DomainTools Discloses Next Auction

Live online auction will take place January 3.

DomainTools disclosed its next live auction today on its blog. The auction will utilize improved auction software similar to the software used at the recent Domain Roundtable conference.

This auction won’t be tied to a conference, and the timing is rather odd — January 3rd. Many people are still on vacation. Even though they can login from their computers to bid, this is a tough time to hold an auction.

There are two catches for sellers this time around. First, DomainTools has exclusive rights to sell the domains for 60 days following the auction. Although I understand the reasoning behind this rule, it’s somewhat hypocritical since DomainTools CEO Jay Westerdal made a backhanded jab against other auctioneers (i.e. Moniker) last time around regarding this type of exclusivity. In response to a comment on his blog, Westerdal stated:

“UPDATE BY JAY: We are not going to lock people into contracts for months. This ought to be a free market so people are free to come and go following the auction is over and no one bid on the domain.”

Second, domains not sold at the auction can be sold by DomainTools for 20% less than the reserve during the two month lockup. As many people pointed out on the DomainTools blog, this disincentivizes people to bid during the auction. If no one else is bidding on a domain, you may as well not bid and then pick it up following the auction for up to 20% off.

DomainTools had a very innovative auction in August, and I’m excited to see the fresh auction format and software in action. But the firm might want to reconsider its fresh rules.