Running a registrar has close to a $500k a year minimum salary bill, which is 50k $10 domains even if you model them as having 0 COGS, which is in fact highly contrary to fact. That's tricky to get to organically, so you start doing things like paid marketing, and then realize that GoDaddy (et al) will happily spend $X0 to acquire $10 a year worth of domain business, both because it has a relatively high LTV and, more importantly, because it has a "backend." (e.g. GoDaddy made a $16 sale for me on bingocardcreator.com back in 2006 and then sold me another ~$5,000 of domains and SSLs over the years, and I don't even use the products where they really make a killing, like hosted shopping carts and what have you.)

Relevantly to HNers: you'll run into math like this for most software businesses. Upfront costs are quite low and COGS may well be near zero, but if you want to actually sustain the business, you get to pay market wages to people, and it is very hard to pay market wages to technologists $1 at a time. There was a story on HN today about a business which just learned this to its sadness. They were not the first to figure it out and they will not be the last.