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Impressions of the TRAFFIC Auction

2011 October 18
by Nat

The TRAFFIC auction fell victim to the recurring curse of live auctions – lack of quality inventory at reasonable prices leading to poor results.

There were some high quality domains,,,,,,, and etc, but the reserves were too high.  UPDATE.  Per Mike Berkens the movie theater domains did not sell.  The highest selling lot was the pair of and for $45,000, pending seller approval of a bid that was well below the published reserve.   That leaves two number domains as the top lot, with and selling as a pair for $38,000.

The auctioneer was entertaining and kept things moving fairly well.

Rick’s innovation to start low and bid up until the market price was reached provided useful market information even when domains failed to meet reserve.  But the bids on passed domains were likely suppressed and lower than they would have been in a No Reserve auction as there was little reason to bid if the reserve was out of reach, so it wasn’t that useful a gauge of market values.

A Live Auction works best when there are multiple competing bidders going for high value domains.  The dynamics of a live auction can add interest and excitement. The visceral experience of going head-to-head with a competing bidder in the same room leads to bidding wars and higher prices.

A live auction has a high hurdle to justify the investment in time and effort to put it together, and the investment in time for those attending.  An online auction can handle multiple auctions efficiently.  A live auction has to go through each domain in the auction list sequentially over the course of several hours.

Did the Live Auction provide value over an online auction?  In this case, the answer is ‘No’.

Just once I would love to see a live auction of high quality domains all at No Reserve.  That would be exciting.

It would require the domain owners to sell their domains at the prevailing market price.  If they aren’t willing to do that, then why even hold an auction?

Other impressions-

.CO domains didn’t have a great showing.  The values were approximately 1% or less of what the corresponding .com would fetch. had a high bid of $60k, less than 1% of the $10m+ valuation of went for $750. would likely fetch at least $75k. (casino in Chinese) sold for $500.  I don’t know what the .com would be worth, but $50k sounds reasonable. had a high bid of $1,000 (didn’t sell). would be a six-figure domain. had a high bid of $500. would be at $50k or close.

It is deflating to have the premium domains such as,, fetching high bids so far below the reserves.  It is also disorienting to have the auctioneer beat up bidders for an extra hundred dollars for (sold for $200) and then move on to ask for million dollars bids for and the other premium domains.  Low quality domains like and shouldn’t be in a live auction wasting a combined live and online audience of hundreds of people.  You don’t see auction houses hawking motel-quality landscapes at a Picasso auction.  You wouldn’t expect a serious bidder for super premium domains such as and to sit through auctions for and

What is the total value of the .XXX name space? sold for $25k, received a high bid (without selling) of $80,000, sold for $25,000, sold for $10,000.  How many domains in the .XXX extension would sell for $10k or more?  3,000?  5,000?  I have no idea.  Let’s say it is only 1,000 domains, that would set the floor for the .XXX name space at $10,000,000, and of course some domains would fetch much higher prices such as Gay.XXX for $500k.

It’s incredible that so much value can be created out of thin air, just by rolling out a new domain extension.  It’s understandable why there is so much interest in the new gTLDs from marketers hoping to recreate .XXX’s success.

Unofficial results provided by’s auction coverage

23 Responses leave one →
  1. adam permalink
    October 18, 2011

    “Rick’s innovation to start low and bid up until the market price was reached provided useful market information even when domains failed to meet reserve. ”

    Do not make idiots of people! Bids like those are mostly fake ones to make auctions look better on the paper. You can never rely on bids under reserve. If you do good luck to you.
    This auction was simply unsuccessful.

    • Nat permalink*
      October 18, 2011

      You are right that bids under reserve shouldn’t be relied on. Bidders may bid higher than they would normally knowing that their bids won’t be accepted. Or, as I said in the post, domains with high reserves may discourage bidding as bidders don’t even bother to bid, so the high bid falls well below true market value. The actual reserve wasn’t usually disclosed in this auction, so when bids reached close to reserve levels, even though the domain failed to sell, those bids were likely genuine bids that reflected the bidders perception of the value of the domain.

