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Mystery domaining auction helps domaining world?

by Barry on January 4, 2009

In case you missed it, Jonathan Motson launched a Mystery Domain Auction aiming to “auction off a mystery domain name for an accumulated $1,000,000 in an “all pay” auction”. The winner gets a mystery domain name which Jonathan says is worth at least $10,000 and is willing to buy the domain name back for $10,000 if the winner wants. So I am going to do something I try not to do and that is jump on the bandwagon of commentary.

Jonathan’s stated goal is to show that domain names are investments and worth good money and that this mystery auction should generate the buzz to get that word out. “My aim is to revolutionize the way general folks look at domain names – I am talking mom and pop type people and your run of the mill business people.” I laud Jonathan’s goal because getting the word out to end users has been difficult and domains often circulate within domaining circles rather than reach the run of the mill business person.

What I disagree with is his method of execution. Domain names live or die by their perceived value. The domaining world has been hidden from the average person’s experience and knowledge. Because of the low cost to enter, many new domainers start with great expectations, are bitterly disappointed and exit with a bad taste in their mouth. In my view, domaining still suffers from being seen as a shady industry exploiting the web and not contributing in any significant way to the accumulated knowledge etc.

Again in my view, the domaining world needs to cast off this used car salesman image and find the legitimacy it deserves. This is where I think Jonathan is doing the domaining industry a disservice.

The bidders

Will the bidders be the “mom and pop” and “run of the mill business people”? I think not. Again domainers will likely be the ones bidding in this auction. First of all, keeping the domain name a mystery is not going to attract bidders other than those willing to take a risk. Domainers already take risks and so the most likely bidders will be the most risk tolerant. Will the domain name match any business or interest of the run of the mill bidder? We have no idea because we don’t know the name. Why should a dentist for instance bid in this auction? What is the incentive for his business and what does he learn about domain names if he does bid?

Being able to post a link as advertising is again really only appealing to domainers and those looking for links and a few extra visitors to their websites. Will the dentist want to bid to advertise his business? Will such brief exposure bring him new clients and get him excited about the potential of domain names?

Bottom line is that this is an auction by a domainer for domainers and does not reach the end user. It is the end user who we need to persuade that domain names have value.

Odd news

Most news agencies know the attraction of the strange and unusual. “Thousands of shoes tie up Miami freeway traffic” and “Man tries to deter drunk driving with paintballs” are the types of headlines that appear in these sections. People love to read them but in no way take them seriously. The mystery domain auction unfortunately is destined to end up in this category and so does nothing to forward the goal of the industry being taken seriously.

Ponzi schemes

With the Madoff ponzi scheme mess making headlines, this is not the time to set up this type of auction format. While this is not a pyramid or ponzi scheme, it’s structure has a similar feel though the only one to lose big presumably will be Jonathan if it fails to reach its goal.In fact it is an “all pay auction” which derives from game theory and used to model various interactions including political lobbying and even bribery. All pay auctions are in fact against the law in some countries e.g. Germany. I am not sure about the legality of this auction but hopefully Jonathan has looked into this as well as having the right oversight and checks and balances in place. Again though how does this auction bring perceived legitimacy to this industry?

A good article was written in the NY Times on the All pay auction.

In summary I applaud Jonathan’s goals but I am disappointed in the execution. What do you think?

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Did You Read The Domaining Manifesto? Was It A Scam? | Domain Name News | Domain News | Expired Domains
January 5, 2009 at 8:03 am

{ 6 comments… read them below or add one }

Troy January 4, 2009 at 10:41 pm

Simple… what he is doing is a scam.

Troy January 4, 2009 at 10:48 pm

A scam that has already netted him $488 with the bid at 3.19 cents. If he can get suckers to simply bid the domain up to $10 he will make $10,000 profit! If he gets it to bid up to $30 he will make over $45,000.

If you are not able to feel guilt then it is a great way to take money from those stupid enough to bid.

If you bid… YOU ARE DUMB.

Jamie Parks January 4, 2009 at 11:34 pm

Glad to see you speaking the truth on this one Barry. Schemes like these are what mutilate the domaining profession. If John would clean the slime off of his experiment, just imagine the good that could actually be done.

Domainers would love to help promote a worthy cause and simultaneously expand awareness of their business. If John seriously wanted to make headlines and prove to the world that the domaining industry is really made out of credible, innovative, honest and revolutionary people, he would be donating a significant portion of the proceeds he receives to a charity that all bidders/advertisers could nominate and vote on (like with a poll.) John also should have been much more open and upfront with all of us in his initial emails where he was talking ‘revolution’ and asking us to promote his other scam/e-book.

There WILL BE a revolution, but it sure as hell isn’t gonna come from a bunch of BS like this…

Barry January 4, 2009 at 11:45 pm

I think its just not good PR for the domaining industry and Jamie, even donating the proceeds to charity still is not going to get endusers excited about domain names though I agree it may give a better feel to the effort.

Of the various goals stated by John for the project, the most likely one to be accomplished is “I aim to use the money earned to take a break from my day job and attend the Targeted T.R.A.F.F.I.C Conference….amongst other things.”

If this succeeds in turning a profit, watch out for the explosion of copycat efforts.

Rob Sequin January 5, 2009 at 10:39 am

Site is closed now. Here’s the text:

Following legal advice obtained as a result of concerns raised by fellow domaining bloggers and some NamePros members about the legality of an all-pay auction in the US where this site is hosted in addition to consideration of the problems I may face at the end of the auction in case more than one person bids with the same amount which is very likely I have decided that the best option is to cancel this auction effective immediately.

All bids have now been refunded.

All affiliates that made sales have been paid out of my own pocket.

Barry January 5, 2009 at 10:48 am

Thanks Rob. Yes, I saw this information this morning. I think it was a wise move on John’s part.

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