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GoDaddy’s Security Falls Short

Posted on Tuesday, Nov 24th 2020

Internet domain provider GoDaddy (NYSE: GDDY) delivered another strong quarter recently. But last week, the company was in the news primarily because of the several cyber security attacks it faced on its cryptocurrency services.

GoDaddy’s Financials

GoDaddy’s Q3 revenues grew 11% to $844.4 million, ahead of the market’s forecast of $835.3 million. Total bookings improved 11% over the year to $945 million. EPS of $0.38 per share was better than the market’s estimates of an EPS of $0.31.

By segment, revenues from the Domain segment grew 12.2% to $387.4 million. Hosting and Presence revenues improved 6.1% to $302.4 million. Business Applications revenues grew 18.7% to $154.6 million.

For the fourth quarter, GoDaddy forecast revenues of $865 million, compared with the market’s estimates of $855.63 million. It expects double-digit growth in its Domains segment, mid-single-digit growth in its Hosting and Presence segment, and high-teens growth in Business Applications.

GoDaddy’s Growing Partnerships

During the quarter, GoDaddy announced several partnerships, including a deeper integration with Facebook. As part of the expanded partnership, GoDaddy has launched Facebook’s business extension, which will allow GoDaddy website and marketing customers to create shops on Instagram and Facebook. Users will be able to place shippable posts allowing end users to purchase directly from these posts. It will also allow for automatic synching between the two platforms, thus creating another channel for customers to sell their products.

It also recently announced a partnership with Vimeo, allowing customers to upload, preview, and insert videos. Users will also be able to use a video as a header on their website.

Besides partnerships, GoDaddy also released product upgrades. It recently released a powerful social composer dashboard for websites and marketing that provides customers with a one-stop-shop to quickly create polished social content as well as view and schedule social posts on connected social media platforms. The dashboard also allows users to track performance metrics on each of the posts.  

Earlier this year, GoDaddy had acquired social content startup Over. It recently announced the availability of Over app as a feature within Websites and Marketing to allow customers to add creative content and market their businesses easily. The app has been made available in over 12 new languages, giving many more customers access to the tools.

GoDaddy’s Security Woes

The recent big news about GoDaddy, though, has been about the severe security lapse issues it faced. Earlier this month, several cryptocurrency trading platforms such as Liquid.com, NiceHash, Bibox.com, Celsius.Network, Wirex app, and KrebsOnSecurity were victims of a series of cyber security attacks that resulted in GoDaddy incorrectly transferring control of some of the domains to a malicious player.

The attacker gained the ability to change DNS records, take control of a number of internal email accounts, even partially compromise Liquid.com’s infrastructure, and gain access to its document storage.

This isn’t the first time that GoDaddy has fallen prey to these attacks. Earlier this year, it was victim to a voice phishing scam that targeted its support employees and allowed attackers to gain control over at least a half-dozen domain names, including transaction brokering site Escrow.com. This summer, GoDaddy revealed that 28,000 of its customers’ web hosting accounts were compromised following a security incident that had happened last year, but was discovered only in April 2020. GoDaddy clearly should be looking at strengthening its security protocols, especially as more and more companies migrate to the digital world.

GoDaddy’s stock is trading at $77.28 with a market capitalization of $13.05 billion. It touched a 52-week high of $89.00 in August and a 52-week low of $40.25 in March this year.

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