Sedo.com Geo Auction Raises Questions

Posted by Steve under General on Monday, February 18th, 2008 2:03 pm

 

Updated:  Ok, so it has been explained what is going on.  As I stated I am no professional on auctions, so I asked the question.  This is a technique that is used to find out reserve pricing set for the domain.  It is very misleading however, but makes perfect sense if you are a bidder interested in securing a domain name for the lowest price possible.

Thanks to all who replied on the board as well as by email.

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I went to the Sedo.com geo domain auction just now and did some investigating on the names with bidders.  Tommy raised some concerns in a comment and I decided to investigate.  It appears there might be some shill bidding going on with the top domains listed. This is very very bad for the industry if this is happening.  I hope I am wrong about this.

I am no expert with Sedo.com auctions, but why would the price of Urlaub.com go from 300,000 to 450,000 euro?  Sedo.com allows you to make 2,500 bid increments  Then bidder 7 bids again bids 5 minutes later and raises it to 700,000 euro?

Another domain like this is Iraq.com.  

Iraq.com bidder 5 makes 3 bids all minutes apart 250,000, 300,000, 350,000

What are your thoughts on this?  Does this look like classic shill bidding?

    

5 Responses to “Sedo.com Geo Auction Raises Questions”

1. Sammy Ashouri Says:
   February 18th, 2008 at 16:25 pm

   An enormous jump like that (50,000-100,000euros) does raise some concerns.

   
   
   
2. Jeff Jefferson Says:
   February 18th, 2008 at 17:09 pm

   Not sure if it’s classic shill bidding since the reserves are still in place. It might be something as innocent as a bidder trying to figure out where the reserve is. For Iraq.com, the reserve is between 500,000 euro and 1,000,000 euro, so bidder 5 might just be pushing it up close to the bottom end of the range. For Urlaub.com, a jump of 250,000 euro is pretty big, but again, it is within the reserve range, so hopefully there is nothing fishy about it. You are right that we need to make sure shill bidding doesn’t taint the domain auction industry, but I don’t think there is enough evidence here to make any solid conclusions.

   Jeff

   
   
   
3. Sam Says:
   February 18th, 2008 at 17:38 pm

   Although I do think there is a fair amount of shill bidding in all domain auctions, I don’t think that this specific point about Urlaub means anything.

   Many times, bidders will make a bid, see that the reserve has not been reached, and then up their own bid until their max point, hoping that they will exceed the reserve at some point.

   I had this happen with a name I sold at a great domains auction, where there was only one interested party, so they kept on bidding themselves up until they breached the reserve or reached their max… in that case, they breached the reserve and the name sold at exactly the reserve price.

   
   
   
4. M. Menius Says:
   February 18th, 2008 at 18:16 pm

   It has been suggested that a pre-qualification of bidders occur with sales over a certain monetary figure. This would be useful for telephone and online bidders in which they are not physically in the room (low accountability). Verifying identity is pretty important these days to insure that bids are legitimate and to help provide recourse if the buyer backs out. I’m 3 months out on a domain which sold at the GEO auction and the “buyer” is still having problems coming through per Moniker staff. I feel that any buyer who fails to complete their part in a contract should be made public.

   
   
   
5. John Bomhardt Says:
   February 18th, 2008 at 18:19 pm

   Depending on the auction system being used, there had been times I would bid at a much higher amount (jumping ahead) I had preset for myself to prevent or to discourage bidding activity thus hopefully eliminating interest in the name so I can get it for myself

   John
   http://unplain.com

   
   
   

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