GoDaddy goes AI: Domain giant’s evolution is a litmus test for small business adoption

KIRKLAND, Wash. — GoDaddy is still the largest domain registrar in the world, by a wide margin. But its business has changed significantly since the days of those crazy Super Bowl ads and the cartoon character with the wild hair.

The company’s logo, for one, now consists of the letters “GO” intertwined in the shape of a heart. And its wholesome ads focus on empowering the small business owners that make up the vast majority of its customer base.

But there’s a more fundamental change behind the scenes. In addition to its core domain business, GoDaddy has been rolling out technologies to help its small-business customers build websites, manage their online presence, sell merchandise and services, and engage with their customers across platforms.

Now, like much of the tech world, GoDaddy is expanding into artificial intelligence, but in its own way. Earlier this year, the company began rolling out its AI-powered GoDaddy Airo service to help its customers automatically create websites, logos, emails, social media, and other content.

For now, GoDaddy CEO Aman Bhutani says the company’s primary goal with AI is ensuring value for customers. In contrast with tech giants already reporting the points of growth that AI is adding to revenue, GoDaddy isn’t rushing to translate the AI buzz into a financial payoff of its own.

“There’s discovery, there’s engagement, and then there’s monetization,” Bhutani said. “And our goal is to get those discovery and engagement numbers as high as possible before we do too much to monetize.”

Part of the reason is the nature of the company’s customer base.

The majority of GoDaddy’s 21 million paying customers are small businesses, with 90% having 10 employees or less. They don’t have massive IT departments to help adopt new technology. GoDaddy’s average customer pays $210 per year, a low average revenue per user (ARPU) compared to enterprise software companies.

That makes the adoption of GoDaddy’s new offerings a litmus test for the rollout of AI tools for everyday businesses. While some customers may be initially reluctant, many of them quickly see the value of AI once they try it, execs say.

“What they don’t realize is, once they start using the generative AI functionality, it actually saves them a lot of time,” said Roger Chen, GoDaddy’s chief operating officer. “Once they start using it, I don’t think they can stop.”

More than 1 million GoDaddy customers have discovered the AI tools since the launch earlier this year, Bhutani said, and more than half of those have engaged with the features in some way.

Internally, GoDaddy is using AI to streamline a variety of processes. This includes using AI to automate performance review summaries, and an internal AI assistant called GABI to help customer support agents. The company centralizes the management of AI usage internally through a unified API to maintain guardrails.

Those were some of the takeaways from GeekWire’s wide-ranging interview with Bhutani and Chen on the sidelines of a recent event in the Seattle area where GoDaddy executives met up with some of their small-business customers.

GoDaddy’s bottom line has improved dramatically over the past decade, with its expansion into higher-margin products and services, swinging from a $132 million operating loss in 2013 to a $547 million operating profit in 2023, according to its current and historical financial reports.

Revenue jumped from $1.13 billion to $4.25 billion over the same 10-year period.

GoDaddy’s expanded footprint has resulted in greater scrutiny. A recent antitrust suit filed by a DNS configuration company, Entri, alleges that GoDaddy used its dominance in domains to unfairly favor its own competing product. GoDaddy declined to comment on the pending litigation and hasn’t yet responded in court.

The growth has also given GoDaddy a broader set of rivals.

The company now lists the likes of Stripe, PayPal, TikTok, Facebook parent Meta, and WeChat among its officially recognized competitors, in addition to domain-related companies like Cloudflare, Tucows, and Namecheap, and tech giants Microsoft, Amazon, and Google.

Although GoDaddy is officially headquartered in Tempe, Ariz., some of its top executives — including Bhutani — are based in the Seattle area, at the Carillon Point complex on the Kirkland waterfront. It’s a short walk from the Woodmark Hotel, where the company hosted its customer event.

GoDaddy established the office in the Kirkland complex a decade ago, during the tenure of former Microsoft and Yahoo executive Blake Irving as the GoDaddy CEO. About 430 of its more than 6,000 employees are now based out of Washington state, many of them connected to the Kirkland office and working on a hybrid basis.

The company allows individual teams to establish remote work policies.

Bhutani is a longtime tech and business leader who joined GoDaddy as CEO five years ago from his prior role as Expedia president in Seattle, making it natural for him to stay in the region. Chen is based in Singapore; Chief Marketing Officer Fara Howard is in Austin; and Chief Financial Officer Mark McCaffrey is in the Bay Area.

“I would say we work very effectively remotely,” Bhutani said. “We don’t really feel the difference of being in different locations.”