RealTime IT News

Amazon Aiming at Third-Party Sales?

First Amazon.com patented the threaded discussion process, now they have paved the way to get into the domain-name business.

Apparently the store that boasts of offering "Earth's Biggest Selection" wants to make sure that the offerings include domain names. And why not, one might ask -- you can already buy all the hardware and software needed to reach the Internet, so why not a domain -- especially if you are a third-party seller on the site.

ICANN - the non-profit Internet Corporation for Assigned Names and Numbers - approved Amazon as a registrar last December and now lists the Seattle-based retailer in its list of accredited registrars.

However, when one clicks on www.registrar.amazon.com, the link simply takes one to an Amazon page that says "The file you requested cannot be found" and then proceeds to offer books for sale, so clearly the business isn't up and running yet.

There is of course a ton of competition in the domain name business since the market was opened up in 1999. Approximately 160 companies now sell domains. Before 1999 the business was a government monopoly. Many companies offer free or greatly reduced price domain registrations these days, so it remains to be seen how much money is in it for Amazon.

An Amazon spokesman could not immediately be reached, but one theory making the rounds is that domain registration might be a service the retail giant could offer to its smaller merchant partners.

"Amazon's move to become a seller of Web domains may be a sign that Amazon intends to delve more deeply into pursuit of micro-retailers as merchant partners -- a market in which eBay and Yahoo Stores are rather dominant," said Ken Cassar, senior analyst at Jupiter Research.

Third-party seller transactions on Amazon's Web sites (new, used and refurbished items sold on Amazon.com product detail pages by other businesses and individuals) grew to 21 percent of worldwide units in the fourth quarter of 2002, compared with 16 percent of units a year ago.

Amazon has a direct link for third-party sellers that helps them to get started.

Although Amazon now has a five-year contract to sell addresses with the five top-level domains (TLDs) to individuals and businesses, the news didn't make a ripple in the financial press, where the Wall Street Journal first reported the story.

Amazon is not currently operating an Internet registrar yet, according to a spokesman for ICANN, adding that it usually takes newly accredited registrars several months to begin registering Internet domain names.