Here’s how the hype cycle for high-profile startups has been working of late. A company raises a ton of money from venture capitalists, catches on with customers, generates a ton of buzz and a lofty valuation—and then suffers some kind of fall from grace, resulting in lowered expectations.
Here’s how the reality cycle has worked for GoDaddy (GDDY), the not-so new, somewhat high-profile provider of domain names and other Internet services for small businesses. GoDaddy built its business slowly, generated a ton of buzz from sexist TV ads, sold out to private equity firms, improved its products and image—and has been a plodding success since its April initial public offering.
Indeed, in a year of few tech-industry IPOs, most of which disappointed, GoDaddy is a shining example of how business and finance are supposed to work.
I wrote about GoDaddy a year before it went public. At the time, veteran Microsoft and Yahoo executive Blake Irving had recently taken over as CEO and was in the process of cleaning up Go Daddy’s act. (Irving once aspired to the top job at Yahoo. Talk about a bullet dodged.) Irving’s game plan was straightforward. GoDaddy needed more effective marketing, snazzier products, and an expansion plan into international markets.
Today, GoDaddy has 13.6 million customers in 37 countries. It is focusing in particular on making its products locally appealing in Asian markets, such as Japan, Korea, Singapore, and China. The stock went public at $20 and now is around $34.
Like any company, GoDaddy faces challenges. Its private-equity owners, who can be justifiably proud of their financial and operational reengineering of the company, will cash out at some point, putting pressure on its stock. Google, which can strike terror in the heart of any competitor, recently began selling a competing product, Google Domains. “Google has struggled previously with domain-related solutions but even small announcements” can spook investors, warns Morgan Stanley. Presumably Google could pick off customers too.
All told, it’s a joy—‘tis the season, right?—to reflect on a success story from a year dominated by turbulence. GoDaddy, the Internet’s bad boy for years, has cleaned up its act.
Blake Irving on the benefits of going public:
This article first appeared in the daily Fortune newsletter Data Sheet. Subscribe here for a daily dose of analysis from Adam Lashinsky and a curation of the day’s technology news from Heather Clancy.