Having worked for start-ups and companies that were eventually acquired by others, or merged with competitors, I can safely say that nothing good ever comes from such corporate fusions.
The acquisition of Afternic by GoDaddy is the big news of the day. It signifies the end of an era for Afternic, which stood out, in my book, as a professional, energetic marketplace that remained untainted by the various domain industry scandals.
Things will definitely change, with GoDaddy aggressively entering an era where the use of cheesy, “kick-ass” movie icons, supposedly makes more sense than the use of “girl next door” female promoters.
Meanwhile, GoDaddy already operates a domain auction marketplace, TDNAM, and through its alliance with Sedo they have turned it into a fused bazaar of lowball offers and unresponsive bidders with an attitude.
Still, GoDaddy maintains that Afternic will continue its independent function as a domain selling platform; however, realistically this is not going to happen in the long run. Executives of the mother company will definitely have the final say; after all, the generous amount of cash that GoDaddy surely paid for Afternic dictates who makes decisions.
Mergers and acquisitions lead to layoffs, corporate conspiracies and ego-clashing; the loser is eventually the customer who has one less option than before – that’s one step closer to a monopolistic industry.
As the domain industry evolves, it will go through the same hoops and evolutionary stages of the tech sector and other industries.
Let’s hope that lessons of the past will be utilized in the process, or the next big bang might involve shifting away from current industry paradigms.
I disagree that “nothing good” comes from mergers and acquisitions. That’s a blanket statement that may (or may not) apply to this specific acquisition, but it doesn’t apply to all.
That being said, it will be very interesting to see what comes from this.
Jacob – In my 20 years of corporate function, the only type of ‘benefit’ that I witnessed from acquisitions, were for the company that bought out the other guy. Mergers are equally damaging as they require careful long-term planning of strategic expansion; in the fast-pacing world of technology, this is rarely feasible.
As I said in my blog post today it’s all just pandering to wall street and dressing up to go ipo. Then Blake and the others will exit and what’s let is like Microsoft and Yahoo from where Irving came. http://www.bloomberg.com/news/2013-07-24/go-daddy-ceo-mulls-2014-ipo-joining-wave-of-cloud-deals.html
Theo,
I think that’s a more fair statement. I understood your original post as saying that no one on either side would benefit.
Jacob – I’m pro-consumer, and the consumer will definitely be at a loss here. Obviously, mergers and acquisitions are part of a financial exchange. That part I do not dispute, but I question the benefits for the company that gets acquired. More often, the one that makes the calls seeks personnel changes, more control over corporate functions etc. No acquisition is an angelic event!
Mergers often lead to a dead-end; a decade ago, I watched an $100 million three-way merger end in two chapter 7 bankruptcies with the remaining entity becoming a dwarf of its former glory.
For the past year I didn’t want to believe it – but new yahoos (literally) in the c level positions have destroyed the culture of godaddy. Like or dislike Bob Parsons – his employees loved working for him. New management has laid people off in one city while hiring the same position in another, destroyed the call center, taking away benefits and treated long term employees like trash – can’t wait till my yearly bonus is paid ( they ruined that too ) so I can find another position – after 9 years I’m disgusted at what they have done to Go Daddy. I predict come April 2014 a lot of talented DBA’S and Software Engineers that made go daddy what it is today will be employed eksewhere – the brain drain has already begun. Start a new tech company or buy it back Mr Parsons – we miss you.
I can’t agree nor disagree w/anon…but the morale has definitely gone downhill in the past 12 months. Most of the acquisitions make sense, but c’mon let’s be realistic – acquired company will remain independent of the parent, but I digress. Yes there is a new set of MS and Yahoo cronies, but then again, we had our fair share from the original regime. I can’t speak for the call-center, but previous mgmt did make them a focus and success. I would never have believed a call-center could be profitable. That was the beauty and intelligence of Bob Parsons and the rest of the previous C-Level execs. Now, it is just a different era – we did not have the discipline and global expertise – our equity partners and new mgmt does – its business. Adapt or Die – i.e., swords vs. guns. My continued complaints about the company are not enough staff to tune systems, train on new systems and there is never enough corporate and inter-dept. communications. New annoyance – seeing new employees swooping in on a good thing and be rewarded with options; though the call center did get stock options this year for the first time – that had to be done – reward employees with a direct customer interaction. I can concur and commiserate with “anon” – Employee A is given a 30 days notice to find another job b/c his/her job is being eliminated. Two unscrupulous scenarios: 1 – Hiring freeze in effect – Employee A is forced to be layed off. 2 – Same to Similar Position is filled in a different location. At least we still have the holiday party to look forward to this year…but for how much longer? Thanks Bob.