TechCrunch Founder/former Pool.com Pres declares war on domainers, Schilling responds

[Vision]

Vile comments from Michael Arrington whose TechCrunch blog blankets Silicon Valley -- about 2 million view TC each month --

Arrington is also the Pool.com Founder.

Here is what this ignorant, hypocritical masochist penned today --

Anyone who doesn’t know how dirty the domain name business is just doesn’t know the domain name business. People pay exorbitant sums to acquire domain names, put Google or Yahoo ads on the parked pages, and collect the advertising fees. They often buy and sell individual domains and portfolios with other domain squatters. But the real feeding frenzy is around deleting domains – the domain names that people let expire and that go back into general inventory.

The process for expired domains to get back into the system is complicated, but every day 20,000 or more previously owned domain names become available. Domain squatters know the list in advance, and spend time looking at Alexa/Compete rankings and lots of other data sources to try to figure out which ones are valuable. If they can just eek out $10 or so per year on a domain via ads, it’s profitable. And at scale, large amounts of money is made.

There are a variety of companies that grab as many of the domains every day that they can and then auction them off to the highest bidder. I once ran a Canadian-based company called Pool.com that invented the practice of auctioning expired domain names, and our company was making over $1 million in profit every month from these auctions – there’s lots of money in this business.

Today the largest company conducting these auctions is SnapNames, which was acquired by Oversee.net in 2007 for $25 million or more.

Today SnapNames admitted that one of its executives was shill bidding on auctions. 5% of auctions from 2005 – 2007 were affected, the company says, and a lesser number since then.

The employee was shill bidding on auctions to pump the price up. When he won, he’d arrange for a partial refund from the company.

SnapNames is saying they’ll reimburse the difference between what an auction should have closed at and what it actually closed at, plus interest.

This is a company that I know well – after leaving Pool.com I consulted briefly for them in 2004. It’s inexcusable that they let this happen, and didn’t catch it for years.

Frank Schilling allegedly responds in the comments -- given Schillings' writing style coupled with tone, I believe this was actually his retort --

Michael. You have a very big microphone so you can say what you want here and the informed (and sometimes uninformed) masses can lap it up.

But calling the entire “domain industry” dirty, is quite simply a stretch. Firstly, in this instance it seems to have policed itself. The supposed bad guy (who has not told his side of the story btw) was outed and the parent company offered refunds to all participants (5 figures in my case).

Try finding an auction on this planet that doesn’t have insider bidding, primping, competitive-bid-ups etc. My wife and I collect antiques and have had executives at sterling plated auction houses concede that it’s impossible to stamp out the shill bidding which they know goes on.

I suppose it just feels a little icky you dumping on everything around this biz when you were once so close to it and it so enriched you. Nobody hates you BUT everyone in America knows somebody who has sold a domain name for a profit. All those entrepreneurs constitute a part of the industry you are dumping on. So you coming out with your swagger tarring the etire space with same brush just feels yucky. Do you understand my (and other’s) view?

Click Here for the TechCrunch Article



Here is more bio regarding Arrington...

According to Wikipedia..

Michael Arrington is an entrepreneur and founder/co-editor of TechCrunch, a blog covering the Silicon Valley technology start-up communities and the wider technology field in USA and elsewhere. Magazines such as Wired and Forbes have named Arrington one of the most powerful people on the Internet.[2][3] In 2008, he was selected by TIME Magazine as one of the most influential people in the world.[4] Wired magazine also included him in a flowchart of "internet blowhards" citing his obsession with "Web 2.0".[5]

 

[Theo]

Yeah, I read all this ranting and truly, Frank Schilling said it: big microphone, small brain. So all the sheep of TechCrap follow along the master debater and his idiotic rant against all domainers.

 

[Vision]

hmmm... I wonder if we will read a write-up in that hot DomainGang site ...

featuring once Consigliere Arringtoni morphing into "Turncoat Mikey" -- left the family, the cosca, now badmouths and stabs the community in the back -- Mikey, what happened to our Domainer Omerta?

 

[EM @MAJ.com]

Let's boycott Techcrash....