Google is entering the domain name market. Last month, the company launched an invite-only beta domain name registration service. The move comes as no surprise to industry watchers: at the end of 2012, Google applied for several new domain name extensions (including .search, .youtube and .ads). Nevertheless, announcement of the new service raises questions about Google’s ambitions, because the company is a colossus by industry standards and its involvement is therefore a potential game-changer for the domain name market.
Two roles
So, what exactly are Google’s ambitions? The intention appears to be for Google to play two roles:
To act as the registry for certain domain name extensions, in the same way that SIDN acts as the registry for .nl and Verisign for .com. In this role, Google will be responsible for the issue and administration of domain names under the relevant top-level domains.
To act as a domain name registrar, i.e. a distributor that registers domain names for registrants. Thousands of companies around the world are currently active in this role. Google has been accredited by ICANN as a generic domain name distributor since 2009.
Google the registry: remains the search-engine independent?
When ICANN opened the door to the creation of new top-level domains in 2012, Google was quick to react. Through its subsidiary Charleston Road Registry, the company submitted no fewer than 101 applications for new extensions, including .search and .shop. So far, about twenty of those applications have been granted. Domain names under the new extensions are to be made available through Google Registry.Within the domain name industry, the developments caused some disquiet, because Google’s current algorithm uses domain name extensions in the ranking of search results. In other words, Google is in a position to give its own products an advantage over those of its competitors. Google has, however, repeatedly insisted that its search engine will remain independent. Consequently, they say, having a domain name with a Google-administered extension will not influence a site’s ranking. Although that comes as reassuring news to other registries, they have no way of verifying that Google is being as good as its word, since the Google-search algorithm is one of the world’s most closely guarded secrets.Moreover, regardless of whether the search engine remains independent, it is reasonable to expect that Google will benefit from playing a dual role: the company has a huge number of customers, for whom a high Google ranking is absolutely invaluable. For many of them, Google will be an inherently attractive provider of domain name extensions.
Google the registrar: gateway to new services
Google taking on the role of registrar has also caused quite a stir, because the company’s overwhelming size makes its involvement a potential game-changer for other market players. By way of comparison: Google’s turnover is more than fifty times that of the biggest registrar in the world (Godaddy). As a registrar, Google could be a serious threat to providers of domain registration services, web design services and hosting services, particularly those serving the SME sector. Google has been trying to build up its customer base in this market for some years, but SMEs have tended to view Google’s services as expensive, leading to the perception that Google was an attractive platform mainly for large companies with sizeable advertising budgets.Google could use domain registration services as a way of establishing relationships with SMEs, enabling it to offer other services, possibly through partners companies. Once an SME has registered a domain name through Google, it is a relatively small step to using Google’s other services. The strategy would bring Google into direct competition with countless hosting forms, web designers and other online service providers.Nevertheless, Google’s involvement might actually be advantageous to such businesses. Google’s appeal and reach could reduce the threshold to getting on line for SMEs, thus generating business for the sector as a whole.
What will Google do?
All around the world, people are keeping a close eye on developments at Google. Many observers justifiably regard Google as a role model for successful innovation. To such an extent that “What would Google do?“* has become an established idiom. In the domain name industry, however, the question on everybody’s lips right now is “What will Google do?”
*What Would Google Do?: Reverse-Engineering the Fastest Growing Company in the History of the World, Jeff Jarvis, 2009.
