Root Causes 316: SquareSpace Acquires Google Domains

Episode Transcript

Lightly edited for flow and brevity.

• 

  Tim Callan

  Okay, so we have a news item today. This comes from June 16, 2023. I am looking at Mashable. Here's the headline: Google Domains Sells to Squarespace as Google Surprisingly Exits Domain Registration Business. Writer is Matt Binder. And as I said, June 16, 2023. So Jason, what went on here?

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  Jason Soroko

  It looks like I believe it was middle of June. June 15. There was a news release and I believe it was put up by Squarespace and the title of the press release was Squarespace Enters Definitive Agreement To Acquire Google Domains Assets.

  And I thought that was interesting. According to the press release, Squarespace is saying that they're transferring approximately 10 million domains from Google over to Squarespace and I think some of those 10 million are mine, because I was a customer of Google's domain registry. And I'll tell you why. I’ll tell you why I was a customer flat out. Here's a little bit of advertisement for what used to be. It was just easy. And it was price driven. I think I've said the story on the podcast before, Tim, it’s kind of kind of funny, just shows how old I am. My first domain was purchased around 1992 or 1993 and I actually licked an envelope closed with a check, put a stamp on it. I think I had the lick the stamp, too. That might be how old that is. And the funny thing about it was I sent a check from a Canadian bank to an American university who happened to be Rutgers and they actually sent me my check back saying we can't cash this but here's your domain anyway.

• 

  Tim Callan

  So you got a free domain.

• 

  Jason Soroko

  I got a free domain.

• 

  Tim Callan

  For being Canadian. Good job, Jay.

• 

  Jason Soroko

  Thanks. Thanks. And you can tell just how absolutely utterly non-Machiavellian, terrible street smarts I had at the time, because I wasn't off buying Coca-cola.com or anything cool like that. Disney.com. I was actually looking at my own name, and just trying to protect it thinking that I just didn't want some other people having my name on the internet. And anyway, so Google just made it really easy to be able to be a registrar and I mean there's a ton of places out on the internet to go. Lots and lots of registrars and they're all pretty good. It’s a very simple thing to do. And all of a sudden, I started getting emails. I hadn't even seen the news release. I was starting to get emails from other registrars saying, hey, if you happen to have domains through Google, and you're uncomfortable with them going to Squarespace, how about moving them over to us – nudge, nudge, wink, wink, right. Just a clever bit of marketing. And I don't blame any of them for doing it.

  So, as you know, Tim, Google has started a lot of projects and cancelled a lot of projects and some of those projects were terrific and people cried when they were killed. And this is another one where it's like, ah, Google, you had a good thing going. It was a good registrar and it was certainly handy if you're using Google Cloud in any kind of way. It was just a great place to park domains. It was a good place to use domains, especially if you were going to put Google's business services on top of it. It just became just a one click no brainer experience. It was fantastic. But it's gone.

  And so this podcast, we talk about web security, we talk about a lot of browser experience, and obviously publicly trusted certificates. That's the sphere of this podcast. But, domains and domain registrars is something that's within this fear of that and I thought, I just wanted to bring it up to make people aware. I bet you some of you have purchased domains through Google, and might not even be aware of this June 15 announcement, and I just wanted to bring it up and maybe ask the question, Tim, why do you think they might have done that?

• 

  Tim Callan

  Well, I don't know. First, I was gonna make a point, just to sort of pile on what you're saying. The world of PKI is so dominated by TLS certificates and the world of TLS certificates are completely and utterly interwoven with domains. Like in just a fundamental way. And so, yes, meaningful developments in the domain name space do directly impact the world of TLS certificates. And so I do echo your thinking that this is certainly part of our mandate on this podcast, and I think we're going to continue to talk about meaningful domain developments as time goes on for exactly that reason.

  What's the reason? Well, I'll tell you what Google said. I had it right here in front of me, but basically it was about focus. The statement from Google was, we need to focus on the businesses that are core to our success, and this is something that we do habitually and we're doing it again here.

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  Jason Soroko

  Fair enough.

