To Decide Future Of Domain Auctions

Auction of domain name could prove to be the biggest domain event of this decade. The domain community is already buzzing about the upcoming sale, and its news is filtering out to general media, but is now a more significant name sale – if indeed it is a ‘sale’.

Sold for £91,500 this week, in a Sedo public auction, the transaction is now contested by the seller. They have tried to cancel it, but can they? And if so what does this mean if they can? Read the background.

Auction of the name is big news by itself: the opportunity to buy a premium 2-word domain name of exact match to the search term of a high volume high value market sector – [mobile phones] – is a seismic force 7 on the Richter scale.

But now the official sale is being disputed by its current owners, it has become an unparalled force 10, nearly off the scale, unrecorded in domain history.

Because of our own work in the Teleco sector, we’ve had the name on our radar for a few years, and understand that a 200k bid was turned down a few years ago, before the recent recession when domain prices were still high. It appears that owners of the also own the .com, and they have quietly sat on the names for a few years.

Auctioned last week, the name received 58 bids from 10 bidders, on Sedo. Well done to Angie Barrow’s ANY-Web for having the forsight to purchase the name. £91,500 is widely recognised as a good price for such a high potential domain name. While there doesn’t seem to be any formal notice by Sedo on the issue yet, Angie herself reports the sale is being contested. Rightly, domainers are up in arms.

(Whilst buyers sometimes do not pay in domain auctions they have won – poor practice, but something we’re all familiar with from eBay auctions for example – it is rare for the seller to renege. Indeed we’re not aware of any for such situation before, particularly for a high value domain name >> please comment below with any you know of or have experienced.)

Mistake by the Seller?

It appears that a bid of £25,000 triggered the auction last week. The case for the sale being in error is supported by such a low initial bid meeting the reserve price, and the subsequent timing of the end of a 7 day auction being late at night (seasoned eBay’ers would be suspicious of a late night auction finish).

But there are numerous confirmation steps required in accepting a bid in Sedo and then releasing it for public auction. It is difficult to understand how this could be done in error, by honest mistake. There are numerous warning and update emails a seller receives during an auction, even before the public information about the auction. Neither an out-of-date email address to Sedo for alerts nor being off-line are plausible excuses, they reacted to the initial bid. Regardless they used Sedo services, and agreed to Sedo’s terms.

Sedo’s Role

Interestingly the name wasn’t given much profile on Sedo during the week – as those many of us who were watching the auction of such a name like hawks can confirm. Sedo was aware plainly aware of the sale, as those who signed up as premium bidders to enter the auction will also confirm. You would imagine Sedo’s own procedures are to perform due diligence behind such a premium sale, to authenticate and to provide the seller with customer service (given the 10% brokerage fee it makes).

Contract for Sale?

Could this series of events happen in error? IF the acceptance of the initial bid, AND the release to public auction, AND the auction house validation, AND the awareness of the auction by the seller, ALL went wrong, then perhaps. Hard to imagine, but perhaps.

Even if these unfortunate events culminated in the auction proceeding and completing, with Angie Barrow’s final successful bid, does it matter? They entered into a legal contract.

Whilst Sedo are only the broker, the terms and conditions of their domain auction spell out the binding agreement by the seller and the potential buyers in a legal contract. Claiming an auction is in error is the same as backing out of it if you don’t like the price you’ve achieved. This case could test the legality of the commonly used domain auction process.


We are in unchartered domain-waters. If such a public sale can be made void, reneged on during or after the bidding process, then the outcome in this ‘sale’ of could set a precedent for ALL future domain auctions. If a name can be put up for auction, the auction run, and won, but then the sale cancelled, why bother bidding?

It would make a mockery of the notion of reserve price, and has enormous ramifications, not just for integrity of the seller and the domain houses running the auction, but the trading of domains as an activity and domain industry as a whole.

The domain market relies on the ability to trade names between buyers and sellers, structured and facilitated by auction houses. Domainers and their industry have had a poor image – somewhat unfairly  – and worked to improve it. The precedent for reneging on auctions could set them back years.

Resolution TBC

You can only imagine there have been a lot of people busy all weekend on this one: the seller stating their case; the buyer evaluating their options (legal or otherwise); Sedo bringing the domain-sale-that-wasn’t to clean and clear resolution. Without it, where do domain auctions go from here?

As the story rumbles on into this week, we’re anxious to hear where it goes, and we’ll keep you posted…

5 replies
  1. Mike Nott
    Mike Nott says:

    Good on the seller to not go down without a fight – it’s her money and if she doesn’t want to give it up for less than she expects, then why should she care about the morals of the auction process.

    But more interestingly – could this be the bursting of the domain industry bubble? Just like what happened 10 years ago to dot coms. Both industries (at the time) with ridiculously inflated prices based on pure speculation and lack of understanding.

  2. Nikhil
    Nikhil says:

    This highlights the loop holes in the online domain auction systems and the insufficient control an auction house has over the sale.
    This affair calls into question Sedo’s role as an auctioneer and the safegaurds they should take to protect both parties and themselves This is perhaps a PR nightmare for SEDO but more so a difficult experience for people like Angie( the buyer) who fall victim to the inefficiency of the auctioning systems.

    IMO rather than bashing SEDO (as evident on forums) one needs to look at the issues invovled and perhaps suggest methods for auction houses to implement. Suggestions like:
    1. For any high value generic sale (above $10k) Sedo should take control of the domain during the auction period.
    2. They should certify sellers just like they do buyers.
    3. They should initiate a confirm you ownership details like all registrars do.
    4. Or in the event of large portfolios have account managers contact domain owners to conifrm the ownership of their listed portfolio once a month/qtr.
    Ofcurse these methods are not foolproof but would go a long way to create a efficient process to avoid scenarious such as

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