GoDaddy decided to acquire Neustar’s (domain name registry) and now it owns an entire chunk of the domain name market from top to bottom. Neustar provided wholesale services for domain names while GoDaddy was a retailer / a reseller of those domains to the final customer.

GoDaddy goes vertical with Neustar registry acquisition

The fact that this acquisition was even possible from a monetary / investment standpoint further validates my idea that the domain name business model is flawed – after all we don’t usually see the bottom line guys eating the top of the pyramid in other markets…

In order to avoid a conflict of interest they are working on a governance model that will, in theory, keep domain prices reasonable and limit the use of a dominant market position against other players.

GoDaddy is known for its monopolistic, anti-competitive and abusive market practices against customers, suppliers and competitors, how can anyone expect this to go well? Where is ICANN / country level bodies complaining and blocking the acquisition now?

My take: A dishonest internet giant decides to consolidate its empire by expanding vertically so it can screw the consumer even further. Meanwhile it avoids a clash with ICANN by introducing a governance model that will be less effective than ICANN’s own multi-stakeholder model. No bureaucrats were hurt in this acquisition.