The acquisition of email marketing firm Constant Contact by web hosting company Endurance International Group, announced earlier this week, will create a major competitor to web hosting and services giant GoDaddy.
That’s the vision described in conversations with the CEOs of both Massachusetts-based companies.
“The headline,” Constant Contact CEO and founder Gail Goodman told me, “is that, together, we’re able to create an end-to-end solution” for small to medium-sized businesses (SMBs). This ranges, she said, from web hosting to domains to e-marketing.
“Most of our customers look for a web presence solution” that includes hosting, email addresses and SEO, Endurance International CEO Hari Ravichandran said. “A whole marketing platform is a pretty natural fit.”
He noted that the combined companies currently have an annual revenue of $1.1 billion, expected to reach $1.2 billion next year.
Goodman pointed to GoDaddy and website building and services provider Web.com as the biggest competitors for this new SMB all-in-one offering. This compares to Constant Contact’s previous main competitors, which Goodman said included SMB-targeted email marketers like MailChimp or Vertical Response.
Although Constant Contact is best known for its email marketing services, she pointed out that their products already include events management, Facebook marketing, a survey tool and contact management. Endurance offers web hosting, e-commerce, e-marketing and mobile business tools.
Goodman noted that the biggest benefit to Constant Contact from the acquisition is exposure to Endurance’s installed base of about 4.5 million customers, many of whom need marketing services. Constant Contact reports more than 650,000 customers worldwide.
“They get 90,000 net new hosting subscribers a quarter,” she noted. “Incredible.”
Neither CEO forecast any new functions or products, but they did suggest that new packaging, pricing and combinations are in the works.
Today, Constant Contact offers three main packages, but Goodman said that, integrated into Endurance, they will “create more customized solutions” that are better tailored to specific needs. When asked how that will manifest itself — will it be a menu of options, or will specialists help to design a package of services? — she said that the exact shape of the offering is still “at the baby steps.”
Ravichandran noted that Constant Contact’s current average monthly price point is about $50 and that there will be “lighter” versions at multiple price points, including ones lower than $50.
The companies had been already been working together for more than a year, with Endurance offering Constant Contact to its customers. Working together contractually “was good,” Goodman told me, “but when it’s family, it’s deeper.”
Constant Contact will retain its brand, remain in its current office location of Waltham, Massachusetts, and continue as a branded offering within the Endurance brands where it had been — Bluehost, HostGator and iPage. Whether it will remain a separate brand or become an integrated, unbranded service for the other Endurance brands — including Domain.com, ResellerClub, MOJO Marketplace and Big Rock — is now being figured out, she said.
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