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06|24|2007 12:33 am EDT

Post TRAFFIC auction pontificating

by Adam Strong in Categories: Domain Sales, Editorial, Events

Gavel and moneyNow that the TRAFFIC domain auction is over and the buzz is out on the street about the over $10m worth of domains sold at the auction, it’s time to throw in my 2cents and pontification of what transpired from my perspective. A few other bloggers have already made posts about the auction from their view, like Jay, Frank and even Paul Sloan. So to join them and to sum up my thoughts simply “WOW! I gotta put some names up for sale”.

Many names that I saw going for $10-20k were, in my opinion, absolutely, blown-out-of-the-water too expensive. I would venture to guess many of these buyers are not going to make their money back on ppc multiples any time soon. That’s all fine and good too, but this is mostly a domainer audience and we all hear about the “multiples of revenue” jazz all the time from domain buyers, so the prices paid still are a bit amazing. I was with one seller whose domain had a low reserve to stimulate bidding. It worked out quite well for him as the name that makes “peanuts”, according to him, sold for well over $25,000 ( I won’t be specific to protect the seller). The seller was thrilled to say the least. +$25,000 on a name that makes next to nothing on ppc and is not some sort of category killer name ? Amazing!

Time for me to start sorting through my domains! I’ve got a whole batch of names in my portfolio of this caliber I thought to myself as each name was announced and the bidding frenzy began. Either I’ve underestimated my own portfolio and in the last 6 months it has drastically increased in value or there was a lot of new blood/money in the room. . . maybe both. On scanning the room though, and seeing the familiar faces bidding, Vern, Larry, Anthony, Scott, it seemed there were more than enough of these domains being won by veteran domainers. Who knows there may have been elevated prices from these vets “marking their territory” or running each other up in a competitive sense. . . . all good for the sellers wanting to maximize their returns. Most of these bids being made seemed to be at similar levels that I see them spending at snapnames on a regular basis, (as you can see from our daily sales reports I watch a lot of snapnames auctions) but add to the mix a few unknowns and newer buyers wanting to get in on the action, and suddenly the prices elevate even further.

half of a bidSpeaking of new blood and inexperienced bidders at auctions, Jay Westerdal and I had a good laugh at the expense of one bidder, who also happens to be a friend, as he waved his hand side to side in a motion similar to the one you would use to “stay” in blackjack. In case you are unaware, in auctions this means you want to bid 1/2 the amount the auctioneer is calling for. If he’s calling for $1000 and the last bid was $500, putting your hand in a horizontal position and waving it this way will tell the auctioneer that you will got to $750. In this particular case, this could have cost our associate roughly 1.5 million bucks. It doesn’t mean “stop”. :) Just nod your head in a manner that says ‘No’ or look away shaking your maybe even a thumbs down hand signal but don’t wave. I’m sure this guy has another hand gesture in mind for Jay and I for giving him a hard time.

The other funny thing I noticed was several of the “fund” domains that sold were marked as “No Reserve”. On opening bid they instantly received $10,000 bids from the phone bank. Dear “Mr. Phone Bidder”, if a name starts at No Reserve you can bid $1000 to start, or even $1 depending on the house rules. There is no sense in jacking the price up on yourself to $10k right off the bat. First, you send a message to everyone in the room that this name is HOT, you want it and they wonder “Should I be bidding too?” Second, what happens if no one else had a desire to bid anyway ? You’ve just made your price about $9,999 more by starting it too high. The only reason I could think of, maybe you are trying to make some sort of “back off” intimidation statement. However, I don’t think the phone bidding is the way to do it. Be at the auction and intimidate in person. My strategy on these names if I was phone bidding would be to start very low but at a price where I would raise suspicions of “this is a steal” or “why so much for this name?”. Say perhaps $1000-2500. Anyway, just my thoughts.

The one last thing that amazed me were the “passed” names. What were some of these sellers thinking? I wonder if more names would have been sold if the sellers were in the audience and could accept bids on the fly or change thier reserves to meet up with interested bidders. I sat next to a seller at one point who would have sold one of the early passed on names for a bid that was cast. However, nothing happened and he never got it back up on auction. Oh well, what’s another +$1m sale anyway when you did $11m in a few hours time right ? :)



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June 24, 2007 @ 12:16 pm EDT

I have been in the used car business for almost 30 years now. Shill bidding at auction is not only allowed in the used car business, it is the norm. I saw on another blog a mention of the possibility of shill bidding in this auction. The phone bidder that you are talking about was possibly much smarter than you think and in cahoots with the owner of the domain. From this perspective, kicking the bidding off at $1000 was brilliant, not stupid. Also, four domains with 5 million dollar reserves went to 4.5 million. This is another possible indication of shill bidding. I wasn’t there and I don’t know. “Let’s be careful out there”

To make an accusation of shilling is pretty bold if you weren’t there. I’ve been participating in live (non-domain) auctions for almost 20 years. I’m aware that shills and collusion go on at every auction most likely especially consignment auctions. I’ve also been to every TRAFFIC auction and participate in daily auctions for domains. I can see the possibility for this to happen but as you implied in your comment, buyers should always be wary at auctions.

Re: the smart phone bidder. The bidder on the phone kicked these off at $10,000 and if my memory serves me they ended up buying the names. . . .I wouldn’t call that a shill since there’s a 15% sellers premium and they ended up with the names.

– Adam


June 25, 2007 @ 4:33 am EDT

I was one those listing to the radio broadcast and yes it was very intresting.
I can also say as i was intrested in bidding at the show the amout of work Chris from moniker did with contacting buyers is one reasons why some bids where at $3.000.000 mark.

I personally dont think there was any skullduggery at the show.all can say is the phone calls i had with chris about a name and the back and forth calls i can understand why some names had bids of $4.500.000. if might have been better if perhaps deals could have been done asap but i know on one name the seller wanted $5.000.000 and was not going to budge from that price.
even if there where bids at $4.500.000.
it was a very good for the domain community in general


June 25, 2007 @ 4:42 am EDT

Great coverage and remarks on the auction. Its nice for someone who did’nt attend to get a first-hand perspective from someone who was there. I wonder what type of sales the next traffic domain auction in Miami will garner.


June 27, 2007 @ 7:06 am EDT

I’m not certain which name you were referring to but the one that caught my eye was the auction suggested a selling price of about $25K and bidding stopped at $150K WOW!!

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