SecProbe.io

CORRESP
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  6350 South 3000 East

  801.947.3100 phone

  Salt Lake City, Utah 84121

  801.944.4629 fax

August 4,
2010

H. Christopher Owings

Assistant Director

United States Securities and
Exchange Commission

Division of Corporation
Finance

Mail Stop 3561

100 F Street, NE

Washington, D.C. 20549

Re:                               Overstock.com, Inc.

Registration Statement on Form S-1

Filed May 14, 2010

File No. 333-166871

Form 10-K for the Fiscal Year Ended December 31, 2009

Filed March 31, 2010

Definitive Proxy Statement on Schedule 14A

Filed April 9, 2010

Form 10-Q for the Fiscal Quarter Ended March 31, 2010

Filed May 4, 2010

File No. 000-49799

Dear Mr. Owings:

Set forth below are the
responses of Overstock.com, Inc. (the “Company,” “we” “us” or “our”), to comments received from the
staff of the Division of Corporation Finance (the “Staff”) of the
Securities and Exchange Commission (the “Commission”) by letter dated August 3,
2010, with respect to the Company’s Form S-1 initially filed with the
Commission on May 14, 2010, File No. 333-166871 (the “Registration Statement”).

For your convenience, each
response is prefaced by the exact text of the Staff’s corresponding comment in
bold, italicized text.

Form 10-K for the Fiscal
Year Ended December 31, 2009

Note
16. Commitments and Contingencies, page F-35

5.                                      We
note your response to comment five from our letter dated July 22, 2010.
Please show us what your disclosure will look like revised as previously
requested. Your response should address the full content of your disclosure of
legal proceedings within your Commitments and Contingencies note to the
financial statements as opposed to an example of a single matter. In this
regard, your current disclosure does not allow a reader to discern what amounts
have been accrued on a case by case basis. Further, by not disclosing the
amounts accrued for each contingency it is not possible for a user of your
financial statements to assess future potential charges when you assert you are
unable to estimate the potential loss or range of loss. You state in your
response that your original disclosures include “[o]ur maximum potential
exposure on the above noted legal matters.” Since you have accrued liabilities
and you have disclosed your maximum potential exposure, it is not evident why
you assert you are not able to disclose the additional exposure to loss such as
the difference between the amount you accrued and the amount you state is your
maximum potential exposure. Please refer to FASB ASC paragraph 450-20-55-21;
and revise your disclosures accordingly.

We
propose to include the following disclosure regarding legal proceedings in the
Commitment and Contingencies note to the financial statements in our Form 10-Q
for the quarter ended June 30, 2010 and similar disclosures in future
filings.

Legal Proceedings

From
time to time, the Company receives claims of and becomes subject to consumer
protection, employment, intellectual property and other commercial litigation
related to the conduct and operation of the Company’s business and the sale of
products on the Company’s Website. In connection with such litigation, the
Company may be subject to significant damages. We may also be subject to
equitable remedies and penalties. Such litigation could be costly and time
consuming and could divert or distract Company management and key personnel
from its business operations. The Company does not currently believe that any
of its outstanding litigation will have a material adverse effect on its
financial statements or business. However, due to the uncertainty of litigation
and depending on the amount and the timing, an unfavorable resolution of some
or all of these matters could materially affect the Company’s business, results
of operations, financial position, or cash flows.

