Other Domain registrars may do this, but it seems to be the most prevalent with GoDaddy, I'll just get right to it. They buy domains you are searching for and then try to re-sell them back to you as a "Premium Domain" for %1000 more or a lot of times even more, I normally see it go to the base "Premium Domain" of $2,500. They offer domains for $1 as a deal a lot of the times to get you searching for a domain on their website, through this I assume they check for trends and buy high trending word uses and popular phrases. This is such a dirty practice for a company who is there to offer an easy solution to purchase a domain for a lot of times peoples first company, website, and hosting plan.
I've been using Google recently (who also offers anonymous registration as part of the cost, GoDaddy up charges for this)
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