Overstock.com announced on Thursday that it is rebranding itself with the addition of the shortcut address O.co.

What does this mean for the future of the .CO domain? The promoters still have significant hurdles to overcome and this will require more than a month long marketing frenzy but a consistent effort with a great deal of money to back it. At first, the effort is like climbing a very steep hill, but can they reach the top? This would be the point at which enough of the public is aware of the extension and major companies are comfortable using it, after which they can coast as a result of the network effect that this would produce.

For Overstock, this is a risky move, so I’m surprised in their decision to make the change and then indicate their intent to promote the new address in their own upcoming commercials without holding the .COM. They probably felt the need to do something radical to reinvigorate the site and took this opportunity to make the change with the Go Daddy .CO Super Bowl ad on the horizon. It’s possible that they could benefit from the media coverage that will follow the airing of that commercial as this may lead to the mention of websites that are using the .CO domain for their address and given that there are relatively few, Overstock will likely be highlighted in this context. From that standpoint, it could turn out to be a savvy move to launch the new address prior to the Super Bowl.

However, this could possibly turn out to be one of the biggest boneheaded moves in branding history because without possessing the .COM version of the name, there will likely be a loss of traffic as many people will enter O.com in their address bars upon seeing the commercials. Will Overstock need to buy ads for the search term “O.com” as a result of the promotion of the new shortcut address?

This is one unique case, a single letter name that this particular company has desired for a long time. They have referred to themselves as “the big O” in prior commercials and with the .COM unavailable they’re giving it a shot with the .CO. I think they’ll use this opportunity to see how this strategy works. I imagine that they believe that with the upcoming Super Bowl commercial, public awareness of the .CO domain will only grow and thus so will recognition of O.co as being distinct from O.com. Perhaps, one of the additional impetuses for the branding change is to lay more groundwork for their claim to the .COM should it ever become available. All in all, it’s a risky but, admittedly, bold move on the part of Overstock; however, I think O.me would have been a much better choice.