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On
February 2, 2007, along with five shareholder plaintiffs, the Company
filed a lawsuit in the Superior Court of California, County of San Francisco
against Morgan Stanley & Co. Incorporated, Goldman
Sachs & Co., Bear Stearns Companies, Inc., Bank of America
Securities LLC, Bank of New York, Citigroup Inc., Credit Suisse
(USA) Inc., Deutsche Bank Securities, Inc., Merrill Lynch, Pierce,
Fenner & Smith, Inc., and UBS Financial Services, Inc. In
September 2007, the Company filed an amended complaint adding two
plaintiff shareholders, naming Lehman Brothers Holdings Inc. as a
defendant, eliminating the previous claim of intentional interference with
prospective economic advantage and clarifying various points of other claims in
the original complaint. The suit alleged that the defendants, who control over
80% of the prime brokerage market, participated in an illegal stock market
manipulation scheme and that the defendants had no intention of covering short
sell orders with borrowed stock, as they are required to do, causing what are
referred to as “fails to deliver” and that the defendants’ actions caused and
continue to cause dramatic distortions within the nature and amount of trading
in the Company’s stock as well as dramatic declines in the share price of the
Company’s stock. The suit asserts that a persistent large number of “fails to
deliver” creates significant downward pressure on the price of a company’s
stock and that the amount of “fails to deliver” has exceeded the Company’s
entire supply of outstanding shares. The suit accused the defendants of
violations of California securities laws and common law, specifically,
conversion, trespass to chattels, intentional interference with prospective
economic advantage, and violations of California’s Unfair Business Practices
Act. In April 2007, defendants filed a demurrer and motion to strike the
Company’s complaint. The Company opposed the demurrer and motion to strike. In
July 2007 the court substantially denied defendants’ demurrer and motion
to strike. In November 2007, the defendants filed additional motions to
strike. In February 2008, the court denied defendants’ motion to strike
the Company’s claims under California’s Securities Anti-Fraud statute and
defendants’ motion to strike the Company’s common law punitive damages claims,
but granted in part the defendants’ motion to strike Overstock’s claims under
California’s Unfair Business Practices Act, while allowing the Company’s claims
for injunctive relief under California’s Unfair Business Practices Act. Lehman
Brothers Holdings filed for bankruptcy on September 15, 2008 and Barclays
Bank has purchased its investment banking and trading business. The Company
elected not to pursue its claims against Lehman Brothers Holdings in the bankruptcy
proceedings. Dislocations in the financial markets and economy could result in
additional bankruptcies or consolidations that may impact the litigation or the
ability to collect a judgment. On January 12, 2009, Goldman Sachs
Group, Inc., Goldman Sachs &Co., Goldman Sachs
Execution & Clearing L.P., Citigroup, Inc, Citigroup Global
markets, Inc., Credit Suisse (USA) Inc., and Credit Suisse Securities
(USA) LLC filed a motion to strike

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portions
of the Second Amended Complaint regarding certain allegations of conspiracy
among defendants and the request for punitive damages. Also, on
January 12, 2009, Goldman Sachs Group, Inc., Goldman
Sachs &Co., Goldman Sachs Execution & Clearing L.P.,
Citigroup, Inc, Citigroup Global markets, Inc., Credit Suisse
(USA) Inc., and Credit Suisse Securities (USA) LLC filed a demurrer
to the first and second causes of action for conversion and trespass to
chattels and a motion to strike various other allegations of the Second Amended
Complaint. On March 19, 2009, the Court sustained the demurrer to first
and second causes of action but granted leave to amend the complaint. The
motion to strike was denied. On April 20, 2009, the Company amended its
complaint against all the defendants, re-pleading conversion and trespass to
chattels causes of action. Defendants again filed demurrer to the amended
complaint and, on July 23, 2009, the court sustained the demurrer.
Discovery in this case continues. A trial date has been set for
September 12, 2011. The Company intends to continue to vigorously
prosecute this action.

On
April 15, 2008, the Company received a letter from the Office of the
District Attorney of Marin County, California, stating that the District
Attorneys of Marin and four other counties in Northern California have begun an
investigation into the way the Company advertises products for sale, together
with an administrative subpoena seeking related information and documents. The
subpoena requests a range of documents, including documents relating to pricing
methodologies, definitions of core and partner product, as well as other
site-defined terms, and the methods of internal and external pricing of
products, as well as documents related to the pricing of a list of product
items identified in the subpoena. The Company has responded to the subpoena and
has engaged in resolution discussions with these authorities. In
January 2010, attorneys for the Company received correspondence from the
Office of the District Attorney of County of Santa Clara in which the same
offices of the various district attorneys made a collective proposal to resolve
the dispute by the Company’s payment of $8.5 million. In March 2010, the
Company received correspondence from the Office of the District Attorney of the
County of Monterey in which the respective offices of the various district
attorneys have made a collective proposal to resolve the dispute by the Company’s
payment of $7.5 million in penalties and reimbursement. The Company disagrees
with the proposal and continues to discuss this matter with the authorities
involved. The nature of the loss contingencies relating to claims that have
been asserted against the Company are described above. The Company has
accrued a liability for this loss contingency. However, no estimate of a
possible loss or range of loss can be made. It is reasonably possible that the
potential loss may exceed our accrued liability. The Company believes that
it follows industry advertising practices and intends to continue to cooperate
with the investigation.

