It's definitely a tough problem to get right, but the status quo sucks so much that the only way is up. I think one feature of the system that would mitigate a

It's definitely a tough problem to get right, but the status quo sucks so much that the only way is up. I think one feature of the system that would mitigate any issues with indices or bidding is the ability for users to "default" a website to a particular domain name. To use another example than x.com - let's say GrubHub didn't exist, and it was being founded today, but GrubHub.com is parked. Instead of using a sub-optimal name or paying tons of money for a domain before they even have revenue, they could go ahead and launch GrubHub.com as a "secondary domain." Users of their iOS/Android app would be told "hey, to get your $10 signup bonus, tap on this link and press 'default as grubhub.com on all devices.'" The users would gladly oblige, because they'd rather have grubhub.com point to an actual service rather than some rent-seeker's landing page. That's especially if there's free money involved. Once GrubHub gets momentum, they will be well-positioned to win the eventual bid, which won't have many bidders. There aren't many companies named GrubHub out there. Again, if they anticipate very limited/no competition in an auction, they can just force the bid to happen before formally launching and maybe pay a few hundred dollars for grubhub.com.