My Thoughts on Go Daddy’s Acquisition of Afternic

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I haven’t had much time to digest the news about Go Daddy’s acquisition of Afternic, but I want to share some of my thoughts and lingering questions in the wake of this news. I think this is going to impact domain investors in many ways.

You are welcome to share your thoughts or questions about this news in the comment section.

– Go Daddy did more than just acquire a leading aftermarket platform. The company is also getting a solid team of domain industry professionals who are experienced in selling domain names in the aftermarket. They know the value proposition of domain names to SMBs, and that is going to benefit the company in many ways.

– I often see negativity towards Go Daddy in articles I write about the company. People are going to have to get over their animosity, because this acquisition is going to help domain investors sell domain names in the aftermarket.

– I am curious about how this deal is going to impact my ability to get good deals on BuyDomains owned inventory.

– I wonder what role the new Afternic redesign played into the acquisition. I also wonder how the deal came about, but I am sure that information won’t become public.

– I wouldn’t be surprised to see other acquisitions from Go Daddy and/or NameMedia in the wake of this deal. I am not going to speculate though.

– I wonder how this deal is going to impact Escrow.com. I believe aftermarket deals at Go Daddy are run through Escrow.com now, and Afternic has an escrow service. *Update – Paul Nicks of Go Daddy had this to say about escrow.

– Perhaps Afternic listings will soon be able to have auction functionality with Go Daddy’s technology.

– Two companies to watch that may be impacted by this deal are Sedo and Thought Convergence. I say this because Sedo is generally considered the most direct domain marketplace competitor to Afternic and I think Thought Convergence has the people and technology to emerge as a stronger competitor.

– Go Daddy is now going to have an east coast presence, and perhaps this will lead to other partnerships and involvement in the tech community on Route 128. *Update – I was reminded about Go Daddy’s acquisition of Locu, a company with an office in Cambridge, MA.

57 COMMENTS

  1. Alot of our sales to corporate end users were coming via afternic, after they were led from godaddy to the site. Godaddy probably figured out they did not have the ability to close the sales via afternic, but were able to generate leads. Personally our business with afternic is up 1000% this year, as most of the domains are with Godaddy. These are end users that want to talk to real people, and buy domains on behalf of their company. The escrow service is damn quick, if you choose paypal with a godaddy to godaddy transfer, everything can be done the same day, including paypal payment.

  2. I hope to see much faster settlement of a domain deal.

    Domain transfer process should be much faster(instant just like the Push) and giving peace of mind to a domain seller,eliminating the hassles of tranferring a domain from one registrar to another wasting one week on the domain transfer process.

    Instant verification of domain transfer must be possible by Godaddy/Afternic as escrow service provider.

    So that faster payment should be made to the domain seller,which is the seller’s most important consideration.

    I think it’s good news for those who want to sell their domains on the secondary market via Godaddy.

  3. Godaddy’s current leadership is relentlessly, literally, making customers “scared” by their marketing. Meanwhile, their spokeswoman is the most trending for two days straight on the internet, and remains elusive regarding Godaddy. They continue to miss clear opportunity. This kind of mistake is un-excusable for Godaddy or business. If they do the same with the recent acquisitions, it would create a vacuum for other companies to take the lead. It’s Go Time, let’s see what they do.

    • Aaron, what do you mean? I’m just not following.
      What marketing is scaring people? The superbowl stuff?
      Does their spokeswoman mean Danica?
      Remains elusive how?
      What clear opportunity are they missing?

      Sorry, just want to understand your points.

      Thanks,
      Higgs

    • Relax cuz* or Jean Claude will do the splits on your bean bag. . . . seriously though I think they know what they’re doing. A campaign is a campaign and some times you lose a sponsorship or a spokesperson. Move along

      *Aaron is not really my cousin or of any immediate relations.

    • Higgs,
      To answer your questions:
      What do you mean? I’m just not following. What marketing is scaring people? The superbowl stuff?

      You kind of answered my point when you mention the Superbowl stuff. Both the Superbowl and Van Dam campaign are “scary” for different reasons..I did not make up that term for these campaigns, the term “scary” is being widely used and I happen to agree.

      Does their spokeswoman mean Danica?
      Yes, Danica.

      Remains elusive how? What clear opportunity are they missing?

      Godaddy has done nothing to capitalize on Danica’s popularity. Between the Superbowl and the Van Dam campaign she has continued her popularity growth with out a direct Godaddy marketing campaign. Godaddy needs her, she does not need Godaddy. Her demographic fan base is unique, very large, crossing all ages, sexes, sports etc. A marketing dream for any company. NASCAR understands that they are bigger and better with Danica, Godaddy does not. Also, her sport takes teamwork, flexibility, focus, hard work, risk and so many other things that relate directly to Godaddy’s target market, “small business”. Instead of capitalizing on Danica, Godaddy is doing more to promote alarm systems and security products for “small business’s” than their own products and services.

