GoDaddy Prepares to Go Public - So is GoDaddy Worth it?
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I'm not even remotely a stock market analyst, so you would be wise to take whatever I say here with a large grain of salt. But there are several more points worth mentioning while we consider this IPO. One of them is why, exactly, GoDaddy is doing the IPO in the first place. At least one analyst has pointed out that $250 million would be a nice start on a war chest if GoDaddy has ambitions of going on an acquisition spree. We've seen moves like this before with other companies in related business, most notably Internet service provider Verio.
Another interesting point is that some analysts are all but salivating at the thought of finally getting to see inside GoDaddy's books. How is the company managing to turn enough of a profit to keep operating, given the thinness of its margins? Indeed, some believe that the company is actually losing money.
Om Malik wrote a quick and dirty of GoDaddy's income stream in his Gigaom blog in mid-April. "The company uses three name servers for its domains, WildWestDomains, Jomax.net and of course GoDaddy.com. The only name server, WWD, is going up, while the other two are trending down. WWD is the #1 host in the US. GoDaddy has a total of 6.66 million domains registered to it. At a very rough average of about $10 a year for registration, that would work out to about $66 million in annual sales just from domain sales/renewals. Warning: this is a very very very rough estimate." Others have estimated that GoDaddy generates about $200 million in annual revenue from all of its products and services.
A third point, of less interest for this particular IPO but of more interest to those who watch the general tech market, is that some analysts think this could trigger other tech firms to file for their IPOs as well. Techdirt observed that this is a case of a "brand name" tech firm going public, and that, while Google's IPO didn't trigger a rush, that was partly because the search engine giant was a decidedly special case.
The final point I'd like to make concerns GoDaddy directly. The company seems to have a somewhat mixed reputation for customer service. A lot of people like hosting with the company, but others have complained about GoDaddy holding domain names hostage, among other problems. I hope the company gets these issues sorted out before offering its stock up for sale; commercials featuring jiggly-chested models can only go so far.
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