GoDaddy flips hosting business for $456 million

GoDaddy has sold off its recently acquired PlusServer business for €397 million ($456 million).
The buyer is a private equity firm, BC Partners.
The registrar had taken control of the business when it spent $1.79 billion on Host Europe Group earlier this year, but had said from the start that the asset was for sale.
PlusServer sells hosting to larger companies, which have more demanding support needs that small-business-focused GoDaddy is accustomed to dealing with.
The unit was bringing in annual revenue approaching $100 million per year.
GoDaddy said it planned to put the proceeds of the flip towards paying off some loans.

GoDaddy launches security service after Sucuri acquisition

GoDaddy has revealed the first fruits of its March acquisition of web security service provider Sucuri.
It’s GoDaddy Website Security, what appears to be a budget version of the services Sucuri already offers on a standalone basis.
For $6.99 per month ($83.88/year), the service monitors your web site for malware and removes it upon request. It also keeps tabs on major blacklists to make sure you’re not being blocked by Google, Norton or McAfee.
This low-end offering gets you a 12-hour response time for the cleanup component. You can up that to 30 minutes by taking out the $299.99 per year plan.
The more expensive plan also includes DDoS protection, a malware firewall and integration with a content delivery network for performance.
There’s also an intermediate, $19.99-per-month ($239.88/year) plan that includes the extra features but keeps the response time at 12 hours.
An SSL certificate is included in the two more-expensive packages.
The pricing and feature set looks to compare reasonably well with Sucuri’s standalone products, which start at $16.66 a month and offer response times as fast as four hours.
As somebody who has suffered from three major security problems on GoDaddy over the last decade or so, and found GoDaddy’s response abysmal on all three occasions (despite my generally positive views of its customer service), the new service is a somewhat tempting proposition.

Bladel quits as Council chair as GoDaddy ruled “ineligible” for election

GNSO Council Chair James Bladel has resigned, after it emerged that GoDaddy, his employer, is not eligible for office under registrar rules.
He will continue to occupy the post on an interim basis until a new election is held.
Bladel was elected to represent the Registrars Stakeholder Group on the Council back in 2013 and was elected by the Council as chair in late 2015.
However, the RrSG has just discovered that he’s actually ineligible for elected office under its charter because GoDaddy is also a dot-brand registry.
The RrSG charter states that in order to avoid conflicts of interest, a registrar that also has a Specification 9 exemption from the registry Code of Conduct in an ICANN registry conduct may not hold office.
GoDaddy signed its .godaddy registry agreement, which includes the Spec 9 exemption, in July 2015. The gTLD is not currently being used.
GoDaddy is of course the largest registrar in the industry, but it appears its ability to wield power in ICANN’s policy-making bodies now appears to be hamstrung by its foray into new gTLDs.
Bladel’s resignation is not expected to have any significant impact on GNSO Council work.
He’s been reappointed by the RrSG executive committee on an interim basis until elections can be held for a replacement. His term is due to expire in November anyway.

