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11|04|2009 05:09 pm EDT

SnapNames Insider Bidding Aftermath – EDITORIAL

by Adam Strong in Categories: Editorial

When I read the news today from Oversee and SnapNames stating that an employee had been bidding on domains, I knew. . . I knew who it was. I didn’t want to hear it but I knew. Like many of my colleagues who frequented SnapNames auctions over the years, the first name that came to mind was “Halvarez” .  To confirm from SnapNames sources later that it was indeed Nelson Brady really was more disheartening.

For those that never worked directly with SnapNames or Nelson, he was the kind of guy that you could email day or night and he’d respond almost instantaneously. He was the kind of guy that you wanted working on the other end of the phone; fast, courteous and intelligent.  To find out now that he was lying and betraying not only me, but everyone that he worked with leaves me speechless.  It left a fellow employee I spoke with at SnapNames speechless as well.  With such a small organization, I can only imagine the feeling of betrayal.

This is a tough day for Oversee. The aftermath of this news will leave a cloud of doubt over SnapNames for years to come.  This isn’t the only problem that this issue created though. Every Tom, Dick and Harry with a conspiracy theory about any domain company will come out of the woodwork now claiming “I told you so” or bringing up more cases of strange behavior that they believe could only be attributed to a nefarious company or individual.

We’re already seeing new theories today with posts in DNN comments citing other SnapNames users such as “Vaxis” may have also shills (most insiders know this was Kevin Ham’s user name).   Other conspiracies popping up include that the company knew about this and Brady is being thrown under the bus. The domain business has always had an unusually high amount of conspiracy theorists, but a conspiracy being proven true is harmful enough to beginning casting a shadow of doubt big enough to cover all in the domain industry.

Take the quote from Michael Arrington, former CEO of Pool.com (another expiring name aftermarket with conspiracy rumors of their own) comment on the Tech Crunch coverage of the SnapNames story :

Anyone who doesn’t know how dirty the domain name business is just doesn’t know the domain name business.

Arrington has taken plenty of stabs at the domain space since his departure, calling ICANN corrupt and domainers equivalent to the mafia.  This time though the dirty laundry is out and you’d have to say his name calling seems justifiable. Arrington’s mainstream audience which likely knows little about domains now gets to read about the confirmation of how dirty it can be and how right Michael can be as well.

The domain aftermarket business needs to take a step back and really think about the things that went haywire here and what exactly should be done.  SnapNames had internal policies prohibiting this (as do other auction houses), but the reality is that no internal policy is going to keep a rogue employee with dollar signs in their eyes from going after that “golden goose”.  Employees at domain aftermaket and parking companies deal with multi-millionaire clients and I’m sure the lure of the easy buck is hard to resist.  If someone wants to bid on domains and the policy says they can’t, they’ll find a way around it.   Policies like this won’t prevent it, they’ll just slow the person down or create a situation where the employee becomes more “resourceful” and goes further “underground”.

It’s not hard for any employee to create a new identity and run everything through that identity or hire someone to bid on domains on your behalf ?  This becomes an extremely difficult policy for a company to enforce, but clearly one that needs to be addressed.  We’re relying on the company to police itself in these cases.  It took Oversee over 4 years to figure this out so what does that say about policing their own company

The industry needs to get a grip on this stuff . We need a code of conduct, outside audits or some sort of layer of trust built in to these auctions.  The accusations of shill bidding are not new. Every auction house has been accused of it before.  Now it’s real.  We need audits and policies that insure that everything is being run right.  If we don’t I think you can rest assured that someone else will step in and create rules for us or settle these issues with lawsuits.

Let’s get it together domain companies!

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27 Comments

Tom

November 4, 2009 @ 5:23 pm EDT

No doubt Brady Nelson was an affiliate of Snapnames as well as an employee.

Under their affiliate program, “halvarez” (aka Brady) would have gotten 20% of the auction! On 50,000 auctions, let’s say he only collected $20 each, that would be $1 million. But I doubt it. I bet it is more than $20 per domain. It could be $50 or $100, or on some auctions $2000! He probably pocketed a few million dollars moonlighting as halvarez and fuc*ed me over in the meantime along with thousands of other snapnames customers.

Under the current program, if a customer clicks on an affiliate link, a cookie is set on that customers computer, and the affiliate receives a 20% commission on every sold domain’s net proceeds (e.g. the margin) for 90 days, unless that customer clicks on another affiliate link during that time, in which case the cookie get overridden by another affiliate link.

Jamie

November 4, 2009 @ 5:36 pm EDT

Tom are postulating that this guy clicked on his own affiliate link, then got commissions on his own purchases for 90 days? If so then he had to do this every 90 days in order to keep getting the commission for additional purchases. This would seem extremely hard to pull off since he’d keep showing up in the monthly affiliate reports. I’m guessing that Snapnames were only compensating on the first 90 days of a New Customer’s activity, not the recurring revenues from an existing customer.

I wonder if your assertion is the same thing that Arrington is getting at when he says “The employee was shill bidding on auctions to pump the price up. When he won, he’d arrange for a partial refund from the company.”

While this episode is obviously a trainwreck, this bit here seems a bit off base. Looking forward to more details as the story unfolds.

Adam Strong

November 4, 2009 @ 5:41 pm EDT

@Tom there was no affiliate program back in the day.

Alan

November 4, 2009 @ 5:45 pm EDT

FYI – The snapnames affillate program did not exist when most of this bidding occured.

uberVU - social comments

November 4, 2009 @ 6:01 pm EDT

Social comments and analytics for this post…

This post was mentioned on Twitter by dnnews: SnapNames Insider Bidding Aftermath ? EDITORIAL – http://tinyurl.com/ycc3vpx

Josh

November 4, 2009 @ 6:26 pm EDT

“It took Oversee over 4 years to figure this out so what does that say about policing their own company”

I think better way of putting it is what does it say about Oversee? They were contacted regarding Halvarez as being suspicious by 100’s of bidders. They are either incredibly inapt or turned a blind eye. I believe this is only out now because they were forced to make it public.

Steve

November 4, 2009 @ 6:44 pm EDT

I believe that Oversee has been in on it the whole time and is now throwing Nelson under the bus.

lassy

November 4, 2009 @ 7:05 pm EDT

“I believe that Oversee has been in on it the whole time and is now throwing Nelson under the bus.”

There’s a “confession” so maybe even some sort of agreement with Nelson already. What sure is Oversee didn’t make it public just to “do the right thing”. There’s more than meets the eye here.

John

November 4, 2009 @ 7:10 pm EDT

I don’t know if this was asked or even answered before, but…

Why? Why did he do this?
If he was just an employee – what profit would he gain through shill bids?

Ok, if he won an auction he got partly refunded – but if he just wanted certain domains there should have been other “technical” means to get them completely without an auction/competing bidders.

To me it seems the only party that massively profited from this behaviour was Snapnames, and therefore management must have endorsed and/or initiated these activities.

Or am I missing something?

Marcia Lynn

November 4, 2009 @ 7:31 pm EDT

This is more than a bit shocking to me. Knowing Nelson personally, and knowing the historic tactics of an unnamed corporation, I’m heavily leaning toward the “scapegoat” theory.

Bill

November 4, 2009 @ 7:40 pm EDT

It seems a bit odd. This is easily enough to put Snapnames out of business, and the only action they have taken against Neslon is dismissal from his job? Any other company would be filing a massive lawsuit, if not a criminal complaint.

Unless, of course, this is just the tip of the iceberg.

Rob Sequin

November 4, 2009 @ 8:49 pm EDT

Well, here’s proof that snapnames owes me money

http://robsequin.com/images/halvarez-bids.gif

This screen cap shows me (I am whatever bidder ID) bidding against Halvarez from $59 to a winning bid of $160 with no other bidders in between. So, there’s $101 coming my way and I know I bid against Halvarez MANY MANY times.

The latest that I can find Halvarez in one of my auctions is from March 2009

http://robsequin.com/images/halvarez-march-2009.gif

If he is bidder ID ppppp too, I’m gonna be getting an even bigger check.

Marcia Lynn

November 4, 2009 @ 8:54 pm EDT

Rob, I don’t doubt Halvarez “upped” the bids.

What I do doubt is that Nelson did it, secretively, of his own accord.

Having personally witnessed shill bidding by an unnamed company at an unnamed domain conference, I will continue to believe this was not the act of a rogue employee, and hard to believe it’s the one man they named/blamed.

Rob Sequin

November 4, 2009 @ 8:57 pm EDT

Doesn’t matter who the person is now that Snap came out and said it was Halvarez. Damage is done and proof is above.

[…] has posted a great editorial here. A […]

Acro

November 4, 2009 @ 9:45 pm EDT

Oversee MUST reinstate the auction history per account IMMEDIATELY, if they want to keep an ounce of business integrity! Why? Because I can personally recall only one auction that Halvarez bid me up – it went to $2,300 before I won that domain. Imagine the thousands of others that were affected and need to perform due diligence which is now being DENIED by Snapnames as there is no access to auction history data anymore.

Stu Maloff

November 4, 2009 @ 11:16 pm EDT

It seemed that Halvarez is in just about every auction I was involved in. He did not always win the auctions. I think he bid on so many at a time, he was unable to keep up.
As per the previous email, I won hundreds of names on Snap Names. The registration info is all there, but they seemed to have deleted most of my bidding history and only have a couple left with Halvarez involved.
They should not people handling the investigation from within.

[…] Strong has followed up on the story in great detail in a must read expose over at DNN, while even Michael Arrington of TechCrunch chose to give his views on the matter […]

Domo

November 6, 2009 @ 8:21 am EDT

In the one hand we need some type of a Coop (I beleive J Berryhill suggested ed afew years back) , in the other hand it will be like organizing snakes , spiders, worms, scorpions and crickets into peaceful co-existence , at times where TM abuses are applauded ,aided and abated in some domain prominent forums.

“something ought to change…”

pitbullstew

November 6, 2009 @ 3:23 pm EDT

oh? I get it now?
Because I am one of the people who complained about something being worng at snapnames its now me that was the problem then and now?
Is that what you are saying?
That our circle of crest fallen cohorts are most used?

pitbullstew

November 6, 2009 @ 3:28 pm EDT

Ripoffreport.com-July 24 2006

Report: Snapnames.com
Category: Internet Services

Snapnames.com ripoff Portland Oregon
*UPDATE by author…

Snapnames.com
Phone: 800-385 4075
Fax: 503-274 9749 115 NW 1st Ave, Suite 300
Portland, Oregon 97209
U.S.A.

Submitted: Monday, July 24, 2006
Last posting: Friday, November 06, 2009
venice, California

Snapnames.com is a company that registers internet domain nmaes. In this example when I searched for a business their domain name had expired and snap names popped up instead with an offer to secure the domain in an auction. I thought I would be interested in that so I placed a bid and secured the domain several weeks later.

When snapnames advised me that the requirements were finished they refered me to the entity that will set up the web site. When I went to the site and entered the password, it would not allow me to log in. I waited severla days and like wise I could not log in.

I called the 415 area code number listeed and you’ll never guess the call patched through to India with a person who I could not understand nor she me?
Frustrated I called again and exactly the same experience. In the mean time I obtained no less than 7 pass words and none would get me past the error user not registered phase.

When I called snapnames in Portland i spoke with a very nice and patient person and explained that I was not satisfied and wanted to cancel the purchase and she had a tech by the name of Roger get on the line asking me if I needed tech support?When I said no he hung up?!!

