Zip-Lining through the canopied rain forest in the Jamaican mountains, I can’t help but to think about Frank Schilling’s post on SevenMile.com. Like most of the big domainers, he doesn’t sell domains and he attempts on his blog to explain why that is so.

Perhaps because I was flying through the trees at night I could focus on the question at hand. When is the right time to sell a name?

I think back to my days at an Internet start-up in the mid-nineties. The venture capitalists would rant about how they would only invest in a company with one of three exit strategies. They would need to “go public” so their shares would be liquid, sell the company or the founders would need to buyout the investors.
What was their reason for this way of thinking? They wanted to realize their gains. They were keenly aware of the worthlessness of paper wealth. Gains aren’t realized until the cash is in the bank. Having something worth money is not the same as having money.

I think that many domainers out there have only paper wealth. I’m not speaking of Frank who has both. A good deal of domainers are sitting on names that are worth a pretty penny but generate little income and they refuse to sell the name. I just don’t see the sense in that.

I suppose part of it is personality related. For me, I can sell a name at or slightly below today’s value and feel comfortable that I can do more with that money than what I sold it for. If I was someone that didn’t have faith in my ability to buy something new for far less than today’s value I would struggle with it a bit more.
For now, I’ll take the cash and this little girl on an adventure.

               

8 Responses to “Realized Gains”

1. Mak Ossa on April 3rd, 2008 at 9:13 am

   I think that was an interesting link to SevenMile. Apparently, Frank is a die-hard buy-and-hold domain investor. He’d probably prefer bonds/mutual funds over stocks. While nothing wrong in playing it safe, but for how can one hold domains? Till infinity? Especially if a domain seller knows that a name has a sentimental meaning to a buyer. Why can just name a price and sell the name to the needy buyer at a good price. This cliché applies: “the more you give, the more you shall get. Just like you said, sell a name and you could come with another one even better. I just feel sorry for those desperate buyers and how they were turned down. I bet some of those sought-after names today might not worth pennies tomorrow because people would get alternatives. some how. Some would-be clients are one-in-a-life time. Letting them go is like throwing fortune away.

   Take it easy with those stunts, Rick. You make the beautiful little girl nervous.

2. Elliot's Blog | Domain Investing News & Commentary on April 3rd, 2008 at 9:40 am

   [...] Rick Latona makes some good points about why domain owners should consider selling some of their domain names: “I think that many domainers out there have only paper wealth. I’m not speaking of Frank who has both. A good deal of domainers are sitting on names that are worth a pretty penny but generate little income and they refuse to sell the name. I just don’t see the sense in that.“ [...]

3. nina villacrusis on April 3rd, 2008 at 12:22 pm

   awww..you have a cute daughter

4. Tivo on April 3rd, 2008 at 1:00 pm

   You are a wise man. Realizing what you own before its to late is a great sense of awareness. I agree with your points of view on this one.

5. Harold on April 4th, 2008 at 9:07 pm

   One also needs to keep in mind that fielding and responding to domain sales offers takes time. Negotiating takes up time.

   With an 8hr day, 5 days a week… each hour of Frank’s time would be worth somewhere just shy of $10,000. Now, be realistic… how profitable would it be for him to spend even an hour of time total to negotiate domain sales?

   Sure, there are exceptions to every rule, but with his time being this valuable I can certainly see why he finds “other” things to do with it.

6. Jason on April 5th, 2008 at 11:53 am

   People like Frank don’t really have to worry but many domainers who hold and never sell will definitely see some of their names become worthless as technology advances. I’m sure a lot of people who had great hd-dvd names wish they would of sold them before they became obsolete.

7. Rick Latona on Why to Sell | PostHits.com on April 6th, 2008 at 2:22 am

   [...] Rick Latona makes some good points about why domain owners should consider selling some of their domain names: “I think that many domainers out there have only paper wealth. I’m not speaking of Frank who has both. A good deal of domainers are sitting on names that are worth a pretty penny but generate little income and they refuse to sell the name. I just don’t see the sense in that.“ [...]

8. The Man! on April 9th, 2008 at 3:58 pm

   WOW her mouth really opens wide! She must have been reeeeaaaal scared!

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