Drop vs Netfleet

[Ashman]

The competition for expiring domain names between Drop and Netfleet intrigues me. Netfleet’s ability to consistently catch the most lucrative expiring domain names is obvious. Drop on the other hand sometimes catch the big ones but are usually left with the scraps so to speak.

I decided to take a closer look at why this may be the case and any input from other members to fully inform me would be appreciated.

Firstly, auDA's policy for registrar accreditation states in paragraph 1.3 as follows: "auDA will not enter into more than one Registrar Agreement with the same entity. Where an applicant is a related entity of an auDA Accredited Registrar, we will consider the application on its own merits."

OK great so they will look at each application independently, probably with the view not to give one registrar an unfair advantage over another. (needs clarification)

On the other hand auDA has a list of accredited registrars and further says that it has authorised Ziphosting Pty Ltd, MD Webhosting Pty Ltd, NetRegistry Pty Ltd, Planet Domain Pty Ltd, TPP Domains Pty Ltd and TPP Wholesale Pty Ltd to share registry connections for the purpose of operating the Netfleet domain catching service.

And auDA has authorised Drop Pty Ltd, Fabulous Pty Ltd and Yexa Pty Ltd to share registry connections for the purpose of operating the Drop domain catching service.

My first question is this, how many connections do Netfleet or Drop actually need to operate their services? Wouldn't they only need one connection each? Wouldn't that result in a level playing field for both entities?

A closer look into MD Webhosting Pty Ltd (part of Netfleet’s drop catching “entourage”) and a visit to their website today revealed a re-direct to Netregistry website.

It looks to me that auDA has accredited MD Webhosting whom on the face of it has the sole purpose of making connections to the registry for catching dropping domains. They have no other purpose as they have no independent website as of 14/4/2012. It seems to me that auDA has simply accredited MD Webhosting for the purpose of strengthening Netfleet’s already dominant position in the drop catch market.

How many more connections will Netfleet be permitted to make by setting up affiliated registrars before they have a complete monopoly on the market and when will auDA revise their policy to allow entry into this market by more independent entities?

 

[Joel]

From memory, MD was an accredited registrar long before NetRegistry bought them out.

I'm personally not fussed which service wins a dropping domain. As the end user/consumer, it's not something I need to worry about really - as long as the name is snapped, beauty.

If I were running a registrar entity with a domain drop catching service, my views would no doubt be different.

 

[BenWalker]

As Joel mentioned above, MD use to be a registrar that operated like any other. Their service was terrible.
Then it was acquired by NetRegistry.

As a "drop buyer" I would much rather the dominance of one platform. Because if you really want it, and if you are happy to put your money where your mouth is at least your guaranteed to get the domain.

That’s not the case for the .co.uk market as an example where multiple drop catchers operate.

 

[Ashman]

Thanks for the input guys and clarification on MD.

The point I am trying to raise is that Netfleet are operating with almost a complete monopoly on the market and their acquisition of MD enforces that position. auDA gave Netfleet permission to share registry connections with MD for the purpose of catching expiring domains and doing so gives Netfleet an unfair advantage in the market place. That is totally anti-competitive regulation.

 

[Bacon Farmer]

When the reg fee differential between the two drop houses blows out to something worth getting uptight about then I'll get uptight but at the moment it's bugger all. I don't see NF charging exorbitant reg fees - yet. Well, besides their backorders ;-)

 

[soj]

The competition for expiring domain names between Drop and Netfleet intrigues me. Netfleet’s ability to consistently catch the most lucrative expiring domain names is obvious. Drop on the other hand sometimes catch the big ones but are usually left with the scraps so to speak.

It wasn't always this way Ashley. In fact Netfleet used to be the bridesmaid rather than the bride. Drop were dominant. There was also another player called DomainWatch
who used to catch some good ones in the early days.