      • Francois permalink
        October 19, 2011

        They should do like we do at CAX, the higher bid under reserve can be accepted as winning bid by the seller. This will refrain those that bid for the fun and this will motivate those that have a real interest but for which the reserve is too high.

        • Nat permalink*
          October 19, 2011

          Hi Francois, thanks for the comment. That’s a good idea, and keeps the bidders interested and the bids genuine. The TRAFFIC auction did something similar, as they accepted several bids that were below reserve, and sold the domains pending seller approval. Also many domains sold without conditions for well below the reserve guidance provided. My sense is that most of the bids at the TRAFFIC auction that were below reserve, especially as the bidding began to approach the reserve price, were genuine bids and not just bidding for fun.

  2. Kelly Anne permalink
    October 18, 2011

    So the bubble has officially burst?

    • Nat permalink*
      October 18, 2011

      What bubble are you referring to?

  3. October 18, 2011

    Nearly 40% of listed domains sold which is probably better than some other auctions we have seen over the last few years.

    • October 18, 2011

      Leonard, you can’t count the no-reserve names in that assessment as they would have sold at least for a $1, so they in a sense were/are ‘guaranteed to sell’ sales.

  4. Dean permalink
    October 18, 2011

    From what I could see on the live feed the room was almost empty. I also don’t “buy” into these auctions or their results as any indication of the market. These type of auctions are rigged from the get go, so many people pulling strings behind the curtain it’s ludicrous and a huge risk to bid at these type auctions.

    • Nat permalink*
      October 18, 2011

      I don’t understand the conspiracy theory viewpoint. The domains are for sale, and you can either bid or not bid. How is it different from an online auction? Do you have any evidence of shill bidding? This auction didn’t have an online component, so nearly all the activity happened in the room. Most people in these auctions know the other bidders by reputation. This is more transparency then you usually get. The Halvarez scandal shows what’s possible in an online auction when you reveal your proxy bids in advance, but those risks weren’t present in this live auction.

    • Francois permalink
      October 19, 2011

      I am wondering who is the “idiot” who placed the camera that way. With hundreds of attendees it’s impossible the few people we were seeing reflect the auction audience.
      Now it’s a recurent problem this poor video coverage. Too bad, when a well done coverage can deliver a totally different and positive ambiance and motivate bidders (in the case of online bidding is possible).

  5. Tin Man permalink
    October 18, 2011

    The author referred to the success of .XXX –huh? I just don’t see it.

    What I see is a bunch of domainers paying relatively small dollars for a TLD that is destined to fail. Think about it. Who would be dumb enough to launch a porn site on .XXX without owning the corresponding .COM? Not me, Mr. McGhee. My guess is: probably not you, Waterloo.

    • Nat permalink*
      October 19, 2011

      Domainers have already invested many millions into the .XXX extension if the published sales reports are to be believed. From the perspective of the ICM Registry (sponsor of the .XXX extension), .XXX appears to be a huge financial success. That’s the success I was referring to. It is too early to tell whether the .XXX extension will be a success for those launching web sites with .XXX domains.

  6. October 18, 2011

    I see auctions as being a clearinghouse for small to (maybe) mid-level domains with decent commercial potential. We tried selling some premium names a couple of years ago and I found it interesting that the highest auction bids we received were lower than the unsolicited offers we consistently receive monthly via email.

    • Nat permalink*
      October 19, 2011

      HI David. Thanks for the comment. “Clearinghouse’ is a good way to put it. A live auction is a place to liquidate your holdings for what will often be fire-sale prices since you are selling to an audience of domain investors, not end-users.

      The problem with most live auctions in the domain space is the disconnect between the sellers, who are holding out for premium prices, and the buyers, who are domain investors looking for bargains.

