GoDaddy is Going Public(fortune.com)
fortune.com
GoDaddy is Going Public
http://fortune.com/2014/06/09/godaddy-ipo/
17 comments
God knows I can't find it now but I remember a story line about Bob betting the ranch and almost running out of money when he started godaddy and using the money from his previous company to fund it. And almost didn't make it (almost like a Fred Smith Fedex type story). Can't find the link right now.
Another thing about Parsons (that I remember but can't link to) is that he insisted on building all his systems in house and not licensing technology or software from others which seems to have worked to his advantage.
Another thing about Parsons (that I remember but can't link to) is that he insisted on building all his systems in house and not licensing technology or software from others which seems to have worked to his advantage.
Interesting you mention Fred Smith of Fed Ex. He and Parsons were both Marines, served in Vietnam, started companies, and are now billionaires.
You skipped the chapter where he killed the elephant.
I'm no fan of poachers, but it's pretty irrelevant to his business career. In fact I'd put money down that there's a positive correlation between successful entrepreneurs and psychopaths.
You'll probably have a blast reading this (I know I did):
http://www.ribbonfarm.com/2009/10/07/the-gervais-principle-o...
http://www.ribbonfarm.com/2009/10/07/the-gervais-principle-o...
Setting aside the killing of the animal ... his actions directly translated to thousands if not millions of domains moving from GoDaddy to competitors. Seems relevant to his career to me.
You mention the elephant, but not the SOPA/PIPA support?
and I think we skipped the part where GoDaddy is losing $200 million a year.
GoDaddy's advertising is horrible and their policies are questionable. I personally find myself hoping that the IPO doesn't go well.
In theory since it will be up for public ownership you could argue that some sense could be knocked into them. But for some reason, it never works that way.
It's kind of a shame that being a publicly traded stock is Not correlated with a company cleaning up their act.
It's kind of a shame that being a publicly traded stock is Not correlated with a company cleaning up their act.
if they go public, you can always just make a billion dollars doing something else, then keep buying their shares and selling them for less, constantly driving the price down, until they don't exist.
This would have no net effect on the supply of shares, so it would not decrease their share price (aside from temporary fluctuations while you are doing the buying/selling).
I'm pretty sure they don't do the sexist advertising anymore. Though I agree that their policies are questionable.
I guess I need to learn to take offense easier, however with two personal sites maintained for family members both registered through GoDaddy I honestly never had a single issue. So what am I missing?
They are losing money... and lots of it. Wow.
GoDaddy has been around a long time, one would think they would be profitable (at least barely) by now. And they are going public with this?
GoDaddy has been around a long time, one would think they would be profitable (at least barely) by now. And they are going public with this?
How did they get into a situation where they're losing >$200M per year -- and with only $100M cash in bank and $1B revenue? Even more perplexing... they recently took on $1B+ in debt, of which they immediately paid out 30% as a dividend to investors?!
I'm not an expert or anything... but their "growth" story stinks; it looks like they're just trying to milk a dying cow. That, or I'm just way off base...
I'm not an expert or anything... but their "growth" story stinks; it looks like they're just trying to milk a dying cow. That, or I'm just way off base...
This smacks of a firm being raided by private equity funds. Leverage, debt use it to do a stock divident to the owners (Private Equity firms), launch an IPO, use the IPO funds to finance more debt, keep the company above water long enough to walk away.
Also the current CEO is a former Yahoo! exec, not exactly confidence inspiring.
Also the current CEO is a former Yahoo! exec, not exactly confidence inspiring.
Being a domain registrar is a terrible business. This is why GoDaddy has all those upsells.
Nope. They were profitable prior to the buyout. Besides they don't make money on the domain registration they make it on selling other things (that you don't need in many cases) the domains are just an acquisition tool on that. A loss leader.
They also have a domain buy service. A domain sale I just handled which came by that service netted them a $6000 fee for essentially contacting the other party (who I worked for) by email. (Don't use them would be my very strong suggestion.)
They also have a domain buy service. A domain sale I just handled which came by that service netted them a $6000 fee for essentially contacting the other party (who I worked for) by email. (Don't use them would be my very strong suggestion.)
>Besides they don't make money on the domain registration they make it on selling other things (that you don't need in many cases) the domains are just an acquisition tool on that. A loss leader.
Those are the upsells I'm talking about.
Those are the upsells I'm talking about.
Direct link to GoDaddy's S-1: https://www.sec.gov/Archives/edgar/data/1609711/000119312514...
