It was identified by DomainNameNews today that:

Under the terms of the performance options agreement, GoDaddy is currently able to exercise 1.6 million of the 6.5 million performance options. As the original domain sales agreement has been terminated, the remainder of the options expired. The Company has not entered into a new performance option agreement.

I believe this deal has less to do with stock options and the Fabulous portfolio and more to do with technology and the Domain Distribution Network (DDN). I think the stock options are just a sweetener then a deal maker. Lately it seems like issuing stock is going out of style for Dark Blue Sea. Recently it was reported that Dark Blue Sea issued new stock in order to acquire an Australian domain drop catcher. This stock dilution indicates 2 important considerations. One, they probably are not very liquid and can’t put out cash to expand. And two, each new stock issuance dilutes current shareholder value.

GoDaddy has for some time struggled in the domain aftermarket and for that the DDN is great. It will provide GoDaddy pertinent information on aftermarket domain values and sales trends. These statistics are critical for updating their aftermarket position outside of expired domains. They’ll have the opportunity to sell to and from the DDN providing more exposure and domain inventory. As with their earlier agreement this will benefit their Premium Domain offerings, which in a previous post I provided a domaining strategy on. I believe there to be a few other factors, but I’ll have to wait and see before I reveal my speculations.

Tags: domain distribution network, Fabulous.com, GoDaddy, sell domains

This entry was posted on Thursday, October 8th, 2009 at 7:41 am and is filed under Domain News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.