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Underachiever to Overlord: Go Daddy's Bob Parsons Started Slow Then Built Two Business Empires 

By Ron Jackson
Editor/Publisher



Back in high school Bob Parsons wasn’t even on the ballot when his Baltimore classmates picked the person “Most Likely to Succeed.”  Sure, he was a bright enough kid from a good middle class family, but hitting the books wasn’t high on his agenda. “I wasn’t really interested in school and just did enough to get by,” Parsons admitted in a new interview with DNJournal.com.

 

The Vietnam War was raging when he got out of high school and as a young man with no college plans, Parsons was just the kind of guy the local draft board was looking for. With his options narrowed down to which branch of the military he would serve in, Parsons decided to enlist in the U.S. Marine Corps. That was the last place most young men wanted to be in those days. My closest boyhood friend, Ron Poole, also went into the Marines right after high school. Less that a year later he was dead after stepping on a landmine in Southeast Asia.  Parsons narrowly missed meeting the same fate.


 

Bob Parsons
Go Daddy Founder & CEO

During one excursion, I was walking point (walking first as the group leader) and was shot,” Parsons said. He received the Combat Action Ribbon, the Vietnamese Cross of Gallantry and a Purple Heart, but more importantly he gained a new outlook on life. “Vietnam was a life-changing experience. I went over there, having no idea what I was really getting myself in to. I made a promise to myself that I would work my hardest to make sure that I could be at mail call the next morning. I never looked beyond that and just took things one day at a time.” 

When his tour of duty was over, Parsons went back home to Maryland with an acute understanding that time is a commodity that is too precious to waste. He used his veteran’s education benefits to enroll at the University of Baltimore. Though his war experience had motivated him to make something of his life, he still wasn’t sure what he wanted to do. To keep it simple he decided he would just major in the first subject in the curriculum book – Accounting.

It turned out to be a fortuitous choice. Parsons found he had a knack for numbers and studied his way to a CPA degree. That opened the door to a job with a direct mail company where he quickly became one of the top representatives. The combination of accounting and direct mail experience would end up playing a key role in the building of Bob’s first business empire.

Personal computers had begun appearing in stores and Parsons was one of those who quickly fell under their spell. “I started messing around, creating different kinds of software. I had the most success developing a tax/finance program to help my wife organize the household,” Parsons recalled.  “Having the brilliant idea that I could sell the software from my basement, I started to take out advertisements in magazines, offering the software for hundreds of dollars.” Unfortunately, that high end of the market was crowded with able competitors and Parsons soon found himself almost broke. 

When he received a tax refund check that he got only because of the previous year’s loss, Parsons decided to use the money in a last ditch attempt to market his product in a different way. “I offered it at a rate so much lower than any of my competitors, I started to make money!”  Indeed I remember getting mail order offers from Parsons Technology back in the mid 90’s offering various programs at remarkably low prices. I bought a few myself and thousands of others did the same. 

Before long, Intuit, the Mountain View, California software giant (makers of Quicken) noticed the success Parsons was having. They came calling with a $64 million check in hand. Parsons took the money and realized the American Dream by retiring a couple of decades early at age 45. Parsons told us, “After the sale I moved to Scottsdale, Arizona to relax in the sun and learn to play better golf. After months of playing golf - and not really improving - I decided I enjoyed the daily aggravation of business more than I enjoyed the daily aggravation of a par-three hole!”

Within a year he had enough of his life of leisure. “I still had a strong interest in computers and computer software,” Parsons said. “I started tinkering again, but this time, I started tinkering with a team of people who had worked with me before and knew what was going on in the industry.” In 1997 he started a new company with no real business plan. This business would become Go Daddy but the original name was Jomax Technologies. 

“The name came from a road I passed on my drive into work,” Parsons said. “At Jomax, we did a little bit of everything. I tried to do education. I tried to do networks. I tried all sorts of things and none of that really worked. I tried to do website development, and we were able to turn a small profit, but it wasn’t worth the amount of work we had to do to earn that profit.” Still Parsons and company kept throwing things up against the wall and finally something stuck. “We decided to try a do-it-yourself kind of web development tool, which we named WebSite Complete. That software helped put us on the map and we are on its sixth incarnation today.” 

