Google Selling Domains, and the/my Hype
Posted on December 25, 2006
Well, if you are a Web Hosting company, an ISP or anyone who resells domains as a loss leader or for a profit, you may have heard or even already looked at Google Apps for Domains and seen that they are now reselling domains through the two prominent registrars GoDaddy and Enom. This is really no surprise. Two of the largest registrars in North America working to build Market share.
While I am sure GoDaddy is hoping to build multiple registrations out of this deal to increase profit, I am sure Enom is also hoping to capitalize on the dropped names for their domain monetization business… Keep in mind this is only my opinion. And we know what opinion’s are like. Personally any registrar would be silly not to be knocking on Google’s door to sell domains if they can fit into the $10.00 domain and private registration(Whois masking) model. It is just good business if the registrar can get in there and make a profit. Google is giving the registrar another retail channel to capitalize on. The argument of course is does the domain business need another retail channel to purchase domains from in an already over-crowded marketplace? Google seems to think so. And, after trying to configure one of my own domains to Google Apps which includes Gmail for domains a couple months ago, even I had some issues configuring the domain for Google Page Creator, one of their free applications. If I were a layperson trying to do this, I would have been very frustrated. Registrations through accredited registrars will help with the auto configuration of the domain services for Google Apps.
Some providers are getting a little hyped up about this. Let me say that it is not going to rain cats, dogs, or frogs any time soon because Google started selling domains. It is just another retail channel. And frankly, my advise is that if you cannot make a profit, or believe that you can spin off additional services to your customer to make a profit by partnering with Google on this “Apps” adventure, then do not do it. Here are a couple additional reasons why I say that. First, Google is not going to stop improving Apps. In fact, while several articles I have read basically state that “Google says” they will not enter the Web Hosting arena, in fact they already have… While Google Page Creator is quite simple currently, I have no doubt in my mind this will improve in the future. Will they add “Checkout” and E-commerce capabilities to Page Creator? Who knows? On the flip side of this lets examine Gmail for a second as well… Google gives us 2.7GB of Email space per Gmail account. That’s a lot of Email Hosting space. To illustrate, I have all of my personal email addresses forward to my Gmail account. What this does is allow me a single repository (because of the size of the account) for all my email, in essence a hosting account for my email. I am going to go out on the limb and say that Google is already in the Hosting industry with Gmail alone. They compete with you on email, and now they compete with you on Hosted, branded email for the SMB that is looking to grow their business. Google Apps are part of their “hosting services.”
Sorry about that I got a little off track. So back to Google and Domains. Here is my fear for the service provider and the small business owner… Whether it is founded or not is for you to decide. This is only speculation so please bear with me:
Everyone knows that Google’s advertising model makes them a LOT of money. And keeping in line with that, they want small business owners to adopt Google Apps to help make life easier for them. with that adoption comes a larger advertising footprint in two ways. More people (users) are exposed to the Gmail interface and therefore have more advertising in front of them to click on, making Google and their advertisers more money. Second, it really puts them in a good position to get a rock solid foot hold for local search. If the small businesses are using their free services, and the registrars of record Google is supporting are supporting the free Google Apps there is really never any reason to change service providers. Third, and the kicker of the speculative thought, what if Google gave preference in their search engine to Google Apps for Domain users or users who bought domains at Google Apps? What would this do for Organic Search and the user outside Google’s network? It would be disastrous for anyone using organic S.E.O. on Google?
Now, would this happen? Maybe, maybe not. I’m sure it crossed someones mind at Google. It had to if it crossed my mind. While domains are not Google’s core competency, I cannot see them putting so much pressure on the market that it really makes a difference to anyone… Heck, many of my own clients look at domain registration as a necessary evil or loss leader today. They stopped viewing it as the “first step” some time ago when GoDaddy really destroyed the market with price. Will Google Apps for Domains it take business from domain resellers? Sure it will. Will it take business from hosting and email hosting companies? Sure it will. But don’t expect all your client’s to jump ship. Just the ones that think they can do it better. Oh, and do yourself the favor of keeping in touch with them. Their Google experiences may be invaluable to your future sales efforts.
The $24,000.00 question: Will Google give preference to the domain purchasers at Google Apps? Well, I do not think so. It goes against the grain of their core business model and mission statement, in which the very first line state’s;”Google’s mission is to organize the world’s information and make it universally accessible and useful.” While very broad the use and context of the word “universally” in the first line alone leads me to believe this.
In conclusion, Google Apps are still in Beta. And as Google keeps adding additional services, it is going to remain in Beta. So are Google Apps really a threat? A thought I hold very close to me is that Google Apps is more of a threat to Local Search and Local Search providers. Local Search represents three times the dollar spend as national advertising, which potentially could increase Google’s advertising revenue to the tune of “more billions of dollars.”
Google Apps has been a subtle deployment with all they hype coming from guys like me blogging away. Google have release only a few press releases around their “Apps” solutions because they have to. It is not a core revenue stream for them, but a vehicle to generating core revenues. That is my belief and that is where I leave it for today.
Happy Holidays and Happy New Year!
