Go Daddy 2015 Annual Report Download - page 27

Table of Contents
customer support organization to ensure our customers continue to receive the high level of customer service which they have come to expect. Notwithstanding our
commitment to Customer Care, our customers will occasionally encounter interruptions in service and other technical challenges and it is therefore critical we are
there to provide ongoing, high-quality support to help ensure high renewal rates and cross-selling of our products. Additionally, we focus on Web Pros and are
continue to expand into non-U.S. markets. We must continue to refine our efforts in Customer Care so we can adequately serve these customer groups as we
expand.
If we do not provide effective ongoing Customer Care, our ability to sell our products to new and existing customers could be harmed, our subscription
renewal rates may decline and our reputation may suffer, any of which could adversely affect our business, reputation and operating results.
We face significant competition for our products in the domain name registration and web-hosting markets and other markets in which we compete, which we
expect will continue to intensify, and we may not be able to maintain or improve our competitive position or market share.
We provide cloud-based solutions enabling individuals, businesses and organizations to establish an online presence, connect with customers and manage
their ventures. The market for providing these solutions is highly fragmented with some vendors providing part of the solution and highly competitive with many
existing competitors. These solutions are also rapidly evolving, creating opportunity for new competitors to enter the market addressing specific solutions or
segments of the market. In some instances, we have commercial partnerships with companies with whom we also compete. Given our broad product portfolio, we
compete with niche point-solution products and broader solution providers. Our competitors include providers of traditional domain registration services and web-
hosting solutions, website creation and management solutions, e-commerce enablement providers, cloud computing service and online security providers,
alternative web presence and marketing solutions providers and providers of productivity tools such as business-class email.
We expect competition to increase in the future from competitors in the domain and hosting and presence markets, such as Endurance, United Internet,
Web.com and Rightside, as well as competition from companies such as Amazon, Google and Microsoft, all of which are providers of web-hosting and other
cloud-based services and have recently entered the domain name registration business as upstream registries, and eBay and Facebook, both of which offer robust
Internet marketing platforms. Google recently launched its new Google Domains service to sell domain name registration services to third-parties. Some of our
current and potential competitors have greater resources, more brand recognition and consumer awareness, more diversified product offerings, greater international
scope and larger customer bases than we do, and we may therefore not be able to effectively compete with them. If these competitors and potential competitors
decide to devote greater resources to the development, promotion and sale of products in the markets in which we compete, or if the products offered by these
companies are more attractive to or better meet the evolving needs of our customers, our market share, growth prospects and operating results may be adversely
affected.
In addition, in an attempt to gain market share, competitors may offer aggressive price discounts or alternative pricing models on the products they offer,
such as so-called "freemium" pricing in which a basic offering is provided for free with advanced features provided for a fee, or increase commissions paid to their
referral sources. As a result, increased competition could result in lower sales, price reductions, reduced margins and the loss of market share.
Furthermore, conditions in our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or
continuing market consolidation. Innovative new start-up companies and large competitors making significant investments in technology and development may
invent similar or superior products and technologies competing with our products and technology. Our current and potential competitors may also establish
cooperative relationships among themselves or with third parties that may further enhance their ability to compete. The continued entry of competitors into the
domain name registration and web-hosting markets, and the rapid growth of some competitors that have already entered each market, may make it difficult for us
to maintain our market position. Our ability to compete will depend upon our ability to provide a better product than our competitors at a competitive price and
supported by superior Customer Care. To remain competitive, we may be required to make substantial additional investments in research, development, marketing
and sales in order to respond to competition, and there can be no assurance that these investments will achieve any returns for us or that we will be able to compete
successfully in the future.
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