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Go Daddy opens Indian call center — a portent?

Kevin Murphy, August 8, 2012, Domain Registrars

Let’s hope this isn’t the beginning of the end for Go Daddy.

When newly installed CEO Warren Adelman abruptly quit and took a back-seat advisory role at the company last week, my gut reaction was that all is not well at Go Daddy.

CEOs of companies with new owners don’t just up and quit eight months into the job unless there are performance problems or substantial disagreements about management style, in my view.

Adelman was replaced on an interim basis by Scott Wagner of Go Daddy’s main investor, the private equity firm Kohlberg Kravis Roberts & Co.

The news a couple of days later that KKR had appointed a new exec to oversee Go Daddy in India also caught my attention.

I was half tempted to write a post there and then speculating that Go Daddy was about to shift its flagship customer service operations — currently based in the US — to India.

While that news hasn’t arrived yet, the company has today confirmed that it has opened a call center in Hyderabad.

Today, the new facility appears to be limited to supporting Indian customers, according to a press release:

A team of local agents, who speak local languages, are now providing Go Daddy’s brand of award-winning customer service to Indian customers. Since opening a little more than one month ago, agents have taken more than 10,000 calls, mostly from entrepreneurs and business owners. To date, Go Daddy India now supports more than 120,000 customers.

But for how long will this be true?

Private equity firms exist to buy companies, make them more profitable, and flip them for a return on their investment. That usually means cutting costs in unpopular ways.

With the new owners in charge, I have to wonder if Go Daddy’s excellent US-based call centers — a constant source of bragging rights in the Bob Parsons era — are at risk.

It’s a lot more expensive to hire wage-slaves in Arizona than India.

I expect that decision will come down to whether Go Daddy starts to view its American call centers as a cost center, rather than a profit center, and whether it thinks it can ship the function overseas without sacrificing quality and alienating its US and other English-speaking customers.

Shipping jobs to cheaper climes might look like a no-brainer on paper, but there’s ample opportunity for #fail in this case.

If, of course, it ever happens. This article is pure speculation.

Shakeup at Go Daddy

Go Daddy has a new boss and new ownership following a deal reportedly worth $2.25 billion.

For the first time in its 14-year history, Bob Parsons will be neither the majority shareholder nor the CEO.

It appears that seasoned technology investment firms KKR, Silver Lake and Technology Crossover Ventures will own, between them, more than half of the domain name registrar.

Very little about the “partnership” was disclosed, including the financial terms. Various media sources valued the deal at $2.25 billion.

It was left to Domain Name Wire to uncover the news that Parsons will actually step aside as CEO to allow COO Warren Adelman to take over.

Parsons will become executive chairman.

A Go Daddy spokesperson said: “Mr. Parsons has said he will be very active in the business, especially in the areas he is most interested, such as marketing.”

She added that “very little will change”.

The spokesperson confirmed that after the deal closes Parsons will no longer be the majority shareholder. He currently owns 78% of Go Daddy, with the remaining 22% allocated to employee stock options.

As DNW reported, 36 employees will cash out for over $1 million each.

I wonder if we’ll see a mini wave of new domain name companies springing up in the Scottsdale area, as a result of newly minted Go Daddy millionaires leaving to launch their own start-ups.