Compared to the $185,000 application for a new top-level-domain (such as .com or .biz), $25 million is a lot of money. Yet that is how much Google forked out at auction to win the rights to control .app, a new top-level-domain that will contribute to a proliferation of novel addresses on the web. Of the 2,000-odd applications to control a new TLD, .app was the most hotly contested, with 13 contenders, including other heavyweights like Amazon and Donuts, a web domain registry.
To make sense of Google’s willingness to splash out on .app, especially when the next highest bid TLD was .baby—won by Johnson & Johnson for a mere $3 million—look at the prospective value it holds. Compare $25 million to the $25 billion global app market—or to the $14 billion Google made in profit in 2014—and suddenly $25 million looks like a vanishingly small number. For what amounts to pocket change, Google has acquired the future of apps on the web.
Moreover, Google has a lot more to gain than the other applicants from controlling .app. Others may have sold .app sub-domains online and Amazon may have tried to use it to remind people that its Kindle Fire tablet has apps too. But Google, which competes with Apple’s iPhone and iTunes for the attention of app developers, will promote it as a certificate of authenticity. From the application (pdf):
This specialized domain name space provides a mechanism by which application developers can easily link and manage their applications and related services. This specialization makes it clear to Internet users that this is the authoritative and designated space where they can find applications and information about developers accessible via differentiated and streamlined web addresses.
Setting up web pages for apps when apps live in the mobile environment is a slightly counter intuitive idea. But many apps already have websites to drive traffic to their mobile software. Circa, a news app, recently started a website. More to the point, the majority of Google’s revenue comes from the web; a web frontage for mobile apps is a good start for the company to reconcile the two.