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SnapNames settles shill-bidder class action

Kevin Murphy, October 26, 2010, Domain Sales

Domain name auctioneer SnapNames said that it has settled the class action lawsuit filed against it by disgruntled domainers after one of its employees was found to be a shill bidder.

It seems to have had a bit of a result, too. Class members will receive exactly the same amount they would have had they accepted its rebate offer, according to a statement released by the company today.

The case was filed almost a year ago, after it emerged that Nelson Brady, a SnapNames employee, had been posing as a bidder in domain name auctions in order to bump up the final sale price.

Posing as “Hank Alvarez” or “halverez”, Brady stood to gain bonuses based on performance targets as a result of SnapNames’ acquisition by Oversee.net, its current owner.

After the abuse was discovered, SnapNames offered affected customers a rebate equivalent to the money they would have saved on a winning bid had “halvarez” not outbid them.

SnapNames said today:

Class members (which are United States residents who were extended the rebate offer but have not yet accepted) have been or shortly will be notified of the settlement terms and amounts (which are identical to the amounts affected bidders were offered in the rebate offer we extended last November).

This seems to mean that anybody who was holding out for a bigger settlement is out of luck.

The deadline for accepting the rebate expires November 4, but the deadline to become part of the class action is not until December 17.

SnapNames will have paid out $2 million to customers in total.

(I wonder how much the class action attorneys are to receive).

More info can be found at snapsettlement.com.

SnapNames has also settled its lawsuit against Brady for an undisclosed amount. The company sued him for $33 million in May.

Oversee said it “believes the financial penalty is appropriate considering the seriousness of the improper activity”.

Go Daddy tech support is a cash cow

Go Daddy’s call center support staff make the company hundreds of thousands of dollars a day in up-sells, according to documents revealed as part of an employee class-action lawsuit.

I covered the lawsuit (PDF), filed by three former Go Daddy employees, for The Register on Friday.

One of the plaintiffs, Toby Harris, was fired after he leaked “confidential” screenshots of the company’s CRM system to his home email address.

I’m not going to get into the details of the lawsuit, which concerns labor practices, here.

But the screenshots, which offer a bit of insight into how much revenue these front-line call center staff make for Go Daddy, are worth looking at.

According to one, Harris delivered over $10,000 in gross sales for the company over nine working days in January, taking about 5% of that for himself in commission.

Not bad for a rookie $12-an-hour support guy, considering how cheap most Go Daddy products are.

Another CRM screen shows the performance of a couple dozen members of Harris’ team, including how much commission they made over a two-week period and how many customer calls they handled.

These 23 employees made between $1,290 and $255 in commissions over the period, averaging $564 each, dealing with on average 31 calls each per day.

If that’s 5% of the gross, over 10 business days, you could try to extrapolate some company-wide data, but the screenshot probably represents too small a sample to make any precise calculations.

Still, it’s pretty clear that that a substantial chunk of Go Daddy’s revenue is generated by call center staff.

Harris told me he was expected to shift $250 to $450 worth of product every day, the equivalent of selling at least one new $8 domain name to every caller.

Domain Name Wire reported last December that the company had 1,600 support staff. At the low end of $250 a day, that would equate to $400,000 a day or $146 million a year from the phones alone.

I guess I found this a little surprising because while I always knew Go Daddy’s web site was a cash machine, I had assumed its call center spent most of its time providing technical support.

As a customer, I often wondered how the company managed to run such a high-quality support service on such a pitifully low-margin loss-leader.

Now I know. Judging by these leaked numbers, those guys more than pay for themselves.