Then it all changed (for a variety of reasons too lengthy to go into here). Suffice to say, Netfleet invested heavily in their business, and did what was necessary to become
number one. They are to be congratulated for that.

But I'm sure Drop (and possibly others) are planning on changing the staus quo if they can!

I decided to take a closer look at why this may be the case and any input from other members to fully inform me would be appreciated.

Firstly, auDA's policy for registrar accreditation states in paragraph 1.3 as follows: "auDA will not enter into more than one Registrar Agreement with the same entity. Where an applicant is a related entity of an auDA Accredited Registrar, we will consider the application on its own merits."

OK great so they will look at each application independently, probably with the view not to give one registrar an unfair advantage over another. (needs clarification)

You need to get your head around what is a "related entity" in the corporate world. Provided company structures are done with this in mind, then there isn't a problem.

My first question is this, how many connections do Netfleet or Drop actually need to operate their services? Wouldn't they only need one connection each? Wouldn't that result in a level playing field for both entities?

..........................

How many more connections will Netfleet be permitted to make by setting up affiliated registrars before they have a complete monopoly on the market and when will auDA revise their policy to allow entry into this market by more independent entities?

How many LJ Hooker franchises would you like to have in Perth? Or McDonalds franchises? Surely not just one if you're permitted to have more (and can afford the capital investment)?

Corner the market when you can!

I'm quite sure we will see other drop catchers enter the market in the near future - after all it costs next to nothing to become a registrar (provided you comply with other requirements).

http://www.auda.org.au/registrars/accreditation/
.

 

[Ashman]

Thanks for elaborating Ned.

I read somewhere that auDA has a policy to treat all registrars equally and not favour one registrar over another. To re-iterate my point on that matter auDA's policy for registrar accreditation is that auDA will not enter into more than one Registrar Agreement with the same entity.

They will however where an applicant is a “related entity” of an auDA Accredited Registrar, consider the application on its own merits.

That last paragraph is so ambiguous and by considering applications on their own merit I think it is contrary to auDA treating all registrars equally especially when it comes to drop catching.

If auDA was treating all registrars equally then they would disallow the accumulation of related entities for the purpose of making registry connections and therefore catching expiring domains. If auDA were truly treating all registrars equally then they would only allow each drop catch entity the same amount of connections.

When you allow a registrar to accumulate registry connections through “related entities” it is not only unfavourable to other drop catchers but essentially prohibits new competition in the drop catch business. How can a new entrant with one connection compete with Netfleet whom currently have 6 connections and I am sure there are plans underway for more.

Ned your analogy with real estate agents is a good point however a franchise is an independent business that pays a licensing fee for the business name which is different to the Netfleet situation where Netregistry is the holding company and its “related entities” (Ziphosting Pty Ltd, MD Webhosting Pty Ltd, Planet Domain Pty Ltd, TPP Domains Pty Ltd and TPP Wholesale Pty Ltd) are subsidiaries. (I haven’t researched the connection between the Netregistry group of companies so correct me if I am wrong).

The whole reason behind my argument is based on auDA ambiguous and unfavourable policy making, and they do not treat all registrars equally. My position in no way reflects upon Netfleet, as they are a great business and provide a great service and have probably invested a lot of money into their technology.

auDA should just say in their policy that it's a "free for all" rather than trying to be politically correct and then doing the opposite.

 

[findtim]

monopolies are never good, and there is always room for at least 2 players in any market, just look at microsoft and apple, mcdonalds and hungry jacks, Beta vs VHS ! all reasoning 20 years ago would have said apple should have died a FAST death but look at it now. PHP should not have become so strong because ASP was the only one !

we use google, but we use to use "looksmart" ! where are they now? i can't remember the last time i went to yahoo!

chryslar cars, pears soap, JUST look at how many milk choices we now have!

it just gets back to management and how clever they are, so don't give up on drop.

