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
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 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.
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.
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.
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 :)
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.
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.
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.
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?
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.
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.
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.
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