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It's become a standard name for IT products (more so than .it!) due to input/output connnotations, and as the other commenter said, it's especially appropriate for a Google product launched at IO.

Also a lot of names sound cool as .io, e.g. cloud.io can be read as "Cloudio". And due to the relatively high cost, a lot of .io names are still available. Just 18 months ago, a ton of 2-letter domains were still going (http://www.russellbeattie.com/blog/two-letter-io-domains-ava...).

Totally trendy and a good example of why the new gTLDs won't break the Internet. Most TLDs stopped really meaning anything a while ago.

The current trend for the .io TLD is of course a playful resurgence of the 80's hip-hop exclamation "yo".

And now you can't help pronouncing it "yo" !

Yeoman was launched today at Google IO.