Regarding my statement above, “Any domain name that reaches expired status and is not renewed by the owner will be auctioned by an auction service.”–it did overstretch. I’ve modified it to be: “A domain name that reaches expired status and is not renewed by the owner will be listed at an auction service (see FAQ for exception to this rule).” Then I added a FAQ to clarify. Please check my thinking:
Simple question: say I get the URL I want via auction for however umpteen hundreds of dollars, what about the renewal prices? Am I at the mercy of the auction house every year I want to renew it? Is it as simple as paying 10 or 15 bucks a year like with GoDaddy with a URL I got not through an Auction? I’m willing to pay for the desired URL up front but I don’t know what that entails down the pike.
 On April 11, 2016, SnapNames (owned by Web.com) and NameJet (partnership between Web.com and Rightside) combined resources on pending delete/dropping domains to better compete with other drop catching services. Going forward, backorders placed on either platform for pending delete names will go into a common backorder pool and will be fulfilled either by NameJet or SnapNames depending on which platform the backorder was placed. Pending delete names that have multiple backorders will be placed in a common private auction accessible to bidders from both platforms to participate in the live auction. Minimum bid increments and proxy bidding rules for NameJet will be modified to match those of SnapNames. Registrar expiry, and direct lister inventory will not be affected by this integration.
However, Pool uses what some have called a “two-phase” auction system. This means that once you win your original backorder, Pool will then move you into the auction phase where you compete with other bidders for the domain. Pool doesn’t reveal how many bidders there are or what they’re bidding, so you have to offer the highest price you’re willing to if you want to get that dream domain.
The second option requires a bit more time and effort than a 301 redirect. You could do a mini overhaul of the site and turn it into a microsite for your main domain. This option is good for exact-match domains for your targeted keyword, and there are other reasons for going the microsite route that Rand's highlighted in his post about root domains, subdomains, subfolders and microsites. This strategy also works better if the old domain has decent rankings for the keywords you're targeting.
Sometimes people purchase domains that they plan to build a website on or sell in the future, but it just doesn’t end up happening. If an individual decides that it is no longer worth the yearly investment of keeping the domain in their account, they may choose to let it expire. Or, someone might just forget to renew the domain before the expiration date. If this happens, it’s a great chance for other domain investors to score rare domain names that are pending delete. Spending time perusing the list of recently dropped domains can be a worthwhile way to find high quality domains.
If you buy a domain from a 3rd party, the backlinks are valuable. I always wait a few months before redirecting, so just set up a quick minisite until two page rank updates have passed and then go ahead and 301 redirect. However, it seems that you'll get the link juice from the back links, the anchor text is ignored by Google. Buying a domain at Godaddy TDName expired auctions, seem to not count as a dropped domain if you immediately set up a mini-site.
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