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Nike, Inc.From Wikipedia, the free encyclopedia
Nike, Inc.
Type Public (NYSE:NKE)
Founded 24 January 1964
1978[1]
Founder(s) William J. "Bill" Bowerman
Philip H. Knight
Headquarters NearBeaverton, Oregon,United States
Area served Worldwide
Key people Philip H. Knight
(Chairman)
Mark Parker
(CEO) & (President)
Industry Designingand Manufacturing:Sportswear
Sports equipment
Products Athletic shoes
Apparel
Sports equipment
Accessories
Revenue US$ 18.627 billion (2008)
Operating income US$ 2.199 billion (2007)
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Net income US$ 1.883 billion (2008)
Total assets US$ 12.443 billion (2008)
Total equity US$ 7.825 billion (2008)
Employees 30,200 (2008)
Website Official Website
Nike, Inc. (pronounced / na ki/) (NYSE: NKE) is a majorpublicly traded sportswear and
equipment supplier based in the United States. The company is headquartered
nearBeaverton,Oregon, which is part of the Portland metropolitan area. It is the world's leading
supplier ofathletic shoes andapparel[2]and a major manufacturer ofsports equipment with
revenue in excess of $18.6 billion USD in its fiscal year 2008 (ending May 31, 2008). As of 2008,
it employed more than 30,000 people worldwide. Nike and Precision Castparts are the
only Fortune 500 companies headquartered in the state of Oregon, according to The Oregonian.
The company was founded on January 25, 1964 as Blue Ribbon Sports byBill
Bowerman and Philip Knight, and officially became Nike, Inc. in 1978. The company takes its
name fromNike (Greek pronounced [nk ]), the Greek goddess of victory; it is also based
on Egyptianusage of "strength", "victory", nakht[citation needed]. Nike markets its products under its own
brand as well as Nike Golf, Nike Pro,Nike+,Air Jordan, Nike Skateboardingand subsidiaries
including Cole Haan,Hurley International,Umbroand Converse. Nike also owned Bauer Hockey
(later renamed Nike Bauer) between 1995 and 2008.[3] In addition to manufacturing sportswear
and equipment, the company operates retail stores under the Niketown name. Nike sponsors
many high profile athletes and sports teams around the world, with the highly recognized
trademarks of "Just do it" and the Swooshlogo.
Contents
[hide]
1 Origins and history
o 1.1 Acquisitions
2 Products
3 Headquarters
4 Manufacturing
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o 4.1 Human rights concerns
5 Environmental record
6 Marketing strategy
o 6.1 Advertising
6.1.1 Kasky v. Nike
6.1.2 Beatles song
6.1.3 Minor Threat ad
6.1.4 Horror ad
6.1.5 Chinese-themed ad
6.1.6 Pretty
o 6.2 Place
o 6.3 Sponsorship
7 References
8 External links
Origins and history
Nike, originally known as Blue Ribbon Sports, was founded by University of Oregontrack
athlete Philip Knightand his coach Bill Bowerman in January 1964. The company initially
operated as a distributor for Japanese shoe makerOnitsuka Tiger, making most sales at track
meets out of Knight's automobile.[4]
The company's profits grew quickly, and in 1966, BRS opened its first retail store, located on Pico
Boulevard inSanta Monica, California. By 1971, the relationship between BRS and Onitsuka
Tiger was nearing an end. BRS prepared to launch its own line of footwear, which would bear the
newly designed Swooshby J.B. Strasser, and trademarked on January 31, 1972[5]. Incidently, the
Onitsuka Tiger brand today is owned by one of Nike's competitor,ASICS.[6]
The first shoe to carry this design that was sold to the public was a soccershoe named "Nike",
which was released in the summer of 1971. In February 1972, BRS introduced its first line of Nike
shoes, with the name Nike derived from the Greek goddess of victory. In 1978, BRS, Inc. officially
renamed itself to Nike, Inc. Beginning with Ilie Nastase, the first professional athlete to sign with
BRS/Nike, the sponsorship of athletes became a key marketing tool for the rapidly growing
company.