Though WebSite Complete kept the company from falling into a deeper hole, it wasn’t the home run Parsons was looking for. “As the sole owner and founder, I was able to make due with a small team of developers, but we soon found ourselves looking for other ways to make money,” Parsons said. In 1999 he decided to enter the domain registration business, a decision that completely changed the face of the industry. Parsons recalled, “We had looked at this industry and decided it was both over-priced and under-serviced. However, to make our mark in a field that was being run by monopolies, we had to offer a proposition that no one else was offering at the time.”

Thinking like a true domainer, Parsons decided the first thing he had to do was replace Jomax with a catchier name. “During one brainstorming session, we started just shouting out names and someone shouted “Go Daddy!” - not really as a name but just as encouragement,” Parsons said.  “When we looked in the Whois, GoDaddy.com was not taken so we registered it and have been Go Daddy ever since!” 

“Now that we had the name, we needed something that would make us distinct from the domain name registrars that were already on the market. Therefore, our “business plan” became low-cost, high-quality products with 24/7 live customer support - that was something the other domain registrars could not compete against. We priced our offering at $8.95 - considerably lower than the hundreds of dollars people originally had paid when the Internet was new, and more than 70 percent lower than the prices they were paying in 1999 when we became a domain registrar. Low prices combined with 24/7 customer support - we could not be touched,” Parsons declared. 

History bears him out. Go Daddy has been the world’s #1 registrar of new domains for three years in a row. They now rank #2 in total domains and Parsons told us that will change as well. “We anticipate overtaking Network Solutions in most domain names under management by summer of 2006,” he said. Few people would bet against Parsons hitting that goal. Go Daddy is profitable and growing rapidly. They will employ 500 people by the end of this year. Parsons keeps those employees happy with generous incentive programs and a commitment to keep the company and its jobs in Arizona rather than follow the current outsourcing trend that is sending so many call center jobs overseas.




Parsons Keeps Go Daddy on a Fast Track

Above:  Parsons at Go Daddy headquarters on one of two Harley Davidson motorcycles that will be the grand prizes in a contest for the company's customer service specialists. Valued at $11,000 per bike, the Harleys (or a comparable automobile) will be the top reward for employees that work in the GoDaddy.com 24/7 Customer Support Center.

 

Strong marketing and favorable word-of-mouth helped make Go Daddy an immediate success but Parsons said a continued drive to develop new ancillary products and services while continuing a low-cost, high-quality pricing structure played a critical role. Some professional domainers, who register hundreds or even thousands of domains, are annoyed by the product sales screens one has to wade through en route to registering a domain at Go Daddy, but it is those product sales that allow the company to remain the low-price leader. 

Based on their registration numbers, most customers obviously view navigating through the extra screens as a small price to pay to get registrations currently less than $5 for some extensions. Especially since the rock bottom prices are accompanied by a full set of features. There is complete DNS control and no charge for ownership transfer, domain locking, email forwarding, URL forwarding and parking pages with a “For Sale” sign. 

“Our multi-product catalog has also assisted in developing other companies, which are now part of The Go Daddy Group,” Parsons said. Those include Wild West Domains, a separate registrar offering a complete domain name reseller program that allows customers to offer Go Daddy products and services on their own sites. Over 11,000 resellers are in the Wild West program and the registrar now ranks among the world’s top ten registrars. 

A third ICANN-accredited registrar, Blue Razor Domains, was added to the mix late last year. Parsons said, “Blue Razor is a membership-based domain name registrar for large volume purchases, kind of like the Costco of domain registration. It has proven to be a successful venture as more and more companies register hundreds of domain names at a time.”

The Go Daddy Group also includes Starfield Technologies, a company that serves the company’s development needs (with more than 100 people on 23 different development teams) and also provides the Group’s Secure Sockets Layer (SSL) Certificate Authority. Parsons is applying the low-cost mantra to this service as well.  “As the owner of a trusted root, Starfield Technologies allows all of our companies to sell validated SSL certificates that provide onsite security to ecommerce businesses and their customers for $49.95, $850 less than other providers.” 

Another venture is Domains by Proxy, a private domain name registration service with patent-pending procedures that allow customers to keep their personal information out of the public database. With these multiple divisions, Go Daddy plans to keep improving current products and rolling out new ones. Parsons said “we recently upgraded our hosting and email account plans and we will be launching an ecommerce storefront building tool this fall that will make it incredibly easy for a small business to launch an online commerce site.”  We also offer domain name backordering and secure online storage and we are expecting to launch approximately 11 new products in Fourth Quarter of this year.” 

Domain name back ordering refers to Go Daddy’s effort in the drop catching arena, an area of the business that has become incredibly competitive in the past year. With SnapNames.com’s recent move from a fixed price to an auction model, Go Daddy is the last major drop catching service that will chase a name for a low fixed price (currently $18.95). However, with only 3 registrars going up against the dozens now employed by Pool.com, Enom’s Club Drop, Snapnames and others, Go Daddy’s success rate on high profile names is low.  

Before the registrar arms race began, Go Daddy had better luck. For example they caught Native.com for Sidney Parfait (who later sold it for $10,000) and I caught two 3-letter .nets on the same day with them. Though times have changed Parsons refuses to get caught up in the registrar partner one-upmanship currently underway. “When Go Daddy started, there were 35 registrars on the market, now there are more than 250," Parsons said.

That explosion in active credentials has been accompanied by horrible experiences with many of the no-name registrars that have been enlisted to help drop catching firms acquire names. The lack of basic domain management features, customer support, or even a functioning website has left many buyers so angry they are simply walking away from the market. Parsons said “something does need to change. The current method used by VeriSign to drop names can continue to work, but needs to be modified to make it not cost effective to add accreditations for the sole purpose of capturing names. The WLS (Verisign’s proposed Wait List Service) is not the answer to that, it simply kills ALL competition.”

Parsons said “VeriSign is attempting to take over the entire market and create a monopoly.” Though he has been at the forefront of the WLS fight he added “we have been and continue to be willing to work with VeriSign and ICANN in solving the problems that face this segment of the market, and still keep it open and competitive.” 

With respect to the new ICANN-accredited registrars that routinely ignore the governing body’s rule book, Parsons added, “ICANN does need to get some teeth and enforce its agreements. But to be fair, they have not had the sufficient resources or staff to do it. That’s why we have so strongly supported the current (increased) budget. It funds ICANN at a level necessary to pursue the enforcement the industry is looking for.” 

Whatever happens Parsons insists “Go Daddy remains committed to offering a backorder program that the average user can understand and be successful with.”  Though the top .com drops will likely remain out of Go Daddy’s reach unless a new distribution system is implemented, the company’s service does have success with less contested drops as well as expiring domains in the new extensions; .info, .biz and .us (they are also the industry’s leading seller of new .us registrations). 

Whenever we corner an industry leader like Parsons, we try to get their take on where the industry might be headed in the months and years ahead. “I think the domain name business will remain healthy for years to come,” Parsons said. “It used to be that businesses that had a domain name were considered unique. Now a business that does not have a domain name is considered incomplete. Businesses can only look to the registrars to provide them with the “legitimacy” that comes with having their own domain.”  

“We were once called the “Wal-Mart” of domain registrars and that is a nickname we keep with pride,” Parsons said. “However the domain name is just the beginning. Now customers are looking for a one-stop-shop for all their web development needs. Companies like Go Daddy that offer hosting, email, security, spam protection, customized web site development tools - those are the companies that are going to be around for the long haul.” 


 
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Editor’s Note: For those who would like to comment on this story, we invite you to make use of our Letters to the Editor feature (write to editor@dnjournal.com).


If you missed our previous Cover Story click on the headline below: 

Inside a Drop Catcher’s War Room: How eNom Arms Maker Chris Ambler Is Turning The Tide for Club Drop

All other previous Cover Stories are available in our Archive

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