The initial domain backorder service was created by Entica in early 2003 and marketed under the product name Domain Sentry. To participate in catching expired domains unique where for a fee of $149.00 Domain Sentry would monitor expiring domains for 3 months and if the domain dropped, it would be registered for you. No auction, just a flat fee so it was a 1st come 1st served type of service. Great if you knew which domains were about to expire, which was not easy as there were no purge lists being provided by the registry operator at the time.
2005 Melbourne IT entered the game with their Names by Request feature, since it was mainly domains expiring by Melbourne IT clients.
However in 2008 a group of registrars lead by Nick Bolton (Bottle Domains, Domain Central, Explorer and Bottle) started catching expired domains for select clients only.
Using 4 registrar connections to drop catch domains, the interesting part was that there were no auctions, just a flat fee. I believe the fee was around $200 per domain caught. The initial success rates were good, and only by chance Anthony Peake working for the same company on a different project, first entered the industry by providing key code refinements to their drop tech. These refinements were used to dominate the drops there after.
Being a flat fee and invite only service soon changed as a result of the expiry of a highly valuable Credit Card domain. The highly valuable domain was the catalyst for the introduction of an auction for expired domains. The instigator of running an auction was George Pongas who headed up the division, used his sales skills and contacts to get a much higher price via a telephone auction for the domain.
The winner of the auction quickly flipped it for even more, prompted the creation of an official service that was launched a few days later, late 2008 called DomainWatch.com.au!
This was the first time that auctions were held for expired domains, introducing the concept of drop auctions and drop catching to the public. The DomainWatch logo recovered from wayback site, was originally created by Anthony and he recalls using Paint as the app he did it in.
In June 2009 after some internal disagreements with Nick Bolton as busy with other projects, George Pongas branched out with the help of some investors and created Domain8.com.au with Anthony Peake once again leading the drop tech development.
In short order Domain8 began to dominate over DomainWatch.com.au and the Bottle Domains group of registrars were subsequently terminated by auDA and sold.
The quick success of Domain8 helped secure an even quicker sale to Darkblue Sea/Fabulous in late 2009.
This is when DarkblueSea rebranded Domain8 to the name it has now: Drop.com.au and added two more registrar connections: Fabulous.com.au and Yexa.com.au.
Both George and Anthony remained with DarkblueSea to run Drop.com.au until they both left. George to auDA/Ausregistry.com.au and Anthony to Netfleet.com.au.
Mid 2010 Netfleet.com.au wanted to enter the expired domain space after launching as a domain aftermarket place and hired Anthony to manage the project. Netfleet Snapper Auctions business was a 50/50 Joint Venture between Publishing Australia (David Lye and Mark Lye) and Netregistry, which was later acquired by Melbourne IT in 2014. Under their group they controlled 5 registrar connections for catching expired domain names.
It did not take long for Netfleet to dominate under the direction of Anthony Peake. Drop.com.au suffered greatly and their catch rate dropped from 100% down to 5% and eventually close to 0% for many years there after as the site was practically abandoned, by Darkbluesea with no updates and limited support.
Early 2012 Trellian initiated discussions with Darkbluesea with the intent to partner and look at reviving Drop.com.au to is former glory, unfortunately the negotiations stopped as key staff left DBS.
In Feb 2015 the start of a new drop catching service called DomainShield.com.au was launched by Anthony Peake. Leaving Netfleet and waiting for the non compete clause to expire, DomainShield started to operate and compete with a single registrar and then adding a second registrar connection Terrific.com.au. One can only imagine that Netfleet management were kicking themselves for letting Anthony leave.
With just 2 connections DomainShield managed to catch a good 30% of the contested domain names. At the time competing against Drop.com.au 4 registrars and Netfleet’s 5 registrars so an amazing effort to achieve that level of success! Granted Drop.com.au at the time was not doing much.
Netfleet tried to maintain their dominance and hired many devs over the years to compete and improve their drop tech but could not increase their drop catch rates but maintained their current 70%.
Early Feb 2017 Ned O’Meara announced the acquisition of Drop.com.au from DarkblueSea, after years of neglect, Ned was at the right place at the right time and had big plans for Drop.
However a congratulatory call to Ned, made by the Trellian‘s CEO resulted in the fastest flip of a Registrar! Less then 1 month after the call the deal was complete and Trellian entered the drop catching space in Australia.
