GoDaddy Buys Locu for Data Syndication Capability

GoDaddy has acquired local data syndication platform Locu. I spoke with GoDaddy CEO Blake Irving and Rene Reinsberg, CEO of Locu.

The Locu network includes Yelp, TripAdvisor, Foursquare, Facebook, Citysearch, Open Table and Time Out (I’m sure there are others). SinglePlatform was acquired by Constant Contact last year for similar reasons. The acquisition price there was $100 million.

Data syndication platform Yext remains independent and others, such as Local Market Launch and UBL, also offer this service. There’s a question in my mind as to whether data syndication is headed toward “commodity” status. Regardless, it has become one of the critical capabilities in local. It’s a “must have” for local marketing services providers.

Locu will now become a permanent part of GoDaddy’s portfolio of SMB marketing services. The acquisition arises out of a partnership the company announced in June with GoDaddy. (Kara Swisher was told the acquisition price was $70 million.)

GoDaddy marketing services

As I’ve written previously GoDaddy is an emerging giant in the SMB/local marketing segment. Earlier this year the company told me that it had 11 million domain customers (globally) and 55 million domains under management. About 70% of GoDaddy customers are SMBs according to the company.

Blake Irving said that half of GoDaddy’s revenue now comes from services other than basic domain registration. I would guess most of that is in hosting.

Domain registration (and later website development) is a powerful way for GoDaddy to gain the ear of SMBs. It then uses telephone sales — there are 2,000 sales/service reps — to offer a range of other digital marketing services, including SEO, PPC advertising and social media.

I spoke to Irving about the degree to which GoDaddy was thinking about getting into back-office support for SMBs. He said the company has thought about it but that it’s focused for now on providing basic services beyond domain registration and hosting to its SMB customers.

What do you think about the outlook for GoDaddy and how successful it will be in offering marketing services to SMBs?

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6 Responses to “GoDaddy Buys Locu for Data Syndication Capability”

  1. Anthony says at

    Curious to hear you feedback on where this’ll leave Yext in the race.  AllThingsD claim that Locu was acquired for ~70m.  I’d assume that GoDaddy was near the top of the list of potential acquirers — but now that they have Locu, they won’t need Yext.  

    Having raised $65M over 6 rounds with multiple founders, it feels like it may be IPO or bust?

    Who buys them?

  2. Greg Sterling says at

    Yext would have been too expensive. Locu was cheaper and had taken very little in the way of investor money.

  3. Anthony says at

    Greg, understood.  Just, who do you think can / will pick up Yext?  

  4. Greg Sterling says at

    As you point out it’s not an easy answer. Yext is probably too expensive for many players. Yahoo is ambivalent about local business solutions; Google doesn’t think in terms of anyone else. And I’m not sure that MSFT would pursue them. Facebook is like Google (focused on its own platform). AOL is out.

    My guess would be someone in the enterprise space that wanted to use the company’s capabilities to deliver enterprise location services. Not sure. The company might be on a path to going public. However I also think they need to develop broader services to remain differentiated if that’s possible in local.

  5. Perry Evans says at

    The challenge for domain service providers, historically, is their focus on products that work well in automated conversion via up-sell and bundle marketing techniques (email, in-line, etc.).  This has most commonly required sub $7-8 a month price points – essentially making every product an easy decision product.

    To convert from this “fries with that” business model to a meaningful provider of services entrusted with hundreds of dollars a month in media/product spend is a MAJOR change in model. Not impossible, but it requires a significantly different sales, service and brand migration.  

    Perhaps it’s more practical to (continue to) be a leading provider of the commodity product funnel, with affiliate or tiered partnerships that provide value-added “human services with tools”. If I were god, I’d build a new brand and hook it up to their funnel, and consider making it more of a competitive marketplace model.  

    Further to the Yext comparable – this kind of player will probably seriously erode the listing syndication price point. Not the best news for Yext, but I think they know the days are numbered for this to be anything but a building block to higher impact recurring services. 

  6. Anthony says at

    Appreciate the feedback, Greg and Perry.  

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