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  Tim Callan

  Right, I don't know. You can see where it makes sense. You can see where this could be a business that makes money but one of the things to think about with a company like Google is they're playing for the biggest stakes in the world, and they are trying to get, they're trying to win really big things. They're trying to win the paid search revenue stream, which is absolutely massive, and which has gone into a whole new area of combat, right, as we look into how AI tools are going to enter into how the search wars are conducted. And you see the investment behind that is absolutely massive on the part of Google and Microsoft and a whole bunch of other people. They're trying to do things like win the public cloud war against massive and powerful competitors, like Amazon and Microsoft. They're trying to win OS wars and browser wars against competitors like Apple and Microsoft. And so these are just hugely important things where a giant campus in Mountain View, California, and a bunch of giant campuses around the world all depend on the outcomes of this. And then if you've got something like a relatively small to Google business that still might seem extraordinarily healthy to you or me, just can be a defocusing problem. And, this is one of the things that these companies have to do and get good at is making sure that they are putting their resources behind the areas that they need to win. And if you believe that the world that determines their revenue streams is fundamentally mentally changing due to things like public cloud, and AI and etc., then I actually can believe that it just it can't get the investment, it can't get the focus, it can't get the roadmap priorities, it can't get the attention of executives, and it's just a thing that is interfering with our ability to focus on the things that are going to yield dividends that are three orders of magnitude bigger. And so that does strike me as credible. I don't have any inside information, but this is how these companies operate.

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  Jason Soroko

  That's fair enough. It's sound business decision making. It looks like the one of the crown jewels inside of this, of course, is the ability to easily set up Google workspaces, G-Suite, those sorts of things. I had never used Squarespace for that service, but it sounds like they had been doing that for a while with Google and then it kind of made sense for, a good business sense, for hey, Squarespace can you imagine being handed 10 million domains? There's a gigantic customer list to go after. And you can see how a Squarespace that would be squarely in their wheelhouse, if you will, to go off and try to use that as a gigantic lead base for themselves. And I also see here, one of the things that would be a big concern for people is where is the DNS for these services now going to reside and apparently, it's going to remain with Google Cloud.

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  Tim Callan

  Oh, okay. Okay.

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  Jason Soroko

  And so I think you're dead on, Tim, in saying that it's a sound business decision and when you think about Squarespace just now having this gigantic lead database ready to go or for selling not just Google services into but obviously all of their own. And then with people being relieved with the fact that, it's one thing to have a different registrar own your domain basically hold your domain for you, but people really get tight in the pit of their stomach when the DNS provider starts to change, especially if that goes to a not so good provider, but it's going to remain with Google which is to me a really good operator for DNS.

• 

  Tim Callan

  Sure.

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  Jason Soroko

  So it all makes sense.

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  Tim Callan

  The other thing about the domain name registration is it is this beginning of the lifecycle moment. So many businesses, they start with the domain name registration, and oftentimes, that's a loss leader and the idea is that things are going to be made up down the road. You’re going to sell hosting services and email security services and security services and marketing services and etc., and that's where you plan on making all your money and if Google feels that they're very good at making their money anyway, or they're not making their money that way, it might be difficult just to justify that piece of the overall ecosystem. If you're somebody whose primary revenue stream is hosting and small business digital services, that's a different story. Then that domain name registration can be much more valuable to you. But if you think you've got a well-established model for making money other ways then that particular motivator is vastly mitigated and when that motivator is mitigated, it can just make less sense to make that decision. So I wouldn't be surprised if that enters into it as well.

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  Jason Soroko

  Tim, maybe just the last thought that's in my head is I'm thinking about the other public clouds, AWS, Azure, they've made big motions towards basically becoming a hosting alternative. And you don't see them giving away anything like that. But Google has now to essentially what is a value added hoster, Squarespace, if you will. They target a specific type of customer who needs a specific kind of hosting. And it really shows that whoever if there's anybody within Google who is trying to champion, hey, let's be like the other big public clouds and promote hosting on the Google Cloud, boy, I tell you, that person is having a rough day. I don't even know if that person exists but I'm just thinking if a product manager exists within that organization that was trying to be at parity with the other clouds, then this is the worst case scenario because you basically sold off your business.

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  Tim Callan

  And presumably, all of that was part of the calculus behind this kind of decision.

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  Jason Soroko

  Exactly. So, that's fine. It just shows though, that Google Cloud, Google as a company, Google Cloud being real specifically where that part of the business would go to, this really does signal an out. I could be wrong, but I wouldn't give away 10 million domains. If you had a registrar that's big enough to have 10 million domains, you wouldn't be selling that off if you wanted to supply hosting to these people. I think Google, the closest they came to that was through their Google workspaces and G-Suite. And I think that perhaps they think that they can sell that through a different stream, being Squarespace, better.

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  Tim Callan

  Right. And if you look at G-Suite, for instance, they absolutely don't need to be the hosting provider to have a business there. They've been very successful with just having people use Google Apps without being necessarily starting their whole business and hosting their whole business on Google. So that's absolutely working for them already.

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  Jason Soroko

  Anyway, there it is, Tim. I just wanted to call it out and just show you the big changes in the registrar world.

• 

  Tim Callan

  Which are not going to stop anytime soon.

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  Jason Soroko

  Never. It’s never boring.

• 

  Tim Callan

  We will keep our eye on it.