Well… they are not marking up on the domain so they need to justify this some other way.
I can totally see them going somewhat like…;
Sales Guy: Hey, our graphs are not spiking upwards like a rocket anymore… we need to get out there! people need to know us!
Marketing Guy: Wait… wait wait! You’re not blaming this on me right?! we’re widely known already, what we need is to get people to think we are the only game in town.
CEO: Well we already offer our basic service…
Sales Guy: I know… let’s fk the registrars, let’s sell domains with a low margin.
Marketing guy: Let’s go viral, let’s not make a cent, instead we’ll force people to use our nameservers. Our user base will skyrocket. It will go viral on social cause we will be wrapping this up on a “nice guy” mantra about how we’re helping people.
CEO: You guys won me at fk…
[Update] Case in Point