It’s not easy to get a short, crisp Web address. In the twenty-eight years since the now-extinct computer maker Symbolics registered the first .com address, symbolics.com, the most economical and memorable Internet addresses have mostly been claimed. Even longer addresses, or domains, like a person’s full name, might not be available—or, more likely, there will be some cyber squatter waiting to ask you for two hundred dollars if you want to develop that virtual vacant lot.

The real estate has been limited because most Web addresses can end in one of just twenty-two generic, top-level domains—also known as g.T.L.D.s, or strings—like .com, .net, or .org. (Country or territory strings like Canada’s .ca are exceptions, as are sponsored domains, like .gov, .edu, and .aero, which require proof of service to a particular community or function--in these cases, government agencies, higher education, or the aviation industry.)

Since 1998, the task of authorizing new domains, when appropriate, has fallen to the non-profit Internet Corporation for Assigned Names and Numbers (ICANN). In 2011, it approved a plan “to dramatically increase the number of Internet domain name endings” by allowing Web addresses “to end with almost any word in any language.” With this new address scheme, CNN, for instance, could potentially acquire the domain .cnn and host its Syria coverage at syria.cnn, rather than something like cnn.com/syria. The plan, which will radically change the way we think about Web addresses, promised to solve two problems: it creates vast new tracts of Internet real estate, and, by allowing non-Roman characters in domains, it offers a way for users in Asia, Eastern Europe, and the Middle East to connect in their native languages.

Suddenly reorganizing the way we navigate the web with new strings like .guru, .club, or .google might seem frivolous or strange, but entities like ICANN and its stakeholders insist that they will make the Web more intuitive and user-friendly; an address like AdoptA.dog is slightly more logical than PetAdoptions.com, which is currently occupied by a squatter. (Not in contention: .cat, which is reserved for the Catalan-speaking community.)

As of August 21st, ICANN has received nearly two thousand applications for new g.T.L.D.s. However, while ICANN authorizes new top-level domains, private firms must bid for the right to own and manage them. Each application to bid on a domain costs a hundred and eighty-five thousand dollars.

In 2010, a group of well-connected domain-name speculators—sometimes referred to as domainers or “Internet real-estate investors”—quietly raised a hundred million dollars for a venture called Donuts Incorporated, whose sole purpose was to apply for and operate new generic top-level domains. The group has spent just shy of fifty-seven million dollars applying to bid on three hundred and seven g.T.L.D.s, like .movie, .limo, and .wtf; it has already won the rights to a number of domains, including .construction and .photography.

Google and Amazon are also highly interested in the brave new world of anything-goes domains: they’ve applied for a hundred and one and seventy-eight applications each, respectively, more than any other company except Donuts. Google applied for domains ranging from .goo to .music and .mom, while Amazon has applied for domains like .kindle and .book—although it lost its battle to register .amazon to a handful of South American countries.

Despite the intense demand for what ICANN is offering—a potentially once-in-a-lifetime opportunity to attain the Internet equivalent of beach-front property—the global nonprofit isn’t equipped to administer dozens of auctions between hundreds of bidders and the possible legal liabilities that come with that responsibility. It has instead encouraged applicants to resolve disputes for contested domains among themselves.

That’s where the firm Innovative Auctions comes in: it holds private auctions to resolve these feuds. At its first domain auction in June, six contested strings fetched $9.01 million. Two weeks ago, its second domain auction resolved contention on eight g.T.L.D.s at a value of $9.65 million. As the auctions continue, Sheel Mohnot, the project director for Innovative Auctions, expects the value of in-demand domains to continue to rise. Last week, he told me, “I would not be surprised if we had eight-digit auctions in the near future.”

The primary motivation for settling disputes in early, private auctions is money. If ICANN runs an Auction of Last Resort, the application fees and bids are non-refundable. By contrast, the Applicant Auction works on an ascending-clock model, which normally works much like an eBay auction: bidders name a maximum price they are willing to pay, and the auction price rises at each stage of the auction, until all bidders but the winner have dropped out. (A similar ascending-clock model has been used in other high-stakes bidding wars, such as a recent diamond auction in Botswana.) Because of its vested interest in the auction proceedings, Donuts initially approached Peter Cramton, a University of Maryland economics professor, who designed the ascending-clock model, for help.

Rather than work directly with Donuts, Cramton worked with Innovative Auctions to customize his popular auction model. In a unique twist, the bid money is divided evenly among those who drop out along the way. “Normally, in a standard auction with a seller auctioning off a painting, there will be many bidders competing with revenues going to the seller,” Cramton told me. “In this auction, effectively, all bidders can potentially be a seller or buyer.” For example, in an auction with five bidders and a winning bid of a million dollars, each of the four losing applicants is paid two hundred and fifty-thousand dollars—minus a four-per-cent fee to Innovative Auctions. (That fee includes a cut for Deloitte, which is acting as a neutral monitoring party, and JPMorgan Chase, which is acting as an escrow agent.)

Despite the fact that the last handful of domains released by ICANN in the early aughts, like .biz and .info, never quite caught on—using a .biz domain today is dowdier than a Hotmail e-mail address—few of the key players seem interested in hedging their bets. And Donuts’s bet may prove to be riskier than most: while Google is simply looking for ways to makes its services easier to access, Donuts is wagering that holding vast swaths of potentially desirable domains will itself be a business. If it’s correct, and Web sites seek to annex or relocate to these radical new addresses in droves, Donuts could find itself very rich—while the first generation of cyber squatters will find themselves sitting on suddenly worthless territory.

Illustration by Philippe Petit-Roulet.