Buying an Expiring Domain Name

I recently bought a domain name after it expired and learned a lot about the process. I had been watching the name for many years, periodically doing a whois lookups on it to check it status. Early last November I did a lookup on it and noticed that it passed it’s expiration date back in October, I thought awesome I might get a chance to grab it! I started researching the domain expiration process [1][2][3] so that I wouldn’t make any mistakes. Ultimately I was able to buy the domain name, www.scottphillips.com, after several months and an auction. This post is about what I learned from the process, hopefully it will help someone else who’s looking into an expired domain name for themselves.

The domain expiration process is not always predictable and may take up to 80 days past the actual expiration date listed for the domain. While the domain is going through this process it will traverse through several states before actually being deleted.  Then once a domain is deleted from the system it becomes available for anyone to register it during the “drop period”. There are a hand full of companies that specialize in catching these freshly deleted domain names during this period. For this post I will start by describing the life cycle of a .com domain name. Next I will discuss the services that specialize in catching dropped domain names. Finally, I will conclude with a few thoughts of my own about the process.

The Life-Cycle of a .com Domain Name

The protocol used by the .com top level domain is the Registry Registrar Protocol (RRP) [4][5] which is also used by the .net extension along with the country codes. The RRP describes the possible states and some policy for handling expiring domain names. Other top level extensions such as (i.e .biz, .info, .name, etc..) use a newer protocol called Extensible Provisioning Protocol (EEP) [6]. Just a few days ago (January 2011) the owner of the .com extension, VeriSign, has agreed to switch to the EEP protocol [7] but as far as I can tell there is no time frame for the migration. If you’re looking at a domain name with an extension that uses EEP than this information may be incorrect.

The first question you probably have is when will the domain name be available? The process is not speedy and current domain owners are usually given a long grace period to renew their domain name. Even in the case where the current owner has no intention of renewing the domain name there typically is no way for them to tell their registrar that, it still has to go through the process.

After a domain name has reached it’s expiration date the current registrar is in the driver seat. Technically once the domain has expired it is their property. Luckily for the owner, registrars often allow the owner to renew the name during the grace periods. For all the reputable registrars the process takes 80 days: 45 days for Registrar Hold + 30 days for the Redemption Period + 5 days while Pending Deletion. However some of the less scrupulous registrars will change the time periods to their advantage.

Active:
This is the default status for a domain once it has been registered. The domain may be modified and will actively support a website, mail, or other services.  The owner holds the rights to the name and may renew the registration indefinitely or transfer the name to another registrar.

Registrar Hold:
After a domain has reached it’s expiration date it typically transitions into the “Registrar Hold” state at the discretion of the registrar. The registrar may keep the domain in this state for anywhere from 0 to 45 days. During this time the registrar is free to implement any number of policies as laid out in their individual terms of service [8][9][10][11][12]. Registrars have several options at this point including keeping the domain for themselves, selling or auctioning off it to another person, or letting it expire. The only thing that ICANN will force them to do is if they are going to let it expire it must go into the Redemption Period. However, most reputable registrars will allow the original owner to renew the registration with no extra fees during this period.

Redemption Period:
After a domain has expired before it can be deleted ICANN mandates that it must go through a 30-day redemption period. During this period the domain name will no longer be in the zone file meaning the website, email, or other services will no longer work for the domain. During this period the original owner may renew the registration for the domain, however there is a penalty fee.

Pending Deletion:
After a domain has gone through the redemption period it is moved to the pending delete status. This status lasts 5 days during with the domain may not be modified, nor can the original owner renew its registration. At the end of 5 days during the time period between 11am and 2pm Pacific Time the domain will be deleted, typically called the “drop period”. Once it’s deleted it is available for anyone to register it.

Once a domain has entered the pending delete status the original owner has lost all chances of renewing the registration. If they want to renew the domain name they will be on equal footing with everyone else attempting to register it during the drop period.

There are a few other states a domain may be in but they are all for abnormal situations such as legal action associated with the domain name. They are: Registry Lock, Registrar Lock, and Registry Hold.

