GoDaddy Buys M.dot, A Mobile Website-Building App, To Push Its Mobile And Freemium Businesses

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GoDaddy, the web-hosting and domain registration giant, is taking one more step into the world of mobile, and another into offering small businesses a one-stop shop for all of their online activities with a freemium sweetener. Today, it is announcing the acquisition of M.dot, a startup that has developed an iOS mobile app that lets users create mobile websites from the app itself. Financial terms of the deal were not officially disclosed, but we have heard that the sale was in cash and stock and could be worth anywhere from $5 million to $25 million, likely to be around $15 million — depending on GoDaddy’s own IPO plans.

This is GoDaddy’s first acquisition under its new CEO Blake Irving, who joined the company January 7, having previously held roles as chief product officer at Yahoo and a number of senior roles at Microsoft. The news was announced as GoDaddy opened up new offices in Sunnyvale.

The acquisition is squarely aimed at expanding the kinds of products and services that GoDaddy offers to businesses, going beyond basic domain registration and hosting. In an interview with TechCrunch, Irving said that while GoDaddy expects M.dot to bring it “a ton of new customers,” GoDaddy also has some 54 million domains under management, “and a lot of them have asked for mobile help.”

Expanding GoDaddy’s revenue streams is also a key part of what the company needs to impress investors in the event of an IPO (the company is currently privately controlled by KKR, Silverlake Venture Partners and Technology Crossover Ventures).

Irving would not comment on when GoDaddy could or would seek to go public, except to note that “this is definitely one of the logical conclusions when you consider GoDaddy’s double-digit revenue and Ebidta growth. I think that it’s something that we definitely will consider but we have no plan for a specific date. The company is well placed to make a decision like that in the next years — plural.”

Dominik Balogh, who co-founded the company with Pavel Serbajlo, says that M.dot was not looking for an exit this early in the startup’s life. Both Balogh and Serbajlo, as well as three others working on M.dot, will join GoDaddy.

First arriving in Silicon Valley from Europe in hopes of getting into Y Combinator — it didn’t make the cut in an April 2012 interview — M.dot opened for business in June 2012. Between then and October 2012 M.dot found funding from investors including Floodgate, SV Angel, Emergence Capital partner Sean Jacobsohn, San Francisco 49ers football star-turned-investor Harris Barton and Archimedes Labs, where TechCrunch co-founder Keith Teare is a partner. M.dot had raised some $700,000 in seed funding.

Mobile is not a new area for GoDaddy: In November 2012, the company launched a website-building product in partnership with DudaMobile, although the primary purpose of that is to help translate a desktop web page into one optimized for mobile. “But we need to go deeper than that,” Irving said. M.dot’s unique selling point has been that, while many businesses have gone online, many have not, and creating a site via M.dot will be the first web experience for many of them.

In the words of Balogh, M.dot is aimed at “the large group of people out there who are hesitant to use a computer but they do have smartphones and use those all day. It’s a very different psychological approach.” So far, some 60,000 businesses have used M.dot’s service.

GoDaddy gives M.dot a chance at much wider distribution, but it gives it something else to target those users with: a customer support system.

“GoDaddy has over 2,000 people in customer support — that’s a big advantage,” notes Balogh. Prior to this, “since we were early stage,” Balogh says M.dot didn’t have any dedicated team to help customers with questions or problems.

M.dot had yet to introduce any kind of charging model for its service. Although there are fairly obvious ways to introduce paid elements into M.dot — say, by adding elements like an e-commerce backend, or giving people the ability to create a native app in addition to a web app — for now the idea is to keep M.dot as a free product. This is part of a new freemium strategy that GoDaddy is looking to explore, according to Irving.

“There are things we will be able to offer based on M.dot — more complete packages that we can make available across a variety of other devices,” said Irving. “What sits in front of the shopping cart that is free and what sits behind the shopping cart is a distinction you will be seeing more from us.” The idea, he says, is to offer users certain services for free and try to entice them to upgrade based on that. It’s a strategy that many other online companies that target the enterprise have taken, from HootSuite to Evernote and Box.

There may not be charging on the cards for M.dot in the coming months, but there will be other developments. There is an Android app in the works to complement the work on iOS. And we may also see enhancements that will let businesses use the M.dot platform to reformat their websites into mobile apps, thereby taking some of the existing DudaMobile work in-house. There is also the question of whether M.dot, a native app itself, will also progress into the area of helping businesses create native apps.

While mobile web has so far been the startup’s first priority, Balogh notes that they have built the business with native apps in mind. “We were thinking about apps at the beginning but we decided that mobile sites make more sense at first,” he says. “In the segment that we are focusing on, when you are a visitor and you are looking for something on Google and you find information it’s not likely that you would download an app. But we have been collecting structurized data so if we decide to turn on a native app function, we can create them with one click. We haven’t closed the door on native apps.”

Release below.

