Do domain extensions (top level domains like .com, co.uk) matter?

Yes, Domain extensions matter in promotion of your site. For example, if your site has .co.uk domain then it will get maximum traffic from UK.
Country specific domains are good for local optimization of the site.
 
It helps to let people know which country you are based in, and also target your audience better. Also it can help to tell your users what type of website it is. Domains like .tv will tell them you are a media site, and .org will say you are an organisation like a charity. Unusual ones are normally cheaper like .me or .net so if price is a concern then try those instead of a .com domain.
 
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