Go Daddy sale to make Bob Parsons a billionaire

Number one domain name registrar Go Daddy is in talks to sell out to private investors in a deal worth north of $2 billion, according to reports.
The deal, first reported by the New York Post and subsequently confirmed by other newspapers, would see the company acquired by a group led by Silver Lake Partners and KKR & Co for between $1 billion and $2.5 billion.
An official announcement could come as soon as Tuesday, these reports said.
Go Daddy has been subject of exit strategy rumors before, notably late last year, and it came to nothing, but this time it’s looking like a done deal.
The company also attempted to go public in 2006, but its IPO was yanked due to poor market conditions and other reasons.
In fact, IPOs appear to be the exception rather than the rule when it comes to domain name registrars.
Register.com did go public, but it didn’t work out too well and it was reprivatized. Network Solutions also wound up in private hands. Demand Media listed last year, but eNom is not its core business.
For many, Go Daddy is synonymous with its flamboyant chief executive, Bob Parsons, who founded the company in 1997 with the proceeds of a previous technology company sale.
As the company’s primary shareholder, the sale will likely make him a billionaire. The question is: as a serial entrepreneur, how long will Parsons stick around?
He’s a pretty good businessman, to be sure, but he’s never struck me as somebody who’s particularly passionate about the domain name industry.
I expect he’ll stick around for a while to groom his successor after the sale closes – it may even be a condition of the deal – but I’d be surprised if he’s still at the helm two years from now.
I understand there are also a number of senior Go Daddy executives with share options; we’re likely to see these guys on the receiving end of windfalls if the deal goes through.
I’ll also be interested to see how new ownership will affect Go Daddy’s philanthropic work.
The company does not like to talk about it (more than three or four times a month) but it does contribute a fair bit to charitable projects.
I don’t think new management will attempt any kind of drastic shake-up of Go Daddy’s business model, such as raising prices, in the short term.
The company has a winning formula that is not in need of fixing right now.

Go Daddy lobbies to delay its IPO

Go Daddy is reportedly behind proposed US legislation that would make it easier for large privately-held companies to keep their financial records secret.
(UPDATE: This post sources a New York Post report, but according to a Go Daddy spokesperson, the company had “nothing to do with” the proposed legislation.)
If the new Private Company Flexibility and Growth Act becomes law, it would enable Go Daddy to avoid being compelled into an IPO.
The bill was introduced by Arizona’s Rep. David Schweikert and other bi-partisan Congressmen yesterday. In interviews, Schweikert talked of having the law pass by the end of the year.
Today, when private companies hit 500 shareholders they have to start publicly disclosing their accounts, by filing their financial statements with the Securities and Exchange Commission.
This creates substantial costs, and in the past many companies (Google is an example) choose to go the IPO route instead, even if they don’t necessarily want to.
The new bill would allow them to stay private, in both senses of the word, for longer.
Schweikert told Fortune that the bill was inspired by “a bunch of little companies” in his Scottsdale constituency. The New York Post reported that Go Daddy was among them.
Go Daddy filed for an IPO in May 2006, but canceled the offering a few months later, citing poor market conditions and conflicts with CEO Bob Parsons’ management style.
In September last year, the company put itself up for sale, with a reported asking price of between $1.5 billion and $2 billion, but the auction was called off a few weeks later.

Go Daddy to sell .xxx domains

Go Daddy has become the latest registrar to agree to sell .xxx domain names.
It’s a bit of a big deal for ICM Registry, given how dominant Go Daddy is in the registrar channel.
There are about 50 .xxx registrars on this ICANN web page, which lists all the accredited registrars along with which top-level domains they’re approved to sell.
Go Daddy isn’t listed as a .xxx registrar yet, but its accreditation was just announced in a press release.
Read more at The Register.

Elephant hunt clip is Video.me’s biggest hit

Go Daddy’s Video.me turned a year old this week and it looks like its biggest success story to date is the video of CEO Bob Parsons shooting an elephant while on vacation in Zimbabwe.
The “Hunting Problem Elephant” clip has been viewed 768,541 times since it was uploaded at the end of March, making it the site’s most-viewed by a considerable margin.
The second most-popular video, with 49,293 views, was uploaded by racing driver Dale Earnhardt Jr, one of Go Daddy’s spokesmodels.
Only five clips have received more than 10,000 views, judging from the front page of the site.
Here’s a screen-grab of Alexa’s user reach graph for Video.me.
The spike corresponds to the elephant incident, which was widely reported online and on TV in the US, but traffic seems to have returned to pre-shooting levels rather quickly afterward.
One of Video.me’s selling points when it launched was the ability to privately share videos, so I guess it’s possible that there’s a thriving community hidden in the site somewhere.