Late March 2017 the acquisition of Drop.com.au, Yexa.com.au, and Fabulous.com.au was official and came with Drop tech that did not work and only caught uncontested name, a Registrar platform that was barely functioning.
Drop came with two part time contractors Cam Bell and Catherine Bell (unrelated) who were supporting the few Drop clients that still used it for their domain renewals.
For those interested in actual numbers here are Drop.com.au financials:
$16,104.98 Drop Catch Revenues Jan – Dec 2016
$9,388.65 Drop Catch Revenues Jan – Dec 2017
$4,196.00 Drop Catch Revenues Jan – Jun 2018 (half year)
Hardly enough to cover hosting/tech let alone any wages to perform critical maintenance, so I can see why the site was left with hardly anything working.
DomainShield throughout for most of 2017 was still catching around 30% of the contested domains, however it was struggling to be profitable as some months were good and some not. Speaking with Anthony the biggest challenges faced according to him was the high cost to maintain accreditation with the auDA stipulated ISS standards and the inconsistent cash flow, which were made worse when some of the bigger clients failed to make payment. Anthony has asked not to disclose who, but a few of these are seen as “well respected” domain veterans, but not great at paying bills. The same players that also had unpaid invoices at both Drop and Netfleet.
By chance Anthony lived really close to the Trellian office and dropped in for a chat after Trellian opened up an account at DomainShield to take a sneak peak at the logged in interface. A month later, in Oct 2017, Trellian acquired DomainShield and appointed Anthony Peake to manage the Drop.com.au project for Trellian. Drop.com.au now owned one more registrar and had access to a second registrar connection (Terrific.com.au) under a pre-existing deal that Anthony had with the owner of Terrific.
Unfortunately the 30% catch rates did not transition with the sale, as focus was put into restoring Drop.com.au taking the drop catch tech offline and spending months updating the Registrar platform to make it compliant.
At the same time the Registry was going through a change from Neustar to Afilias and the hand over of this was July 2018. Trellian spent all its resources in getting Drop ready for this change, while Netfleet enjoyed close to 100% catch from Oct 2017 to end of June 2018.
With the change over to Afilias registry tech in July 2018, introduced a different purge format, Drop.com.au starts to catch 80% of contested domains, for the 1st time beating Netfleet since 2010. Ending Netfleet’s 8 years of dominance in the space.
By mid 2019 after year of poor results against Drop.com.au, Netfleet followed in the same footsteps of DomainWatch and declined rapidly. By early 2020 the JV was falling apart, the two parties did not wish to speak with each other, while Nicki was running operations with little support from either party.
Since late 2018, Trellian had been engaged in negotiations with the former Melbourne IT CEO Martin Mercer, to acquire Netfeet as a whole, where negotiations were later taken over by the interim CEO Brett Fenton and an agreement was reached early 2020. Unfortunately this was stalled at the last minute by a potential Webcentral acquisition by Web.com.
While the Melbourne IT/Webcentral 50% share was stalled, Trellian was able to acquire the other 50% of Netfleet in July 2020 from the Publishing Australia half, taking the management role of Netfleet, with the agreement to acquire the other 50% from Melb IT shortly after.
After reaching a full agreement and signing on our end, Melb IT/Webcentral then went though a hostile take over by 5GN who blocked the already signed sale agreement. After spending some quality time with lawyers and barristers a court settlement was reached to continue with the remaining 50% acquisition.
Late Nov 2020 Trellian completes the 100% acquisition of Netfleet. Adding 3 registrar accreditation’s to the Trellian group (Netfleet.com.au, Ziphosting renamed to Help.com.au and NetAlliance1 renamed to DNTrade.com.au).
2021 and on-wards Drop.com.au is the primary drop catcher that secures the vast majority of contested domains, but an interesting fact is that this is still less than 50% of all domains that are picked up by other Registrars back order services from the pool of expired domains. Netregistry and others leading the way.
Timeline:
2003 Enetica.com.au Domain Sentry Backorder service.
– Catching names uncontested.
2005 Melbourne IT – Names By Request back order service.
2008 BottleDomains.com.au custom drop catch service offered by Nick Bolton.
– Started to catch most of the expired domains and Domain Sentry gradually closed down.
– DomainWatch.com.au launched by Nick Bolton, headed up by George Pongas with the help of Anthony Peake working on the drop tech.