We have 50 reader reviews of GoDaddys website builder at Site Builder Report. Of the 50 reviews, 48 have received the lowest possible rating (1 star out of 5). http://www.sitebuilderreport.com/reviews/godaddy/user-review...
No other website builder we cover is the target of as much outrage from readers.
No other website builder we cover is the target of as much outrage from readers.
I found there S-1 Registration statement insiteful--especially about competition, and how domain names are
not as important as they used to be. I'm a customer of Godaddy because I'm a sucker for a bargain(99 cent names).
I think the company would benefit if they stoped trying
to outwit their customers; like stop changing the renew
automatically, and don't assume I want to spend more than 1
year with you. Oh yea, we all know Godaddy is the big daddy
in domain names--you don't need to spend countless millions
on eye candy. I understand spending a lot on advertising in
emerging markets, but not in the U.S.--pass those saving on
to your customers. Yes--I know the Super Bowl ad put you
in the game, but we know the system now--we know what you do, and when we are being gouged. My final thought is this,
if you want repeat customers--stop playing tricks like pricey privacy options, holding domains hostage because they
are a day late in payment, and constantly changing automatic
billing settings. Bye--
Surely it's a little late for an IPO from GoDaddy. They've been around for a long time, they're already established as a market leader, there'll be little to no hype.
Forbearing a massive success with the new TLDs that seem to be given out like candy, I can't see any huge growth areas for them to move into. Maybe China, but that's always going to suffer from preferential treatment to incumbent local competition. (If the Chinese allow free DNS registration at all?)
The only way I'm seeing this is that the owners want to sell, but the financials are so bad they couldn't find a private buyer. I'll give it a pass unless anyone knows different?
Forbearing a massive success with the new TLDs that seem to be given out like candy, I can't see any huge growth areas for them to move into. Maybe China, but that's always going to suffer from preferential treatment to incumbent local competition. (If the Chinese allow free DNS registration at all?)
The only way I'm seeing this is that the owners want to sell, but the financials are so bad they couldn't find a private buyer. I'll give it a pass unless anyone knows different?
>On July 1, 2011, Go Daddy confirmed that KKR, Silver Lake Partners, and Technology Crossover Ventures had closed the deal. Although the purchase price was not officially announced it was reported to be $2.25 billion, for 65% of the company. [1]
That my shed some light on your doubts.
[1] http://en.wikipedia.org/wiki/Go_Daddy
That my shed some light on your doubts.
[1] http://en.wikipedia.org/wiki/Go_Daddy
Bob Parsons pulled the IPO back in 2006 because of market conditions: http://www.bobparsons.me/archive_article.php?entry_id=121
Thanks, that at least explains why they're IPO'ing so late. Still not enough to convince me it's a good buy though :)
Definitely not a good purchase. Though they may be a market leader, they are grudgingly so, and most people with experience stay away from them.
I had assumed GoDaddy was already public. Seems like the sort of company that would have gone public ages ago when it was still growing aggressively.
I think they have a few things to fix before they go public, like the insane amount of money they've been spending on marketing.
Does it not work though? They are known for being shitty yet they are one most popular(if not the most[1])
With this bad reputation and even some boycotts like "leave godaddy, they support sopa" it is obvious they don't have a good reputation and their service is "good enough to not bother switching"
I don't think they'd grow without massive marketing.
[1] I dont know how accurate this data is, although it doesn't look too far from truth http://www.webhosting.info/registrars/top-registrars/global/...
With this bad reputation and even some boycotts like "leave godaddy, they support sopa" it is obvious they don't have a good reputation and their service is "good enough to not bother switching"
I don't think they'd grow without massive marketing.
[1] I dont know how accurate this data is, although it doesn't look too far from truth http://www.webhosting.info/registrars/top-registrars/global/...
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"The self-described “outspoken” executive called the quiet period “suffocating” and didn’t want to give up his weekly radio show, or other planned radio and TV appearances."
Oh sure, right. As if he didn't know that when he got involved in the process and hired investment bankers.
Oh sure, right. As if he didn't know that when he got involved in the process and hired investment bankers.
Given who owns the company now, I'm pretty sure that they'll be looking for acquisitions to tack onto their upsell activity. Pretty sure that's what this IPO will do. GoDaddy will be buying some companies in a year.
I remember reading about how private equity takes companies and leverages them for a handsome payout, only to dump them in an IPO to let the public assume an untenable balance sheet.
1B in revenue on 1B in debt...its right at the limit for healthy.
1B in revenue on 1B in debt...its right at the limit for healthy.
How do I purchase put options for an IPO?
