Google buys new domain for users to reach its services more easily.
Following the trend of Twitter to buy t.co or Amazon to buy a.co, google has now bought g.co for its url shortening purposes. Google wants to use it as official url shortcuts for its services and not just for user generated links e.g. g.co/[service] will take you to corresponding service by google. Exact usage and details will come later but we can expect variety of urls to work e.g. to goto Google docs you would use: g.co/d or g.co/docs and hopefully both will work.
Google has told that g.co can be used by people with confidence that it will not take them outside google’s domain and will target them to the service they are looking for the easy way.
.co domain trend is high as shortcuts service, and has more than 1 million domains registered in just 10 months. While the single letter domains like g.co cost around 1.5 million dollars.