Questionable investment: RetailMeNot spends $4.3 million for fresh domain names

Firm has common investor with fresh top level domain firm Donuts.

Struggling Austin internet firm RetailMeNot spent $4.3 million to acquire second level domain names under a fresh top level domain name, an SEC filing revealed. The purchase was first noted by George Kirikos, and OnlineDomain wrote regarding it earlier today.

While the SEC filing doesn’t disclose the top level domain or registry, it almost certainly is Donuts. The common denominator is Austin Ventures, which backed both RetailMeNot and Donuts.

As I’ve opined ahead of, Austin Ventures is most likely the reason RetailMeNot forked out money for Donuts’ previous .codes domain names.

This seems like an awful lot of money to spend on these domains, especially in light of the lukewarm reception of fresh top level domain names. That might be the kicker: the agreement was entered into ahead of fresh top level domain names started rolling out on the market.

RetailMeNot has struggled with changes in Google’s search algorithm. It needs a way to attract traffic from more diversified sources, but I’m not sure using all of these domains will pay off. I’d be wary of this deal and the venture capital connection if I were a RetailMeNot investor.