Go Daddy Software Inc is making a killing out of the domain name registration business, and is looking to grow in related markets such as security and hosting. The company is also pondering an initial public offering, according to CEO Bob Parsons.
The company is generating cash, is profitable, has no debt, no outside investors, and expects $110m of sales this year, Parsons said. Parsons is the sole shareholder, but the company does have an employee share option plan in place.
Asked about IPO plans, Parsons said: We’re talking about it, we’ve been in contact with a few people about it. The company has also been approached about being acquired several times. Going public is not expected to happen soon, Parsons said.
Parsons said the company is currently focused on improving its existing services, such as web hosting and SSL certificates, and on growing its already considerable base of domain name registrations customers.
By selling domains for $8.95 per year, making them among the cheapest of the large registrars on the market, the company has second place in terms of the total number of existing registrations, and first place in terms of growth.
Go Daddy says it regularly has 30% to 35% of the net new domain registrations in terms of the ICANN TLDs, (.com, .net .biz and others), and has about 22% of the total domains under management in these TLDs.
But VP of marketing Elizabeth Perrine said that this growth has been achieved largely through word-of-mouth. The firm recently commissioned its first-ever market research, to find out what customers wanted, and will soon start advertising on television.
The company is also trying to bring its budget business model to the SSL certificate space. Go Daddy will soon start selling web server certs in the low-validation market segment, priced even more cheaply than the $49.95 certificates it currently sells.
Certificates and domains have long gone hand-in-hand, since VeriSign Inc bought Network Solutions Inc in 2000. People starting up e-commerce sites need both products, both of which are delivered digitally.
VeriSign, with is own-brand and Thawte brand, is still easily the market leader, but younger firms such as GeoTrust Inc and Comodo Ltd have been eating into its market share, mainly because of their budget certificate offerings and speed of delivery.
Go Daddy launched its SSL certs service in February, and has yet to make a significant dent in the market. Go Daddy certs are $49.95 per year, and are high validation, meaning the buyer’s identity is validated manually before the cert is issued.
Comodo Ltd also sells for $49.95, but its validation is done automatically, by comparing the contact details of the buyer against the contact information for the domain for which it will be issued, found with a Whois lookup.
These low validation certs can be issued in minutes. The manual ones usually take a day or two. Geotrust and Thawte have similar services, costing $179 and $159 per year, respectively. VeriSign’s high-validation certs are $349 to $895 a year.
Parsons said these are too expensive. I can make money all day at $49.95, he said. Prices have not been set for the low-validation Whois-based cert service, but it will be much cheaper than its manual validation services.