The regulatory body that governs options restricts them for IPOs. There is a period of time (I believe it's 2 weeks) after IPO that options are not allowed to be traded in public markets, so you have to wait until then. At that point, you can buy puts from any full service brokerage (and many discount brokerages).
If you are a sufficiently high net-worth individual or investing on behalf of a sufficiently large fund, you may be able to make a private deal with one of the investment banks participating in the IPO, but I don't know much about that.
If you are a sufficiently high net-worth individual or investing on behalf of a sufficiently large fund, you may be able to make a private deal with one of the investment banks participating in the IPO, but I don't know much about that.
Does that mean they have to stop being awful at PR (shooting elephants, objectification of women, etc)?
For some companies an IPO is the final frontier just before they really start to cook. For others it is the final round in a game of pass-the-buck.
My hope is that it is the former, my fear is that it is the latter.
Even Facebook eventually ended up above their IPO price so maybe GoDaddy won't do so bad. Give it a few years.
My hope is that it is the former, my fear is that it is the latter.
Even Facebook eventually ended up above their IPO price so maybe GoDaddy won't do so bad. Give it a few years.
I changed from GoDaddy to domainsite 5 years ago.
Me too, it seems domainsite is acquired.
Why are companies like GoDaddy allowed to just lose hundreds of millions of dollars every year? I don't get it!
The cheap domain thing is not a capital intensive industry, there are thousands of IT companies that can sell you a domain out there, it is not as if you need a factory or hundreds of thousands of staff to get into the business, so cheap isn't necessarily going to get you into a monopoly position - e.g. de Beers - so that they can have the market to themselves.
If they were making cars instead of domains and selling everything at what amounts to a loss year in, year out, some EU type of organisation would come along with an anti-dumping tariff to put an end to it.
Why is it with tech companies that GoDaddy style business models are allowed to persist? Sure some of those losses are due to acquisitions, but, again, why can companies that don't make money allowed to buy up companies that do make money?
The cheap domain thing is not a capital intensive industry, there are thousands of IT companies that can sell you a domain out there, it is not as if you need a factory or hundreds of thousands of staff to get into the business, so cheap isn't necessarily going to get you into a monopoly position - e.g. de Beers - so that they can have the market to themselves.
If they were making cars instead of domains and selling everything at what amounts to a loss year in, year out, some EU type of organisation would come along with an anti-dumping tariff to put an end to it.
Why is it with tech companies that GoDaddy style business models are allowed to persist? Sure some of those losses are due to acquisitions, but, again, why can companies that don't make money allowed to buy up companies that do make money?
In case you are serious about not getting it: you can operate at a loss in a number of situations: if you have profits in reserve, if you have available credit to float the difference in revenue, or a combination therein. You cannot bleed forever, only as long as you have capital to push onward. If you have access to a ton of credit, or have a ton of money in the bank, you can take losses for quite some time.
I haven't looked too deeply at their internals, but some companies choose to (properly) mark down existing assets or investments on their books to current market value at certain times for strategic tax purposes. Eg. if you have a warehouse full of stuff you can't sell, but profit from other divisions the right thing to do is to write down those assets to market value (sometimes that is zero, but not always)
I haven't looked too deeply at their internals, but some companies choose to (properly) mark down existing assets or investments on their books to current market value at certain times for strategic tax purposes. Eg. if you have a warehouse full of stuff you can't sell, but profit from other divisions the right thing to do is to write down those assets to market value (sometimes that is zero, but not always)
"Why are companies like GoDaddy allowed to just lose hundreds of millions of dollars every year? "
What do you mean "allowed"? You mean "allowed" by the government or "allowed" by investors who perhaps may know something that you don't?
Investors make mistakes for sure and bet on the wrong horse. But if they are they are making a calculated risk by using information that you are not privy to or knowledge that you don't have. (And I can see from some of the comments on this post that is not unusual.)
What do you mean "allowed"? You mean "allowed" by the government or "allowed" by investors who perhaps may know something that you don't?
Investors make mistakes for sure and bet on the wrong horse. But if they are they are making a calculated risk by using information that you are not privy to or knowledge that you don't have. (And I can see from some of the comments on this post that is not unusual.)
- Grew up poor, flunked high school, enlisted in the Marines during the Vietnam War
- Graduated from college, self-taught programmer at age 25
- Started Parsons Technology at 34
- Grew it to 1,000 employees and sold it for $64M at 44
- Started GoDaddy at 47
- Exited Godaddy in 2011 for $930M at age 61 (http://www.bizjournals.com/phoenix/blog/techflash/2014/06/go...)
Great entrepreneurs never develop overnight, this game only gets better with age.