I chatted with David Menlow, who is the founder IPOfinancial.com yesterday about Godaddy’s planned IPO and Google’s announcement this week that they were entering the domain name registrar business
“I don’t see how GoDaddy’s IPO could “move forward.”
“If it does, the valuations of this deal has to be radically”
“Whatever valuation models were being thrown around had to be completely redone”
IPOfinancial.com “has been serving the investment community with information on IPOs and Secondary offerings since 1990”
Mr. Menlow says his company specialize and is retained by investors and investment companies for its opinion on how IPO shares will trade once the open on the market.
I pointed out to Mr. Menlow that Godaddy has a dominant market share of around 50% of the domain registrar market, which isn’t as big as Google own market share of Search, still very substantial.
I also pointed out that Google hasn’t released many details of what Google Domains will be offering, what domain names they will be carrying or what the pricing will be.
“It doesn’t matter that there are no details regarding Google Domain offering”
“Google is not the 800 lbs Gorilla in the room, its the 800 ton Gorilla.”
I asked Mr. Menlow if he had any advise for Godaddy with Google coming into the market
“I would turn the lights off in the office and go into the fetal position”
Should we tell Facebook yet that it can uncurl itself from the fetal position and turn the lights back on? Or did Google Plus already kill that company off? I can’t remember.
I think this IPO expert is overreacting and then some.
Google is large, obviously. Too obviously, perhaps. We’re used to Google services displacing competitors in search. But I’m not aware of any special power that would allow Google to suck domains out of GoDaddy accounts into its own. Inertia favors established registrars. What can Google do? Undercut them on price?
It’s a long way to catch up.
All his jocular hyperbole aside, Menlow is quite smooth.
“800 ton Gorilla”?
I liked that one too
While Google will take some industry market share, I believe Godaddy will be able to defend its dominant position as the number domain registrar.
Google tried much the same thing when Facebook was going for IPO. It went on a road trip with its “Knowledge Graph”/Wikipedia scraper while everyone had heard of Facebook’s Social Network. Naturally the technology churnalists lapped the whole thing up without ever stopping to wonder what was going on and why Google was worried. (Google Plus failed miserably because it forgot the Social aspect of Social Networks).
Rolling out a bunch of Googlers with no real combat experience in the Domain Wars might impress Google fanboys and fangirls but the domain name registrations and hosting is a very serious business. It also is a customer orienated business and handwaving from Google celebrities won’t work when someone’s domain name or website is not working.
The domain name business is rather opaque to outsiders and and he may have missed something that Google might have noticed. The over 50% of domain names in some TLDs are not used or are on holding pages or PPC landers for undeveloped domains and the Godaddy PPC lander for undeveloped domain names is actually one of the commonest webpages for many TLDs. Excluding acquisition costs, these domain names have customers who pay the registration fees but don’t use the domain names. Godaddy’s got its own domain monetisation system too.
@McCormac,
You’re quite right; Godaddy is the Lionel Messi of the Domain Industry. They have been dribbling all Registrars with high level skills for decades.
It’s no coincidence that all the Godaddy codes, including renewal ones, all of a sudden dried up since the launch of the new gTLDs. Some may say they are trying to dibble registrants into this highly lucrative (in their perspective) scheme, but that’s another topic.
No, you’re right. Godaddy is bound to be a formidable foe for anybody.
I think that Godaddy claimed to have 54 million domain names under management, Domenclature.
That’s a significant player status right there. Where Godaddy is weak is on the country level markets. Country level markets tend to be ccTLD dominated and most of the top ten hosters/registrars in a country market will be based in that country. If you look at the main nameserver stat for Godaddy, it is still way above others in terms of the com/net/org/biz/info TLDs but it also has many more hosters and nameservers on its IP space. The sheer size of Godaddy’s domain and hosting footprint is something to which Google can only aspire. Now the Google fanboys and fangirls typically haven’t a clue about the hosting business. There are different kind of hosting and once Google tries to get into that business, it is not only competing with Godaddy but with every web developer and hosting company world wide. It is also competing with Amazon and Microsoft when it comes to Cloud hosting.
One would have to wonder why Google is so desperate to get into the domain name registration and hosting business. Godaddy is the number one hoster in the US market. But the gTLD market is quite complex and it is quite regionalised. In the last two weeks, I ran a TLD mapping survey (mapping com/net/org/biz/info/mobi/asia/etc websites to their country of hosting. The US market is absolutely huge when it comes to gTLD websites. You can see the websites per country maps for the TLDs on http://www.hosterstats.com/gtld-websites.php and I think that the US market will be Google’s primary target. It is a market of just over 101 million com/net/org/biz/info/mobi/asia websites.
But Godaddy is not the only Tier 1 player in the US market and Google has to offer the end-user some reason for switching and or registering with it. The happy clappy talk about the future of the web and meaningful domain extensions is not really going to cut it. The bulk of the US domain name registration and hosting activity is on .COM TLD. The new gTLDs might as well not exist for the end-user in the US. Google might have to put a checkout for its domains on every search results page in order to compete with the rest of the domain registration and hosting industry.
@McCormac,
Excellent comment, with facts and figures.
Google could be sensing fatigue from domainers regarding Godaddy, Moniker, and several other Registrars. I’m sure, for a company with extensive tentacles in domain industry data (and so many other verticles, perhaps ALL), it is not a stretch to assume this. I personally do not think that Google domains is a well thought out high-level venture; it is my opinion that the newly formed DNA brought some mid level Google executives, (albeit ones with power to test and experiment), in contact, and alliance with Domain Industry Veterans, especially on the Registrar side, who are now pushing new gTLDs; these smart veterans were able to, not paternalistically true, but somehow inexplicably, manipulate to launch this.
Now, I want to get something off my chest here. Domainers will have no honor if they allow Google to do this. What Google did to us with PPC partnership we had with them is completely unacceptable; they walked us to the middle of the ocean, and disappeared. How can we just jump into another one with them? I’m NOT going to do it. If Google wants our business, they need to make good on the PPC and ad sense deal. We were NOT paid since 2009, and they know it. I will not register a single domain name with them until they correct it; and pay by eyeballs. I don’t care how good they could be, or what revolutionary impact their entrance will have in the industry, including making Godaddy reduce or abandon unnecessary charges. I will be boycotting thsi Google domains, on principle, until they make the foregoing corrections, including establishing a responsible call center, manned 24 hours to handle issues…
Mr. McCormac, I’ve learned to ignore commentators, including bloggers who are apparently enamored by success, and often form and worship idols out of it. The type of study necessary to declare Godaddy dead due to renaissance of Google in this space is very complicated; these blogger declarants wouldl have to show some type of meta-data analysis of Google and Godaddy, producing abstract, but backing it up with statistics, techniques, bias, assessment, result evaluation, references, and much more…
They don’t even come close to showing any, so how can we take their word for it? I’m not.
I meant to add that it is not a new phenomenon, or a rarity to see a titan enter into the Registrar business. I point to Yahoo, which has been an ICANN Registrar along the lines that we anticipate Google domains to be. If there would be any difference, it won’t be too significant. Godaddy and other Registrars have managed to survive Yahoo.
I think he is right that this will probably put Godaddy’s IPO plans on hold, investors will see this as a big risk right now and as he says the IPO would need to be repriced down to factor that in.
I think the the chance of Google actually taking large market share away from Godaddy is low though.
People already complain about the lack of customer service with current registrars. As far as I know, Google has zero experience with customer service, except for the largest spenders. They are a monolith. With their corporate culture, I can’t see them bothering to help Joe Smith when his website is down or his name needs a name server change. Those things can’t be handle by a clever algorithm. Google already treats Adwords buyers with contempt, why would they treat the far less profitable customers of their registrar any better?