Drugs.com: The $823,000 Name

And the buyer is ... a guy named Tony Hsieh.

Hsieh stepped forward Monday to reveal that he was the previously anonymous bidder who plunked down $823,456 for the Web domain name Drugs.com to help a company that is part of Venture Frogs LLC, his San Francisco-based startup incubator.

"We definitely believe it's worth it, and a lot more, and so did some other people," he told CBS.MarketWatch.com. Hsieh, who bought the name in an online auction last week conducted by GreatDomains.com, made his identity public on Monday.

Hsieh said one factor in bidding was to consider how much the value of Drugstore.com (DSCM) would be diminished if a competitor opened at Drugs.com. He pointed out Drugstore.com's market capitalization is more than $2 billion.

"Would it be reduced by one-tenth of 1 percent ($2 million) if Drugs.com went into competition?" he asked. "We believe definitely."

Hsieh was quick to say his incubator company has a different plan, preferring to be what he called a drug-pharmacy portal. "We hope to be partnering with Drugstore.com and PlanetRx and other online pharmacies," he said.

Hsieh has been through startups, including his own Internet advertising service, LinkExchange. It was bought by Microsoft for a reported $250 million.

As a result, Hsieh said he needed "no special financing to buy the domain. "We have a $27 million investment fund, so we had the cash on hand." However, "I wouldn't say this was a risk-free purchase," he added.

Written By Frank Barnako, CBS MarketWatch