Catching a Dropped Domain Name

A fleet of companies have specialized in acquiring deleted domains during the drop period. These aftermarket companies have researched the precise timing and little tricks to get any advantage they can during the drop period. They’ve invested in their infrastructure to have the available bandwidth to repeatedly query the DNS system to see when a domain is available, but not too much so that they get banned. Most of these companies work on a close auction model. This works by potential buyers placing minimum bids on the domain prior to a domains deletion. Then if the company acquires the domain it will go on auction with only those who placed bids previously being able to participate.

Many of the individual registrars have formed exclusive partnerships to handle aftermarket auctions for their expired domain names. Instead of dropping the domain for anyone to grab the domain is handed over to the partner company who will auction it off to the highest bidder.  Unfortunately it is hard to find out which registrars have exclusive partnerships [13][14], and they seem to change often [15][16].  I am not aware of any good rule you can use to find out which drop catching service you should use. Your best bet is to search the current registrar’s website to see if they explicitly state whether they have an exclusive arrangement with an aftermarket company or not. Sometimes it’s buried in their terms of service, other times they have made a press release announcing the partnership. However, If you can’t find this, then your best bet is to place initial bids with them all. That way you’ll still be in the game no matter which service catches the domain.

Pool.com

Pool.com pioneered the current model where buyers only pay if they acquire the drop with out any upfront fees. Now days this is pretty much the standard across the board. The minimum bid price for pool.com is $60. Multiple people may place bids on the same name. The system will not tell you if anyone else is bidding against you until Pool.com acquires the drop. Then, if multiple people placed bids the domain name goes to a closed eBay style auction.

SnapNames

SnapNames use to be the exclusive auction site for Network Solutions domains. The site is still going strong after that partnership ended. However, there has been a bit of scandal at the company where an employee was caught placing shill bids on domain auctions [17]. It looks like the company took appropriate action when it found out about the problem, refunding buyers money. However it is still a big black eye for the outfit, especially one in a business where trust and fairness is important.

The minimum bid with SnapNames is $79, and you do not need to pay unless you win the auction. In fact, you don’t even need to provide SnapNames with payment information until after you win. If SnapNames catches the drop then it goes into a 3-day auction between only those who placed a bid on the domain name prior to the drop. The auction is run as a typical eBay style auction where you can place multiple bids, set a maximum bid, etc. If no one else is interested in the domain then you’ll automatically win the auction at the minimum bid.

SnapNames caught the drop for my domain. The site will not tell you if anyone else placed bids on the domain name until after they acquire the drop. When that happened I found out that 9 other people also placed minimum bids on my domain! However the vast majority of those didn’t place a bid higher than their initial minimum bid. The bidding for my auction was obviously just between other Scott Phillips’s. I don’t believe the normal “domainers” were involved in the auction.

NameJet

NameJet is the newest company to the market, being formed when the partnership between Network Solutions and SnapNames ended. NameJet is the exclusive aftermarket auction site for Network Solutions, eNom, and Bulk Register [18]. If the domain you are interested in currently registered with one of these registrars then NameJet is the only site you need to deal with.

The minimum bid price starts at $69 and as normal you do not have to pay unless you win the auction. They offer both public auctions where anyone can place a bid, or private auctions where only those placed a bid before the drop can participate. I am not exactly sure how they decide which auction system is used, but I expect that the public auction is only used for the really popular domain names. Of course, if no one else is interested then you’ll automatically win the auction at the minimum bid.

GoDaddy

GoDaddy’s website is truly amazing in how hard it is to navigate. I can’t possibly imagine creating a more confusing experience. With their system you first purchase a “DomainAlert Pro Backordering” slot for $20.99. This slot can be used again and again until a backorder is successful. Once you’ve purchased that slot you can select which domain name you want to place a back order on. One thing to note is that they only allow one back order per domain name. So if, after purchasing the slot, it gives you a confusingly generic error when placing the back order it may be that someone else already has the one. As your consolation prize you can re-use the slot on another domain name.

If GoDaddy catches the drop then you’ll receive the domain right away. Since they only allow one back order per domain there is no post-drop auction like the other services. However, it seems like GoDaddy’s system rarely gets the drop. Unless the domain name you’re interested in is currently registered with GoDaddy then I would pass on using them.

Final Thoughts

The domain expiration process is still a bit like the wild-wild west. I think the basic problem is a conflict between the registrars and ICANN. The current system is tilted towards each individual registrar because they can create these exclusive partnerships with auction services. Undoubtedly they get a portion of the final sell price for each domain sent their way.

