A reader inquires about GoDaddy’s .biz price jump.
Dear Domain Name Wire:
Godaddy recently raised its prices on .biz to a published $14.99. Even going through an account manager the price is still over $10. GD has definitely been getting less price competitive, but this one seems completely out in left field. Did prices change at the registry level? Or something else? – Michael Z.
Good question, Michael. .Biz registry NeuStar charges $6.42 for domains, the same price VeriSign (VRSN) charges for .coms. I asked GoDaddy about the price jump, and a company spokesperson said:
“We frequently test the price of all the TLDs. At this time, .biz has been priced at $14.99.”
In other words, there’s no rationale other than GoDaddy trying to make more profit. You can’t fault them for that.
My guess is GoDaddy is considering raising prices on a number of domains. It is testing the waters with .biz to see how it affects business. If 10% of .biz owners transfer their domains out and they get 10% fewer new orders, then GoDaddy still ends up making more money (excluding profit from add-ons such as webhosting.)
Keep in mind that GoDaddy’s customer base is becoming less sophisticated. It’s not just domainers, it’s mom and pops who own a domain or two. Most of them won’t bother transferring their domains for a $5 a year price difference. (Need proof? Consider all of those people who still pay Network Solutions $35 a year). And hey, the company has to pay for those Super Bowl commercials somehow.
When VeriSign increased its prices on .com 42 cents to $6.42 earlier this year, GoDaddy raised prices $1.04. I doubt it had much of an impact on business (other than the bottom line).
For comparison, Moniker’s published price for .biz is $10.95 and 1&1 charges $7.87.
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M. Menius says
“Most of them won’t bother transferring their domains for a $5 a year price difference.” – Andrew
I agree, Mom & Pop won’t transfer out for $5.00. .biz is currently over 1.9 million registrations worldwide. Many of these are in large portfolios, but many more are in daily use by small companies.
Strangely, .tv and .mobi are being offered at a discount for the moment after having been sold at relatively higher prices in past year. GoDaddy testing the limits of the market perhaps?
Joshua says
It is still amazing that some people are still willing to pay $35 yr for a domain name. I can’t fault GD at all for raising its prices to raise some capital. Surely this is a ever present tempation for all registrars. In general, domains have come down in price dramatically over the past few years, giving every one a chance to take the first step towards creating a website. Plus even at $35, they are still a very vheap annual investment in your website or business. I agree with M. Genius, not everyone buying domains is a ‘bulk domainer’ – regular people are increasingly securing them for their personal and business use. As good .coms become harder to secure, the popularity of alternative TLDs should continue to grow. Pricing changes are indeed a good way for registrars to “test the market” for potential backlash.
Thanks to the posters for the ongoing ‘domain industry analysis’.
Joshua
1&1 Internet
Andrew says
@ Joshua – I think a lot of the people paying that much for domains don’t know how to do a transfer, or they work for a big company and just “trust” one of the original registrars more than someone like GoDaddy.
I think segmentation is a good plan. Look at Dotster, which has $15 domains but then has affiliated registrars that cater to domainers with $8 domains.
Joshua says
I think you are right! Unfortunately for domain owners, not only are there some “hoops” to jump through in order to appease ICANN, but individual companies also vary how easy they can make it for transfers to occur. Nonetheless, I think it is still a good time to be a new domain buyer since there is so choice among competitors.