No Sugar for Go Daddy

But times have changed, which suggests Go Daddy may have its work cut out finding people to buy its stock.

Analyst David Garrity of Dinosaur Securities said he believes Go Daddy should "expect to receive a lukewarm reception at best."

Last year, Go Daddy had $139.8 million in sales, up 92% from a year earlier. As of Dec. 31, the company had about 2.4 million clients. It expects people to continue to flock to its service.

"The number of Internet users worldwide was estimated to be 1.2 billion in 2005, and is estimated to grow to approximately 2.2 billion in 2010, while only approximately 94 million domain names were registered worldwide as of Dec. 31, 2005," Go Daddy says.

But as the company continued to grow, so did its costs.

Marketing and advertising expense rose more than 250%, to $15.2 million in 2005, largely because of its Super Bowl advertisements, according to the company's filings. Selling and general administrative expenses jumped 96% to $50.3 million during that same time period, as salaries and related expenses for new hires jumped.

One reason why Go Daddy has needed to promote itself so heavily is that there is a huge number of companies doing what it does. The company's filing points out that the Internet Corporation For Assigned Names and Numbers, the international organization that oversees Web names, has 667 accredited registrars.

"There are relatively few barriers to entry in this market, so as this market continues to develop we expect the number of competitors to increase," the filing says.