Old news, see story on Donuts.inc [1] for example. Lots of people pooled money to create a gTLD registry, it is nominally free money. Cost of hosting 24 servers (one for each time zone) which can handle millions of DNS lookups per second is pretty small (like $100K/year all up, less if you use part time/contract systems folks) You can get 10G links with 100M commit pretty cheaply and if you get more traffic its because you've got more domains so that cost scales with profit. Vs $10/year so once you get 10,000 domains you're break even. Pretty easy math.

[1] http://www.washingtonpost.com/business/technology/donuts-inc...