I want to first say, in FULL DISCLOSURE that I sold the company I co-owned (Solid Cactus) to Web.com Group in 2009, and I no longer hold any position in Web.com, nor do I really care about the stock price – but I still follow Web.com because a good part of my past life still lives within the Web.com organization – including a lot of wonderful memories and a bunch of awesome people. I am writing this commentary because I have been in the technology industry since it’s inception and seeing Web.com lose almost 25% of it’s value in one day is almost laughable. I’m going to tell you why (since it’s obvious that most bankers and investors have absolutely NO knowledge of technology or how it works).
So upon the release of the news that Google is venturing into Domain Registration sales, and email services… (article: http://www.pcworld.com/article/2367060/google-tests-domain-registration-service.html)
- Domain Registration is an extremely STICKY product. Do you have any idea how difficult it is to move a domain name from one registrar to another? Let’s say I’m paying Web.com $35 a year for my domain name, and I have been since 2000… IF I wanted to move this domain name to Google, which of course would make no sense, since I could have moved it to GoDaddy 7 years ago but never did – I would have to first, UNLOCK the domain name, then get a transfer code, then go to the new registrar and request the transfer using the transfer code I was given by Web.com. After this step takes place, I have to approve the transfer by email, AND most of the time the email address on file with the registrar is incorrect, causing the transfer to cancel automatically. Did I mention I have only 7 days to accomplish this? Did I also mention that any step in the process that is done out of sequence will cause the transfer to fail? Come on people, this is the most ridiculous overreaction to news I’ve seen in a long time… GoDaddy has been prostituting domain names on the open market for almost a decade.
- Believe it or not, you were able to buy domain names directly from Google for the past few years if you were pointing them to your Blogger blog. The domain renewal interface is borderline HIDEOUS at best. I have a domain name there and I spent an entire month trying to renew the domain name because guess why… the email address on the registry was incorrect. Google has also been a member of ICANN (Internet Corporation for Assigned Names and Numbers) for a number of years. It is no secret to anyone that they would get involved in domains at some point in time.
- People tend to renew their domain names in one place, regardless of price. An expired domain name means the potential to lose your entire online business if you don’t act fast. If you run a business online, do you really think that to save $20, you will put your entire business at risk?
- Moving your email provider is such a hassle that probably only about 10% of people who work in technology even know how to change an MX record and not cause downtime, let alone CNAME and A records. Mind you, Gmail has existed for practically as long as I can remember. Buying a domain name can be “do it yourself”… Knowing what to do with a domain name after you’ve purchased it is a far cry from “do it yourself”. Have you ever tried to call Google for help??? If not, I suggest you try.
- I’m not sure at this point how much of Web.com’s revenue comes from services, but I’m sure it’s quite a bit. Also, don’t forget about the “aftermarket” revenue. A good portion of Web.com’s business model is handling domain auctions and expired domain names – which is a big business, and one in which they are the clear leaders.
- There are some very smart people running Web.com (in my opinion).
The moral of this story… Such a reaction to such a useless piece of news is funny, but sad to watch.