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GoDaddy says it turned around Neustar, and .biz numbers seem to confirm that

Kevin Murphy, November 4, 2021, 08:17:47 (UTC), Domain Registrars

GoDaddy is pleased with how its new registry division is doing, with CEO Aman Bhutani claiming last night that it’s managed to turn around the fortunes of Neustar, which became part of GoDaddy Registry a year ago.

Reporting a strong third quarter of domains revenue growth, Bhutani highlighted the secondary market and the registry as drivers. In prepared remarks, he said:

On Registry, we are continuing to prove our ability to acquire, integrate, and accelerate. A great example is the cohort performance within GoDaddy Registry. When we acquired Neustar’s registry assets in Q3 last year, its new cohorts were shrinking, with new unit registrations down 4% year over year. We are now one year into the acquisition, and we’re pleased to report that within that first year, we have been able to accelerate new business significantly. We are now seeing new unit registrations increase nearly 20% year over year — all organically.

If you’re wondering what a “cohort” is, it appears to refer to GoDaddy’s way of, for analysis purposes, slicing up its customers, how much they spend and how profitable they are, into tranches according to the years in which they became customers.

So GoDaddy’s saying here that Neustar’s number of new customers was going down, and it was selling 4% fewer new domains, at the time of the acquisition last year, but that that trend has now been reversed, with new regs up 20%.

The numbers are not really possible to verify. Neustar’s main three TLDs for volume purposes were .us, .co and .biz, and of those only .biz is contractually obliged to publish its zone file and registry numbers.

But look at .biz!

.biz zone graph

That’s .biz’s daily zone file numbers for the last two years, with the August 2020 acquisition highlighted by a subtle arrow. It’s only added about 50,000 net names since the deal, but it’s reversing an otherwise negative trend.

Monthly transaction reports show .biz had been on a general downward, if spiky, line since its early 2014 peak of 2.7 million names. It’s now at about 1.4 million.

When asked how the company achieved such a feat, Bhutani credited “execution” and left it at that. Perhaps this means something to financial analysts.

When asked by an analyst whether GoDaddy was giving its own TLDs preferential treatment, promoting its owned strings on the registrar in order to better compete with .com at the registry, Bhutani denied such frowned-upon behavior:

We don’t do that. All TLDs work on our registrar side in terms of their merit. It’s about value to the customer — whatever works best irrespective of whether we own the registry side or not. That’s what we’ll sell in front of the customer.

The company reported domains revenue up 17% at $453.2 million for the third quarter, with overall revenue up 14% at $964 million compared to year-ago numbers. Net income was up to $97.7 million from $65.1 million a year ago.

GoDaddy expects domains revenue to grow in the low double digits percent-wise in the current quarter.

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