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The credibility of the domain auction system was impeached

Derek Iwasiuk
July 07, 2008

GoDaddy VP of TDNAM Adam Dicker was caught bidding against customers at the company’s auctions and winning some of the domains he bid for. The story raised questions about unethical business practices and conflict of interests which hurt the credibility of the whole auction system.

All began with a thread at NamePros about .us domain names going through auction at GoDaddy’s TDNAM and the high prices they were bought at. It was mentioned that Adam Dicker, who runs Godaddy aftermarket service, had won a couple of auctions for domains through the service. Surprisingly, GoDaddy commented that the company didn’t have a policy prohibiting its employees from bidding at auction.

“Go Daddy does not have a policy forbidding its employees to engage in public auctions or registrations. You can be assured we have tools in place to prevent anyone from gaining the opportunity for an unfair advantage in securing a domain name through registration or auction.”, GoDaddy VP of Public Relations Elizabeth Driscoll told for Domain Name Wire.

At the same time, Wiredblog unveiled facts about Adam Dicker that don’t need any comments:

“Dicker's position at the company even raises some questions: The guy was a mini-mogul in the domain space before he joined Go Daddy; he founded High Impact Sites Inc., a company that supposedly owns 60,000 domains and 3,600 web sites. He also owns (a forum for domain name players). He told the Domain Name Journal that he was in the process of "completing a deal to purchase an existing ICANN accredited registrar...”

Domain Name Wire launched an investigation to shed light on which registrars let their employees bid on aftermarket domains. With some restrictions, other major companies like NameJet, Network Solutions, eNom, and Pool also allow their employees to compete with customers.

Many people felt personally deceived by the story. They believed that the employees of these companies were responsible for the increase in the domain aftermarket prices. It was also questionable whether the employees pay the full price or are entitled to receive discounts which would provide them with a competitive advantage. According to others, the entire domain name market has gotten out of control.

On the other hand, companies like SnapNames and Sedo don’t let their employees bid against customers.

Last Monday, GoDaddy couldn’t resist the public pressure and announced the change of its policy.

"To ensure customer confidence and to avoid any possible future questions of impropriety all GoDaddy employees are now and in the future prohibited from participating in TDNAM auctions, purchasing, sales and back orders," said Go Daddy general counsel and corporate secretary Christine Jones.

The story revealed some of the hidden problems in the auction system. Our hope is the whole industry to embrace the new policy and ethical business practices which is the only way to restore the credibility in its customers and avoid future conflict of interests.

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