If ICANN was an effective organization they could set up a single waiting list or auction style system that would be better for everyone involved. Until they fix the current any-thing-goes system individual buyers are left open to potential fraud, lots of confusion, and an amazingly enormous waste of resources. Really, the best system that ICANN could figure out is one where people build big systems to continually ping the DNS system for the drop? Or where companies forge hidden back-room deals deciding where the domain goes? Why can’t the whole process be transparent and above-board where we as a society are able to better utilize the limited amount of domains.

There have been some proposals for fixing the current system [19]. However they seem to be tilted towards benefiting “domainers” instead of the common consumer. I wish ICANN would stand up and create a system that would be fair for end-users to understand and participate in. Until that time we’re stuck with this crazy system.

If you’re looking to try and catch an expiring domain name, good luck. I hope this article helped you navigate the waters and if it did please drop me a note letting me know.

References

[1] “How to snatch an expiring domain“, A great blog post by Mike Davidson back in 2005. This post was the inspiration for my post with updated information 5 years later.

[2] “How to Lose a Snap Names Domain Auction“, A funny blog post about the auction experience.

[3] “So best way to buy expiring domain?” A forum thread about purchasing expired domain names.

[4] “NSI Registry Registrar Protocol (RRP) Version 1.1.0“, The initial version of the RRP protocol

[5] “VeriSign Registry Registrar Protocol (RRP) Version 2.0.0“, A revised version of the RRP protocol.

[6] “Extensible Provisioning Protocol (EPP)“, The current version of the EPP protocol.

[7] “.COM Agreement Appendix 7“, The agreement between VeriSign and ICANN regarding the .com registry where VeriSign agrees to migrate to the EPP protocol.

[8] “Network Solutions: Domain Deletion Policy“, The agreement says that they will probably give you a grace period but by no means have too.

[9] “GoDaddy: What is your process for handling expired domain names?“, An FAQ about GoDaddy’s expiration process. Note that the agreement states all domains will be auction off by GoDaddy skipping the ICANN redemption period.

[10] “Name Cheap: Registration Agreement“, The agreement says that they will give you at least 27 days to renew the domain after expiration, but after that it’s up to them what they want to do.

[11] “1&1: What is a redemption period?“, As I read the FAQ from 1&1 they state that they will skip the registrar-hold status and immediately go to the redemption period (which imposes a penalty fee).

[12] “Tucows: What happens to domain names when they expire?“, When a domain expires Tucows will give you the full 45 day grace period to renew after which they make take the domain, auction it, or let it go into the redemption period before deleting.

[13] “Partnered Domain Names Understanding them“, a web page describing the partnerships between registrars and aftermarket auction services.

[14] “Which Drop Catch Service to Use for Expiring Domain Names“, An extensive list of registrar and aftermarket auction partnerships. I am not aware of how accurate this information is or when it was last updated.

[15] “SnapNames, Register.com Renew Deal“, Press release announcing the renewal of the exclusive partnership between SnapNames and Register.com.

[16] “Tucows Inks Expired Domains Deal with NameJet“, an article about the new partnership between Tucows and NameJet.

[17] “SnapNames sues former vice president for $33 million, alleging he rigged website auctions“, an article about the scandal surrounding SnapNames’s employee placing shill bids.

[18] “About NameJet“, this page lists the exclusive partnerships for NameJet. It’s the only one that lists them by name.

[19] “ICANN Tutorial: Changes in the expiry process“, Slides from a presentation given by the CEO of pool.com at a 2007 ICANN meeting on potential changes to the expiration process.

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9 Responses to “Buying an Expiring Domain Name”

  1. Ok but how do we know where to backlist a domain? What would be the most effective backlisting registrar?

  2. Scott says:

    Martin,

    That’s the problem, without any additional information you can’t really know. The best advice I can give is to first check the domain’s current registrar to see if they have an exclusive partner for aftermarket sales, if they do then just place an order/bid with that service. However, most registrar’s don’t publish this information. In this case you’re best bet is to just use them all.

