What’s Up With GoDaddy’s .Biz Pricing?: Mailbag

A reader inquires regarding GoDaddy’s .biz price jump.

Dear Reglike:

Godaddy recently raised its prices on .biz to a published $14.99. Even going through an account manager the price is still over $10. GD has definitely been getting less price competitive, but this one seems completely out in left field. Did prices change at the registry level? Or something else? – Michael Z.

Good question, Michael. .Biz registry NeuStar charges $6.42 for domains, the same price VeriSign (VRSN) charges for .coms. I asked GoDaddy regarding the price jump, and a firm spokesperson stated:

“We frequently test the price of all the TLDs. At this time, .biz has been priced at $14.99.”

In other words, there’s no rationale other than GoDaddy trying to make more profit. You can’t fault them for that.

My guess is GoDaddy is considering raising prices on a number of domains. It is testing the waters with .biz to see how it affects business. If 10% of .biz owners transfer their domains out and they get 10% fewer fresh orders, then GoDaddy still ends up making more money (excluding profit from add-ons such as webhosting.)

Keep in mind that GoDaddy’s client base is becoming less sophisticated. It’s not just domainers, it’s mom and pops who own a domain or two. Most of them won’t bother transferring their domains for a $5 a year price difference. (Need proof? Consider all of those people who still pay Network Solutions $35 a year). And hey, the firm has to pay for those Super Bowl commercials somehow.

When VeriSign increased its prices on .com 42 cents to $6.42 earlier this year, GoDaddy raised prices $1.04. I doubt it had much of an impact on business (other than the bottom line).

For comparison, Moniker’s published price for .biz is $10.95 and 1&1 charges $7.87.

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