Schilling expects GoDaddy to return after dumping Uniregistry gTLDs

Uniregistry CEO Frank Schilling has expressed his “surprise” that GoDaddy has decided to stop selling his company’s gTLDs, but said he expects the registrar to return in future.
GoDaddy’s decision to stop new registrations and inbound transfers for Uniregistry’s portfolio of gTLDs came after the registry revealed price increases for 16 strings that ranged from nominal to over 3,000%.
The registrar told Domain Name Wire yesterday that Uniregistry’s move presented “an extremely poor customer experience” and “does not reflect well on the domain name industry”.
Registrars are of course the customer-facing end of the domain name industry, and the burden of explaining renewal price increases of 5x falls on their shoulders.
But Schilling seems to expect the ban to be temporary.
“We are extremely surprised by GoDaddy’s reaction but are pleased that our extensions are available at many other registrars who support our approach. We remain ready to support GoDaddy when they decide on a path which works for their customers,” he told DI today.
“We expect them to return,” he added.
It’s a plausible prediction. GoDaddy’s statement to DNW said Uniregistry had been cut off “until we can assess the impact on our current and potential customers”, which suggests it’s not necessarily permanent.
GoDaddy is Uniregistry’s first or second-largest registrar in most of the affected gTLDs.
But because the gTLDs in question have so few domains in them, the number of GoDaddy-sponsored domains is typically under 1,000 per gTLD.
Even in the much larger zones of .click and .link (which are receiving small price increases and will still wholesale for under $10), GoDaddy’s exposure is just a few thousand domains and it’s nowhere near the market leader.
I wonder how much of GoDaddy’s decision to drop Uniregistry has to do with the reaction from domain investors.
Ever since DI broke the news of the price increases a week ago, there’s been a stream of angry domainer blog and forum posts, condemning Schilling and Uniregistry for the decision and using the move as a stick to batter the whole new gTLD program.
For registrars, it doesn’t necessarily strike me a terrible deal.
While they will have to deal with customer fallout, over the longer term higher wholesale prices means bigger margins.
Registrars are already adding about a hundred bucks to the $300 cost of a .game domain, and the price increase from $10 to $300 of the Spanish equivalent, .juegos, likely means similar margins there too.

GoDaddy Super Bowl ad results “best ever”

GoDaddy said its Super Bowl commercial, which aired yesterday, resulted in its “best ever” Sunday for new customers.
The company said in a press release it had seen its “its best-ever Sunday for attracting new customers in the books”.
That doesn’t necessarily mean it sold more domains than its previous Super Bowl efforts, nor that it made more money.
It seems the web site builder service GoCentral, which is currently offered with a free trial period, accounted for “about half” of these new customers.
GoCentral was the subject of the ad, in which the abstract concept of “The Internet” is embodied as an irritating hipster. It can be viewed here:

GoDaddy revenue tops $1.8 billion in 2016

GoDaddy today said that its revenue for 2016 topped $1.8 billion.
In a preliminary disclosure to the markets ahead of its formal February 15 earnings announcement, the registrar said that annual revenue for 2016 is expected to come in at $1.84 billion.
That compares to $1.6 billion in 2015.
Its fourth-quarter revenue is expected to be $486 million, up from $425 million in the fourth quarter of 2015.
GoDaddy said that at the end of the year it had $573 million in cash and equivalents and just over a $1 billion in long-term debt.

Go Daddy’s Merdinger named DNA chair

Go Daddy VP of domains Rich Merdinger has been appointed interim chair of the Domain Name Association, replacing Neustar’s Adrian Kinderis.
In a blog post, Merdinger said the DNA will become more “vocal” under its new leadership and outlined three priorities for 2017 — awareness, adoption and access.
He said the DNA will share ways businesses can pursue a strategy of “blending” TLD types in their online activities, promote domains as search engine optimization tools, and make it easier for DNA members to participate.
There will be a new series of DNA Virtual Town Hall meetings to facilliate communication. Merdinger wrote:

Expect to see a more vocal DNA – whether it is at the next virtual town hall or learning about new research on domain name strategies and their business impact. As Interim Chair, I will be working with our leadership team on ways to spotlight how domain names are being used strategically and tactically to support business objectives in 2017 and beyond.

He replaces Kinderis, formerly CEO of AusRegistry/ARI/Bombora, who is now, post-acquisition, VP of corporate development at Neustar.
Kinderis, DNA’s founding chair in April 2013, will remain on the DNA’s board of directors, representing Neustar.
It’s interesting that Merdinger’s appointment to chair is being linked with the DNA becoming more “vocal”.
While Merdinger certainly isn’t a shrinking violet, Kinderis, I’m sure he wouldn’t mind me saying, is one of the bluntest, mouthiest guys in the industry.
That said, GoDaddy has name recognition and has proven to be a bit of a headline magnet over the last decade or so.
It surely has a higher profile among would-be registrants — a big part of the DNA’s audience — than Neustar, which isn’t primarily a domain name company or even necessarily primarily an internet company.
The DNA will continue to operate without an in-house staff, having dumped its second executive director earlier this year in favor of outsourcing to a trade group management company, to cut costs.

