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.

Source: http://www.domainnamenews.com/registries/verisign-registry-i...

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)