    Scott–

  3. Ryan says:

    Thanks for this great resource! I’m currently looking at sniping a GoDaddy domain. Do they have exclusive backorder rights to domains register through them, or should I bid with other companies as well? I would love to avoid dealing with GoDaddy, but it sounds like it might be the way to go?

  4. Scott says:

    Ryan,

    Yes. To the best of my knowledge if the current registrar is GoDaddy then you have to go through them if you want to be sure to be involved in the auction. On the positive side, GoDaddy has the cheapest minimum bid price.

    Good Luck (and you’ll need it to navigate GoDaddy’s site)

    Scott–

  5. Bit Wrangler says:

    One related issue that is seldom mentioned in this context is the ICANN Domain Name Dispute Resolution policy, whereby one party can file with one of several authorized organizations against another party that owns a domain name. Possible grounds are that you have a legitimate business interest in the name but the current holder does not; or that the current holder has attempted to make an *excessive profit* (undefined) in selling the name to you. This works best if you hold a trademark or other registered IP that is identical or very similar to the domain name, and can demonstrate that you have been in a business somehow related to that name for a long period. The process is expensive – as of 2007 it cost $1,500 to file, and there is a tremendous volume of documents that must be completed and shuffled back and forth. I have successfully filed and pursued such a claim with WIPO against a cybersquatter on behalf of my employer, without any help. I am not a lawyer, although some familiarity with law would be helpful (if contemplating this action, you might also consider meditating in front of the shark tank at the local aquarium :) Before you commit to the full course of this action, make sure that you have a sound case, and that the value of rights to the name merits the effort and expense. However, it might also be useful to begin the filing process at the same time that you are waiting for expiration of a name that you seek. It probably couldn’t hurt to make the parties with whom you will be negotiating aware that you have begun that process. If nothing else, they may see $1,500 as the most they could possibly get (the cybersquatter who I successfully challenged initially asked for $6,000.) Caveats for my part are that the filing fee may well have increased since 2007, and I don’t know how the arbitrators (who are professionals selected from a pool – most of the filing fee goes to reimburse them) weigh the business interests of the registrars against those of other enterprises. In other words, how does the business interest of Network Solutions in vending or auctioning the domain name acmepogosticks.com for profit stack up against the interest of a company Acme Corporation that has been in the business of manufacturing pogo sticks for 30 years?

    -BW

  6. Great read. Congratulations on acquiring that domain name.

  7. Cathy says:

    I’ve been tracking a domain name for something like 10 years. On Jan 30 it expired. Sometime in Feb, it went into “pendingdelete”. At the end of 5 (or was it 6?) days, it went to auction. Not sure why, it certainly didn’t say any of the statuses that indicated the original owner had an opportunity to get it back. And it was definitely less than 30 days after the expiration date.

    It didn’t sell at auction (no one bid on it). Then it’s been in “pending_account” status since Feb. Now, it’s in “pendingdelete” status again.

    Snapnames has the domain listed as “available soon” (ie the date it is supposed to drop – today, actually). Their min bid is $79. I honestly don’t think anyone else wants it, so I’m really hesitating to put in a bid.

    Presuming no one bids on it (which is quite likely), when will it be available? Would that be 3 days from the date it shows as it will be available? ie – it shows as being available on April 19, so if no one bids it’s back in the pool on April 22?

    The bidding part about the names going to auction I understand. What I can’t seem to find out is what happens if no one backordered it, and no one bids on it? Does it then go back into the pool? Or is there yet another part of the process before I can get this domain?

    Not sure if you know the answer, but any info you have would be helpful.

    Thanks!

    Cathy
    P.S. Sorry this was such a long comment!

  8. Scott says:

    Cathy,

    The domain will be dropped after 5 days in the pending delete status. The other status, redemption period and registrar hold, may be skipped with the consient of the owner. Some times people just want to get rid of unwanted domains so they call up the registrar and say delete it please. In that case it could jump straight to pending delete.

    Scott–

  9. Bo Simmons says:

    Scott – great post and great comments on ICANN … I mean really who’s pocket are they in ?? There should be a clear and transparent system to deal with domains… funny it was Network Solutions only and they sucked ( does anyone remember the late 90’s having to fax forms to them to make changes or modify the Organization name’s when it was wrong ) then it opened up to more registrars but we now don’t have a way to deal that mess…

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