If you’ve heard of GoDaddy, you most likely have seen one of their controversial marketing campaigns; notably the voluptuous women driving you one step closer to making the wrong decision in your choice of web hosting service provider, as seen with the super bowl.
However, today we’ve chosen to write about GoDaddy due to their sheer dominance in the domain name registrar market. As of today, the 8th of January, they hold a total of 36.5 million active domain names. With the Internet housing 148 million domain names GoDaddy has an estimated market share of 24.5%, towering over competitors. Just to give you a better idea of this monopoly, Network Solutions – the second largest domain name registrar in the US – holds 3.2 million active domain names, which translate into a measly 2% market share (12.25 times smaller than that of GoDaddy). It is easy to see how segmented the market is with 267 domain name registrars existing all over the world.
Let’s talk about how much the company actually generates. If we take their minimum monthly charge per domain name of $2.99, and apply it to the 36.5 million domains registered, we arrive at monthly hosting revenues of around $110 million. Let me remind you this is taking the minimum monthly charge!! More so, this fails to capture multiple other revenue streams that GoDaddy has. Accordingly, we estimate GoDaddy will effortlessly make in excess of $1 Billion in revenues per annum.
So why is GoDaddy so dominant in this market? The founder of GoDaddy, Bob Parsons, received $2.25 Billion in investments into GoDaddy in 2011 from three of the largest private equity firms in the world (KKR & CO, Silver Lake Partners, and Technology Crossover Ventures). Following this deal, Bob Parsons has held onto his controlling interest in the company. Though we do not know exactly the extent to which Bob Parsons sacrificed his ownership of the company, we do know Parsons continues to be the largest single shareholder.
Nevertheless, in light of all the glory GoDaddy has raked in, here at BMAS we have never used GoDaddy! Why? We are truly grateful for our peers who advised against using this service, as they are notoriously bad for their customer service, and this factor is too important for a thriving enterprise. With BMAS having to ensure over 50 websites are running efficiently, we’ve thoroughly enjoyed using our trusted hosting registrar United Hosting. They are absolutely fantastic, any problems we’ve encountered have been solved in less than 10 minutes, and their polite representatives are easy to find on theirs sites and are just an email away; our business would not be where it is today.
It is important to us to be as responsive as physically and technologically possible with our clients, and others have failed in this due to poor support teams as seen with companies like GoDaddy. This is a clear sign that just because they are big, it does not make them great. The .com and .net TLDs reached a combined total of approximately 121.1 million domain names in the fourth quarter of 2012. Make sure that if you are going to be registering soon; think hard about whom you want looking after it! Find out more about GoDaddy.