To sell or not to sell?
With so many venture capital companies entering the market, is it the right time to sell your portfolio? Part with a few domains? or sit tight for awhile longer?
There are many different views on this topic, and the debates are becoming more and more frequent in the domain industry. Some people claim that selling now is foolish, others feel that selling off certain types of domains should be done now, and still others feel that their portfolio will only increase in value as more and more competition enters the marketplace.
There is no right or wrong answer to this question in my opinion, as many of us know, playing the drop game or buying domains can be compared to gambling and even the stock market. Some people are ready to let it ride, others want to cash out and reinvest a small percentage of their winnings.
Please voice your opinion on the positives and negatives of cashing out now, and/or holding out for a bigger pay day. Will the prices being paid for portfolios continue to rise, or will they begin a slow decline? Will highly targetted traffic continue to be bought at 8-10 years revenue, will generic keywords and brandable domains soon start to sell for much more? Will the advertisers that are currently spending tens of thousands of dollars per month on ppc advertising, see that they can cut costs by owning the sources of this targetted traffic?
Share your opinion, I am curious to see what you think, before I share my own.
Sidney Parfait
DropWatch.com
May 22nd, 2005 at 2:35 pm
I think many people with large domain inventories are trying to bail out right now, given the few high sale prices we have seen in the past 12 months. There would have been many more sales, except some people still try to cling to their pipe-dream of late 90s and asking way above what the market would buy.
PPC is a model that is quickly losing its legs as more and more fraud is uncovered and advertisers become ever more paranoid of this. Curious type-ins, the model that fuels PPC traffic, don’t convert well into sales, so the worry that people will soon uncover and discover “truckloads of rotten traffic” is there as advertisers start looking more and more into conversion ratios.
As bricks-and-mortar exploit the web more, they will fuel massive web traffic through spiral techniques that will make the type-in model look like Alice In Wonderland, totally clueless.
You can fool some of the people, some of the time. The strategy seems to be to fool as many people, as quick as possible. The clock is ticking.
IMHO.
May 22nd, 2005 at 8:42 pm
The only group I know that paid 8-10x annual revenue was Marchex, and keep in mind they weren’t just looking at current revenue, but also the potential value of each domain. I don’t know many others paying above 2-3x.
May 23rd, 2005 at 11:17 am
DropWatch: Is VC Interest A Selling Opportunity?
Does the venture capital money flowing into domains mean it’s time for portfolio owners to cosndier selling?
May 26th, 2005 at 2:02 pm
DomainNameWire.com Says:May 22nd, 2005 at 8:42 pm e
The only group I know that paid 8-10x annual revenue was Marchex, and keep in mind they weren’t just looking at current revenue, but also the potential value of each domain. I don’t know many others paying above 2-3x.
This borrowed from an article by Ron Jackson DNJournal.com
“Venture capitalists were busy working the crowd……During the standing room only session they told attendees they were looking to acquire portfolios for 5-7 times annual revenues”
That is the point of this topic, to gain the perspective of readers and hopefully understand the pros and cons of selling at this time.
June 12th, 2005 at 10:55 am
People are not willing to let thier names go at a reasonable valuation. Everyone wants that next BIG sale when in fact those are rare and far between. I personally contact people about buying domain names all the time and the people in the market are always asking insane prices. Everyone wants to sell on brandability. IMO, brandability is what you make of it. I am not paying you good money for a name when there are a million other names out there for 8 dollars just like yours with no traffic.
Ebay, shopzilla, tucows…..there are tons……don’t get lost in the hype!