2009 Domain8.com.au launched by George Pongas and Anthony Peake.
– Started to catch the majority of names and DomainWatch ceased to operate shortly after.
2009 Drop.com.au launched with the acquisition and renaming of Domain8 by DarkblueSea.
– Drop ran for a while alone catching all domains.
2010 Netfleet came as a JV with Netregistry and the Lye brothers.
– Netfleet hired Anthony Peake and started to dominate on the catch rates.
– Within a year Drop was catching hardly and contested domains.
– Within 2 years the site was left and not maintained. As no longer profitable the site was neglected.
2014 Melbourne IT acquired NetRegistry which included the 50% share in Netfleet.
2015 DomainShield started by Anthony Peake after leaving Netfleet.
– achieved 30% catch rate
2017 Drop was sold to Ned O’Meara
2017 Drop acquired by Trellian from Ned O’Meara with months.
– close to 0% catch rates for 2017 and half of 2018
2017 DomainShield was acquired in Oct 2017 with a 30% catch rate track record.
– merged with Drop and unfortunately in transition lost the 30% catch rate success
– Netfleet dominated with near 100% catch rates until Jul 2018
2018 Drop after 2 years of 0% catch rates, starts to catch 80% of expired domains from July 2018 after registry change.
2020 Netfleet by June 2020 was not being maintained, the JV was falling apart and on the verge of liquidation.
2020 Trellian acquires 50% of Netfleet in July with the agreement to acquire the other 50% from Melb IT shortly after.
2020 Trellian completes the 100% acquisition of Netfleet after court settlement was reached with 5GN.
2021 Drop.com.au catches the vast majority of contested domains but this is still less than 50% of all domains that are picked up by other Registrars back order services.
Looking at the above timeline and history of .au domain catching, there does not seem to have ever been a time where there were 2 or more drop catchers that were profitable at the same time. As soon as one dominated, the other could not sustain operations. Any business will be hard pressed to survive without a stable income stream, while your costs are the same if not increased as you need to work extra hard to refine your drop tech to be more competitive. One needs to be committed to ride the ups and especially be ready to survive the downs.
If anyone has any corrections to the time line that they are aware of happy to edit.
The one part that this article did not cover in the time line are the various changes made within each Drop Catcher, to auction systems, pricing formats, flat fee, tier pricing, blind bidding, hidden bids, $1 bids, proxy bids, all contributing to the evolution of domain name drop catching in Australia.
Thanks to Kim Lowton that provided a correction to the timeline and the Netfleet entry to the market with Netregistry that was later acquired by Melbourne IT.
ebay syle bidding from $10 was the best way to bid for domains. When that changed it took out a lot of spec buyers who bought hundreds of domains each year (including me). Now I mostly stay out of the aussie domain space and only focus on the .com space. Probably better that way for me, but sad for the Australian drop catch market when the drop catchers became greedy.
Hi Rudy,
Every auction model has its pros and cons. I doubt that greed was the driving force on the auction models.
Drop when acquired had $1 increment bidding, and you would get notified if you were over bid. But due to the nature of dropping domains, they come with a final close time that could not be extended, unlike ebay auctions that can be extend and extended and extended as long as there are new bids placed. This hard end created an environment of snipe bids that most clients absolutely hated. But at the time Drop was not catching anything.
Netfleet on the other hand adopted Blind bids of any amount you wished to place, and would never know if you were the top bidder or not. At the time this was the main drop catcher securing the vast majority of the expired domains. The reason for blind bids was so that their competitors (Drop and DomainShield) would not know what domains that they had orders on and how much so that they could tweak their catch tech to go after the more valuable names. Prior to that they had $1 increments as well, but changed that due to the hard close of a domain auction and because Drop/DomainShield were using their bids to compete on the more valuable names.
DomainShield had semi blind bids based on set price Tiers, and you were told if that Tier was already taken or not when placing your initial bids in, however you were not told if your tier was later over bid by someone else. The final price was not disclosed after the end of the auction. This was put in place to keep the competition guessing so that they did not know what domains they were focusing on more so based on value.
Drop in the present day has a hybrid auction system that takes the DomainShield tiered approach, with a lot more tiers, while also keeping bids public and providing out bid alerts for but still needs to work within the hard close of the auction.
