THE PRESENT TENSE- HOW CAN IT BE MADE PERFECT?

According to reliable news service reports, dot com companies are currently failing at the rate of about one per day; some 9,000 jobs were lost in the Internet industry over the course of 2000, with most of the losses occuring in the latter half. It is anticipated that at least 30 additional mid-size and large e-commerce firms will shut their doors by the end of the first quarter of 2001, and it is entirely possible that the pace of closings will accelerate over the remaining portion of the year. At one time, start up companies based on ingenious idea had only to knock at the doors of the venture capitalists in order to secure ample funding; however (after the fall) nervous investors now insist that traditional, stodgy performance standards such as return on equity and capital turnover rates be satisfied before committing their cold cash. Near term prospects for profit, a subject not even mentioned prior to the last six months or so, have suddenly come (once again) to the fore as an important basis for buy, sell and hold decisions. It has recently become very noticeable that even the great names associated with viable e-commerce sites are bucking against stiff price resistance and buyer skepticism as they shyly present themselves in the resale market. Blockbuster names such as Orange.com can still command megabucks in the auction ring, but they are the beneficiaries of rare, serendipitous niche positioning. The blush is most definitely off the bloom for domains being offered in the $500,000 plus range; further evidence of slowing can be taken from the fact that mid-cap names ($50,000-$250,000) are experiencing considerably longer dusty shelf stays than a year ago.

Given the above difficult market conditions, why am I advising that the present time provides a good setting for undertaking the sale of dot com web sites and names? Several of my colleagues are advising that now is the time to hold on to good, solid dot coms and to await the turnaround that they anticipate will occur when the dot com inventory scarcity reaches the critical stage. Surely, they reason, dot com names put aside for investment purposes will significantly appreciate in value as the possibilities for valuable generic and creative brand names grow slimmer and slimmer. While I agree to a certain extent with the validity of the above counsel, I do not hesitate to suggest that holding dot coms in anticipation of future appreciation is fraught with a fair degree of risk and that there are compelling reasons why the present is a good time to place dot com names and businesses up for sale.