What A Goddady Sale Could Mean For The Domain Industry
Love him or hate him you have to admit that Bob Parsons has bought attention to domain names to mainstream America like no one before him.
That’s why the story by the Wall Street Journal yesterday saying that Godaddy was going to place itself in an auction to sell the company, is one all domainers should follow.
Godaddy is not just a company in the domain space it is a company responsible for over 50% of all new domain registrations.
If Godaddy.com sells to a wall street investment firm or to a company like Network Solutions, there is more than a good chance that we have seen the last of the marketing Godaddy.com is famous for.
Super Bowl ads, car racing sponsorship and even Danica could all be causalities of a sale.
If Godaddy winds up being owned by a bunch of “suits”, like the major registrars that have come before, this may mean a lot less exposure for the company and the domain industry as well.
I mean when was the last time you saw a commercial for Network Solutions?
Register.com runs TV commercials from time to time but I can’t honestly say I could even tell you anything about the commercials.
That’s the difference between a company run by a guy like Parsons and a company run by a bunch of suits.
Here is another possible effect of the sale of Godaddy.
If the company is bought, the new owners might decide to go the way of Tucows and retain the cream of the crop of the expired domains for themselves.
Domainers hate this practice, but its perfectly legal and within the rights of the registrar.
Of course a sale, may also leave the door open for an existing or new registrar to make a move on Godaddy.com market share.
For me the sale comes at a pretty strange time for what seems to be a very small price.
$1 Billion dollars for a company which reportedly grossed $800M in 2009 seems downright cheap.
Just over 1x revenues.
However at least one site says, despite all the revenue, Godaddy.com makes no profit.
However maybe Godaddy is using its knowledge of domain auctions and use the same basic strategy to sell itself.
Put a Low number out there to attract bidders and let them bid the price up.
Its like putting a a million dollar domain up for auction with a $100K reserve.
You know a lower price will attract more interest, more bidders and hopefully a sales price well above reserve
Second the timing.
We all know we are in the middle of the worst recession of the last 70 years, so as we all know with our personal assets, this is not the best time to sell.
If you own a house you know you don’t put it up for sale now until you need the money. Otherwise wait.
Same here.
The stock market is shaky, money is tight and this is certainly not the time to get top dollar for anything.
We also know how successful the .co rollout has been adding additional revenue to Godaddy for 2010.
We also know that in 2012 the new extension will start rolling out, hundreds of them a year and with a greater than 50% market share of all new registrations no one is in a better situation to make money off of the new extensions that Godaddy.com.
All and all a strange time to sell and a low ball price.
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Google would have a hard time getting government approval to buy Godaddy. Controlling 80% of search and 50% of url sales equals monopoly.
IF one registers for 10 years, does that lock in the cost for 10 years ?
Where does the money go during that 10 year period ?
…to the Registrar ? to the Registry ?
What happens when the new .COM servers are deployed ? (better security, stability, redundancy…blah blah blah)
Does your 10 year registration in the legacy IPv4 .COM servers transfer ?
“equals monopoly”
Google already IS a Monopoly
.
Jim
“IF one registers for 10 years, does that lock in the cost for 10 years ?
Of course its prepaid
“Where does the money go during that 10 year period ?”
The registrar collects the money, it has to pay Verisign $7.34 for each year of renewal, ICANN gets $.18 per year, the rest the registrar keeps.
So Verisign gets $73.45m ICANN get $1.80 and the registrar keep the remainder.
…to the Registrar ? to the Registry ?
“What happens when the new .COM servers are deployed ? (better security, stability, redundancy…blah blah blah)”
Nothing
“IF one registers for 10 years, does that lock in the cost for 10 years ?”
yes, it could be a marketing trick to sell more long term domains before the GoDaddy buyer will increase the domains prices
“$1 Billion dollars for a company which reportedly grossed $800M in 2009 seems downright cheap.”
I agree, but what was the .net income? (Pun intended)
We went from having over 350 domains with GD to only having about 11 now. There were many good things about GD, but a number of bad ones as well. The things that drove me away the most were the annoying upselling and crude commercials. Well of course they were affective: Most of the country is crude and the rest only too willing to discuss how crude the others are. But I think it’s cheap publicity and a different spin would have more longevity, if not the same initial impact.
Google is already a registrar and it would make a good fit. I think the marketing would change, but we would still see some commercials. Hmmm, is Gomain.com, gDomain.com and GoodDaddy.com registered…? Well of course they are…!!!
“The registrar collects the money, it has to pay Verisign $7.34 for each year of renewal, ICANN gets $.18 per year, the rest the registrar keeps.”
WHEN does the Registrar pay ? immediately ? year-by-year ?
Does the Registrar have a Liability on their books to support the customer for 10 years ?
What happens if Microsoft decides to charge for their PNRP domain system ?
What happens if countries (currently meeting in the .EU) decide to charge for .COM domains ?
http://www.intgovforum.org/cms/
Jim
Typically a registrar will have a prepaid amount on account at both VeriSign and ICANN, amounts are settled daily, meaning if the registrar has no credit left no registrations or renewals will occur.
So to answer your question daily for most, monthly for everyone
I don’t know how the registrars treat the amounts.
.Eu has no jurisdiction to charge for .com’s.
.com’s are managed by contract given by ICANN to Verisign
“.com’s are managed by contract given by ICANN to Verisign”
And, as one of the founders of ICANN, Michael Roberts, has recently said:
“ICANN has only self-invented legitimacy”
Michael Roberts – Sep 12, 2010 2:12 PM PDT
http://www.circleid.com
“self-invented”… in other words, it is all made up as they go along.
As for other countries or platforms charging for .COM, anyone that sits between a large base of consumers and the DNS database could in theory charge a toll.
One easy way to do that is to charge the Registrars, the way ICANN does.
All of this brings up other topics, such as “Who really owns a .COM domain?”
With S.C.U.B.A DNS that is very clear. You can hold the box in your hand with the domain credentials burned into the flash memory. All of the boxes connect
and form “the Registry”. The .NET is the Registry.