Yesterday was a day of broken dreams for a lot of people thanks to Godaddy and the .me domain name landrush fiasco.

Yesterday Godaddy opened up registration for .me domain names, which led to a virtual stampede for the most sought after domains (hug.me, resu.me, add.me, f*ck.me, etc.)

The twittersphere was abuzz with “I just registered 10 awesome domains” as everyone placed their orders. Almost everyone was sorely disappointed, however, when they started receiving “failed to register” emails from GoDaddy. Essentially Godaddy took a lot of people’s money but failed to register most domains.

I think there’s a good possibility Godaddy will get slapped with a lawsuit since most people were probably not made aware of how this “actually” works. Domain Name wire answers some questions about how this .me registration really works (be sure to check out the comments).

Essentially, the registry reserves the most valuable and obvious domains for themselves, then let others fight it out for the rest of anything that’s worth registering – via auction to be held later this month – but this information is not presented up front. Perhaps someone like Sarah Bird can chime in whether this would be grounds for a fraud suit against Godaddy.

I went through a similar experience mysself about a month ago after I saw that .me domain name registrations were available for pre-order (via stuntdubl’s tweet). They were $100 ($50/yr. min of 2 years) to register, so I ordered 3 of them, not knowing that if anyone else registered them, we’d have to go into auction for ownership later.

It willbe interesting to see how this all shakes out: Will Godaddy automatically refund everyone’s money? How high will the auctions go? Will there be any foul play or insider bidding? Will Godaddy get slapped with a class action suit?

In my next post we’lll step back for a second to get some perspective on “what are these .me domains actually worth?” stay tuned…

P.S. The only domain name I know was succesfully registered (ironically) is sodomize.me :)