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I would normally do exactly as you suggest, however, like I said, the original url also represents a category of business I don't wan't to be in anymore, so I could stop selling that product, but to have a url that references a product I don't sell anymore seems counter productive.

I've had a successful online business for the past 8 years, and my website was consistently on the front page of Google for 5 of the years, almost all of my longtail (that's an old term huh?) keywords as well as my top choice, vanity keywords.  However, with the last update and Google's brand push, I've gotten beaten up pretty badly, falling to 3rd, 4th and 5th page results.   Maybe I could have saved them (disavow some links, improve speed) but I had a really happy and horrific event in my life, the birth of my first child.  Happy because I've wanted a family since I was 13, horrific because she's been ill, and it's only my wife and I taking care of her.  I literally haven't been back to sit in front of my computer for the past 3 months except to do quick searches on medicines, treatments, etc.

So now that I have some freedom to get back to work, and our major selling season is over (with a massive drop in sales) I'm considering on re-branding with a new url (our reputation suffered a lot too, late shipments, long customer service waits).  The current url is a partial match domain relative to the two categories of products I sell - thisproductandthatproduct.com.  However, one of these categories of products I want to drop because that side of the business no longer represents a profitable market, but I want to keep selling the other category of product.

I own productname.net and and old fashion iproductname.com.  I know that it's possible to rank .net's but since I'm in the online retail field, .com's usually have more success.  The iproductname.com I think I can brand successfully, but the i in the domain name makes it kind of cliche and old fashioned.  The Exact Match Domain .net is really, REALLY tempting, because it represents a search that is done about 250k per month.  But, it's a .net, and might be more of a struggle since Google seems to be cracking down on EMD's, which sucks because my site is not a content or affiliate traffic site, but a retail source.

And, that's not the end of my predicament.  Do I start from scratch, or redirect.  The current url is ten years old, with about a PR4 according to seobook's browser tool.  It's still within the first 100 results, which might or might not mean it still has some authority.  I was thinking about redirecting the category pages to the new url and keeping the old one as an informational page for old customers, with a link to the new site, then redirecting later on.

Any suggestions would be really helpful.