Having said all that, i find netfleet MUCHHHHHH easier to use. i actually emailed drop last week and asked the question of why i was having difficulties even finding a domain past the letter "C" and they resolved that.

what i do find is its a PAIN to have to bid and keep an eye on both auctions but i suppose in the end its better then 1 monopoly charging excessive fees because they are a monopoly.

I totally accept they have a $44 buck fee for winning the domain which gives you 2 years rego but if we had a monopoly and it started to go up and up then that would be a real issue for me given i can renew or register a domain for $20

TOTALLY accept they have created the infrastucture and thats their profit and everyone needs profit to survive.

I won 2 domains on netfleet this week, i bid on both at drop as well, but i am confused? drop auction finished 5 minutes before netfleets, then drop went into another countdown of 5 minutes?? excuse my ingnorance but wouldn't that mean the netfleet bidders can still bid whilst drops can't ?

i only won th edomains as noone was bidding against me, maybe this is the issue? i do not know how it all works but would love to know as i can't find any documentation that describes drop v netfleet, so anyone please place a link if you have one.

tim

 

[FirstPageResults]

Thanks for the input guys and clarification on MD.

The point I am trying to raise is that Netfleet are operating with almost a complete monopoly on the market and their acquisition of MD enforces that position. auDA gave Netfleet permission to share registry connections with MD for the purpose of catching expiring domains and doing so gives Netfleet an unfair advantage in the market place. That is totally anti-competitive regulation.

Note that Netfleet is operated by Net Alliance, a JV between Netfleet and NetRegistry.

NetRegistry's parent company owns all 5 registrars, Netfleet runs independently AFAIK. A few years ago NR took big loans/got capital and brought up other registrars like MD & TPP (from memory, dont quote me). Back then there were far fewer registrars and the moves may have been scrutinized.

Personally I think they have both done a great job in the AU space, particually NR with SMEs.. We need the likes of NR to combat the godaddy scum who are advertising locally

 

[johno69]

We need the likes of NR to combat the godaddy scum who are advertising locally

NR is 3 X the price on .com's as GD. Until that changes I can't see GD losing all that much market share.

 

[Bacon Farmer]

I won 2 domains on netfleet this week, i bid on both at drop as well, but i am confused? drop auction finished 5 minutes before netfleets, then drop went into another countdown of 5 minutes?? excuse my ingnorance but wouldn't that mean the netfleet bidders can still bid whilst drops can't ?

i only won th edomains as noone was bidding against me, maybe this is the issue? i do not know how it all works but would love to know as i can't find any documentation that describes drop v netfleet, so anyone please place a link if you have one.

tim

Drop Rule

Previous discussion

 

[findtim]

We need the likes of NR to combat the godaddy scum who are advertising locally

I DO NOT like it, but ALL trends say its irreversible, we have to face that australia is no longer a closed society and we need to compete across borders, even china is feeling the pinch on this .

everything is global, even if it ends in .com.au and its not going to slow down, we need to take a step up and compete rather then rely of "blocking" OS competitors as its just a slow downward spiral of death.

god knows no government , labour, liberal, greens, etcccc will ever look after the self employeed "innovators" of australia.

tim

 

[findtim]

thanks bacon farmer, so its like graysonline

cool

tim

 

[FirstPageResults]

NR is 3 X the price on .com's as GD. Until that changes I can't see GD losing all that much market share.

My point was that they are advertising for TLDs as opposed to our ccTLD, which I think is a bad thing.

 

[DavidL]

The point I am trying to raise is that Netfleet are operating with almost a complete monopoly on the market and their acquisition of MD enforces that position. auDA gave Netfleet permission to share registry connections with MD for the purpose of catching expiring domains and doing so gives Netfleet an unfair advantage in the market place. That is totally anti-competitive regulation.

Whilst I would argue that NF does have a monopoly on the market, even if it does that's not a crime. I mean if a company X is so good at delivering a product Y that it garners a high proportion of the market, should that company be deliberately hobbled to help others get a foothold? Of course not.

