Domain registration and hosting company GoDaddy is continuing on its acquisitions roll, with the announcement today that it acquired Media Temple, a premium domain hosting and website services company based out of Los Angeles that targets website development professionals. Financial terms are not being disclosed. [Update: But website builder Virb that Media Temple bought in 2011 is spinning out.]
This is GoDaddy’s sixth acquisition in 15 months, but MT (as it is known) will stand apart from the rest in two ways. The first is that it’s taking GoDaddy deeper into premium services, catering to those who publish content specifically to be consumed on the web; and the second is that it will be the first acquisition that GoDaddy intends to operate as a separate business, staffed by MT’s 225 existing employees, rather than integrating into GoDaddy’s existing operations, which currently serve 12 million customers with over 4,000 employees.
Part of the reason for this, GoDaddy CEO Blake Irving says, is because of Media Temple’s existing size and position in the market. It has 125,000 customers for its premium website management services, and it hosts over 1.5 million websites, with some 88 percent classified as being for “advanced web and IT services”.
“Media Temple is absolutely killing and a standalone brand, and it has an incredible technology,” Irving said in an interview. “We can learn a lot from them, whether it’s in infrastructure or customer acquisition. There is a ton of things that we can learn on the developer and marketing sides. We can continue and invest in and accelerate its growth without integrating. We think it’s a much smarter move for Media Temple to let them remain as their own business.”
Media Temple is a startup that is a little long in the tooth: it’s been around since 1998, growing up in tandem with the wider web. In that time, its founders have raised money ($16.1 million, almost modest by today’s standards), started their own venture fund (now wound down) and built out an impressive list of customers from a mostly bootstrapped enterprise. (Customers include companies like Fifty Three, Drop Stop and LRG to projects for brands like Sony, NBC, The Wall Street Journal, Starbucks, Vogue and Volkswagen.)
As for why MT decided to finally exit after all this time, co-founder Demian Sellfors said that this was always the plan.
“We’ve had our eye on an exit since we started 15 years ago,” he told me. “We regard ourselves as entrepreneurs first and we designed it for exit from the start, even if on the way we accidentally built a phenomenal culture and a business that resounded with the marketplace.” He says that the idea of selling to a much larger company like GoDaddy is to make Media Temple “bigger and better. We are growing nicely but it’s still very humble growth.”
About a year and a half ago, Sellfors helped hire Russ Reeder to run MT, and he will remain in place as its president under GoDaddy, and he echoes the sentiment that this was the best way for MT to continue to grow. “We are excited about this; we’re excited to learn from their scale,” he told me.
For its part, GoDaddy — specifically under Irving (who comes from very senior roles at giants like Microsoft and Yahoo) — has been trying to build out and evolve its business beyond that of a basic web domain registry.
That has included acquisitions and its own product launches to build out different web services for the small businesses that register domains on GoDaddy — these include accounting and payment services, as well as those geared to help them create mobile sites.
Media Temple will help GoDaddy build out more expertise in providing more sophisticated offerings to web-based operations, and will help raise the company’s profile among that class of users for future business. That business, as well, is likely to have higher margins than some of GoDaddy’s existing basic products. MT’s portfolio includes three different classes of web hosting services (priced between $20 and $50 per month), API management, SSL services and CDN (content delivery) services.
Prior to today, GoDaddy’s other recent acquisitions included Ronin for bookkeeping services; Afternic for aftermarket domain registry services (basically a domain resellers’ marketplace); M.dot to help website owners create mobile Internet sites; Locu to help them organize and distribute their business data to other sites/services; and Outright for bookkeeping.
Irving tells me, by the way, that another important area for GoDaddy going forward will be how it expands internationally. Its main site is already available in 30 different languages, but the aim is that by the end of 2015 it will be in some 60 markets with much more localized focus. “Today it’s really about two markets, English and Spanish,” he admitted. “We want to roll out to both Europe and Asia.”