Registrars Will Win in Downturn — Strong Domain
Cash-rich domain name registrars can take advantage of economic downturn.
In any economic downturn, the strong firms come out ahead and the weak ones die. The same thing will happen in the domain registrar business over the next few years. Cash-rich domain registrars will be able to buy flailing registrars for pennies on the dollar.
Even if domain registration rates remain strong, registrars that over leveraged themselves, created inefficient organizations, or bet on a losing product mix will likely be put up for sale.
One of the domain registrars that may come out on top is Moniker, thanks to its parent firm’s $150 million infusion from Oak Hill Capital Partners. Although I’m not sure of the terms of the investment, the firm would be wise to look for registrar buyout opportunities to bolster Moniker’s positioning.
It’s hard to tell how the world’s biggest registrar, GoDaddy, will do during the downturn. I’m not sure of the firm’s cash position, as the latest data we have is what was in the S-1 it filed over two years ago.
How can you find weak registrars? Well, if you are paying for multiple years’ worth of renewals in advance and notice the expiration date at the registry is different from your registrar, that’s a sign that the firm is holding your cash and not paying the registry in advance. That’s not good.
