What people think about the Dan.com acquistion

They’re concerned about one key thing.

The day’s talk in the domain community is that GoDaddy (NYSE: GDDY) is acquiring Dan.com. Domain investors want to know what this will mean for them.

I just held an hour-long Twitter Space on the topic, and I can sum up the top concern in one word: commissions.

Dan charges just 9%. GoDaddy charges 20% up to $5,000, 15% of the amount from $5,001-$25,000, and 10% of the amount over $25,000. For most sellers who focus on the low end, this is effectively a question of 20% vs. 9%. That’s a big difference.

While it makes sense to pay GoDaddy 20% for completing a deal through its network (and perhaps if their brokers get involved), paying that much for a landing page sale is difficult to swallow.

Would people move to different landing page services if Dan.com were to increase its prices? It’s a good question. One likely reason GoDaddy acquired Dan.com was that the upstart was taking a bite out of its aftermarket sales. So if people move to another provider, GoDaddy loses much of the value. That’s a reason for it to keep commissions in check for landing page sales through Dan.com.

After all, you can pay just 7.5% selling through Squadhelp or 4% through Sav.com.

Landing pages themselves aren’t complicated. But Dan.com brought together a complete package: easy of use, payment plans, guided transfers, good UI, etc.

One person on the Twitter Space asked in Namecheap could swoop in and pick up Dan.com’s clients if GoDaddy increases commissions. Namecheap CEO Richard Kirkendall has stated on Twitter that he’s working on some sort of Afternic competitor, so it’s possible.

Another concern on the call was innovation. GoDaddy hasn’t innovated much on the domain sales front. It’s the upstarts like Dan.com that have tried new things. I hope the Dan.com team can still try new things under the GoDaddy umbrella. In his email interview with me, GoDaddy President of Domains Paul Nicks stated, “…our goal is for Dan.com to become an experimentation engine driving better results on the shared platform.” It would be ideal if Dan.com remained a separate platform where the company tries new things.

Some people expressed hope. They hope that having the GoDaddy brand behind Dan will make buyers more comfortable using the platform. They also think it could be helpful to have Afternic integrated. And since Dan.com was working on its own registrar for faster transfers, perhaps domains held at GoDaddy could be transferred faster after a Dan.com sale.

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