Brand TLDs & Digital Strategies
Did Google Overpay for .APP?
In 2014, we saw the first 500 of approximately 1,400 new Top Level Domains (TLDs) delegate and go live on the Internet. There are now over 4.5 million domains registered in these new spaces and it is growing at a rate of 1 – 1.5 million per quarter. This is before broad market awareness. Granted, there are some registries with giveaway strategies pumping the numbers, other names registered by speculators who see the value ahead of the masses but most by registrants who seek to launch new ventures or initiatives and are securing a memorable brand name that best represents their value proposition in their line of business. ie: coffee.club. Language matters and new TLDs offer fantastic, simple, memorable branding and service delivery opportunities.
Google pays $25 million for the APP REGISTRY!
On Feb 26, 2015, Google competed in an auction and outbid a dozen competitors for the right to run the APP REGISTRY. Google will now be able to sell, give away, innovate on and scale a new Internet platform entity called the APP REGISTRY.
What is that? What will they do with it?
The APP REGISTRY will be what Google makes of it. We will see. Consider a few possibilities. It will obviously be used as labels for APPs, as a starting point, but perhaps very high quality APPs, perhaps ONLY high quality and secure APPs, APPs of distinction, APPs of all kinds; categorized, discoverable, sharable for download and used in combination with other APPs and systems.
We are seeing something different here. The power of the promotional Web (domains), the network foundation of the Domain Name System(DNS) and the usability of interactive, engaging APPs all to be mashed together to create something that is entirely new. I expect the Google team responsible for thinking this through is breathing a sigh of relief because they now know they have it. They may also be thinking – holly expletive we got it.
Why did they pay $25 million for THE APP REGISTRY?
Google understands that a TLD registry has tremendous value as a slice of the Internet for a particular line of business. Valuation business drivers could be varied and include;
- Every connected person will use dozens, hundreds or even thousands of APPs over their lifetimes. How will they discover, learn about, gain trust in, download and cross connect with other APPs or systems.
- The Internet of Things runs on networks with APP interfaces. How many devices are predicted? A lot; 10s of billions.
- The domain market is already at multi-billion dollar levels and we are in the VERY early days of Internet evolution
- Registries bring new capabilities; authenticity – control – data – security – innovation – visibility … yet to be built technologies.
- TLD registries and the DNS they run on are the foundation of the Internet and will be for the foreseeable future
- All of the above and more.
Did Google overpay?
In a market where one domain can sell for $35.6 million dollars (insurance.com), the APP REGISTRY potential for millions of names and most importantly in the hands of technology and brand titan Google, I think not. Google will not just sell .APP domain names, they will likely create a network of services on the APP REGISTRY to leverage the substantial corporate capabilities, assets and market position of the Google brand. If some other less known entity paid $25m as a traditional seller of generic domains, hoping to support the investment with pure registration/renewal revenues, I would argue the opposite, but this is Google. They can create something significant and powerful, not just because of their technology but also because they are a global brand with market position.
The $25m may in hindsight prove to be Google’s best investment in years, if they leverage the registry differentiators and their innovation chops to drive billions in future revenues. It is worth many times that, if they execute.
Why BRAND MANAGERS should pay attention!
Proprietary BRAND REGISTRIES are the future for almost all major and aspiring brands whether their leadership realizes it or not. Registries and particularly BRAND REGISTRIES are extremely valuable with differentiating platform capabilities that brands control, secure and innovate upon. Google recognizes the value in registries. While .APP is not a proprietary BRAND REGISTRY it holds tremendous value in the hands of a large brand.
If you are a digital leader and don’t see it. You are not alone. It is tough to be ahead of the curve compared to Google teams who eat, breath and sleep digital innovation. The question is; what are you going to do about it? It is happening now with 4.5m registrations and counting.
- How will your brand ensure it does not become obfuscated in the expanding space?
- What proactive steps should you take to differentiate as a digital leader or at least prepare your teams and systems to be a fast-follower?
Understanding and setting actions related to the TLD expansion is a strategic imperative for all digital and brand managers seeking to ensure future digital relevance. It is confusing and worrisome today but when leaders start to think it through, they are going to like it.
Fun Stuff – Peter