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Godaddy.com up for sale. Could fetch $1 Billion (wsj.com)
94 points by atentaten on Sept 10, 2010 | hide | past | web | favorite | 54 comments

Bob Parsons is a crazy/interesting dude thats for sure... The complete polar opposite of any silicon valley CEO.

I don't get nor agree with most of what he does but I find it fascinating.. Has anyone else seen his blog? The irony is even though his video blog series - he and a busty blonde giving advice with cartoonish editing usually featuring motorcycles in some way - looks ridiculous its actually really smart, useful information

Doesn't surprise me he'd prefer to exit with an auction instead of IPO

Godaddy always struck me as the Ryanair of domain names. A company that you didn't need to love as long as they did what they said on the tin.

They also remind me of Paypal: you can use them fine for years and years, and then one day they totally fuck you over.

Mind you, I probably have 50+ domains registered with GoDaddy, I've just read some horror stories too.

I wonder what is keeping them from doing an IPO. Selling a company as large and as profitable as GoDaddy at a public auction seems very strange.

Well first of all it is unlikely to be a public auction. It will probably be a private one organized by a various investment banks.

And I think it does make some sense, especially in these days when private equity is so well developed. The stock market likes growing companies, and I am not sure whether they would like GoDaddy which seems to be reaching the limit to its growth. Also, the stockmarket does not like situations where the owner is cashing out, and much prefers companies that sell stock mostly to re-invest in their business. If Godaddy did an IPO, the owner would not be able to cash out immediately and would have to wait a while and sell his stock slowly and hope he does not cause a collapse in the price.

Private equity specializes in these situations (owners wanting to cash out, and companies that may have plateaued or are in decline), so it seems like a good choice.

The high cost of being a public company under our current laws, perhaps.


The numbers there don't seem nearly high enough to determine a decision like this. I think it'd take a lot more than an expense equal to 1-2% or so of revenues to cause someone who was going to IPO to go the other way.

They did try an IPO a while back and decided not to go through with it. Bob Parsons blamed the way accounting rules worked with his business and SOX if I recall correctly.

The reason may be as simple as Bob Parsons not wanting to run the business anymore...

Isn't going public just another sort of a public auction?

Surprising to read between 800-900M 2009 revenue and a price tag of 1B.

Well, revenue is not profits. It would be interesting to see what their actual profits are. For one, they spend a lot of money on advertising.

I would think their profit margins are huge, though you're right, they do spend a ton of money on ads.

IIRC, registrars pay on the order of 25 cents a domain, which they then resell for $8 or more, and GoDaddy is the registrar for something like 1/4 of all .coms. Web hosting and email are very high-margin too.

The registrars pay $7.34 per .com domain to VeriSign. So they are only making 66 cents on that $8 domain. That is why GoDaddy bombards you with add-ons when you register a domain.

Touche. I knew about the ICANN fees, but didn't know about the $7.34 for dotcoms that VeriSign gets. Thanks for the correction.

There will also be a transaction fee from their payment processor and there's discount codes.

I'm sure godaddy gets a discount based on volume...

As someone that works for a domain registrar, I can tell you this is definitely true.

Do they seriously only pay 25 cents (or so) per domain?

Why has there not been some disruptive registrar selling .com's for, say, $4? Whatever the operating costs of being a registrar are, it seems like they should be no more than $1/domain-year. So if a registrar dropped their prices to $3 or $4 and grabbed half the market out of it, they'd post huge profits.

Obviously those numbers are just guesses, but I highly doubt that it really costs $9/year to host a domain at scale.

ye that should have tipped you off that the dude above has no idea what he is talking about (he got domain names mixed up with skittles)

Agreed. That's a price/sales ratio slightly over 1. Salesforce.com has a price/sales of over 10.

Different biz I know but both are ultimately subscriptions.

GoDaddy is a go-between. Salesforce is not.

Go-between or not doesn't change the nature of their revenues.

Buying a domain is a subscription (you pay annually) and they cross-sell you on a bunch of other "enhancements". It's also pretty sticky for the vast majority of domain holders.

That type of recurring revenue is valuable. Salesforce is a subscription as well. GoDaddy prob doesn't deserve a p/s of 10 like 10 but 1 seemed low. That is what i was pointing out.

Not sure why I got down-voted but sorry to someone at Salesforce who I offended :)

It does strike me as a very low barrier to entry business. Amazon could sell domains for 1$ more than versign charge them.

Google could bypass verisign completely and launch their own top level domain with their own root DNS and give away ".go" domains.

That could be likely with the introduction of the New Top-Level Domains: http://www.newtlds.tv/newtlds/ http://en.wikipedia.org/wiki/GTLD#New_top-level_domains

The point of the internet is that somebody with enough servers and their own browser could easily introduce their own TLDs.

