Godaddy.com up for sale. Could fetch $1 Billion
online.wsj.com
online.wsj.com
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
Mind you, I probably have 50+ domains registered with GoDaddy, I've just read some horror stories too.
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.
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.
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.
Different biz I know but both are ultimately subscriptions.
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 :)
Google could bypass verisign completely and launch their own top level domain with their own root DNS and give away ".go" domains.
Explain that.
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.
"Qatalyst Partners, the boutique firm run by veteran technology banker Frank Quattrone, has been 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...
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.
The returns are infinite if you don't use any of your own money.
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.