ToysRUs bought the domain name Toys.com at auction for $5.1 million after a heated bidding war with domain holding company National A-1, owner of a portfolio of names that includes free.com and divorce.com.

Was this a good purchase for ToyRUs? It is if they want to own the online space for toys. Wonder what their estimate is to recoup the investment for this domain? Is the long term goal branding, increased market share via more traffic to the site, taking advantage of type-in traffic or to save money on paid search?

Clearly ToysRUs has been eyeing this asset for years and finally had the chance to buy it and did so when they had the chance, despite dropping a large chunge of change in an extremely poor economy. Even thought I think the price they paid is extreme, I have to think it is a nice asset to own long-term since the value of domains have proven to hold up over time, and clearly are holding their value much better than actual physical real estate at present.

How many Tickle-Me Elmo’s does ToyRUs have to sell to net $5 million? You folks at ToysRUs HQ better hope the toy industry comes out with some blockbuster must-have toys for you to sell come Xmas 2009.

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