Two of the major services let employees compete with domainers.

[Note: See update at bottom of article.]

Earlier today a reader tipped me off to a discussion at NamePros about GoDaddy’s TDNAM service. Apparently GoDaddy VP (and owner of DNForum) Adam Dicker won a couple auctions for domains through the service. Dicker runs the aftermarket service. The reader was surprised that GoDaddy let its employees bid against its customers and push bid prices up:

These employees may or may not have access to more information than the rest of us, and they may or may not have to pay full price for the domains they win. This is particularly insidious at GoDaddy since they are one of very few auction sites which don’t show you who you are bidding against. So I have no idea if any of the names I won that day were inflated in price due to TDNam executives bidding against me.

Elizabeth Driscoll, GoDaddy VP of Public Relations, told Domain Name Wire, “Go Daddy does not have a policy forbidding its employees to engage in public auctions or registrations. You can be assured we have tools in place to prevent anyone from gaining the opportunity for an unfair advantage in securing a domain name through registration or auction.”

You may be surprised to learn that GoDaddy isn’t the only major expired domain service and auction house that lets its employees compete with customers. According to a phone representative with NameJet, employees of that company and its partners Network Solutions and eNom are allowed to bid on domain names through the service. The representative said employees are required to pay full price for their domains just like customers and don’t get any unfair advantages. [Update: an Enom representative says that Enom and NameJet employees are only allowed to buy domains that no one else bids on.]

SnapNames, on the other hand, doesn’t let its employees bid against customers. The company confirmed to Domain Name Wire that “Oversee.net employees are strictly disallowed from bidding against customers.”

Although it’s easy to find fault in GoDaddy and NameJet’s policies, there’s a deeper challenge that domain name companies face. They want to hire talented employees, and that often means finding skilled domainers. These domainers won’t abandon their domain “businesses” for the job. How can they hire qualified employees while not creating conflicts-of-interest?

What do you think? Should employees of GoDaddy and NameJet be allowed to bid on their auctions?

[UPDATED 6/30/08: GoDaddy has officially changed its policy…see GoDaddy Bans Employees from Bidding on TDNAM.]