  4. The one thing I think will be a huge plus (hopefully) for the small domain investor will be more equal representation on the Afternic platform. Judging by past sales reports, 80-90 of sales on the Afternic platform were from BuyDomains inventory? Seems like the scales were tipped way in their favor and made me suspect of how much their brokers pushed their inventory as opposed to other inventory? Maybe this will level the playing field somewhat..

  5. Here’s what Paul Nicks had to say regarding escrow:

    “We can tell you there is not a plan for GoDaddy to enter the escrow business. You’ll see Name Media handling the escrow transactions until that service can be transitioned to Escrow.com, which as you know, GoDaddy uses currently or another escrow provider.

    DLS listed domain names will continue to operate as is.”

  6. If escrow service is handled by a separate entity,I am afraid it may not be said to be “super-simple” or convenient for a buyer/seller. I guess sellers and buyers want an integrated service from one entity from beginning to end. That’s my humble opinion as a small domainer.

  7. This will be great for investors. The discounted premium pricing alone should get us excited. I wonder if GD will kill CashParking in favor of SmartName. Congrats to Paul and the other folks at GoDaddy for making this happen.

  8. They should go buy 4.cn and escrow.com
    They’ll eventually go public
    Someone needs to develop a platform to that allows one to post to 100’s of auction sites for a flat fee or low % commission. That’s where a good niche lies and will help in creating a lot more secondary market sales of domain names. Real Estate industry has a few platforms that allow for listing homes on multiple sites for free that people and brokers use.
    Not many in this industry are going to be able to compete with GoDaddy as they keep scaling. Think Amazon & Google for domain names.

    • I don’t think GD should buy Escrow.com———professionally it might be a conflict of interest and for accountability there should be separation of duties but I could be wrong.

      However, I am thrilled with GD’s development and am looking forward to an incredible sales platform in 2014ish.

  9. Knowing the main reason of acquisition could help to predict the next step for Godaddy. Do they have a plan to keep expanding and killing the competitions? or this was just a step forward for growing.

  10. Elliot,
    Have bought several domain name from Buydomains usually at negotiated prices since pricing them is purely arbitrary.Do you think this will continue with Godaddy since their responses are mostly scripted.

  11. Mergers and acquisitions of this magnitude never serve the industry, just the executives involved in the exchange. But hey, it’s go-go time, for the customers who want fewer options.

  12. Elliot,

    Curious if you can elaborate on whatcha mean about impacting your ability to get names via BuyDomains.

    i.e., price inflation? More buyers competing for the same names? etc?

  13. Whatever.. there are those naysayers who will always find something to harp about. Let’s face it, you can banter on about other registrars, but Godaddy still delivers the best customer service out there. Much better than any registrar, including any niche type that cater to so called domain investors, experts and would be developers/programmers, etc,.

    • How is buying and selling a domain name or any other asset stealing? It’s called speculation. And, Not everyone can do it successfully just like with stocks, homes, used machinery or whatever they choose to try to buy and sell.

    • Come on Elliot, you know too much well the economic scenario to don’t understand that Domain Capital is not the way, at least not for medium-low valued domains; it is not a smart, simple, fast, useful platform, permitting buyer to take posses of a good domain, financing it with few simple clicks.

      • Why would any company offer financing for medium to low value domain names? Most domain names that are considered by their owners to be “medium-low valued domains” are probably worth nothing in reality, and I can’t imagine why any company would consider financing those. The risk would be far too great.

        In my opinion, if you need financing options for low value domain names, you probably shouldn’t be buying them.

      • Excuse me, but…what are you saying Elliot? 🙂
        I am speaking from the point of view of a final user, not an investor.

        Doesn’t make sense for a webmaster or a mom pop business take a domain, let say, priced at $ 10,000 with small monthly payments?

        Doesn’t make sense for a little business expanding their activity with a, for instance, a generic domain priced at $ 20,000 paying in installments? Have you an idea how fastly a company will go to bankruptcy if they pay everything cash? All investments cash?!? Paying cash is not the way to run a company….also for investments, like must be considered of course domains

        • First off, I am pretty sure Domain Capital would give a loan on a $25k domain name if the buyer qualifies.

          In my opinion, there is no way to determine the real value of a domain name, and that makes it very risky for a company to offer loans for them. The more risk, the higher the interest rate of course.

          A domain name could be worth $25,000 to one person and worth much, much less to everyone else. If a company gives a loan on a $25k name and the buyer defaults, they are stuck with a low value and illiquid asset. At least with a home or car the company can liquidate it quickly when necessary. With a domain name, that $25k name might really be worth $1k to another buyer.

          I assume you would want more competitive rates than what is currently offered. I don’t see how it would be possible to give out higher risk loans on domain names at better rates.

