30 Million Domains for Go Daddy
Go Daddy said this week that it is now managing more than 30 million domains, the latest reminder that the domain registrar has assembled one of the largest business platforms on the Internet. "Go Daddy's market share of new domain registrations is now more than 45 percent worldwide," Go Daddy chairman and CEO Bob Parsons said in a video blog.
It's surprising to me that Go Daddy's name hasn't come up in the speculation about potential acquisitions and partnerships prompted by the Microsoft-Yahoo talks. Many Americans know Go Daddy primarily for its edgy, bazoom-filled Super Bowl commercials. But the company's domain registry business is a powerful engine for acquiring customers for hosting and other Internet services. Go Daddy is aggressive – even by registrar standards - in using its domain checkout process to upsell hosting services and e-commerce products.
Here's an example: Go Daddy's e-commerce business is flourishing. The company said this week that revenues are up 72 percent this year for customers using Go Daddy's Quick Shopping Cart to sell products through their web sites.
Go Daddy is the United States’ largest host of SSL-enabled sites, which typically represent higher-value customers operating online stores. It is also an SSL certificate authority, and its certificates are significantly cheaper than those offered by market leader VeriSign. They're selling better, too.
"For (the last) four months Go Daddy has continually led all other SSL providers in the number of new certificates issued and has shown the largest overall growth over the past 12 months," said Mike Prettejohn, director of Netcraft Ltd., which tracks SSL certificate usage on the web.
These are just a couple of examples of Go Daddy's ability to move up the value chain from its core domain business, and position itself for growth in higher-margin niches in hosting and e-commerce. The company has also shown growth in the sale of dedicated servers, virtual private servers, and hosting accounts. And it operates what is arguably the world's largest domain "parking lot," with many of those parked names generating revenue through advertising.
What's the value of a domain registrar managing 30 million names? Is Go Daddy and its portfolio of paid services any more or less viable a business platform than Facebook, MySpace or other Web 2.0 properties with evolving business models built upon free service offerings?
It's an intriguing question. Go Daddy is almost entirely owned and controlled by Parsons, so any acquisition or partnership would need to be on his terms. The company filed for a $200 million IPO in 2006, but later withdrew its filing, citing market conditions. At the time, the company was losing money but had positive cash flow from operations.
The stock sale was structured so that Parsons would retain control of the company, so perhaps he's not ready to sell just yet. But the IPO effort suggests that Parsons, who sold his previous company to Intuit, has taken a close look at exit strategies. One thing is sure: so long as the domain name remains the on-ramp to Internet business services, there are at least 30 million reasons to keep an eye on Go Daddy.
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By Rich Miller 
July 02, 2008 | Permalink | >Get Posts By E-mail
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