Here’s why GoDaddy – Donuts deal makes a lot of sense

Donuts sold its aftermarket portfolio and enters into expired domain partnership.

This weekend, Elliot Silver broke the news that Donuts sold its aftermarket portfolio of domain names to GoDaddy (NYSE:GDDY) and will also begin sending Name.com’s expired domain names to GoDaddy Auctions.

The first part of the deal didn’t surprise me much. I had predicted it, in fact. Donuts got the portfolio of 200,000 domain names when it acquired Rightside. These were mostly .com domain names, so it didn’t make sense for a new top level domain company to hold onto the domains. GoDaddy was one of only a few potential buyers for the portfolio.

The expired domain deal makes sense in the larger picture but was a bit of a surprise. Rightside owned NameJet until it sold Enom to Tucows. So that relationship no longer existed, freeing up Name.com to strike a deal with a new expired domain partner. I can see why GoDaddy wanted the expiry stream in conjunction with its portfolio purchase.

I spoke with Donuts SVP of Sales, Matt Overman, about the deal. He explained that the expired domain deal with GoDaddy won’t start until 2018. Name.com names will continue to flow through NameJet until then.

This must be bittersweet for Overman, who led NameJet for many years.

Overman reiterated that this is only a deal for the aftermarket business.

“The aftermarket part of our business was less strategic to us, but we’re committed to Name.com,” he said.

I imagine Donuts also gets a boost from establishing a larger relationship with GoDaddy, the largest registrar by far and one that can help move the needle on registrations of Donuts’ new top level domain names.