August 8, 2009
TechCrunch reports today that when Amazon acquired Zappos in July for more than $900 million, it also bought intangible assets including various domain names.
One of these acquired domain names is Clothes.com. According to Amazon’s SEC filing, Zappos had bought Clothes.com for $4.9 million from Idealab in May 2008. The domain is currently redirecting to a Zappos web page selling clothing products.
In May 2008, we [Zappos] acquired the Clothes.com internet domain name from Idealab. The domain name was recognized as a purchased intangible asset with a useful life of 20 years. The entire purchase price of $4.9 million was assigned to the price of the domain name intangible asset and will be amortized on a straight-line basis over its remaining estimated useful life.
This makes Clothes.com the second-highest domain sale of 2008, topped only by Fund.com, which was sold for close to $10 million. The sale shows once again how many top-dollar domain sales go unnoticed in any given year. But it also shows that many smart companies do care about generic domain names, which they quietly acquire and then use to increase sales and support their brands.
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