| Sedo, the world’s largest domain name auctioneer, sold a popular URL, Boobtube.com, for $41,688 last week, but then turned around and canceled the sale because the seller didn’t really own it. This auction had lasted more than two weeks, and was frenetic. The cancellation raises prickly questions about the nascent domain name exchanges, which are handling several hundred million dollars of trades. Are they trustworthy? Are they open to market manipulation? This might be pardonable if it were an isolated, very rare case. However, it doesn’t appear to be so — from what we’re hearing. I know about Boobtube.com, because I was one of the bidders, and Sedo’s customer service department notified me of the nullified auction. I was the first bidder at $5,000 (my wife and I are authors of BOOB TUBE, a novel about the daytime television soap opera industry, to be published later this year). Click on thumbnail images to see the start and ending bid prices. Clearly, the exchanges must take more decisive measures to protect the interests of buyers and sellers. While I appreciate that I and my fellow bidders weren’t defrauded of our money, it was still a big time sink. Sedo apparently noticed the problem only at the last minute. Without the essential service of trusted and transparent exchanges, domain buyers and sellers are forced to negotiate blindfolded in the virtual equivalent of a dark alley. If Sedo serves as any example, the domain exchanges have a long way to go. At Sedo, for example, domain buyers and sellers are presented with incomplete information about how the auction process works. In my case, my quest at Sedo for Boobtube.com actually began about one week earlier than the public auction. Sedo lets you negotiate one-on-one with seller, who was initially asking $7,500. My bid started at $500, I raised, he lowered, and when I raised it to $5,000 I was surprised to learn my private one-on-one negotiation was moving to a public auction. Nowhere in their online documentation does Sedo warn buyers of this possibility. (Sedo’s customer service department tells me sellers like this option). Imagine you’re at an art dealer, negotiating a price for a painting and at the last minute, the dealer ends the negotiation by saying, “sorry, I think I’ll auction this at Sotheby’s instead.” Will Sedo press criminal charges against the naughty seller for trying to sell a domain he didn’t own? We doubt it. Despite my personal requests for additional details, Sedo has been mum. If these shenanigans were taking place on the Nasdaq or NYSE, you can bet the exchanges and the Securities Exchange Commission would want to hang the perpetrator from the nearest lamp post. Up until last year, Boobtube.com was owned by Rogers Cadenhead, an author, blogger and industry gadfly who himself came to notoriety when he registered benedictXVI.com in anticipation of the new pope. What does Cadenhead have to say about last week’s Boobtube.com fiasco? I contacted him last week to inform him of the scam, and to learn if he still owned the domain and was willing to sell it. His reply:
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