After Automattic (makers of WordPress) announced its control of the .blog top-level domain, Chris Schidle paid more than $200 to pre-register chris.blog. He did so under the expectation that, as Automattic had promised, domains with multiple applicants would go to auction. Eventually he was told the domain was "reserved"—no auction necessary! He got a refund, but wants to know why Automattic took money for an auction that wasn't going to happen.
My interpretation is this: we yanked your domain and aren't going to let you have it or bid on it until we find a way to make more money from it. After all, we have to recoup the $19M we spent to buy the TLD. …
A few weeks back, before I had inquired about the auctions, I thought to check get.blog to see if anything had changed. chris.blog was still $30/year, but christopher.blog was $2,000/year! I tried some other common first names and many had annual fees in the thousands, while a few were still pegged at $30/year. My guess is that the cheap ones already had applications, then Automattic panicked and raised the prices on the rest.
At Hacker News, at least two more people report similar stories of their .blog fees being refunded and the domains no longer being available. The implication seems to be that the auctions failed to attract the pre-bid interest Automattic expected, so it began proactively marketing short and trademarky domains to private parties on the sly.
All domains are auctionable, but some are more auctionable than others. This is a huge warning to anyone thinking of registering under a newfangled, privately-operated TLD: what's to stop your landlord evicting you, or raising the rent?
UPDATE: Mark Armstrong from Automattic responds:
We want to repeat our apology to customers who had a frustrating experience trying to obtain certain domains. Anyone who applies for a domain and is unsuccessful gets their application fees refunded.
Domain registries are allowed to reserve a certain number of domains before putting the rest up for auction, and we have done that, reserving them for founders and other projects. There seemed to be some instances in which users were not able to see whether a domain was actually available before submitting their application fee. We're working to solve that problem and clarify our messaging. No one will be charged for a domain they don't receive.