GoDaddy will pay $1.79 billion for HEG in major Euro expansion

GoDaddy is to substantially increase the size of its European operation with the $1.79 billion acquisition of Host Europe Group.
The market-leading registrar confirmed yesterday earlier reports that it was on track to buy HEG, which counts several big-name British and German registrars among its brands.
The deal is worth €1.69 billion ($1.79 billion), which breaks down to €605 million to HEG shareholders and €1.08 billion in debt. It’s expected to close in the second quarter next year.
HEG’s domain brands include 123Reg and DomainMonster in the UK and DomainFactory in Germany.
The company says it has 1.7 million customers and manages over seven million domains.
But the acquisition is more concerned with HEG’s higher-margin small business hosting business, where the company has nine data centers in Europe and the US.
GoDaddy said in a press release:

Combining GoDaddy’s global technology platform with HEG’s footprint in Europe will enable the rapid deployment of a broader range of products to customers and allow for better scale of product development and go-to-market investments across both companies.

One part of the HEG business, the $92 million-a-year PlusServer, is likely to be sold off, however.
GoDaddy said that unit “serves larger, more mature companies that require a dedicated field sales force and account management”, which is not GoDaddy’s core strength.
The deal means that GoDaddy will become the owner of the annual NamesCon conference, which HEG picked up in August for an undisclosed amount.
The acquisition is unlikely to have closed before this coming January’s NamesCon, so there’s unlikely to be many obvious changes to the 2017 event.
GoDaddy said the acquisition is being financed by debt.
HEG’s current owner is private equity firm Cinven, which paid $545 million in 2013.

GoDaddy in talks to buy massive registrar Host Europe – report

GoDaddy is reportedly talking to Host Europe Group, one of Europe’s largest registrars, about an acquisition.
Reuters today reported that the deal, should it go ahead, could be worth as much as $1.8 billion.
GoDaddy has been favored over rival bids from United Internet (owner of United-Domains) and buyout firm Centerbridge, Reuters said.
HEG is the parent company for several registrar brands. Notably, it owns 123-reg and DomainMonster, two of the UK’s largest registrars.
123-reg had over 900,000 gTLD domains on its books at the last count. HEG overall says it manages over seven million domains.
The company was acquired by private equity group Cinven for £438 million ($545 million) in 2013.
It has 1.7 million customers and 1,300 employees spread across eight countries. It primarily operates in the UK and Germany.
HEG had 2015 revenue of €269.8 million ($286.3 million) and made a loss of €55.6 million ($59 million).
For GoDaddy, the acquisition is a chance to shift its revenue mix away from domains and more towards the more profitable hosting market, according to Reuters.

GoDaddy spearheads Domain Connect spec

GoDaddy has published a new specification designed to make it easier for domain owners to quickly set up web sites using third-party site-building tools.
Its new Domain Connect Initiative is tailored for customers who do not know how to configure a DNS record and do not care to learn,according to Charles Beadnall, senior VP of domains.
While signing up for a participating site-building service, Shopify for example, customers currently have to either figure out how to manually reconfigure their DNS or get GoDaddy’s customer support to talk them through it.
GoDaddy currently receives tens of thousands of customer support calls every year related to these scenarios, Beadnall said.
But using Domain Connect, instead they will be able to simply enter their domain name with Shopify and, after authenticating with their registrar (via OAUTH), their domain’s DNS will be automatically configured to point to their new site.
This saves the customer’s time and GoDaddy’s money.
Under the hood, it works using a series of templates, authored by the service providers, which instruct the registrar or DNS provider in how to set up the domain to use the service, Beadnall said.
Due to the high risk of malicious exploitation, it’s not completely frictionless. Service provider templates must be manually pre-approved and white-listed by registrars, Beadnall said.
As the system does not involve domain registration or transfer it’s not really within ICANN’s policy wheelhouse, so the spec has instead been published via the IETF.
It has already been embraced by leading rival registrars eNom, Name.com and United Domains, as well as toolmakers including Microsoft, Shopify and Wix.
The announcement of Domain Connect was made a couple of weeks ago while I was off sick.
More information and documentation can be found on the Domain Connect web site.