Elliot's Blog

My Snapnames Theory

Elliot — Sun, 08 Nov 2009 16:53:00 +0000

I have no way of knowing what really happened with the Snapnames employee bidding scandal, but I do have a theory, and unlike other theories I’ve read, this doesn’t involve any real conspiracies. Maybe this happened, and maybe it didn’t, but at least this is what I hope happened, since the implications would be far less reaching across the Oversee.net brands and the domain industry:

“Halvarez” was a domain auction bidding script that placed bids based on a variety of factors set up by its creator, a Snapnames employee. Since the creator worked for the company, he may have had access to domain data (I really don’t know here just guessing), giving him an advantage when buying domain names, as he could justify paying more than others based on assumed PPC revenues. In addition, perhaps there were revenue goals on the line or future compensation tied to company revenue that would have been directly impacted by a bidder of this magnitude, hence the reason he bid in so many auctions but didn’t win.

The creator of “Halvarez” could have established a company and separate bank accounts and credit cards in the company’s name to look more authentic. “Halvarez” probably always paid Snapnames on time, $xx,xxx (or more) per month, further avoiding suspicion. Because of this, Snapnames looked at this mysterious bidder as one of their top customers, and as a courtesy, the company gave refunds on some names for whatever reason (or maybe they didn’t even know about the refunds). This may sound shady, but if they are like most companies, the top tier of customers get special treatment when they ask, like returns, favorable payment terms, dinners, event invitations, and other benefits for bidding so much.

Since “Halvarez” was so private, Oversee.net executives would never get a hold of him (assuming they tried to meet with this VIP), but the guy paid on time so they left him alone. There has been at least one extremely private individual who was active in our business for a long time, so it’s not out of the realm of possibility that nobody knows who “Halvarez” really is. In addition, the trusted person who was fired may have told company officials that he had communicated with “Halvarez” in the past, and since the guy was trusted, they took him at his word.

“Halvarez” reached out to iREIT to sell a portfolio of names, and the prices were right for them. Since he was able to score good deals, he could also sell the names at great prices, recouping some of his investment. iREIT paid “Halvarez’s” company, knowing that Snapnames has confirmed that “Halvarez” is a real bidder while not thinking it was any different than any other deal.

I really have no idea if my theory happened, but I am hoping that it is what happened. Things seem so obvious now that this has been revealed, but at the time, there wasn’t much that could have been done. Perhaps someone did do something, and that caused the investigation that revealed the bidding. Only a few people probably know that, and we may find out in time.

I feel badly for the people who lost out on great domain names to “Halvarez,” and I don’t think the rebate offer does anything to compensate them. I think it would be impossible to remunerate them fairly for these potential losses.

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SnapNames Auction History Now Available

Elliot — Sun, 08 Nov 2009 00:44:11 +0000

I’ve seen a number of comments on my blog and other places criticizing Snapnames for not providing the auction history for bidders prior to 2007. According to the company, in June of 2005, Snapnames limited a person’s order history to 24 months prior to the date the look-up was being performed.

As a result of this order history truncation, many people have complained that they couldn’t gain access to their order histories to compare them to the rebate emails sent to many Snap customers on Friday.

As of this evening, I have been informed that the staff at Snapnames has adjusted the system so order and bid histories are available back to August 2004, when auctioning began with the company. I have checked my auction history (dating back to 2006), and it appears that everything is there, although I have participated in less than 125 total auctions.

You will now be able to review all auctions in which you participated to cross-check the rebate offer with your results. You can also get an idea of the number of auctions of yours in which “halvarez” participated – both auctions that you won and lost (possibly even to “halvarez.”) I appreciate the transparency, and when I fully inspect the history sometime soon, I hope I don’t find any domain auctions in which I lost to “halvarez” where I really wanted the name.

I also want to take a second to say that there are a number of good people who work for Snapnames and Oversee.net who probably had absolutely nothing to do with any of this mess. Keep this in mind if you need to speak with anyone at the company. I worked in AIG’s Accident Insurance direct marketing group before the meltdown, and I know that many of my former colleagues were treated poorly simply because they worked for the company, despite the fact that they had absolutely nothing to do with the company’s problems. While you might have every right to be pissed at the company and certain individuals at the company, there are plenty of good people who work there too, and this is tough on them as well.

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Piece of Advice Before You Develop

Elliot — Sat, 07 Nov 2009 18:10:44 +0000

It’s a beautiful (but cold) Saturday in New York City, and I want to head out, so I will keep this post brief. Before you develop a domain name into a website, you should map out your 3, 6, and 12 month plan for the site. I didn’t do this on a few of my websites, and I am regretting it.