The company's first self-designed product was based on Bowerman's "waffle" design. After the
University of Oregon resurfaced the track at Hayward Field, Bowerman began experimenting with
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different potential outsoles that would grip the new urethane track more effectively. His efforts
were rewarded one Sunday morning when he poured liquid urethane into his wife's waffle iron.
Bowerman developed and refined the so-called 'waffle' sole which would evolve into the now-
iconic Waffle Trainer in 1974.
By 1980, Nike had reached a 50% market share in the United States athletic shoe market, and
the company went public in December of that year.[7]Its growth was due largely to 'word-of-foot'
advertising (to quote a Nike print ad from the late 1970s), rather than television ads. Nike's first
national television commercials ran in October 1982 during the broadcast of the New York
Marathon. The ads were created by Portland-based advertising agencyWieden+Kennedy, which
had formed several months earlier in April 1982.
Together, Nike and Wieden+Kennedy have created many indelible print and television ads and
the agency continues to be Nike's primary today. It was agency co-founderDan Wieden who
coined the now-famous slogan "Just Do It" for a 1988 Nike ad campaign, which was chosen
byAdvertising Age as one of the top five ad slogans of the 20th century, and the campaign has
been enshrined in the Smithsonian Institution.[7]San FranciscanWalt Stack was featured in Nike's
first "Just Do It" advertisement that debuted on July 1, 1988.[8] The "Just Do It" trademark was
filed by Nike, Inc. on October 3, 1989 with the description attributed to sports clothing, on which
the mark was to be affixed.[9]
Throughout the 1980s, Nike expanded its product line to include many other sports and regions
throughout the world.[10]
Acquisitions
As of November 2008, Nike, Inc. owns four key subsidiaries:Cole Haan,Hurley
International,Converse Inc.andUmbro.
Nike's first acquisition was the upscale footwear companyCole Haan in 1988.
In February 2002, Nike bought surf apparel company Hurley Internationalfrom
founderBob Hurley.[11]
In July 2003, Nike paid US$305 million to acquire Converse Inc., makers of the iconic
Chuck Taylor All Stars.[12]
On March 3, 2008, Nike acquired sportsapparel supplierUmbro, known as the
manufacturers of theEngland national football team's kits, in a deal said to be
worth 285 million (aboutUS$600 million).[13]
Other subsidiaries previously owned and subsequently sold by Nike include Bauer
Hockey and Starter.[14]
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Products
A Nike brandathletic shoe
A pair of Nike Air Jordan I shoes
Nike produces a wide range of sports equipment. Their first products were track running shoes.
They currently also make shoes, jerseys, shorts,baselayersetc. for a wide range of sports
including track & field,baseball,ice hockey,tennis,Association
football,lacrosse, basketball and cricket.Nike Air Maxis a line of shoes first released by Nike, Inc.
in 1987. The most recent additions to their line are the Nike 6.0, Nike NYX, and Nike SBshoes,
designed forskateboarding. Nike has recently introduced cricket shoes, called Air Zoom Yorker,
designed to be 30% lighter than their competitors'.[15] In 2008, Nike introduced the Air Jordan
XX3, a high performance basketball shoe designed with the environment in mind.
Nike sells an assortment of products, including shoes and apparelfor sports activities
like association football[16],basketball, running, combat sports,tennis,American
football,athletics, golfandcross training for men, women, and children. Nike also sells shoes for
outdoor activities such as tennis, golf, skateboarding,association football,baseball,American
football,cycling,volleyball, wrestling,cheerleading, aquatic activities, auto racing and other
athletic and recreational uses. Nike is well known and popular in youth culture,chavculture
andhip hop culture as they supplyurban fashionclothing. Nike recently teamed up with Apple
Inc. to produce theNike+product which monitors a runner's performance via a radio device in the
shoe which links to theiPod nano. While the product generates useful statistics, it has been
criticized by researchers who were able to identify users'RFID devices from 60 feet (18 m) away
using small, concealable intelligencemotes in awireless sensor network.[17][18]
In 2004, they launched theSPARQ Training Program/Division.
