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One Of 2015's Biggest Tech IPOs Comes Straight Out Of 2005

In a year when dozens of startups have attracted the coveted billion-dollar "unicorn" status, the big-tech IPO feels like the product of a different age.

Posted on April 1, 2015, at 4:37 p.m. ET

Spencer Platt / Getty Images

GoDaddy CEO Blake Irving visits on the floor of the New York Stock Exchange as the website hosting service makes its initial public offering (IPO) on April 1, 2015, in New York City.

One of the biggest tech companies to IPO so far in 2015 is a domain registration and hosting service best known for its provocative, sexed-up Super Bowl commercials. GoDaddy raised $440 million, pricing its shares at $20, above the range it projected of $17 to $19.

The stock closed at $26.15 on the New York Stock Exchange Tuesday, giving it a market value of $4 billion.

Just over half of the company's business comes from "domain products," which it says are "primarily" domain-name registrations. About 40% comes from other website products, like security certificates and e-commerce tools.

GoDaddy is trying to market itself as a vendor of web services like business applications and e-mail accounts for small businesses, even though it represents a small (but faster growing) part of the company. Of the company's $1.4 billion in 2014 revenue, 8% came from selling business applications, including Microsoft Office, email accounts, bookkeeping, and email marketing products.

The company lost $143 million in 2014, down from $200 million in 2013. But its private equity owners — it was bought out by a consortium of firms including KKR, Silver Lake, and Technology Crossover Ventures — were likely satisfied that its earnings before interest payments, taxes, depreciation, amortization, and some other costs were $272 million, up from $196 million last year.

Based in Scottsdale, Arizona, GoDaddy isn't the sexiest or most innovative technology company and isn't run by a young, visionary entrepreneur (its founder, Marine Corps veteran Bob Parsons, sits on the company's board). But its IPO is the second-biggest one for the technology sector so far this year. That's in part because the massive consumer-facing tech companies whose products live on the home screen of your phone and the covers of newspapers and magazines are staying private. They can raise hundreds of millions of dollars in venture capital while their valuations soar into the many billions. Stock market investors have also grown more wary of technology companies that have low or nonexistent profits and persistently high marketing and sales costs.

According to Renaissance Capital, the first quarter of 2015 has been the slowest quarter for IPOs since the beginning of 2013, with only 34 deals bringing in $5.4 billion (Renaissance's figure is slightly lower than the actual number as GoDaddy went public at a value above what was expected).

The other high-profile technology IPO this year, Box, is a money-losing (although quickly growing) enterprise software company that went public at a price below its last private valuation. But its founder, Aaron Levie, tweets frequently, wears brightly colored sneakers, and soaks up love from the Silicon Valley intelligentsia. GoDaddy, on the other hand, pulled a Super Bowl commercial this year about a puppy being sold through one of its websites.

"We've made a tremendous amount of progress over the past two years, advancing the GoDaddy brand as a company that cares a great deal about small business and is in their corner to help them succeed," wrote Blake Irving, GoDaddy's CEO, when the company said it would pull the ad. "People increasingly know who we are, what we do and who we do it for."

Two years earlier, GoDaddy's Super Bowl ad featured a queasily long kiss between Israeli supermodel Bar Refaeli and a chubby, nerdy-looking actor who was supposed to represent the company's staff. Critics pointed to it as a high watermark of sexist Super Bowl advertising, and the resulting backlash helped lead to 2015's trend of maudlin advertising.

The company is hoping its embrace from the public markets lasts a little longer.

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