I understand what you mean technically, but I don't think the point of the internet is to let only companies like Google introduce TLDs.

I like the .go idea, sounds interesting and worth analyzing.

Here is a company, that since its inception, has done the exact opposite of what is published in business and entrepreneurship papers and has succeeded to great effect.

Explain that.

I'm not sure what you mean by doing the exact opposite. The founder, Bob Parsons, built something people wanted - a cheaper way to get domain names. His marketing tactics are, um, a bit different from most online/tech companies, but he's built two successful companies from the ground up using tactics from direct marketing.

This time, Parsons acted as his own angel investor burning through millions from his first company, but seems to have acted rather frugally while building his business. His first was bootstrapped from home while he worked a day job. His persistence and determination are remarkable.

Parsons is an outlier because he's built both companies outside of Silicon Valley with no funding but his own, no degree from a big-name school, but just drive and guts. I think that's why his businesses look different that what we normally see. They grew in a different ecosystem and seem like an alternate species on the outside, but inside they still operate much like other companies.

If you want to know more details about how he did it, read his blog or listen to his older podcasts (if you can find them). He's a shameless self-promoter who doesn't mind telling his story.

But do know that his recent video podcasts are just garbage. After the Super Bowl commercial that put GoDaddy on the map, he's apparently decided that buxom females are the only thing that matters and has gone all the way with it. His earlier audio podcasts were actually more like Mixergy, where he'd talk to young entrepreneurs about how they did it and share his own stories. His story helped inspire me to work on my first startup.

By bombarding customers with page upon page of cross selling options.

Price. Domains are a commodity. Back when Godaddy took off, they had the cheapest reliable service.

Here's to hoping that the future owners drop those ridiculous TV ads.

I thought about this a while a back, and as ridiculous as their TV ads are, I do believe they serve a purpose: getting members of the general public to start with go daddy when they want to create a website. I’d wager a significant portion of their revenue isn’t from domain registration, and instead from all the extra services they offer, and first-timers are likely the main customers of these services. As ridiculous as the commercials are, they do get the general public's attention and drive first-timers to go daddy’s services.

I used to have over a hundred domains with them, but they canceled one of my favorite domains because THEY didn't charge my debit card. The domain was set to auto-renew, and there was money in the account... They lost me for good.

If godaddy can fetch that much, I would sell it as well; I say bravo to that man.

Wait, is the whole company for sale, or just the domain name?

The company - hired to shop the Go Daddy Group Inc

On a completely different note, just noticed that WSJ injects a link when you do a copy/paste from their site:

Read more: http://online.wsj.com/article/SB1000142405274870359720457548...

Probably using Tynt - http://www.tynt.com/ .

The whole company. From the WSJ:

"Qatalyst Partners, the boutique firm run by veteran technology banker Frank Quattrone, has been hired to shop the Go Daddy Group Inc. ..."

Not sure why you were downmodded, I'd like to know this as well, and it certainly relates to this thread.

Probably because the answer could be found easily in the article. However, there's a possibility the intent was to just question the accuracy of the title?

Leveraged Buyout (LBO) city, baby!

Prediction: a firm like KKR or Carlyle buys GoDaddy and borrows a bunch of money (> $10B ?) on the cheap, and then uses GoDaddy's revenue to service the debt.

Why would KKR need to borrow $10B? They could get away with $1B, and probably less than that if they use some cash.

That's easy to answer : they don't like using their own cash.

The returns are infinite if you don't use any of your own money.

I have all my domains registered with them. Despite the fact that I'm registering a few domains a month and they obnoxiously upsell me every time, I've gotten used to them and they have decent customer support that's always been available for me, as well as rad coupons ($7.49+fee domains). I hope the sale doesn't change things up too much. When my previous web host, aSmallOrange got bought, their service became inconsistent, frustrating and all-in-all horrible so I switched to HostGator and have been thrilled ever since (24/7 live chat is great!).

Don't forget that they park spam pages at your domains if you haven't set the DNS yet. So make sure you redirect your arbitrary sub-domains.

I hate GoDaddy and all that they stand for. I'll never do business again with such a spammy company, even if it means paying $2 more a year with someone else.

Considering ASmallOrange was bought by Hostgator, I find your story about the switch ... surprising.

I'd offer $9 for just the domain name.

humor folks. and on-topic. lighten up!

that's sad. the voting system is broken. i recommend only allowing admins to bring any comment below 1 point.

I think the voting system is working as intended. One thing that's lame about Reddit is that the first few comments from a story are jokes and one-liners; jokes written in forums are rarely funny, and they typically don't add anything insightful. So I think it's great that jokes are typically downvoted here.

maybe you could register it with ..

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