The .co domain is hot... at least from a marketing perspective. GoDaddy and others have run large television campaigns (including during the Super Bowl) to promote the new domain. I have no data to suggest that the .co domains are gaining traction (although I suspect that is not the case). The first major .co move? Overstock.com which is rebranding themselves as O.co. It will be interesting to watch whether they gain branding / marketing traction with the move (again, I suspect that will not be the case). It is an interesting / bizarre move considering that Overstock is already a prominent brand and advertising efforts around a rebrand are challenging... no matter how short or clever the new domain is.
This ad, which is currently running in prim time television, is proof: the spot is focused on explaining the rebrand while reinforcing the core brand qualities.... tough, confusing and probably not worthwhile.