March 4, 2009

Toys R Us Buys Toys.com Domain Name

Toys R Us has paid $5.1m for the Toys.com domain name.

Onlookers are surprised by the amount and expect a deeper commitment to online retailing by the toy store giant.

This payout for a domain name is the biggest this year.  In 2007, $14 million was paid for the domain sex.com, and $9.5 million was paid for porn.com.

The U.K. domain name seller Sedo said that it has seen prices halved for .co.uk domain names since the economic downturn started to take hold.

However, Sedo's business development manager Nora Nanayakkara said, more small-to medium-sized businesses are buying domains.

"Sales have tripled as businesses see the value in having a presence online," she said.

"In the case of Toys R Us it could be that they are thinking of rebranding or increasing its online presence," she said.

"Toys.com is going to put them in the top search ranking and is likely to give them kudos in terms of brand recognition," she added.

According to Ron Jackson, editor of the Domain Name Journal, the U.S. domain name prices have remained stable, despite the economic downturn.

The average .com domain was selling for $2,688 in the fourth quarter of 2008, compared to $2,788 for the same period in 2007, he said.

"The severe recession is forcing businesses to look for the most cost effective, efficient way they can possibly operate and for many that means establishing or reinforcing a web presence," he said.

"This is especially true of brick and mortar retailers. There is much less overhead involved in selling toys for example online than through hundreds of cash-draining big box retail stores."

The auction for Toys.com took place last week, and saw a series of bidders for the domain.  As the price hit $3 million, only two bidders were left - Toys R Us and National A-1 Advertising.

Previously, the domain was up for auction and went to a company called Faculty Lounge for $1.25 million.


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