GoDaddy CEO talks IPO, Google and Janet Yellen
GoDaddy (GDDY) is known for its risque advertisements, but actually sells fairly boring web hosting and management services to small businesses. It sometimes is referred to as a Silicon Valley tech company, even though it’s based in Arizona. Today it went public, despite the fact that it continues to be majority-owned by private equity firms.
So we spent some time on the phone with CEO Blake Irving, who joined GoDaddy in late 2012 after earlier stints with both Yahoo (YHOO) and Microsoft (MSFT). He tells us about his goals, Google’s impact on the business and how Janet Yellen could have delayed the GoDaddy’s IPO.
FORTUNE: You have said that IPO day is just a singular day, and that what you really need to do is deliver quarter-after-quarter. Deliver what?
Irving: From the business perspective, we need to make sure we’re delivering our own expectations of growth for the top-line and EBITDA and cash-flow. From the customer perspective, we need to keep growing our base , offering new products and improve things we’ve already built. And do all of that with good consistency.
GoDaddy already has deep penetration among small businesses. Does that mean we should actually expect slowed top-line growth?
No, because that deep penetration is mostly in the U.S. What small businesses need is a global phenomenon and is remarkably homogeneous. We only entered the global market 15 months ago, and are now in 37 different countries and in 17 different languages — and, when it comes to global, we also think of different payment types, currencies, imagery, vernacular, local phone numbers, etc.
We have a little over 9 million customers in the U.S. and around 3 million outside the U.S. Most tech companies have more customers outside the U.S. than inside of it, so there are still very large growth opportunities for us on the top-line.
We also currently service very small businesses, but there is nothing stopping us from broadening our suite of services to move more up-market to a suite of customers that would still be considered small business, but larger than who we currently serve.
Last summer, Google formally announced that it was entering the domain registration business. How has it impacted GoDaddy?
There’s been no business impact at all. We’ve watched very carefully and have seen all of the gTLD [generic Top Level Domains] that have been applied for and contested, and Google (GOOG) hasn’t been bidding. It did buy .App, but overall seems to have lost interest in the space. I think Google originally became interested in this around four years ago and, at the time, it made a lot of sense because no tech company with great products was in the domain business. But we’re doing that now, which gives Google less of a reason to be there.
You originally filed for the IPO last June, and were planning to go public in Q3 or Q4. Why the delay, and why was now the right time?
I’ve been in the business for a little over two years, and we’ve made a ton of progress in the time. We’ve built out the leadership team and have delivered against a strategy. So now we feel like it’s time for us to start putting points up on the board, and this largely is a branding event for us in which we can show that there is a big business behind the name.
As for timing, a lot of companies sat on the sidelines waiting for Alibaba’s (BABA) IPO, and then the next couple of months were pretty choppy in the markets. We just wanted to launch in the best possible window. In fact, we went so far as to make sure we’d hit the road after the FOMC meeting happened, so that we’d know the results. There was a lot of noise around oil prices and unemployment and the strength of the dollar. If Janet Yellen was going to provide language that would strongly indicate something like significant and imminent rate hikes, we wanted to know about it.
Had she done so, would you not have priced last night?
It’s possible, depending on what the exact language had been. We didn’t want to be on the road show with investors who are thinking about what they’re going to sell rather than what they’re going to buy.
Three private equity firms still own a majority of your company, post-IPO. Do you have any insight into their future plans about holding or selling?
No, I don’t. But I do know that they not only didn’t sell in the IPO, but they acquired more shares. So they think it was a pretty good deal.
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