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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”.

Slots.com bidding starts at $4 million

Kevin Murphy, May 6, 2010, Domain Sales

The week-long auction of slots.com is underway, and the two first bidders have already pushed the price over $4 million.

It was announced yesterday that SnapNames had grabbed the rights to auction the domain. A reserve price of more than $5 million has been set.

Given that online gambling is basically a license to print money, it’s no surprise that many of the biggest domain sales every have been in this market.

Casino.com reported sold for $5.5 million, while Poker.org went for $1 million last year, the highest-ever price for a .org domain name.

The slots.com auction has a little over six days left on the clock.

SnapNames lawsuit: “halvarez” was chasing $1.5 million bonus

Howard Nelson Brady, the former SnapNames VP and alleged shill-bidder known as “halvarez”, was chasing a $1.5 million performance-related bonus, according to a lawsuit filed yesterday.

SnapNames and its parent, Oversee.net, have sued Brady for $33 million, claiming he used the pseudonym “Hank Alvarez” and his privileged access to SnapNames’ auction platform to artificially inflate the sale prices of auctioned domain names.

According to the complaint, Brady started his alleged shill-bidding in order to boost SnapNames’ revenues and boost his potential “earn-out” from the June 2007 acquisition of SnapNames by Oversee.

“The purchase of the SnapNames business was based almost entirely on projections extrapolated from past revenues of SnapNames, which had been artificially inflated by Defendant Brady’s shill-bidding,” the complaint says.

Oversee further claims that, following the acquisition, Brady set about embezzling money from the company by buying domains using his “halvarez” account and then refunding himself some of the purchase price.

The company alleges he made $175,000 that way, before suspicious activity was noticed on his account.

“Hank Alvarez” had a mail drop, a Paypal account, and sometimes sent emails to Brady, which were then forwarded to other members of staff, the lawsuit claims.

The lawsuit is seeking a mountain of cash. Clearly, Oversee and SnapNames are not pulling any punches when it comes to attempting to restore their reputation.

The bulk of the $33 million is made up of punitive damages, but Oversee also wants Brady’s entire salary and other compensation for the period while the alleged activities were taking place.

You can read the complaint in PDF format here.

A timely domain drop – iquitfacebook.com

Kevin Murphy, April 23, 2010, Domain Sales

The domain name iquitfacebook.com is dropping this weekend, and it couldn’t have come at a more appropriate time.

Facebook has walked into a bit of a privacy nightmare by announcing it will start to give third-party sites access to user data, leading some people to quit the service.

The site has already been called “Privacy Enemy Number One”, and there are dozens of other pieces of commentary and news picking holes in the new Facebook features.

Widely followed Googler Matt Cutts also raised eyebrows when he said he had deactivated his Facebook account today, and others are following suit.

“I just deactivated my Facebook account using the guide at http://goo.gl/rhpE Not hard to do & you can still revive it later,” Cutts tweeted earlier today.

Is there an opportunity for an enterprising domainer to capitalize on a trend here?

The name iquitfacebook.com is pending delete this weekend. It’s listed on SnapNames with an April 24 deadline, and has already attracted six bidders on Namejet, with a high bid of $79.

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