The problem wioth monopolies (and I'm not an economist so perhaps I may be corrected), as I see it, is if they use their position to squeeze out competition through anti-competitive behaviour. Eg Bunnings saying to a supplier 'We'll only stock your product if you don't supply it to Mitre 10'

It wasn't always this way Ashley. In fact Netfleet used to be the bridesmaid rather than the bride. Drop were dominant. There was also another player called DomainWatch
who used to catch some good ones in the early days.

The timeline went like this I think:

1) Enetica offered the only drop catching service and had 100% of the market
2) Domainwatch came in and dominated, gaining pretty much 100% of the market
3) Drop came in and started eating into DW's market share
4) Netfleet came in and the three parties fought it out
5) DW faded into obscurity leaving Drop the dominant and NF picking up scraps
6) NF gained the ascendancy on Drop and now gain 80%+ of the market with Drop picking up the rest.

So it's actually been a very competitative industry and I'm sure the balance will chance again in time. However at no stage has auDA offered any advantage to any of the entities above. Any registrar today can jump in and have a go.

As a "drop buyer" I would much rather the dominance of one platform. Because if you really want it, and if you are happy to put your money where your mouth is at least your guaranteed to get the domain.

That’s not the case for the .co.uk market as an example where multiple drop catchers operate.

Yes that's a good point. If you, as a buyer want a co.uk name, you need to register a 'slot' on literally dozens of drop catching services (most of which don't have a website so it's through a manual email & 'account' setup) and then cross your fingers but you'll probably lose it anyway because there will be dozens of other non-public drop catchers chasing it for themselves.

But I'm sure Drop (and possibly others) are planning on changing the staus quo if they can!

As they should do. In fact on Saturday they won over 50% of the spoils so should never be written off. As is repeatedly said here, even if they are only winning 10% or whatever, everyone should still cover themselves on Drop. No win, no fee just makes sense.

Best of luck with your drop catching service too webpark:

http://www.webpark.com.au/expired-domain-names

 

[Ashman]

Thanks for the comprehensive breakdown David. An interesting history lesson.

Ashley

 

[soj]

Best of luck with your drop catching service too webpark:

http://www.webpark.com.au/expired-domain-names

Ha ha! Good one David.

Ashley, I have to ask whether you have thought this through properly. Aren't you purporting to offer something you can't necessarily deliver?

Or am I missing something?

This is from your site:

Buy Expired Domain Names

Every day we list hundreds of Australian domain names due to expire because the current domain owner has for some reason not elected
to renew their domain license. Each day, we will present these expiring domains to our users for them to register. The expired domains
in this list are valuable because they already have a history on the Internet and many have valuable backlinks.

And then you have an "Apply" button?

I'm a bit puzzled.
.

 

[Ashman]

Hi Ned, if you took some time to explore my site you would have realised that the "apply" button relates to the sorting feature of the expired domain list.

Who said anything about offering a drop catch service? I simply list the expiring domains (past and current) as a resource to users if they want to register the ones that are available. The majority of expired domains are available to register as you probably already know.

Ned I didn't realise it was necessary to explain my business model in an open forum but if you have any further questions feel free to ask and I will do my best to explain it as simply as I can for you.

 

[soj]

the "apply" button relates to the sorting feature of the expired domain list.

My apologies - I see that now.

Who said anything about offering a drop catch service?

DavidL wished you good luck with it.

I simply list the expiring domains (past and current) as a resource to users if they want to register the ones that are available. The majority of expired domains are available to register as you probably already know.

Your wording had me confused - and I imagine it would have "joe public" a bit confused too.

Each day, we will present these expiring domains to our users for them to register.

They can't be registered through your site if they are picked up by Drop or Netfleet.

That's all I was getting at. Not trying to score points - simply trying to be helpful.
.

 

[cherrytron]

tbh I am just happy there's not 10 drop services that we have to bid at each day.