The dot com industry is currently experiencing a significant downturn, with companies failing at an alarming rate of one per day. The year 2000 saw the loss of approximately 9,000 jobs in the internet industry, with the majority of these losses occurring in the latter half of the year. It is projected that at least 30 more mid-size and large e-commerce firms will close their doors by the end of the first quarter of 2001. This trend may even accelerate throughout the rest of the year. This article explores the current state of the dot com industry and provides insights into why now might be the perfect time to sell dot com websites and names.
In the past, start-up companies with innovative ideas could easily secure ample funding from venture capitalists. However, the recent downturn has made investors more cautious. They now demand traditional performance standards such as return on equity and capital turnover rates before committing their funds. The focus has shifted towards near-term profit prospects, which were not a significant consideration six months ago.
Even well-established e-commerce sites are facing stiff price resistance and buyer skepticism. While big names like Orange.com can still command high prices at auction, they are the exception rather than the rule. The market for domains priced over $500,000 has cooled significantly, and mid-cap names ($50,000-$250,000) are staying on the market longer than they did a year ago.
Despite the challenging market conditions, there are several reasons why now might be the perfect time to sell dot com websites and names:
The future of dot com and TLDs can be compared to the 800 long-distance numbering plan or a superhighway whose lanes are inadequate to handle the traffic volumes. When the "exclusive" 800 scheme reached depletion, 877 and 888 were introduced as acceptable substitutes. Similarly, as the need for TLDs other than dot com becomes more apparent, it is almost certain that at least one new TLD will succeed in the foreseeable future.
In conclusion, there is ample evidence to support the argument that now is an excellent time to sell dot com names. There are certain risks associated with waiting for improved conditions in the future. The key takeaway is that creativity will continue to be an important factor in the creation of new domain names, regardless of the TLD in which one is operating.
