Toys 'R' Us bought toys.com last week for $5.1 million, making it the biggest domain name purchase this year. The deal puts toys.com in the ranks of seniors.com and porn.com as one the Top 10 Most Expensive Domain Names ever purchased.
And what's more, Toys 'R' Us got a hold of the name only after a heated bidding war with National A-1 Advertising.
As if to spite old-world models, U.S. domain name prices have remained stable in the past few years even as the rest of the world goes Kerplunk. Average domain names are going for $2,688 a pop and in England, "[s]ales have tripled as businesses see the value in having a presence online," said Nora Nanayakkara, business development manager for Sedo UK domain name seller.
The toys.com purchase wasn't all good news, though. Ron Jackson, editor and publisher of the Domain Name Journal, said:
Had it not been such a recession, I think it probably would have gone for a little bit more than that.
By "a little bit more," he meant $2-3 million.
So…healthy competition is good thing?
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.
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.
Boy, those businesses better stop being so innovative if they want a piece of the bailout action.