The Street.com reported that AOL’s recent announcement of its plans to begin offering free personalized domains to internet users from September 2006, has adversely affected Godaddy.com’s IPO plans. In fact Godaddy has announced the shelving of the IPO plans.
Godaddy revolutionized the domain name regstration industry by offering low priced domain name registration via the web (According to Godaddy, their prices are up to 70% lower than the some of the competition), thus making personalized domain names affordable to millions of internet users. I count myself as one of their satisfied customers, having been with them for the past two years. Godaddy has grown exponentially with their unique strategy and is now the world’s largest domain name registrar.
Naturally when I first read the news I was apprehensive about the company’s future without the IPO.
Fortunately my fears turned out to be unfounded as I soon read on Bob Parson’s blog (Bob is the founder and CEO of Godaddy.com) his rationale for the change of plans and more importantly that Godaddy has always been cash flow positive operationally, an important point if it is to continue as an independent business.
However without the IPO, whatever expansion plans or diversification strategies that Godaddy had planned to implement with the IPO money would have to be shelved also. It remains to be seen how that will affect Godaddy’s competitive position in the long term.