Does It Make Sense To Buy GoDaddy Stock?

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By Jacob Maslow

godaddy logoOne of the bright spots in the technology IPO market is GoDaddy (NYSE:GDDY). GoDaddy has been slated to go public for at least one other time in the past but can not seem to make it happen. Well, it finally happened and it looks like the post IPO fortunes of this domain registration company looks quite bright.

I am quite bullish on GoDaddy because unlike other domain registrars, it is quite aggressive in milking as much revenue from each domain registrant as possible. If you have put up a website in the past and registered a domain with GoDaddy, you know exactly what I am talking about. You have to go through several hoops just to pay and get your domain.

GoDaddy is extremely aggressive in offering as much value to your domain registration as possible. We are talking about anything from privacy to hosting and other kinds of value added services. Compare this with traditional plain vanilla domain registrars that are more than content with the hefty profit margin that they would get from a simple domain registration.

Since domains are essentially the building blocks of the internet, expect GoDaddy’s potential future profitability to be quite rosy. As more and more businesses go online, they would of course need domain names. If they find themselves at GoDaddy, expect a lot of sales pressure for value added features which can lead to a higher profit margin for this company. Make no mistake about it, GoDaddy is not just your run of the mill domain registrar.

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