Fewer business segments and high-level aftermarket data.
GoDaddy will now report just two business segments
GoDaddy previously had three business segments for reporting: Hosting & Presence, Business Applications, and Domains. Going forward, it will have two segments called Applications & Commerce and Core Platform. Here’s a breakdown of the old and new segments:
I think it’s a warning sign when a company changes its reporting like this. It makes me think one part of the business is facing headwinds and this will be obfuscated by tucking it into another. I also don’t like how the domains business will now be lumped in with part of the hosting business, while another part of hosting (Managed WordPress) will be part of the other segment. Technically, WordPress is an application, but I think most people who choose it are just looking for a hosting provider. People have a choice to use the free WordPress CMS on a regular hosting plan or a so-called Managed WordPress plan.
The domain aftermarket is sizzling
GoDaddy reported some high-level numbers about the domain aftermarket.
First, it says everyday entrepreneurs purchase 80% of aftermarket “retail inventory.” This inventory excludes domain auctions, where domain investors scoop up most of the inventory. The company also says that the 24-month lifetime value of a new aftermarket customer is 15 times more than a new domain customer. This makes sense because the cost of entry into this cohort is more, so they are primed to spend more money on their online presence. (The lifetime value does not include the initial domain purchase.)
The company also shared that aftermarket growth in terms of units sold has grown by a 29% CAGR since 2019. It also breaks this out by size of transaction. GoDaddy’s presentation has very few y-axes, so it’s hard to get granularity here. But the average selling price is going up and GoDaddy is selling more domains: