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Wagner takes dig at Verisign as GoDaddy reports $310 million domain revenue

Kevin Murphy, November 7, 2018, 14:35:50 (UTC), Domain Registrars

GoDaddy CEO Scott Wagner ducked a question about how the company will react to future .com price increases during its third-quarter earnings call yesterday, but used the opportunity to take a gentle swipe at Verisign.

Asked by an analyst whether the first 7% price increase, almost certainly coming in 2020, would have any effect on GoDaddy’s gross margins (ie, will they shrink as the company swallows increased costs, or swell as it increases its own prices above 7%), Wagner said:

the last time VeriSign took a price increase the industry passed that through to the end registrant.

.com and more importantly the software around bringing somebody’s .com to life is valuable and, modestly, we’re providing the value in that relationship around taking a domain name and actually turning it into something that somebody cares about.

I’m interpreting that as a pop at the idea that Verisign enjoys the fat registration margins while GoDaddy is the one that actually has to market domains, up-sell, innovate, deal with customers, and so on.

The remarks came just a few days after Verisign, in a blog post, branded GoDaddy and other secondary-market players “scalpers”, infuriating domainers.

Wagner was talking to analysts as the market-leading registrar reported revenue for Q3 of $679.5 million, up 16.7% year over year.

Revenue from domains, still the biggest of its three reporting business segments, was $309.5 million, up 14.0% compared to the year-ago quarter. GoDaddy now has 18 million customers and over 77 million domains under management.

Overall net income was down to $13.2 million from $22.4 million, as operating expenses rose over 16% to hit $642 million, after the company invested more in marketing, development and so on. Its operating income was $37.5 million.

Contrast this with Verisign’s performance for the same quarter, reported two weeks ago.

It saw revenue about the same as GoDaddy’s domains revenue — $306 million — but net income of $138 million and operating income of $195 million.

GoDaddy and Verisign could find themselves competing before long. As part of its deal with the US government to allow it to raise .com wholesale prices once more, the government also lifted its objection to Verisign becoming a registrar, just as long as it does not deal in .com names.

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Comments (3)

  1. Mark Thorpe says:

    Verisign vs Domain Industry is going to go 12 rounds. Round 1 just ended, 11 more rounds to go!
    This fight is going to be ugly, bloody and dirty right to the very end!
    Domain Industry wins by TKO, because Verisign’s profits “drop” without domain Industry money.

  2. John Berard says:

    Versign’s opponents in this battle will likely begins to speak of effective alternatives to the TLD and any under the company’s control.

    Which TLD is best positioned to be the one around which those opponents will rally?

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