There’s been a fair amount of talk recently on ways to keep domain names looking old, Rand posted about the drop name service providers Snapnames, Enon and Pool. I wanted to explain about a recent development that’s rocking the industry: the domain auction.
Ok some background information. When you fail to renew your domain name you have 40 days after the expiry date where you can rescue the registration, at the end of this period the domain has traditionally dropped back into the public pool. In theory that means the domain is available for anyone to buy again.
Well in theory anyway. In practice the drop name companies had far more resources than everyone else. With multiple PCs and fast connections to the registries the chances were heavily stacked in their favour (for more info read Domain Catchers War Room). Domain Kiting (as Bob refers to it) is also a result of this general drop process. Bottom line – valuable domains are becoming impossible to grab when released into the public pool.
So everyone started thinking up a better system for re-selling domains. What followed has been a VHS-BETAMAX style battle to determine how the domain reselling industry is going to work. Verisign and Snapnames proposed the Waiting List Service (WLS) where users would be able to pay for second place rights to any domain. If the owner defaulted on the registration the second place holder got a chance to take the domain.
There are some obvious problems with this. The main one being that any company with any sense would register the option-holder place themselves as a security measure. WLS would effectively push everyone to register their domain name twice.
The alternative model put forward was to allow Registrars to auction off domains within their own portfolio within the 40 days redemption period. This model has been quickly adopted by the major players, such as Network Solutions, GoDaddy and now Tucows. Although it allows domain prices to escalate, the auction model does seem to level the playing field.
The problem with both these models though is that valuable domains are never going to drop into the public pool any more. Most major registrars have established an in-house auction system and you better get a handle on these if you’re interested in the old domain business.
Why should you be interested in old domains?
Well aside from the existing IBLs, they have often passed into the trusted zone. Jim Boykin has plenty to read on this subject and says it better than I can (1, 2, 3). The interesting thing about domain auctions is the initial registration date (CREATION DATE) remains untouched when the domain changes hands as technically the domain never drops.
OK so how do you get in on the action? Take some time to explore these auction systems. Each one is unique as it will only contain domains from that registrar’s portfolio (unless you have found a reseller). I’ve listed a couple of them below to get you started: