Wednesday, February 20, 2008

Early effects of Expired Domains changes

Like many of their regular customers I've been monitoring Expired Domains' pricing and auction end time changes.

In the last few days before the changes took effect an unusually large number of expired domains with more than 2 days to go were entered into their system, many of these are registered to well known domainers and may not go the full cycle. I ended up bidding on over 190 of them and another frequent buyer bid on a large number himself. Although I have no indication why these domains suddenly appeared on Expired Domains, I'm assuming it was most likely to be one of
  • The domain owners playing the system
  • Customers requesting domains they knew to be expired to beat the deadline
  • Expired domains trying to drum up interest
  • Some mixture of the above
Until these domains and the bids on them filter out of the system it's a bit unfair to think of the situation as being in any way typical, and as there have only been two nights with the changes in place it would be far too soon to try and say anything definitive about the long term results but I think I'm already noticing some early effects.

Last night there were 6 domains drop that I believe would previously have attracted bids:
Of these only one of these,, attracted bids on Expired, and (as at 10:30PM) was also the only one with bids on Discount Domains yet all but blessings are now registered. Hip and seventeen were caught by Nominate while affordable, and xhtml were manually registered overnight and I grabbed psychometrics at 8AM. Expired Domains made $0.00

While we'll never know if these domains would all have had multiple bids at the $24.00 price it's reasonably easy to say that had I not been so badly overextended by the bids on over 140 domains I would have bid at least $24.50 on,, and and obviously someone thought was worth UKP 59.

Obviously my evaluation of which domains are worth having is not a universal rule and other domains that I wasn't monitoring have been purchased outside the Expired Domains system. One person who has manually registered a domain over the last few days has told me that previously he would have put in a low bid as a safety measure on Expired Domains to compete with anything coming in from Nominate or Discount but instead he watched midnight roll around with no bids on Discount and then when there were no bids on Expired just before the end of the bidding period he decided to just chance manual registration.

That two domains went to Nominate for well over twice Expired or Discount's minimum shows that the money's out there yet not going to Expired.

When I ask myself why this should be I come up with a few possibilities
  • The domains that Nominate didn't take aren't worth $59 to current investors or don't fit their portfolio
  • The buyers haven't adjusted to the new end time
  • Investors are sitting out while they see how the market will change
  • Buyers are just exhausted by the flood extra expiring premium domains
  • Being able to see Discount's auction end with no bids before Expired closes allows them to choose to risk a manual registration
So where's it all going?

It's obvious that the use of drop catchers change over the next few weeks as the pre-price rise domain flood recedes and investors adjust to the new timings and prices. I'm picking that the number of bids will remain relatively low because many investors when they see no bids on Discount they will take the chance of manually catching marginal domains rather than opening the auction on Expired. Once a few people start doing this there will be collisions and some of them will return to using drop catchers ... obviously not for domains they value less than $59.

I think Expired have made a tactical error putting their closing time after Discount's. Discount have never promoted their service very well I was a Discount Domain customer for registration before I caught my first drop in Expired, yet I was unaware they offered this service until I spotted that someone other than Expired was registering domains at 12:34 so they usually only get investors there and to me it's always been a place to try and undercut the people that outbid me on Expired or occasionally when I know that Nominate has a bid on the domain to give me an extra chance of catching the drop. I used to call Discount the "second chance" auction. Now Discount are the first chance auction and with the minimum bid the same I see investors using their service more. With Expired now closing after Discount I suspect they may come to be seen as the second chance option.

Will Discount change their service to compete better on getting bids? A little promotion, smaller increments and a more open bidding system might cause them to start getting a flood of bids.

Will Expired fine tune their system and maybe adjust their close time to the same or earlier than Discounts?

Time alone will tell.

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