ICANN tries to limit rogue registrars

As part of its growing efforts to clean up the domain name registrar market, ICANN has introduced background checks for companies applying for accreditation.
ICANN will check criminal and financial records, as well as doing credit checks, on companies that want to be able to sell domains in gTLDs.
As a result, the cost of applying to become a registrar is going up by $1,000, to $3,500, to cover the cost of accessing the relevant third-party databases.
The changes, made largely at the behest of law enforcement participants in ICANN, concerned that some registrars are not what you’d call responsible netizens, come into effect July 1.
The intellectual property lobby had called for the checks to include cybersquatting and UDRP judgements, but those suggestions were not taken on board.

Pricing competition begins in .xxx

DomainMonster plans to charge between $75 and $300 for .xxx domain names, a fair bit cheaper than the only other registrar to so far disclose its prices.
A single .xxx domain will cost $99.99, dropping to $89.99 and $74.99 if the customer has more than 10 or more than 25 items in their cart when they check out, according to CEO Matt Mansell.
DomainMonster’s pricing scheme offers discounts on all products – including non-domain services – when more than 10 are purchased at the same time, and this will also apply to .xxx.
For trademark holders wanting to register or block their names during the sunrise period, the company will charge $299.99, $289.99 and $249.99, all but $50 of which is non-refundable.
Grandfathering prices for existing porn sites without trademarks will cost $199.99, $179.99 and $149.99, with the same non-refundable component. Landrush fees will be the same.
The only other registrar I’m aware of to announce prices so far is Key-Systems. Regular .xxx names will cost $133 there, with landrush names checking in at about $250.
ICM Registry, the .xxx manager, will charge $60 for domains during general availability. I hear through the grapevine that its fee to “block” a trademark for 10 years is $162.
According to ICM, the ratio of pre-registered domain names to registrants works out to between 20 and 30 names per person, so it’s seems possible DomainMonster’s volume pricing has a market.
About 60 registrars have been approved to sell .xxx domain names so far.

First .xxx domain name prices revealed

New .xxx domain name registrations could retail for as much as $158 a year, a markup of almost $100 over the wholesale registry fee, it has emerged.
Key-Systems, one of the first registrars approved to sell .xxx names, plans to charge €92.44 ($133), or €110.00 ($158) including VAT, per name per year during general availability.
The prices were revealed on the German company’s consumer-facing web site, DomainDiscount24.com.
ICM Registry’s wholesale fee is $60 per year. Excluding VAT, Key-Systems stands to make a whopping $73 margin on .xxx domains.
For comparison, the registrar’s margin on .com domains is less than $10.
Prices for trademark holders that wish to register .xxx names defensively will be even higher.
In the first sunrise period, reserved for porn companies with trademarks, the company will charge a non-refundable application fee of €134.95 ($194), plus €130.90 ($188) per name per year.
In a second sunrise, which “grandfathers” registrants of porn domains in other TLDs, domains will cost €95.20 ($137) in non-refundable application fees, with the same again for the first year’s registration.
If you’re a non-porn trademark holder, and you want to block your brand from the .xxx namespace – say you’re Disney and you want disney.xxx permanently reserved – it will cost €450 ($648).
That’s a “one-time fee”, but it’s not yet clear how many years it covers for 10 years, which works out to €45 per year.
Landrush fees, for non-trademark holders, will be €80 ($115) per application, non-refundable, plus €95 ($137) per domain per year.
Key-Systems is the first registrar to disclose its pricing plans. It’s possible other registrars will offer lower (or, I suppose, higher) prices.