      Those running the auctions are ultimately responsible for the inventory in the auction. They need some marquee domains, like, to attract interest and press, even if the domain is priced too high to sell. Years ago, when was offered at a TRAFFIC auction, it received a lot of mainstream press even though it didn’t come close to selling in the auction. But marquee names at unrealistic reserves are not enough to have a successful auction.

      As you say, small to mid-level domains with decent commercial potential at low or no reserve are what is needed for a successful auction. Too few live auctions have enough of this inventory.

  7. October 18, 2011

    great analysis, the interesting thing about todays auction is it finished on the same day that sedo/afternic results came out, what a difference in prices…its clear that the only money left for domainers is finding the end users, something this auction did not attract and I think further validates that the days of live domain auctions are over, domainers selling to domainers just is never going to return to 2007 levels

  8. adam permalink
    October 19, 2011

    Maybe camera was put in correct place as people in the back were mostly colleagues of Rick, blogers with not intention to buy etc.
    Anyway I do not see why I should come to auction if I can find most of these domains on Sedo. If I wanted to buy any I would first email buyer and try to reach agreement outside auction. Seller would not pay auction fee so I would have much bigger chance to buy cheaper.

  9. October 19, 2011

    I watched a bit of the auction and was surprised by the poor showing. Nothing made this auction special. In the end, stupid reserves kept the real players away, and the high costs kept everyone else away. This auction offered nothing more than what we get on Sedo, Moniker or Snapnames.
    An end user would surely have benefited from this auction. For example, were there any power brokers or power suppliers bidding on Why not? Did they even know of the sale?
    How many eye doctors knew that was being auctioned off? Do you think the name has value to them?
    Honestly, If it were not for Rick and some other bloggers who send me the daily news every monring, I would not even have known this auctioned existed. What happened to the Hype?

  10. October 19, 2011

    Another interesting note was the success of the two number dotcom names. and were the second highest realisation at $38,000. At $19k each average that pushes the average price of names up s notch. (I was an under bidder on that lot)

    • Nat permalink*
      October 19, 2011

      Good point. I missed the boat on the number dot-com domains. I continue to be surprised by the prices they fetch.

  11. October 19, 2011

    Thanks for the great coverage and observations Nat. I was not able to attend, but my only comment is that the economy is obviously much to blame for any auction’s poor results. Those with cash right now are presented with such incredible opportunities from all sorts of investments, that unless something is presented at a perceived value of 30 cents on the dollar, it won’t sell. This will all change, hopefully sooner than later, as the economy rebounds….all it will take is an economic recovery and some srtong reported sales. For now, it’s a great time to develop and monetize what you have, and not sell at this point. And yes….great time to buy if you can!!! Fred.

  12. October 19, 2011

    Props to the sales… However, appearance wise from those of us not there and viewing it on video perceived a failure of an auction. Perception is everything… The frigen commercials you had to sit through to view the auction made it look like a joke. They couldn’t pay for a private video feed for a few hours? I mean c’mon man!

  13. Franki D permalink
    October 20, 2011

    At least he tried something different. Now as far inventory is was not good that is why people paid because they believed they had something good.

    You bozos talk about shill bidding. Come on they guys that run this have portfolios in the 50-100 million range they don’t care about trying to raise the price by a 10 k or something that is not why they run these. They did something that none of you have ever even tried.

    Now for the .co bashers if you had some real hot generic tech names in the group like,,, etc then you would see 50k on up for those type of names. The .co that where in the group did not mean anything.

    I bet you don above would like to own and not the .org.
    >com version for try 1-3 million if your lucky.

    I bet anyone you guys would love to own or if given the chance.

    The best way to sell is sell maybe 5-10 names in the same category and advertise the hell out of it and put it on cax, or box. If people don’t know your name is for sale then you will never sell it.. Hire a broker for 15% and be done with it.

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