GO DADDY ACQUIRES M.DOT – BOLSTERS ‘MOBILE FIRST’ STRATEGY
Gives Go Daddy Website Customers a Unique Smartphone Edge

SUNNYVALE, Calif. (Feb. 11, 2013) – Go Daddy, the Web’s top platform for small businesses, has acquired M.dot Inc., the leading mobile app for small business website creation and management. The addition of M.dot to Go Daddy’s extensive product offerings gives Go Daddy’s 11 million customers an easy way to create and manage compelling mobile websites right from their smartphones.

“We’re pleased to welcome M.dot to our growing Go Daddy family,” said Go Daddy CEO Blake Irving, who made the formal announcement at today’s ribbon-cutting ceremony for the new Go Daddy office located in Sunnyvale, California.

“M.dot’s global vision of a mobile future for small businesses fits beautifully with what our customers need right now,” Irving said. “Go Daddy wants to help businesses connect with their customers wherever they are in the world, and that means providing killer mobile technology. It also means helping our customers manage their business from anywhere, anytime with the simplicity of their smartphone or tablet. With M.dot, small businesses can compete on a big-time level without spending big-time money. We’re completely stoked to have M.dot on board.”

Over the last three years, mobile Internet traffic has grown more than 10 times from one percent to 13 percent of total Web usage[i]. In that same time period, smartphone and tablet shipments surpassed PCs. Go Daddy customers are using their smartphones to manage their online presence more and more everyday as a means to find and acquire customers. The M.dot acquisition provides Go Daddy’s customers with an innovative platform to capitalize on these trends.

M.dot was founded by Dominik Balogh and Pavel Serbajlo in June 2012. They have the backing of leading Silicon Valley investors including Floodgate, SV Angel and Archimedes Labs and have been featured by Apple in the iTunes App Store on multiple occasions. The company will operate from Go Daddy’s Silicon Valley office, which is a major new center of engineering and product design for the company. Over the next year, Go Daddy plans to double its current Sunnyvale-based staff, from 40 to 80.

“We’ve been impressed with Dominik and Pavel throughout this process,” said Go Daddy President of Products and Technology Jason Rosenthal.. “These guys understand, like no others we’ve seen, how mobile is top-of-mind for small businesses right now. They’ve solved some very important usability and technology problems around mobile site creation and management, which make them unique. Dominik and Pavel embody the kind of creativity and entrepreneurial drive we value at Go Daddy and most importantly, they’ve built the foundation for an extraordinary product our customers will love.”

M.dot co-founder Dominik Balogh pointed out the shared values of the two companies. “Go Daddy is exactly the kind of technology company we wanted to join because they cater to and understand the small business customer,” Balogh said. “We’ve always believed small business is essential for a healthy economy and Go Daddy has extensive experience as the industry’s leading platform for small enterprises. Joining Go Daddy means our mobile software will now be accessible through much larger distribution channels and will help even more small businesses achieve greater success. It also gives us the benefit of integrating with Go Daddy’s immense customer support foundation, which I believe is a significant competitive advantage in this segment.”

“Go Daddy was built from scratch and is now a multi-billion dollar company – their industry expertise and achievements are inspiring,” said M.dot co-founder Pavel Serbajlo. “We’re looking forward to taking mobile software for small businesses to the next level with Go Daddy. We share the same vision for mobile. We’re passionate about small businesses, start-ups and entrepreneurs … we all want to build software products that enable our customers to succeed online.”

The M.dot app offers mobile website creation based on pre-loaded templates with easy-to-use custom features, such as store location, driving directions, tap-to-call, galleries, business hours and price lists, all in a user-interface designed for mobile device screens. It also includes a blog feature, which allows users to write and insert photos and video with rich text capabilities. It integrates with Facebook, Twitter, Flickr, YouTube and Dropbox.

M.dot is available in the iTunes App Store at: https://itunes.apple.com/us/app/m.dot/id565017826?ls=1&mt=8

Financial terms of the M.dot acquisition have not been disclosed.

In late 2011, Go Daddy received an investment from KKR, Silver Lake and Technology Crossover Ventures designed to build upon Go Daddy’s commitment to providing high quality products and services to its customers.

Since then, the company has also embarked on international growth, including expansion into India. Go Daddy also has facilities in Arizona, California, Colorado, Iowa, Toronto, Amsterdam and Singapore.

To apply to join the Go Daddy team, please visit, http://www.GoDaddy.com/Jobs.

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About Go Daddy
Go Daddy is the world’s largest domain name provider, Web hosting provider and new SSL certificate provider, focused on helping small businesses grow larger. Go Daddy provides dozens of cloud-based services and is the largest worldwide mass-market hosting provider by annual revenue according to 451 Research (Mass-Market Hosting Report-Fall 2012) and is the #1 provider of net-new SSL certificates for 2012, according to the Netcraft, LTD Secure Server Survey. To learn more about the company, visit http://www.GoDaddy.com/PR.
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