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Donuts Tries a Domain Grab

A small company takes on Web heavyweights in a domain auction
Donuts Tries a Domain Grab
Illustration by Chi Birmingham

The Internet seems like an endless expanse, but it actually functions like a very crowded real estate market. Website domain names are like property addresses. Nicer neighborhoods command higher prices. Speculators, sometimes unsavory ones, abound. That’s why the auction of 1,400 new suffixes in mid-2013, beyond ubiquitous designations such as .com, is such a big deal. It’s the first major expansion of domain names since 2004, attracting interest from Google and Amazon.com, as well as Donuts, a little-known Bellevue (Wash.) company that wants to grab as many new addresses as possible and license them for a hefty profit.

The domain game can be surprisingly lucrative. Back in 2010 an offshore holding company called Clover Holdings, based on the Caribbean island of St. Vincent, paid $13 million for the rights to sex.com, according to Kieren McCarthy, author of a book about the sale. The introduction of suffixes such as .app, .law, and .financial likely will also attract all manner of companies. Amazon bid for the suffix .book, while Google applied for .ads, .buy, and .google, among others.