If drop services were allowed to use their own Registrant details to secure a name and then run an auction the ebay style would indeed work well. But here you would find that the price of a domain would be a lot more than what it is now, as the auction would last longer than the current 1 day to place a bid on expired domains. You could see an auction last a week or even longer. This would to me would be fair, give all potential buyers longer like an ebay style auction. This would however put most of the domainers out of business as many of these great names would be picked up by end users instead and would not be flipped by a domainer.
So not sure that Drop clients want an ebay style platform.
I used to have a tab open with drop open in one and netfleet open in the other and make my highest bid a second before closing time.
I knew my highest bid wasn’t the actual amount I would pay, so in some cases I would bid high regardless and let the chips fall. And I could do this because it would only ever take my bid as a proxy, only bidding higher than the next person if it was needed.
And some of the domains I bid on were scrappy domains that I didn’t really want, but might be handy in the future. If I got them cheap enough I was happy to take them.
The changing landscape of blind bidding changed all that for me. My bid became what I paid – so there was no more proxy bidding and so therefore no more ‘getting a win’ and scoring a cheapy.
It meant that ALL my ’emotional bidding’ for a random chance of winning something cheap disappeared out the window and I just pulled my head in and lost interest. The fun was taken away. No more surprises.
The $1 increment works because domains with value still have people biding higher – many more domains sold – but then I guess they needed their servers focusing on securing less domains so the system could capture everything they wanted.
I imagine this is the real reason why the different auction styles came through. Their limited server capacity was only able to ‘snatch’ a small number of domains at the second they become available.
PS I don’t suppose you could alter your comment system so people can comment with one website login rather than leaving name, email, website with each comment? đŸ™‚
Edit:
If you subscribe and login via https://domainer.com.au/sign-up/
Then when you navigate to the comments section, you no longer need to add your details over again with each post.
Hi Rudy,
Being in a unique position to have access to all the Drop bidding history from all 3 platforms: Drop, Netfleet, DomainShield, I can categorically confirm that right now, many more domains than than ever before get a bid, the vast majority are $25 and under, this increased even more with the launch of the reverse dutch auctions aimed at low contested names…
So I suspect that that are still many clients “scoring a cheapy” as many wait for the price to drop to $10 for a domain ($10 includes the registration cost!) In comparison the cheapest Netfleet price was $59 which was their Catch fee plus registration cost.. in my opinion this price restricted many bids and gave drop some income that it would otherwise not have made. Drop were charging $1 bid on top of Registration cost at that time.
Clearly Drop was running at a loss… I posted the Drop revenues in the article, what I did not post is that the bulk was chewed up by the actual Registration costs, did not leave much for other costs… all of which were being absorbed by the parent DarkBlueSea company.
Good names rarely expire these days as everyone knows they are worth 5 figures or 6 figures.
What’s needed is are quality aftermarket auctions.
Decent names expire every month… the really good ones are indeed rare, to me have always been rare.
Going back month to month… not many names in there that went for more than $10k+ a handful $100k+ and that is since 2009… maybe prior to 2009 the really good ones dropped.
Though names that are picked up at the Drops many are flipped for decent returns.
I know that 2LL names drop frequently, and even just in the last 2 weeks there have been a few decent names drop:
capable.com.au
flexible.com.au
increase.com.au
jagged.com.au
jetty.com.au
modular.com.au
nails.com.au
pampered.com.au
scroll.com.au
socialmediamarketing.com.au
stylish.com.au
virtualcare.com.au
As for aftermarket place, many have tried and many marketplace platforms already exist.
At Above.com the auctions feature was disabled as it did not generate a good user experience as many domains were simply passed in, and did not meet reserves set by the seller.
Other platforms all have the same issue, more auctions are passed in then actually close.
The problems are:
– too much inventory, the vast majority of names are low quality
– the good names are hard to find amongst the junk
– unrealistic pricing set by domain owners
– buyers are predominantly domain investors (domainers) and as such do not want to pay the premium rates.
In my opinion, domain auctions are good for lower value domains, as for a marketplace the hardest part is the get domains in front of end users at the right time when they have budgets…
That is why domain auctions rarely work… end users need a lot of time to secure budgets for high value names… that is why there are sooooo many Domain Brokers out there. They can spend as much time as they need pitching the right domain and sometimes wait months/years for the buyer to come up with the budgets/funds.
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