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Some of Nike's newest shoes contain Flywireand Lunarlite Foam. These are materials used to
reduce the weight of many types of shoes. [19]
In the video gameGran Turismo 4 there is a car by Nike called the NikeOne 2022, designed by
Phil Frank.
Headquarters
This section needs additionalcitations forverification.Please helpimprove this articleby addingreliable references. Unsourced material may
bechallengedandremoved.(July 2007)
Nike's world headquarters are surrounded by the city ofBeaverton, but are
withinunincorporatedWashington County.
This distinction, according to The Oregonian, has been a source of contention between the city of
Beaverton and Nike since the company purchased 74 acres (0.3 km) of nearby Beaverton land
that soon fronted theJared Co-operation. When Nike proposed expanding their headquarters in
that direction, Beaverton at first wanted them to build housing near theMAX light railstation and
criss-cross the property with two public roads, expectations defined by the zoning already in place
when Nike bought the land. Beaverton's request was mostly consistent withMetro's transit-
oriented development plans for the region. After a year, which included a threat by Nike to move
5,000 jobs out of the state, Beaverton backed down from the requirement for housing, but the
lack of accommodation was something that Nike did not forget.
The annexation standoff soon led Beaverton to attempt a forcible annexation. That led to a
lawsuit by Nike, and lobbying by the company that ultimately ended in Oregon Senate Bill 887 of
2005. Under that bill's terms, Beaverton is specifically barred from forcibly annexing the land that
Nike and Columbia Sportswearoccupy in unincorporated Washington County for 35 years,
whileElectro Scientific Industries and Tektronix get that same protection for 30 years.[20]
The world headquarters is situated on approximately 200 acres (0.81 km2) of land. The first phase
of construction was completed in 1990, followed by expansions in 1992, 1999, 2001 and 2008.
There are 17 buildings, together providing approximately 2,000,000 square feet (190,000 m2) of
office space. Each building is named for a legendary coach or athlete who has had a long
affiliation with Nike, includingTiger Woods,Lance Armstrong, Mia Hamm,Michael Jordan,Pete
Sampras,Joan Benoit Samuelson,John McEnroeand several others.
Two of the buildings are child development centers, named forJoe PaternoandC. Vivian
Stringer, that together provide daily child care for approximately 500 children of Nike employees.
A man-made lake, fed by a natural spring, covers 6 acres (24,000 m2) and is adjacent to a
protected wetland area that runs through the center of the campus. The dirt from the lake was
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deposited around the perimeter of the grounds to create a 14-foot (4.3 m) tall, sloping berm that
helps create a campus-like feel. Approximately 5,000 employees are based at the world
headquarters, with another 2,000-2,500 in additional buildings in office complexes nearby.
Manufacturing
Nike has contracted with more than 700 shops around the world and has offices located in 45
countries outside the United States.[21]Most of the factories are located in Asia, including
Indonesia, China, Taiwan, India, Thailand, Vietnam, Pakistan, Philippines, and Malaysia.[22] Nike
is hesitant to disclose information about the contract companies it works with. However, due to
harsh criticism from some organizations like CorpWatch, Nike has disclosed information about its
contract factories in its Corporate Governance Report.
Human rights concerns
Nike has been criticized for contracting with factories in countries such as
China, Vietnam,Indonesiaand Mexico. Vietnam Labour Watch, an activist group, has
documented that factories contracted by Nike have violated minimum wage and overtime laws in
Vietnam as late as 1996, although Nike claims that this practice has been halted.[23] The company
has been subject to much critical coverage of the often poor working conditions
andexploitation of cheap overseas labor employed in the free trade zones where their goods are
typically manufactured. Sources of this criticism include Naomi Klein's bookNo LogoandMichael
Moore's documentaries.
Nike has been criticized about ads which referred to empowering women in the U.S. whileengaging in practices in East Asian factories which some felt disempowered women.[24]
During the 1990s, Nike faced criticism for use of child labor in Cambodia and Pakistanin factories
it contracted to manufacture soccer balls. Although Nike took action to curb or at least reduce the
practice of child labor, they continue to contract their production to companies that operate in
areas where inadequate regulation and monitoring make it hard to ensure that child labor is not
being used.[25]
In 2001 a BBC documentary uncovered occurrences of child labor and poor working conditions in
a Cambodian factory used by Nike.[26]In the documentary, six girls were focused on, all of whom
worked seven days a week, often 16 hours a day.
