Develop in house, sell cheap, and make money on high sales volumes. That's the philosophy at GoDaddy, which just added e-mail marketing software to its portfolio of value-added services.

by Alex Goldman ISP-Planet Managing Editor [April 5, 2004]

At Scottsdale, Ariz.-based GoDaddy, Bob Parsons, who is president and founder, retains the simple philosophy that made Parsons $64 million in his eponymous company, Parsons Technology, which he founded in 1984 and sold to Intuit in 1994. He started Parsons Technology in his garage. "I guess you kept costs down, at first," we note.

"At first? I always keep costs down! I'm sitting at a conference table right now that cost $180, and that's one of the best tables in this office. Normally I don't spend that much! I promoted somebody to vice president eight years ago. I gave her $800 to decorate her office. She gave me $350 back. I told her that's why she was the vice president!"

Parsons does permit spending on areas that are important to the business. "When we spend money, we spend it where it makes sense. We're a Cisco shop, and we're triple redundant. That benefits our customers and the company. Furniture and office decoration don't count for much with me."

The philosophy of the company is to offer value-added services at a lower price than the competition. The company does not offer Internet connectivity. It does offer: spam-protected e-mail, webhosting, storage, copyright protection, website design, web traffic stats, computer privacy protection, SSL Certificates, and, through partners, online merchant accounts.

Pricing in all categories is low, as the pricing of SSL Certificates shows. "We own our own trusted root," says Parsons. "We retail SSL Certificates at $89.95 per year. Geotrust charges $299, and VeriSign charges $899."

The company's latest product is the GoDaddy QuickSizzle Email Maker & Mailer. The product consists of five components:

• Call Opt-in Magnet, which allows people to opt in and out of mailing lists, and allows users to import existing opt-in lists
• List Database Manager, which manages the lists of subscribers
• QuickSizzle Email Maker, which helps users build messages in HTML and text formats and send them in the format the subscriber has selected
• Response Analyzer, which tracks statistics
• Anti-Spam Compliance Manager, which ensures that senders comply with the CAN SPAM law and with e-mail marketing best practices

Spam compliance is not overly complex, explains Warren Adelman, GoDaddy senior vice president. "The software verifies that the company name is in the e-mail, that there's an opt out in every part, and a report abuse link. There's a mechanism for IDing and validating the 'From' address to make sure it's coming from where it says it's coming from, and a mechanism to check for misleading header information. Overall, there are six or seven components."

The company charges $29.95 per 5,000 e-mails the software sends. Parsons notes that not only is that cheaper than the competition, but that the 5,000 e-mails can be used over a year, whereas subscribers have to use them in one month on Roving, resultsmail.com, or Yahoo!'s GotMarketing.

Parsons says he's in this business for the long term. He jokes, "I have an exit strategy: cremation."

More seriously, the company has sixteen product development teams working on new or existing products. "I learned this from a guy called Bill Gates. It's not my brainstorm. Once we put a team on a project we never take them off it. The products we release get better and better and better and we sell them for less and less and less, and that makes us, I like to think, a formidable competitor."

He says the company operates 24 x 7 tech support by phone and Web board. Software developers spend a few hours each week on the Web boards answering questions, and if issues arise frequently, the company simply fixes the problem and sends out an update.

The company welcomes ISP customers. "While we do offer some services that ISPs do," notes Elizabeth Perrine, GoDaddy vice president of marketing, "with GoDaddy, they can round out their porfolio of products and provide additional services."

Resellers welcome
The company's reseller program, Wild West Domains, is also cheap and flexible. For a $99 annual fee, resellers get a default page with default pricing. The company promises competitive buy rates for its products (i.e., below its own retail prices).

Parsons says anyone can make money on low margins if their sales volumes are high enough. "It's a lesson I learned early on. It's okay to get paid in nickels if you make a lot of nickels."

—End