With my geodomain names, I did not build them on a content management system (CMS) like Wordpress or Joomla. I didn’t have the expertise and didn’t ask the right questions. I gave direction like I knew exactly what I wanted, and I got exactly what I asked to have built. Basically every time I want to add a page of content, I need to do it in Dreamweaver and then make a few tweaks on other related pages, sitemap, home page…etc. With a CMS like Wordpress, it would be automatic. Instead of taking 15 minutes to post an article (not counting the writing part), it takes 5 minutes. My bad. You don’t need to make the same mistake.

You should also think about how often you plan to work on the site and add content or business listings. If you want to be hands-off, you should use a platform that will allow others to add their listings (for a fee or free) where you can simply moderate it. I didn’t do this on my sites, so this is a struggle. I get listing requests practically every day, so it’s a lot of additional work for me. It isn’t difficult, but it can be time consuming.

One reason you need to think about where you will be in a few months and/or even years is that development can be expensive, especially. However, if you go about it the wrong way, it can be even more expensive and anxiety-provoking down the road. I am very thankful this blog was built on Wordpress because it’s pretty easy to make changes to design, advertising, and even the SEO is practically done for me with a few plugins.

It’s essential to consider the amount of revenue you can derive from your site when you are making your plans. If you don’t really think people will pay for listings or advertisers won’t pay to be on your site, you should reconsider development. It can be expensive, and if you don’t really have a business plan, it can be a huge waste of money for you.

Because of the lack of knowledge I had when I started, I have to make a decision about whether to use a CMS on my geodomain names and then import all of my content, which will be a tedious and time consuming (expensive) job. Eventually I will get around to doing it, but there are other decisions and ramifications that will result.

The newest site I am working on will be an automated directory and should have limited online involvement from me. I’ve learned my lesson and gained enough knowledge, which I hope can help you as you develop.

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Special Offers from eDirectory

Elliot — Fri, 06 Nov 2009 18:09:27 +0000

I know a number of people that either use eDirectory on their websites or have considered using eDirectory, and I wanted to let you know about a special offer I just received in case you are thinking about using them in the future. I am not being paid or compensated to post this (nor have I even been asked to do it), but I know that the cost has been one primary reason why some people have been reluctant to use the products, and these special offers may be beneficial to people who read my blog:

The following three offers are valid during November and December. There may be some exceptions and exemptions, that I am unaware of, so you should email Owen Zhu with questions.

November:
- 20% discount off your purchase
- Free 30 minute private business consultation with our Marketing Director, Jared Elder
- Code: November2009 (Expires November 20th, 2009)

December Part I
- 15% discount off your purchase
- Free 23 page, “How to Monetize your Directory” booklet. $400 value.
- Code: December2009 (Expires December 10th, 2009)

December Part II
- 10% discount off your purchase
- Code: December10 (Expires December 31st, 2009)

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Snapnames Emails Rebate Information

Elliot — Fri, 06 Nov 2009 16:16:55 +0000

I just received two emails from Snapnames with information about the rebate offer (both emails look the same). The email from the company confirms the bidder ID as “halvarez,” which has been widely reported already. It also informs users that audits were performed on all closed auctions by FTI Consulting, a third-party forensic accounting firm. The rebate offer is described in full detail in the email, and customers were notified what auctions were affected and how much their rebate will be.

If you were involved in a one on one auction with “halvarez” and won, the rebate is the difference between what you paid and the opening bid, plus interest. If you bid in an auction with “halvarez” and others, the rebate will be the sales price minus what the next high bid would have been without the involvement of “halvarez” plus interest.

One issue I see with the rebate offer is related to the perceived value of the domain name in auction. On a personal level, I feel more comfortable bidding on a domain auction where there is more than one person bidding against me. It reassures me that the domain name has more interest than me and another bidder. Having read that “halvarez” was a big bidder in the past, I may have been more confident in my bidding if he and another bidder were involved.

Another large issue I see is that this rebate offer does not take into consideration domain auctions where the bidder lost to halvarez. Had halvarez not participated in the auction, there is the potential that domain auctions would have been won by another bidder at a lower price. I don’t know how or if Oversee will address these issues. Maybe there was another email sent to people who lost auctions to halvarez.

Finally, Snapnames requires you to return the acceptance form to Rust Consulting (who according to their website is the leader in “Class Action Settlement Administration”), as they are the third party administrator for these rebates. If you do accept the offer, you will need to waive “any claims you may have against SnapNames and its affiliates relating to this matter.”

I have never been a big Snapnames bidder, so most of this doesn’t really apply to me, but they’re a few things to consider. As with any document of a legal nature, you should consult with an attorney and/or accountant to review your options.

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