A domain name extension for the US State of California.
Reasons explained to go for such a Top-Level Domain are to me good enough to register a .california domain name.
Even if it is difficult to say that Google will better index such domains - because content of the web site would be related to the "california" keyword" also present in the domain name - the benefit of showing "california" in the URL in your Google search results is of great value for the consumer.
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