I helped a friend win an auction for an expired web site domain name. Apparently, when a domain name expires, the domain registry does not immediately release the name to the general pool. First, they hold it for 30 to 45 days, giving the original owner about a month or so to get their act together and renew it. After that grace period, the name is released to selected partners. If the name had been registered through Network Solutions, the largest .com registry because they were first, it is released to Snap Names.
Before the name is released to Snap Names, you can place a free backorder for the name. You give them a credit card and agree to bid a minimum of $60 for the name if it becomes available.
Over the weekend the name was released and the auction started. 32 people were in it. The rules are little different than an ebay auction. Only those people will backorders can participate in the auction. That means that once it starts, the pool of participants is fixed. Also, if a new bid is made near the end of the auction, the time of the auction is extened. This give everyone a fair chance, and increases the amount of money Snap Names can earn from the auction.
For most of the auction, I was the high bidder at $81. I had put my maximum bid at $200. On the last day, first I upped it to $500, then $1000, and finally $2000. Every time some one upped their bid, I was already there with a higher number.
It got pretty nerve-wracking at the end, because in the last minute, someone placed a new bid. This extended the auction another 4 minutes. When it was finally over, I had purchased the domain name for $1601. This auction also included 1 year registration on Network Solutions.
I am the legal owner of the domain name, but I spent my friend’s money. It may seem like a lot of money to me, but does not compare to the current record: property.com for $750,000.