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Jay Westerdal from DomainTools.com today proposed to auction off the remaining single-letter domains. This is not a new idea. I remember Sedo once wanted to conduct auctions for single-letter domains too, but this never got anywhere. George Kirikos also proposed this allocation method to ICANN on October 16, 2007. I think this is a good way of making the remaining single-letter domains available and it would probably be the most lucrative solution, as many companies would make bids on these highly coveted domain names.

Any of the single-letter domains could end up being sold for prices in the $1-5 million range, in my opinion. Some might even get sold for more. G.com, for example, would be the perfect domain for Google and Y.com for Yahoo!, and I’m sure the two search engine companies would make a significant bid to not miss such a one-time chance. Because that’s exactly what it would be: a one-time chance. After an auction these domains would never be put on the open market again. This would cause an immediate rise in value of any single-letter domain, because other interested parties would know that they could only get their hands on the domain by making a much higher bid, which could easily be in the $XX-XXX million range, or by acquiring the company that owns it. This is similar to the situation of the domain market in general in the mid 90s, when one could buy many one-word generic domains for no more than $xxx each. Just look at the value appreciation of generic domains and then compare it to single-letter domains, with the only difference that the value of single-letter domains would begin to climb from a seven-figure instead of a three-figure amount.

If ICANN decides to sell the remaining single-letter domains in an auction it won’t handle the auctions in-house, I think. It’s to assume that ICANN would partner with an experienced IP or domain auction company. So, which domain auction company is secretly working to win ICANN’s favor in this matter? By the way, another possibility would be to make the auction companies pay for the rights to hold the auction, which would result in even more revenue for ICANN.

Sedo?
Moniker?
DomainTools?