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On
May 30, 2008 the Company filed a complaint in New York state court against
the New York State Department of Taxation and Finance, its Commissioner, the
State of New York and its governor, alleging that a recently enacted New York
state tax law is unconstitutional. The effect of the New York law is to require
Internet sellers to collect and remit New York sales taxes on their New York
sales even if the seller has no New York tax “nexus” other than with New York
based independent contractors who are Internet advertising affiliates. The
complaint asks for the court to declare the law unconstitutional and enjoin its
application to the Company. New York filed a motion to dismiss. The Company
responded to the motion and filed a motion for summary judgment, and both
motions were heard simultaneously. On January 12, 2009, the court granted
New York’s motion to dismiss and denied the Company’s motion for summary
judgment. On February 12, 2009, the Company filed notice of appeal, and
argued the appeal on October 29, 2009. The appeal is still pending before
the New York Supreme Court, Appellate Division.

On
August 12, 2008, the Company along with seven other defendants, was sued
in the United States District Court for the Northern District of California, by
Sean Lane, and seventeen other individuals, on their own behalf and for others
similarly in a class action suit, alleging violations of the Electronic
Communications Privacy Act, Computer Fraud and Abuse Act, Video Privacy
Protection Act, and California’s Consumer Legal Remedies Act and Computer Crime
Law. The complaint relates to the Company’s use of a product known as Facebook
Beacon, created and provided to the Company by Facebook, Inc. Facebook
Beacon provided the means for Facebook users to share purchasing data among
their Facebook friends. The parties extended by agreement the time for
defendants’ answer, including the Company’s answer, and thereafter, the
Plaintiff and Facebook proposed a stipulated settlement to the court for
approval, which would resolve the case without requirement of financial
contribution from the Company. On March 17, 2010, over objections lodged
by some parties, the court accepted the proposed settlement. Various parties
objecting to the settlement have appealed and their appeal is now pending. The
nature of the loss contingencies relating to claims that have been asserted
against the Company are described above. However no estimate of the loss or range
of loss can be made.

On
November 14, 2008, the Company filed suit in Ohio state court against the
Ohio Tax Commissioner, the Ohio Attorney General and the Governor of Ohio,
alleging the Ohio Commercial Activity Tax is unconstitutional. Enacted in 2005,
Ohio’s Commercial Activity Tax is based on activities in Ohio that contribute
to production or gross income for a company whether or not the company has a
physical presence in or nexus within the state. The Company’s complaint asked

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for a
judgment declaring the tax unconstitutional and for an injunction preventing
any enforcement of the tax. The defendants moved to dismiss the case. On
July 28, 2009, the trial court ruled that there was no justiciable
controversy in the case, as the Company had not yet been assessed a tax, and it
granted the defendants’ motions to dismiss. In September 2009, the Company
received a letter of determination from the Ohio Department of Taxation noting
the Department’s determination that the Company is required to register for
remitting of the Commercial Activity Tax, and owes $612,784 in taxes, interest,
and penalties as of June 30, 2009. The nature of the loss contingencies
relating to claims that have been asserted against the Company are described
above. The Company has accrued a liability for this loss contingency.
However, no estimate of a possible loss or range of loss can be made. It is
reasonably possible that the potential loss may exceed our accrued liability. The
Company believes the determinations to be unlawful, erroneous and is vigorously
contesting the determination.

On
March 10, 2009, the Company was sued in a class action filed in the United
States District Court, Eastern District of New York. Cynthia Hines, the
nominative plaintiff on behalf of herself and others similarly situated, seeks
damages under claims for breach of contract, common law fraud and New York
consumer fraud laws. The Plaintiff alleges the Company failed to properly
disclose its returns policy to her and that it improperly imposed a “restocking”
charge on her return of a vacuum cleaner. The Company filed a motion to dismiss
based upon assertions that the Company’s agreement with its customers requires
all such actions to be arbitrated in Salt Lake City, Utah. Alternatively, the
Company asked that the case be transferred to the United States District Court
for the District of Utah, so that arbitration may be compelled in that
district. On September 8, 2009 the motion to dismiss or transfer was
denied, the court stating that the Company’s browsewrap agreement was
insufficient under New York law to establish an agreement with the customer to
arbitrate disputes in Utah. On October 8, 2009, the Company filed a Notice
of Appeal of the court’s ruling. The appeal was denied. The nature of the loss
contingencies relating to claims that have been asserted against the Company
are described above. However no estimate of the loss or range of loss can be
made. The suit is in its early stages, and the Company intends to vigorously
defend this action.

On
September 23, 2009 the Company along with 27 other defendants was sued by
SpeedTrack, Inc. in the United States District Court in the Northern
District of California. The Company is al