar criminals.
Sincerely,
Louise
By Louise on Feb 7, 2010
Hi, Just to break it down,
“It is possible for your domain name to be transferred to another registrar.” – Network Solutions agreement, a disclaimer inserted to allow a BTAPPA!
This means, my friend, you and I could wind up customers of Go Daddy against our will!
By Louise on Feb 10, 2010
Not to beat a thing to death – it devolves to me because I am the only one offended by Verisign’s BTAPPA process! – I heard from James Tierney, Chief of the Networks and Technology Section of the Antitrust Division, U.S. Department of Justice by email, and am composing a response! Stephen, may I email you privately instead? Louise [at] RecoverDomainName .com