Campaigns have been taken up by many colleges and universities, especially anti-
globalisation groups as well as several anti-sweatshop groups such as the United Students
Against Sweatshops.[27] Despite these campaigns, however, Nike's annual revenues have
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increased from $6.4 billion in 1996 to nearly $17 billion in 2007, according to the company's
annual reports.
A July 2008 investigation by Australian Channel 7 News found a large number of cases involving
forced labour in one of the biggest Nike apparel factories. The factory located in Malaysia was
filmed by an undercover crew who found instances of squalid living conditions and forced labour.
Nike have since stated that they will take corrective action to ensure the continued abuse does
not occur.[28]
Following Liu Xiang's withdrawal from the 2008 Olympics, Nike admitted seeking help from
"relevant government departments" in the Chinese government to track down and identify an
anonymous Internet poster.[29]
Environmental record
The consistently growing textile industry often negatively impacts the environment. Because Nike
is a large participant in this manufacturing, many of their processes negatively contribute to the
environment. One way the expanding textile industry affects the environment is by increasing its
water deficit, climate change, pollution, and fossil fuel and raw material consumption. In addition
to this, today's electronic textile plants spend significant amounts of energy, while also producing
a throw-away mindset due to trends founded upon fast fashion and cheap clothing.[30]Although
these combined effects can negatively alter the environment, Nike tries to counteract their
influence with different projects. According to a New England-based environmental organisation
Clean Air-Cool Planet, Nike ranks among the top 3 companies (out of 56) on a survey conducted
about climate-friendly companies.[31] Nike has also been praised for its Nike Grindprogramme
(which closes theproduct lifecycle) by groups like Climate Counts.[32] In addition to this, one
campaign that Nike began for Earth Day 2008 was a commercial that featured Steve
Nashwearing Nike's Trash Talk Shoe, a shoe that had been constructed in February 2008 from
pieces of leather and synthetic leather waste that derived from the factory floor. The Trash Talk
Shoe also featured a sole composed of ground-up rubber from a shoe recycling program. Nike
claims this is the first performance basketball shoe that has been created from manufacturing
waste, but it only produced 5,000 pairs for sale.[33] Another project Nike has begun is called Nike's
Reuse-A-Shoe program. This program, started in 1993, is Nike's longest-running program that
benefits both the environment and the community by collecting old athletic shoes of any type in
order to process and recycle them. The material that is created from the recycled shoes is then
used to help create sports surfaces, such as basketball courts, running tracks, and playgrounds.
[34]
Marketing strategy
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This section needs additionalcitations forverification.Please helpimprove this articleby addingreliable references. Unsourced material may
bechallengedandremoved.(July 2007)
Nike's marketing strategy is an important component of the company's success. Nike is
positioned as a premium-brand, selling well-designed and expensive products. Nike lures
customers with a marketing strategy centering around a brand image which is attained by
distinctive logo and the advertising slogan: "Just do it".[35] Nike promotes its products by
sponsorship agreements with celebrity athletes, professional teams and college athletic teams.
However, Nike's marketing mix contains many elements besides promotion. These are
summarised below.
Advertising
From 1972 to 1982, Nike relied almost exclusively on print advertising in highly vertical
publications including Track and Field News. Most of the early advertising was focused on a new
shoe release, essentially outlining the benefits of the running, basketball or tennis shoe. In 1976,
the company hired its first outside ad agency, John Brown and Partners, who created what many
consider Nike's first 'brand advertising' in 1977. A print ad with the tagline "There is no finish line"
featured a lone runner on a rural road and became an instant classic. The success of this simple
ad inspired Nike to create a poster version that launched the company's poster business.
