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.
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.
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.
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?