Rick Latona Offers Candid Insights Following Unsuccessful Live Domain Auction
The highly anticipated adult domain name auction, orchestrated by prominent domain industry figure Rick Latona at The Phoenix Forum, recently concluded with results that fell significantly short of expectations. In an exclusive interview, Latona openly addressed the myriad challenges encountered during the event, offering a transparent account of what went wrong and sharing his refined perspective on conducting live domain auctions at events not primarily focused on domain investors.
This detailed post-mortem offers invaluable lessons for domain sellers and buyers alike, highlighting the complex interplay of market conditions, technological reliability, and audience engagement that defines the success of such high-stakes sales. Latona’s commitment to accountability and his readiness to pivot strategies underscore the dynamic nature of the domain market and the continuous need for innovation in sales methodologies.
Anatomy of Disappointment: Unacceptable Results and Latona’s Pledge
When asked about the auction’s performance, Rick Latona minced no words. “We think the results were terrible and completely unacceptable,” he stated unequivocally. Taking full personal responsibility, Latona emphasized that “the buck stops with me.” This candid admission set the tone for a transparent discussion of the factors contributing to the auction’s disappointing outcome.
To mitigate the financial impact on his sellers, Latona announced a remarkable gesture: for every name that sold in the live auction for less than $500, he committed to personally contributing an additional $300 from his own pocket. This act of good faith not only demonstrates his dedication to his clients but also highlights the extent of the underperformance. Initially, expectations were considerably higher. Latona’s team believed they had meticulously assembled “the right kind of inventory,” secured “the right software,” targeted “the right audience,” and provided “the right financing options.” However, as subsequent events unfolded, it became clear that some of these critical assumptions were, regrettably, unfounded.
Unforeseen Market Challenges in the Adult Industry
A significant contributing factor to the auction’s lackluster performance was an unanticipated downturn within the adult entertainment industry itself. Latona revealed, “We’ve learned over the weekend that the adult business is in worse shape than we thought.” While the industry was already grappling with the widespread impact of free tube sites, which had eroded revenue streams for many premium content providers, a more recent and severe challenge emerged. Since October of the preceding year, many adult businesses had experienced a dramatic “fall off a cliff” in revenue, as Latona described.
The core issue, Latona explained, stemmed from Internet Payment Service Providers (IPSPs), which process credit card transactions for adult sites. These providers had reportedly doubled the rate at which they were declining credit card transactions. This escalation was attributed to increasing pressure from banks and an unprecedented rise in chargeback ratios. The broader economic climate, marked by non-paying cardholders, had evidently exacerbated these financial vulnerabilities, making it increasingly difficult for adult sites to process payments reliably. This critical shift in payment processing capabilities directly impacted the purchasing power and willingness of potential buyers at the auction, severely dampening demand for adult domain names, irrespective of their intrinsic value.
Operational Glitches and the Proxibid Predicament
Another major hurdle encountered during the auction was the functionality of the chosen online bidding platform, Proxibid. Latona’s personal experience underscored the severity of these technical issues. Unable to attend the Phoenix Forum in person, he attempted to participate and monitor the auction remotely, akin to any other online bidder. This unique vantage point allowed him to firsthand experience the platform’s shortcomings.
Latona candidly stated, “Proxibid sucks and I’ll never use them again.” He expressed gratitude, despite the outcome, for having personally encountered the system’s flaws, acknowledging that this experience would inform future decisions. He found the auction “very hard to follow” and struggled to get the system to work for himself until the first four lots had already closed—a significant operational failure for a live event.
Critical Bidding System Limitations
One of the most frustrating aspects of the Proxibid platform was its restrictive bidding mechanism. Latona recounted a critical flaw: “If I clicked on bid I couldn’t bid more unless I was outbid.” This meant that even when he had legitimate, high bids from absentee buyers, he couldn’t enter them unless the current bid was surpassed. This limitation had profound financial consequences for several high-value domain names.
For instance, Latona had received a $450,000 bid from a buyer for CamGirls.com. However, due to the system’s constraint, he could only enter a $300,000 bid, matching what his own auctioneer was asking for at that moment. The inability to reflect the true buyer interest directly undermined the potential sale price. An even more dramatic example involved webcam.com, for which Latona had a buyer willing to pay $750,000. Describing the agonizing experience, he said, “I was screaming to myself in my office that I couldn’t enter a $750,000 bid.” He was unable to communicate this substantial offer to his auction manager, David, who was on the phone with the seller. The result was watching his own auctioneer pass on the name at a significantly lower value, a truly “miserable experience.”