In 1982, Nike aired its first national television ads, created by newly formed ad
agency Wieden+Kennedy, during the New York Marathon. This would mark the beginning of a
remarkably successful partnership between Nike and W+K that remains intact today. The Cannes
Advertising Festival has named Nike its 'advertiser of the year' on two separate occasions, the
first and only company to receive that honor twice (1994, 2003).[36]
Nike also has earned theEmmy Award for best commercial twice since the award was first
created in the 1990s. The first was for "The Morning After," a satirical look at what a runner might
face on the morning of January 1, 2000 if every dire prediction about Y2K came to fruition.[37]The
second Emmy for advertising earned by Nike was for a 2002 spot called "Move," which featured a
series of famous and everyday athletes in a stream of athletic pursuits.[38]
In addition to garnering awards, Nike advertising has generated its fair share of controversy:
Kasky v. Nike
Consumer activistMarc Kaskyfiled a lawsuit in California in 2002 regarding newspaper
advertisements and several letters Nike distributed in response to criticisms of labor conditions in
its factories. Kasky claimed that the company made representations that constituted false
advertising. Nike responded that the false advertising laws did not cover the company's
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expression of its views on a public issue, and that these were entitled toFirst
Amendment protection. The local court agreed with Nike's lawyers, but theCalifornia Supreme
Courtoverturned this ruling, claiming that the corporation's communications were commercial
speechand therefore subject to false advertising laws.
The United States Supreme Court agreed to review the case (Nike v. Kasky) but sent the case
back to trial court without issuing a substantive ruling on the constitutional issues. The parties
subsequently settled out of court before any finding on the accuracy of Nike's statements, leaving
the California Supreme Court's denial of Nike's immunity claim as precedent. The case drew a
great deal of attention from groups concerned withcivil liberties, as well as anti-sweatshop
activists.
Beatles song
Nike was the focus of criticism for its use of theBeatles song "Revolution" in a 1987 commercial,
against the wishes ofApple Records, the Beatles' recording company. Nike paid $250,000
to Capitol RecordsInc., which held the North American licensing rights to the Beatles' recordings,
for the right to use the Beatles' rendition for a year.
Apple sued Nike Inc., Capitol Records Inc., EMI Records Inc. and Wieden+Kennedy advertising
agency for $15 million.[39] Capitol-EMI countered by saying the lawsuit was 'groundless' because
Capitol had licensed the use of "Revolution" with the "active support and encouragement ofYoko
Ono Lennon, a shareholder and director of Apple."
According to a November 9, 1989 article in theLos Angeles Daily News, "a tangle of lawsuits
between the Beatles and their American and British record companies has been settled." One
condition of the out-of-court settlement was that terms of the agreement would be kept secret.
The settlement was reached among the three parties involved: George Harrison,Paul
McCartney,Ringo Starr; Yoko Ono; and Apple, EMI and Capitol Records. A spokesman for Yoko
Ono noted, "It's such a confusing myriad of issues that even people who have been close to the
principals have a difficult time grasping it. Attorneys on both sides of the Atlantic have probably
put their children through college on this."
Nike discontinued airing ads featuring "Revolution" in March 1988. Yoko Ono later gave
permission to Nike to use John Lennon's "Instant Karma" in another ad.
Minor Threat ad
In late June 2005, Nike received criticism from Ian MacKaye, owner ofDischord Records,
guitarist/vocalist forFugazi&The Evens, and front-man of defunct punk band Minor Threat, for
appropriating imagery and text from Minor Threat's 1981 self-titled album's cover art in a flyer
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promoting Nike Skateboarding's 2005 East Coast demo tour.
On June 27, Nike Skateboarding's website issued an apology to Dischord, Minor Threat, and fans
of both and announced that they tried to remove and dispose of all flyers. They state that the
people who designed it were skateboarders and Minor Threat fans themselves who created the
ad out of respect and appreciation for the band.[40] The dispute was eventually settled out of court
between Nike & Minor Threat. The exact details of the settlement have never been disclosed.
Horror ad
In this ad, a parody of horror films, Olympic runnerSuzy Favor-Hamiltonis running a bath in a
remote wilderness cabin when a chainsaw-wielding masked killer appears. Hamilton is obviously
in much better shape than the would-be killer and, thanks to her Nike gear, sprints away. The
final shot shows the killer out of breath, limping away and ends with the tagline, "Why Sport?"
which is quickly answered with "You'll live longer."
