Domain has and always will be an entry point for many people. To the extent that the other entry points shift power, control and choice away from GoDaddy to Shopify, Wix, Squarespace, Amazon or Google, those are the existential risks that GoDaddy faces. - Former SVP, Domains at GoDaddy
GoDaddy (GDDY) is the largest domain registrar globally. The business model is simple: acquire domain customers online and upsell higher-margin ancillary services like hosting, email and website building software.
Over the last decade, the company has spent $2.4bn+ in advertising to build drive traffic and resell domains like .com and .co.uk. Reselling domains is a commodity business if it’s standalone. However, GoDaddy’s ability to upsell high-margin ancillary services drives a higher LTV / CAC relative to standalone registrars.
The chart below shows how a customer who adds a website on top of a domain has ~5x the recurring revenue and 43% of the churn level as a customer that only buys a domain. A customer that adds both email and a website with a domain generates 10x more recurring revenue with a third of the churn level.