The Washington PostDemocracy Dies in Darkness

The Internet’s first gatekeepers are getting older, and the Web is leaving them behind

Race-car driver Danica Patrick is applauded by GoDaddy executives as she rings a ceremonial bell on the floor of the New York Stock Exchange as GoDaddy's initial public offering starts trading Wednesday. (Richard Drew/AP)

Anyone out there need a Web site? Anyone?

GoDaddy, the world's biggest provider of domain names (like and a major cheerleader of risqué TV ads, saw its stock price climb 30 percent Wednesday, to about $26 a share, during its first day of public trading.

But the initial public offering also brought out its share of detractors for a company loaded with debt, beset by competition and unable to turn a profit. Amid a slew of stock offerings by major tech upstarts, 18-year-old GoDaddy — a geezer in Internet years — seems to be increasingly showing its age.

More than half of all American small businesses as of 2013 still did not have a Web site, giving GoDaddy a big opportunity for growth. But small companies also have more ways than ever to get their word out without a Web site, including social media sites like Facebook, rating sites like Yelp and directories like Angie’s List.

Trading today set GoDaddy's market value at about $4 billion, putting the world's biggest brand in domain names below the values of tech companies like peer-to-peer loan site Lending Club and King Digital Entertainment, the maker of Candy Crush Saga and other mobile games.

"I would have expected to see great growth plans for the future that would compensate for the inadequate financials, but GoDaddy does not have any," analyst Lior Ronen wrote on investment blog Seeking Alpha.

"I think it's telling that it's not making money," CNBC trading personality Jim Cramer said Wednesday. "That's code for, 'What the heck are they doing?'"

In a field of nameless registry services, GoDaddy made its name with the help of time-worn marketing gimmicks, like scantily clad women, Super Bowl ads and celebrity cameos. Race-car driver Danica Patrick, their longtime spokeswoman, helped ring in the bell Wednesday at the New York Stock Exchange.

But to succeed as a company, the firm is pushing to grow beyond its cheeky ad campaigns — like that depressing spot this year of the puppy being sold online — and further into the wallets of small mom-and-pop shops looking for an easy way to get online.

"Small businesses in their environment, fighting the good fight ... That's our business," GoDaddy's chief executive Blake Irving said Wednesday during a Bloomberg News interview. "The dollars we make in our business are because small-business customers pay us to get them online, and to give them a Web presence that makes them look bigger than their business can be."

GoDaddy, with its 13 million customers, has registered about 20 percent of the world's domain names and pushed to broaden its business overseas. More than a quarter of the firm's sales now stem from buyers in 37 countries.

GoDaddy has also pushed to expand more into Web hosting, design, security and other helper services, including as a reseller of Microsoft’s Office 365 software suite. That expansion, the firm said, has helped its average revenue per customer grow from $93 to $114 in the past two years.

But the Arizona-based firm also faces rising competition from both a crop of low-cost rivals and some of the tech world's largest names. and Google last year, seeking the same small-business market, unveiled their own domain-name registrars.

Competitors in the low-profit-margin business, like Squarespace and, have followed GoDaddy's lead by offering sleek Web site designs and hosting at low costs. Both companies even advertised during the Super Bowl with their own celebrity cameos.

And unlike those rivals, GoDaddy has big challenges ahead.  Its purchase in 2011 by a triad of private equity firms — Silver Lake, Kohlberg Kravis Roberts and Technology Crossover Ventures — left GoDaddy with a $1.4 billion boulder of debt.  And the company has posted net losses of about $800 million between 2011 and 2013, acknowledging in company filings last year that "we have a history of operating losses and may not be able to achieve profitability in the future."

GoDaddy filed once before to become public, in 2006, but backed out only three months later, with company founder Bob Parsons blaming market uncertainty and remarking that his firm didn't need to go public to thrive.

But since 2011, when the firm was bought for $2.25 billion, GoDaddy has pushed to expand beyond its traditional market under Irving, a veteran of the tech world's old guard, including Xerox, Compaq, Yahoo! and Microsoft.

The strong day-one bounce means investors believe that GoDaddy still has room to grow, even if, as analysts with Triton Research wrote, "recent competitive and internal changes could impact its market positioning."

GoDaddy, for its part, is doing its best to stay current. Riding the livestreaming trend, the firm broadcast its stock debut live on Periscope, Twitter's buzzy streaming app.