Go Daddy checkout charity raises $20k for Haiti

Go Daddy’s quietly launched “Round Up For Charity” scheme has so far raised over $20,000 for the Hope For Haiti appeal, according to the company.
The month-old initiative gives the domain name registrar’s customers the option to round their bill up to the nearest dollar when they buy a product on its web site. The proceeds go to the charity.
With a new .com costing $12.17, that works out to a $0.83 donation every time somebody checks the box. With that in mind, $20,000 works out to the equivalent of about 24,000 registrations.
I was expecting more, given how much business passes though Go Daddy’s site every day, but I guess not all donations will be as high as $0.83, and not everybody will check the box (there really is no excuse for not checking the box).
It’s a pretty cool idea, a good example of how a company can leverage scale to do some good in the world. Haiti could use all the help it can get at the moment.
Company CEO Bob Parsons has also promised to match his customers’ donations dollar for dollar, according to a press release. He’s also uploaded a video of a recent trip to Haiti here.

ICM adds another .xxx registrar

DomainMonster has become the latest registrar, the first in the UK, to announce support for ICM Registry’s upcoming .xxx porn-only top-level domain.
The company said it has been accredited by ICM, and that it will start taking pre-orders for the domains on its Domainbox reseller platform soon.
Others registrars to have announced that they plan to carry .xxx domains over the last few months include Network Solutions, Blacknight, EnCirca, RRPProxy.net and United Domains.
I’m not sure if any have been officially accredited yet — no .xxx registrars show up on ICANN’s offical list.
DomainMonster CEO Matt Mansell said: “We anticipate the .XXX launch to be the biggest we’ve seen in recent years. The demand our support teams are seeing already far outstrips anything that’s gone before.”
ICM has previously projected somewhere between 300,000 and 500,000 registrations after launch. It took around 600,000 pre-reservations in the few years before it was approved by ICANN.
Getting .xxx accrediation is said to be quite a lengthy process. Registrars have to answer 14 detailed questions, including agreeing to abide by ICM’s policies and detailing how they plan to promote the domains.

Registrar threatened over “stolen” Facebook domain

ICANN has threatened to terminate the domain name registrar EuroDNS for failing to transfer a typo domain lost in a UDRP case to Facebook.
But EuroDNS says it is subject to a court case in its home country, Luxembourg, which has prevented it handing over the name.
The original registrant of facebok.com lost a slam-dunk UDRP case back in September 2010. He didn’t even bother defending the case.
But over half a year later, he’s still in control of the domain, and he’s using it to recruit folk into a shady-looking (but probably legal) subscription text messaging service.
EuroDNS is the registrar of record for the domain, and like all registrars is responsible for transferring domains lost under the UDRP to the winning party, in this case Facebook.
ICANN’s compliance department – my guess is under pressure from Facebook – has therefore threatened EuroDNS with termination unless it hands over the domain in the next three weeks.
This is noteworthy because EuroDNS isn’t the kind of tiny, fringe outfit ICANN usually files compliance notices against. It’s a generally respectable business. It even shows up to ICANN meetings.
EuroDNS deputy general counsel Luc Seufer tells me that the company was fully prepared to transfer the domain – it had even sent the authorization codes to Facebook – but it found itself on the receiving end of a lawsuit claiming that the domain had been “stolen”.
Somebody in Luxembourg, it seems, has sued to reclaim an obvious typo domain that’s probably going to be transferred to Facebook anyway.
“We are therefore in an incredible position where if we transfer the name before the judge’s ruling we will be accountable in our own country and if we don’t transfer the name we are in breach of the [Registrar Accreditation Agreement],” said Seufer.
The Luxembourg case has not yet made it to court, hence EuroDNS’s delay, he said. ICANN is aware of the action, and has seen the court papers, he said.
According to ICANN’s breach notice (pdf), the only way for EuroDNS to avoid its obligation under the UDRP is to show proof that the original registrant has sued Facebook to keep the domain.
But the case in question was filed by a third party claiming to be the rightful owner of the domain, not the original registrant. EuroDNS seems to be trapped between a rock and a hard place.
Seufer said the company is prepared to hand over the domain, adding:

Should we simply ignore a judiciary court case against us in our own country – that could prevent us from operating the transfer since it is was asked of the judge – because of our RAA’s obligations?

The domain in question, facebok.com, currently redirects to a series of sites asking visitors to fill in a survey to win a Mac.
Those who are duped by it are actually signing up to a text service that costs, in the UK, £4.50 ($7.40) per week.