GoDaddy Prepares to Go Public
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GoDaddy filed for its IPO. Is it really a strong enough company to take its chances on the stock market? Keep reading to find out about the market, GoDaddy's revenues, and more.
Speculation has been running hot for at least a couple of months that web hosting provider and domain registrar GoDaddy (http://www.godaddy.com) was planning to make an initial public offering of stock. That speculation reached a fever pitch in April, when analysts learned that GoDaddy had hired Lehman Brothers. Sure enough, late in the day on Friday, May 12, GoDaddy announced that it had filed a registration statement on Form S-1 with the United States Securities and Exchange Commission, proposing the initial public offering of its Class A common stock.
So far, there aren't a lot of details about the IPO itself available. At the time of this writing, neither the number of shares on offer nor their price had been settled. The preliminary prospectus was still being put together, so we don't even have that much to go on. Thankfully, that doesn't mean we're entirely in the dark about the company. GoDaddy has made a huge splash since Bob Parsons founded the firm back in 1997, though it's been only since about 2002 that anyone outside of webmasters, website owners, tech journalists, and other technology aware people have started to recognize the name.
GoDaddy can thank a certain Super Bowl commercial for that. In 2005, the registrar ran an ad that simultaneously made fun of Congressional hearings and the "wardrobe malfunction" that happened during the previous year's Super Bowl half-time show. One hopes GoDaddy paid the buxom brunette in the ad very well, because it went from managing less than two million domain names in 2002 to more than 13 million domain names today, according to the registrar's website. This means that it operates the largest domain registration business in the world.
GoDaddy almost has to be that big in order to make any money at all, given its prices. Like every other registrar, GoDaddy pays $6 per year to VeriSign when someone goes to it to register a domain name. ICANN also gets a fee. But GoDaddy advertises prices lower than $9 per year for domain registration. That's not a very big margin for profit. Where's the money coming from? Or is GoDaddy not a good bet as an IPO?
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