Late last night, the New York Post published an article about GoDaddy’s upcoming IPO, and the most interesting aspect of the article to me doesn’t really have to do with GoDaddy. According to the article, “Google has decided against making an aggressive push into the domain space, The Post has learned.”
I am sure this will come as good news for GoDaddy and other large domain registrars. I haven’t heard many people in this business publicly express concern about Google Domains, but I would assume many registrars had private fears that Google could potentially become a major competitor if it chose that path.
The New York Post’s source also mentioned that Google apparently does not have plans to enter the hosting or website development business. This is also good news for companies like GoDaddy who have been focusing on these add-on services to drive revenue. I think that this may be a key driver in a decision about a big move into the domain business.
Despite Google’s size and reach, I think there is at least one major barrier to becoming a major player in the domain name registrar business. Domain names are a low margin product, and many registrars make a good portion of their revenue by selling upgrades like web development and web hosting. It would seem strange that Google could offer web development services when the company is the leading search engine, and a major goal of good web development is top search engine rankings. Imagine buying web development services from Google and having a website that doesn’t have good search results. One would assume that if Google builds a website for a client, it should rank well for relevant searches. That doesn’t seem like a promise that could be kept.
A secondary issue is that web development and hosting tend to be a hands on service. People want to work closely with their service provider to make sure the website works well. This requires a large (and expensive) customer support staff. I presume Google has the resources to build a large staff, but I don’t know if the company wants to do this.
The New York Post article is interesting, but the information shared is not an official Google position. In fact, a Google spokesperson declined to comment for the article. I am sure domain registrars will continue to monitor Google Domains developments.
If true this is another blow to new gtlds. If google aggressively marketed new gtlds throughout their entire business ecosystem, incorporating into their technology, etc there would most likely be a much quicker wide scale adoption.
New gtlds have hurdles in two key areas that don’t appear to be discussed enough:
1. International appeal and marketability. Foreign companies, especially Asian, realize that if they have a great .com than they can attract significant more investment. Additionally, most of the world doesn’t speak English. So a new gtld that ends in English doesnt mean anything to the masses of billions of people. .Com is the real, truly reputable and respectable TLD for commercial ventures across the world.
2. Vast majority of domain investors have no idea how much it costs large corporations to migrate off of a TLD they have been using for 15, 20, 25 years. Their entire infrastructure has been built around their initial TLD, and for very large corporations that is almost exclusively .com. For a very large company to migrate to a new .brand tld it might cost them tens of millions in IT and marketing costs. If no other large corporations are doing it why change what is working? Maybe in 5, 10 years the IT portion of migration could come down substantially with new technology. But the marketing cost transition is still there.
Will some new gtlds have value, absolutely yes. Has the current adoption rate and proliferation of new gtlds been successful as hoped, absolutely not.
Interesting thoughts – thanks for sharing.
Very good points all around!
Elliot thanks for the coverage. Maybe it’s strange that Google wouldn’t offer hosting but would offer domains, e-mail, apps, traffic from ads, etc. (though they’re offering hosting indirectly via partners such as Wix as the article says).
The article said Google made no comment — but what source would know better than Google about Google’s plans? Maybe the anonymous source commented before Google secured .APP for $25MM. Regardless, intelligent companies aren’t getting into new gTLDs by accident.
At any rate, I don’t think an indictment of new gTLDs is warranted by the article.
I was looking at this news from a consumer facing domain registrar angle rather than the registry side. I think Google could do well operating a portfolio of new domain extensions even if it didn’t have a consumer facing registrar.
I think Donuts has been doing that quite well so far.