If you’ve always wondered how GoDaddy really works and makes a profit, it’s actually pretty simple. Many newbies to the online business world have probably encountered GoDaddy, if not simply from their Super Bowl and NASCAR commercials, then from searching for options for making a domain. GoDaddy is the popular place to go for those that need to take out a domain and make a website for their company.
Being the leader in domain registration services, you may think that’s all they do to make their money. They actually do quite more and it’s obvious by their 2014 filing for IPO with a placeholder value of $100 million. Here is a look at what GoDaddy is really doing to make money seeing that their IPO valuation is at almost $4.5 billion.
How does GoDaddy see such a huge profit?
The company of GoDaddy makes about $1.01 billion in revenue due to their domains, along with their hosting and presence and business applications. Domains are responsible for over half of their revenue due to new domain name registrations and domain name renewals. Domain privacy, backorders, advertising revenue from parked domains and fee surcharges to ICANN also contributes to this huge chunk of their revenue.
The registration of domains changes often because they charge different amounts depending on the type of domain. A new domain can cost around $9 per year for a 2-year contract if you go with a “.com” address while a “.org” or “.net” domain may cost more like $24.99 per year.
Profits through their hosting
The next item that makes GoDaddy profitable is their hosting and presence products. This would be their website building products, their SSL certificates, their SEO and even the SiteLock website security along with private IPs.
More items contribute to their second highest profitable business element but these are the main items being purchased. GoDaddy offers shared hosting, VPS and dedicated servers at just a few dollars per month per domain and beginners can access site building tools to get set up quickly.
Business applications
Lastly, GoDaddy makes their money through business applications like email accounts, online data storage, email marketing, online bookkeeping and online payment systems. Products offered include Microsoft Office 365 for around $5 per month per user and email marketing service at around $10 per month for 1,000 subscribers.
GoDaddy tends to up-sell with their related products, upgrades and cross selling to make even more. They are sort of a pro at this task and it’s what makes them so profitable. You may spend $10 to register your domain and end up spending $150 with all of the add-ons like security features and hosting.
If you’ve ever wondered how GoDaddy makes their money, now you have an inside look. They don’t just offer domain names and they do up-sell quite a bit.
This is a look at how GoDaddy makes their money. It’s not secret, GoDaddy does very well and they are a highly profitable company.