          There is a reason why financing rates for exceptional domain names are so high, and there is a reason why most traditional financing companies wouldn’t touch this market with a 10 foot pole.

        • “In my opinion, there is no way to determine the real value of a domain name, and that makes it very risky for a company to offer loans for them”.

          Exactly, financing with a middleman CAN NOT WORK in the domain industry, because the domain has value ONLY for the buyer, the middleman, if the buyer stop to pay, can’t sell fastly the doamin, so they are USELESS for the domain industry and they are reluctant to make agreements.

          Domainers semm to not understand how MUCH MONEY THEY ARE LEAVING ON THE TABLE (AND HAVE BEEN LEAVING FOR YEARS) without platforms for domain financing without middlemen, simple platform, trusted but simple, fast: few clicks and clear standard agreemnts.

        • You never know… Godaddy is a great financer, every time they give yo ua coupon for a new doamin for 1 buck they are financing you 🙂
          Maybe they are planning to be the middleman that can finance domain acquisitions and selling domains in a fast manner whenevr buyers will stop to do payments.

          I believe very little in this hypothesis, but you never know 🙂

        • Infact I said I don’t think Godaddy will go to finance domain acquisitions, neither on TDNAM nor on “most valued” domains on Afetrnic.

          But trust me, that so called loss leader strategy could bring Godaddy to double in 6 months the number of their customers if they apply it to the financing issue

      • And if you think borrowing money is the answer to business success go and revisit 2008 financial collapse, which we are all still living in. There are businesses buried everywhere that were over leveraged.

      • I quote my self only to adding that I can also agree to take the payment in installments also without asking an interest rate, may be because I like the buyer’s plans and/or I want avoid to pay too much taxes…etc.

        It is a simple problem of cash flow, fro the buyer: the first, most important thing to run a business (without consider the fact that, maybe, the domain could also work not well, not bringing the expected results to the buyer: with financing, of course, the damage would be less).

      • If the buyer can’t get a traditional bank loan or home equity loan, there’s probably a reason for that, and I can’t imagine a company would have that big of a risk appetite to finance the purchase of illiquid assets.

        In any case, this topic has nothing to do with Go Daddy’s acquisition of Afternic, so perhaps it’s better suited for elsewhere.

      • “if the buyer can’t get a traditional bank loan or home equity loan, there’s probably a reason for that”

        Yes, often it is called “bankers’ plans to take posses of the entire world economy”. Is the same reason of the financial crisis.

  14. Sorry, I d’dn’t see Domain Capital is your sponsor.
    Okay, you’re excused 😉
    Doamin Capital can work, but it is a drop in the desert

  15. I used Zenscrow.com and was the seller.

    I worked with the buyer and did 3 month term on it.

    Worked just fine. Happy buyer. I was happy.

    So yes there are options.

    Moniker has an offering as well and payment options.

    • That doesn’t sound like financing to me.

      To me, financing would be where a financing company pays the seller in full at the time of the deal and the buyer pays the financing company for the domain name plus interest over time.

      Did Zenescrow fund the purchase and finance it for the buyer, or did the service allow you to give the buyer terms (ie, pay over time).

      When you finance a home purchase with a mortgage, the home seller is paid in full at closing. They don’t have to wait for 30 years to be paid in full 🙂

    • That is not the point. We all know how finanicing happen in the real wolrd. This is not the real world, and there are chance to follow another more productive way.

      What matter here is permitting the buyer to take the domain in a simnple manner paying in installments. Period.

      I, the seller, can be the financing company. If I accept the payment in installments, the buyer achieve his aim. That is all that matter for the buyer. So that is the way: giving the buyer the option to take the doamin paying in installment with a simple procedure. With or without the middleman. The fact is that the middleman make the process slow, complicated and probably more expensive for the buyer.

    • They are only reasonings about what lacks in domain industry and, in particular, on buying/selling platforms, so also what lacks on Afternic or Godaddy (as well as on Sedo or all the others platforms)

  16. Elliot- just showing things can be completed.

    Create a win, win. Yes you are right. Remember how u started out Elliot. And hey its actually a good feeling knowing a buyer is happy because I worked with him.

    • There’s absolutely nothing wrong with a payment plan in any way. If offering that can help close a deal, that’s excellent, especially because if the buyer only pays half, you keep the money and the domain name.

      My comments were made because I think it’s different than what the other poster was talking about with respect to financing, so it’s sort of unrelated.

  17. There all ready options out there for payment options and over time. You don’t need to spend 25k on a name. I done a Zenscrow deal for 3300 I believe.

    Not sure what your getting at ? If you are planning to walk into a bank one day with domains- that’s like 20 years away. If it ever happens.

    If the mom and pop wants to chat about brand, flyers and print but dosent get the powers of domain names then that’s there loss. Register new extensions or .us or .info

    Elliot tried helping u. I gave 2 examples. Maybe Elliot do a current blog post on this topic.

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