Web-hosting firm GoDaddy is realizing that it must change its tune to attract small businesses.
Microsoft and Yahoo veteran Blake Irving didn’t see much to phone home about when he first considered running GoDaddy, the web domain-name provider. At best he saw a mixed bag of opportunities at a well-known, if poorly understood, company. GoDaddy had quirky marketing and attentive customer service but weak product development. It boasted an impressive footprint in the U.S. yet had made virtually no effort to do business beyond its native shores.
However, the biggest opportunity by far was in changing how the Scottsdale-based company addressed its customers. Irving says women run 58% of small businesses in the U.S. Yet GoDaddy had built its reputation on a series of Super Bowl TV ads beginning in 2005 that were overtly sexist. The attention-grabbing spots were blatant attempts to generate chatter about a product that its founding CEO, Bob Parsons, thought was boring. And while the strategy worked gloriously in making GoDaddy the subject of water-cooler conversation everywhere, “never has a company had as big a gap between what the ads say and what the company is,” Irving says.
Now barely more than a year into his tenure as CEO, Irving is well on his way to changing the company’s positioning — and not just in its marketing efforts. Indeed, despite having been purchased by private-equity firms led by Kohlberg Kravis Roberts and Silver Lake Partners only two years ago, GoDaddy is already expected to go public sometime this year. Irving is transforming GoDaddy by focusing the company on very small businesses and their unique digital needs. “Microsoft thinks of small business as 50 employees and under,” says Irving, who worked at the software giant for 15 years. “Our definition is five or under. Eighty-five percent of businesses in America have five or fewer employees,” he adds — and most of those are sole proprietorships.
With 12.1 million customers, who pay an average of $125 a year for GoDaddy’s services, the company is neither young (it was founded in 1997) nor small. Irving has been using a combination of cash flow and debt to bulk up. He has made five acquisitions, each designed to provide a digital service that gives tiny companies the prowess of larger entities. Locu, for example, lets merchants “get found” on multiple web services like Google, Bing, Yelp, and OpenTable. Ronin is an invoice-generation tool. The former Outright, a pre-Irving acquisition, is now GoDaddy Online Bookkeeping. Other acquisitions provide “buy-it-now” functionality (à la eBay) and advanced web-hosting capabilities.
With fresh capital also comes a revamped management team and a strengthened focus on product development. Irving says teams first addressed basic improvements like simplifying GoDaddy’s website-building tool and streamlining the process for adding orders to shopping carts. The company also increased the number of currencies it accepts from one to more than 40.
It helped that Irving, despite his big-company roots, was something of an Internet tinkerer himself and already a GoDaddy customer. Before becoming CEO, he owned 49 domains managed by GoDaddy, including stopdoingthat.com and startdoingthat.com. (Neither is a developed site today.) In fact, Irving believes that opportunity lies in the solo operator who is “established and content” but has no website.
Nowhere are the company’s changes more apparent than in its advertising. This year’s Super Bowl ads focused on entrepreneurs, not eye candy. One spot featured an engineer who quits her real job in front of millions of viewers to become a puppeteer. It ended with the tag line “Build your dream.” (Implied message: Get a website.) And just to show that GoDaddy could still be quirky without being sexist, another ad featured Danica Patrick, the racecar driver who had starred in its racy earlier ads, in a bodybuilder costume, running through the streets with a pack of real, mostly male bodybuilders. Their destination: a tanning salon run by a woman who eagerly anticipates the arrival of her new customers. “It’s go time,” she says as they press up against the window. It could well be go time for GoDaddy too.
This story is from the April 28, 2014 issue of Fortune.