Calling back I asked for an explanation and he said well you said you didnt want help so i hung up?
I snet them two emails and they say they arnet formated correctly and that the emails were attched?
What the heck kind of nonsense is this?
When we as consumers bid and obtain a domain and are sent to the next step only to wind up over seas dealing with persons who refer you back to snapnames who says all sales are final?

Well all sales are not final all sales using a credit card are subject to review by the card company and the actions of snapnames are subject to a review of the consumers affairs beaureau of Oregon or the city of Portland?

And finally the court of consumer opinion.

If snapnames wnats to dump consumers to overseas entities who cannot communicate effectively and are impotent to resolve the issue of not being able to log on, then who needs snapnames?
I want to unite this deal and will see to it that it will be untied.

Stewart
venice, California
U.S.A.

Steve Fox

November 7, 2009 @ 4:34 am EDT

Halvarez to be named sniper of the year
LOL

Bob Aronin

November 8, 2009 @ 4:43 pm EDT

Wow! What a surprise! Domain auctions aren’t always on the up-and-up!

In an industry where absolute control of product, supply lines, distribution channels and pricing is in the hands of vertical monopolies and inter-locking, inter-related major corporate interests, this attention on the misadventures of Nelson/Whoever-Whatsis is akin to concern about a pimple in a sea of acne.

An employee of a company engaged in rigging the aftermarket was caught rigging a few auctions? And, he learned how to do so by working where and watching whom?

Monte Cahn’s made a personal fortune, in part, by gaming a system he was instrumental in building. It’s an admirable achievement, regardless. But, I’m a lot more concerned about the inability of the vast majority of us to acquire an expired domain except through SnapNames, Namejet, or Pool auction, than I am that he got bit in the ass by an employee.

It would be a shame if this incident detracted from the essential, overall focus on industry-wide collusion and restraint of trade.

Pat

November 8, 2009 @ 7:53 pm EDT

Code of Conduct? Yeah right.

This is an “industry” where a major registrar, Tucows (among others), every day just appropriates (read “steals”) expired domain names. Where’s the outrage at that? They brag about it to their shareholders for crying out loud. WTF???

ICANN is an utter joke. There is no credible supervision for any of these clowns.

Bend over domainers.

Adam

November 8, 2009 @ 11:48 pm EDT

@pat mike at thedomains.com has written several pieces about registrars hoarding domains and specifically Tucows. I don’t remember what I’ve written but I’m very much opposed to the practice and would be happy to shed more light on it. Send us all your tips and experiences if you like to editor@domainnamenews.com

@bob you speak as if you know more . “the inability of the vast majority of us to acquire an expired domain except through SnapNames, Namejet, or Pool auction, than I am that he got bit in the ass by an employee.” “collusion and restraint of trade” ?
Do tell . What would you propose would be the best way to reallocate expired domains ?
Please feel free to contact us at the above email as well

pitbullstew

November 14, 2009 @ 4:20 pm EDT

keep movng keep moving nothing to see here folks keep moving…
> Our File Number: FF++++-09
> Complaint About: Snapnames.com Inc.
>
>
> Thank you for the information that you sent us. Although there does not now appear to be a need for an investigation or legal action, we will keep your information on file as part of the public record.
>
> Our primary goal is to identify and eliminate the most serious marketplace violations, and many factors are considered in determining what cases we should pursue.
>
> We appreciate the time that you took to alert us to a possible problem in the marketplace. Your information may prove to be valuable in a future enforcement action.
>
> If you need to contact us about your complaint, please write to me and note your file number: FF++++-09, or contact me by phone at 503-934-4400 or e-mail at mailto:heather.j.mcfarlanemartinez@state.or.us
>
> Heather McFarlane-Martinez
> Enforcement Officer
> Financial Fraud/Consumer Protection Section
> Oregon Department of Justice

scrabble cheat

April 15, 2012 @ 1:44 pm EDT

I agree on you damage is done and it can’t be back..An investigation is needed on this why did it happen…

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