Godaddy is Sold out to KKR and Silver Lake

Godaddy is sold to KKR and silver lake

The Hosting Industry always gives us surprise. GoDaddy Group Inc — The world's largest Domain registrar and web hosting provider agreed to be bought by a private equity consortium led by KKR and Silver Lake for $2.25 billion, including debt, people close to the situation said on Jul 1, 2011. This is the largest business transaction after bluehost acquired by EIG.

Godaddy Overview — Since founding the company in 1997, their founder and CEO Parsons has seen GoDaddy grow into the world's largest Web hosting provider, serving more than 9.3 million global customers and managing more than 48 million domain names. GoDaddy has over 3,000 employees, with roughly 500 dedicated to product development. If you like to know more about their founder, you can refer to this Godaddy CEO article.

KKR Overview — The name might be new to many people since they have not attended any web hosting related business. KKR began operations on May 1, 1976 as a private equity firm specializing in leveraged buyouts. At that time, the notion of a buyout was not well understood. KKR actually stands for three of their founders' names, Kholberg, Kravis and Roberts

Silver Lake Overview — Founded in 1999, Silver Lake is a global private investment firm with approximately $14 billion in assets under management. With offices in Menlo Park, New York, London, San Francisco, Hong Kong and Tokyo, Silver Lake employs over 90 investment professionals across its strategies.

How will Godaddy adress their existing business?

Their founder Parsons, who is currently chief executive officer, will become executive chairman of Go Daddy, while current President and Chief Operating Officer Warren Adelman will move into the role of CEO. As you see, their founder will stay in the new group. I'm sure he will still play a main role in hosting business but just downgraded from CEO to CEC :p

What would be the change in future godaddy business?

Well, as you see, it's over billion money deal. I believe their new owner will invest more to improve their service/products in order to be more profitable. From what Parsons explained, their business growth has been slowed in recent years, so godaddy actually left a big chanllenge to their new owner. In the next 2 or more years, I believe their service level will be promoted and attract more people to sign up.

How do we think about the web hosting industry?

The sell and purchase is actually very common in the commercial society, however there're still many people don't like such transaction especially when it's happened to the industry leader — the most well know brand. In my opinion, we should not only focus on what the owner is but what kind of service the company could offer. Basically, it's not my or your company so why should we pay so much attention to their actual business? As long as the owner think it's good deal, then it is. He can actually earn more by doing so. It's still business.


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