Beyond these high-profile examples, similar issues plagued the sale of less expensive names. On at least two other occasions, buyers were willing to meet the reserve price, but Latona couldn’t place bids at that level because the Proxibid system only allowed bids matching the auctioneer’s current asking price, which was often below the reserve. These fundamental flaws highlighted the urgent need for a more robust and flexible auction platform. Latona affirmed, “This is a big lesson learned and the hole will be plugged in our next auction.” He committed to using “new software” and ensuring that bids would “starting at reserve” in future events, eliminating the problematic scenarios encountered.
Addressing the “Vertigogo” Query: House Bids for Absentee Buyers
The presence of an active bidder named “Vertigogo,” which is also Rick Latona’s known handle on platforms like Afternic, raised questions during the auction. Latona addressed this directly, explaining, “Yes and no. They were house bids, not shill bids.” He clarified that having missed his flight to Phoenix, he was online, desperately trying to solicit bids from his network via instant messenger and phone. Many individuals encountered difficulties with the Proxibid system but conveyed their desired bids to Latona, who then placed these “absentee bids” on their behalf. He pointed out that “I use Kabonga or Vertigogo as my username at all registrars and auction companies. Most players know this. Clearly I would have chosen something else if it was for another reason.” His frantic efforts were genuinely aimed at securing bids for his sellers, given the surprisingly low prices. This explanation underscored his commitment to his sellers, even while battling the platform’s limitations.
Rethinking Strategy: The Future of Domain Auctions at Non-Domainer Events
The experience at The Phoenix Forum led Rick Latona to a significant re-evaluation of his strategy concerning domain auctions at non-domainer events. When asked about future participation, his response was unequivocal: “No, I do not.” While this doesn’t signify a complete withdrawal from the adult market, it does mark a decisive shift in approach. Latona confirmed that they have already informed The Phoenix Forum that they will not be returning the following year.
His refined perspective on achieving success in such contexts is even more direct: “I think the key is to not do them.” Latona elaborated that conducting auctions for valuable domain names at events where the primary audience consists of industry professionals, rather than dedicated domain investors, poses an “too risky for our valued sellers.” He explained that in such environments, “no reserve names end up selling at fire-sale prices because the audience simply doesn’t recognize the value.” This fundamental disconnect between the perceived value of domain names by specialized investors and a general industry audience makes traditional auction formats inherently unsuitable for maximizing returns.
A New Paradigm: Vertical Brokering and Targeted Advertising
In response to these critical lessons, Latona’s company is embarking on a significant strategic pivot, moving away from broad-based live auctions at non-domainer events towards a highly targeted, proactive sales approach. “We will be quadrupling our vertical brokering efforts,” he announced. This strategy involves dedicating resources to directly connect domain names with specific end-users within relevant industries, moving beyond the auction floor.
Latona revealed plans for a substantial investment in traditional advertising. He observed that the money lost in the Phoenix Forum auction could have instead funded a two-page magazine spread in X-Biz, the adult industry’s largest trade publication, running for an entire year. This comparison highlights the cost-effectiveness and sustained reach of targeted advertising. He confirmed, “I’m going to do it.” His intention is to list the names of his sellers directly within these advertisements, “drumming up sales at high-returns the old fashion way, with hard work and advertising.” This method leverages established industry channels to reach buyers who are already within a relevant vertical and actively looking for business assets.
This strategic shift is already underway. Latona referenced a previous successful endeavor where he purchased a full-page ad in Black Belt magazine to promote their portfolio of martial arts-related names. To support this expanded initiative, his office now has a full-time staff member dedicated to “assembling a database of top trade magazines in various markets and ad rates at each of them.” This systematic approach ensures that future marketing efforts are precisely targeted and optimized for maximum impact.
Direct Engagement: Buy-It-Now and Call Center Outreach
Latona firmly believes that if the audience for domain sales isn’t primarily composed of domainers, the most effective approach is to proactively “put buy-it-now prices on the names and court the buyers.” This direct sales model eliminates the unpredictability of auctions and places the power of negotiation and valuation back into the hands of the seller and a dedicated sales team. This method is designed to appeal to genuine end-users who recognize the specific business utility of a domain name rather than viewing it purely as an investment.
To execute this ambitious strategy, Latona plans to leverage his call center in the Philippines, combining its outreach capabilities with the robust trade magazine ad campaigns. This dual approach aims to generate leads from advertising and then meticulously follow up with direct, personalized engagement. Latona acknowledged the inherent financial risk in this new direction, stating, “Wish me luck because I’m taking a big financial risk on this and if it works it’ll benefit us all.” This bold move represents a significant evolution in his approach to domain sales, promising a more focused, effective, and ultimately rewarding experience for both sellers and serious buyers in niche markets.