GoDaddy courts mom and pop 

Contact: Scott Denne

Like most tech M&A denizens, GoDaddy slowed its dealmaking in 2017. This year, it’s getting back into the market with an early, substantial purchase, spending $125m for social marketing services provider Main Street Hub. The acquisition, its second-largest to date, comes as GoDaddy must transition beyond its reliance on domains by upselling more software and services to each of its accounts.

According to 451 Research’s M&A KnowledgeBase, GoDaddy averaged four acquisitions in the four years leading up to 2017. Last year, it printed just one. In fact, it was just as often on the sell-side as it divested PlusServer, the managed hosting business it obtained as part of its 2016 Host Europe buy. Relatedly, it shuttered its cloud server business around the same time to focus on its small business market to maintain its growth.

Today’s deal aligns with that focus. Main Street Hub runs a service that helps small, local businesses build, maintain and monitor their social media presence. GoDaddy’s approach to landing small business customers is to lead with its domain name service and then attach software to that, such as its recently launched website builder GoCentral and its email service, email marketing and WordPress hosting.

Choosing a tech-enabled service or another SaaS offering gives GoDaddy’s customers the ability to manage their brand across a range of digital properties – Yelp reviews, Google listings, Facebook pages, TripAdvisor profiles, and so on. A single software tool would likely be too time-consuming or limited in scope to be of use to resource-constrained small businesses. Generating more revenue from those customers gains increasing importance for GoDaddy this year as it expects the roughly 10% annual expansion of its core domain business to decelerate.

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