A domain name is the addressing system for the internet. Like a phone number is used to identify a person or business in telephone system, a domain name is the ID on World Wide Web. As internet becomes more and more popular, you see more and more business listing their URL in addition to their telephones on yellow pages, bulletin boards, and the products.
Domain names are the virtual real estate. It is the foundation on which a website can be built, same way as a house or office is built. As the saying in real estate, "location, location, location", not all domains are created equal. Certain domains are considered premium names. One type of them are the short domains. First of all, it is easy to remember and type in shorter names. Second, a short acronym conveys a sense of seriousness for the business. So everybody knows of MSN.com, instead of MiscrosoftNetwork.com.
Four letter domains have long been registered for resale purpose. Several of the largest portfolios dated back around 2000. Actually all the four letter dotcoms are scooped up in 2007. We see many significant sales, as reported by DNJournal.com