First aired during the opening ceremony of the 2000 Summer Olympics (Friday), the ad titled
"Horror" generated roughly 200 complaints (according to NBC) that caused the network to pull the
ad by Sunday. ESPN followed suit, but the ad continued to air with little or no controversy on
several other networks, including FOX, WB, UPN and Comedy Central.
Protesters argued that the ad made light of violence against women, while others claimed it was
just too scary to watch, especially for children who enjoy watching the Olympics. Nike
spokespeople retorted it was meant to be humorous, and to satirize the typical horror flick where
a helpless woman was destined to be slashed. Hamilton herself stated the ad was inspirational,
since it is the woman who defeats the man.
Chinese-themed ad
In 2004, an ad aboutLeBron James beating cartoon martial arts masters and slaying a Chinese
dragon inmartial arts offended Chinese authorities, who called the ad blasphemous and insulting
to national dignity and the dragon. The ad was later banned in China. In early 2007 the ad was
reinstated in China for unknown reasons.[41]
Pretty
In the run up to the 2006 U.S. Open, Nike began runningPretty, a television advertisement
featuring Maria Sharapova. The ad was a popular and critical success, and went on to win
several of the industry's top awards, including twoCannes Gold Lions.
Place
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Niketown at Oxford Street,London
Nike sells its product to more than 25,000 retailers in the U.S. (including Nike's own outlets and
"Niketown" stores) and in approximately 160 countries in the world. The company also has a
program called NIKEiD at nikeid.com, which allows customers to customize designs of some
styles of Nike shoes and deliver them directly from manufacturer to the consumer. Nike sells its
products in international markets through independent distributors, licensees, and subsidiaries.
Sponsorship
Main article: Nike sponsorships
Nike pays top athletes in many different sports to use their products andpromote/advertise their
technology and design.
Nike's first professional athlete endorser was Romanian tennis playerIlie Nstase, and the
company's first track endorser was distance running legendSteve Prefontaine. Prefontaine was
the prized pupil of the company's co-founderBill Bowerman while he coached at the University of
Oregon. Today, the Steve Prefontaine Building is named in his honor at Nike's corporateheadquarters.
Besides Prefontaine, Nike has sponsored many other successfultrack & field athletesover the
years such asCarl Lewis,Jackie Joyner-Kersee and Sebastian Coe. However, it was the signing
of basketball playerMichael Jordan in 1984, with his subsequent promotion of Nike over the
course of his storied career with Spike LeeasMars Blackmon, that proved to be one of the
biggest boosts to Nike's publicity and sales.
During the past 20 years especially, Nike has been one of the major clothing/footwear sponsors
for leading tennis players. Some of the more successful tennis players currently or formerlysponsored by Nike include: James Blake, Jim Courier,Roger Federer,Lleyton Hewitt,Juan
Martn del Potro, Andre Agassi, Rafael Nadal,Pete Sampras,Marion Bartoli,Lindsay
Davenport,Daniela Hantuchov,Mary Pierce,Maria Sharapova, Serena Williams.
Nike is also the official kit sponsor for the Indian cricket team for 5 years, from 2006 till end of
2010. Nike beat Adidasand Puma by bidding highest (US$43 Million total).
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Nike also sponsors some of the leading clubs in world football, such as theUS National
Team, Manchester United, Arsenal, FC Barcelona,Inter
Milan,Juventus,Shakhtar, Porto, Steaua,Red Star, Club Amrica,Aston Villa, CelticandPSV
Eindhoven. Nike will also sponsorDundee Unitedfrom summer 2009.
Nike sponsors several of the world's top golfplayers, including Tiger Woods,Trevor
Immelman and Paul Casey.
Nike also sponsors various minor events including Hoop It Up (high school basketball) and The
Golden West Invitational (high school track and field). Nike uses web sites as a promotional tool
to cover these events. Nike also has several websites for individual sports, including
nikebasketball.com, nikefootball.com, and nikerunning.com.
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