Internet marketing firm Marchex Inc. has finalized a deal to pay a whopping $164.2 million for Name Development Ltd., which displays keyword advertising across a portfolio of more than 100,000 domains. The deal, along with the recent sale of a misspelled domain name for $112,000, offers evidence that mistyped URLs and other "accidental traffic" have become big business
source [news.netcraft.com]
Now, why would they want to sell in the first place?
Besides, why not cash out? Time to do something new!
Now, why would they want to sell in the first place?
The simple answer is liquidity. With the size of their domain portfolio, it was necessary to negotiate a sale. Selling 100,000 domains piecemeal would be an enormous undertaking. Secondly, a huge supply pressuring the secondary market or even a rumor getting out that they were dumping that many domains would likely send the domain market into a tailspin. Third, the domain market is currently experiencing a significant uptrend. It is much easier to sell a large portfolio in good times than when prices are collapsing.
Classic inveestment advice is "Buy low. Sell high.".
a) their business isn't as good as it used to be, eg. because of more competition and stuff. If poor cash flow is the reason the price seems way too high.
b) 100K domains is all or if this was just part of their portfolio, ie. that business goes on in another firm (normally there'd be some competition clause in a sale like that so i guess it's not as likely)
