The Psychology of a Multi-Million Dollar Sale (

By | April 15, 2009

In January 2008 I sold and 170 related sites for $4.5 million. This represented over half of my company (I still have 200+ smaller sites and 9000 domain names), and the vast majority of my profits. was easy to run, had 10 years of steady growth, and there was little risk that the income would ever go down. So, why did I sell?

The main reason I sold was so that all my wealth would not just be virtual. Having paper profits is great, but there is nothing like having lots of money in the bank. If the Internet keeps going up, I still have a big business that will keep going up in value. If everything crashes, at least I will still always have enough money to live on.

That is the short version of the story, but there was really much more to it. Selling a business isn’t an easy decision, especially when you’ve put a lot of time and energy into it.  Over the years I had received some lowball offers for, but never really considered selling it because it made a huge amount of money ($35,000/month profit), was not hard to manage, and kept growing year after year. On the other hand, I had spent the past 13 years working 7 days a week to build up my company, with the constant pressure of dealing with hundreds of emails and phone calls each day and worrying about things like server crashes, payroll, accounting, potential lawsuits, bills, and taxes. I could not let anything slip through the cracks because it could have led to the downfall of, so it was a lot of pressure.

In 2006 I got a multi-million dollar offer for from a buyer who had bought some domains from me in the past (through a broker), but the problem was he wanted me to finance much of the purchase price, and in addition he needed to first sell one of his big domains to raise the cash, and I had doubts if that would happen as easily as he thought it would. So, I did not take his offer too seriously. But, over the next year or so we went back and forth on various potential deals for, and during that time I started to realize selling might be a reality, even if I found another buyer for it. What at first seemed out of the question to me (life without suddenly now seemed like something I wanted to do. In fact, there was a period of a few months where I did not hear from the buyer, and I assumed the deal was dead, so I went out looking for other potential buyers. I was now almost desperate to sell, because I already had it in my head that that was the plan. I had already started dreaming about having all that money in the bank, working less, and focusing more on my family. In fact, at that point I didn’t really care what part of my company I sold, I just wanted to cash out. One option was for me keep and sell my domain portfolio, but after I solicited some offers, I realized the price would be too low to make it worthwhile for me. Plus, it took almost no work to run my domains, so it made more sense to sell the sites I spent most of my time on, and keep my domains which made me money without having to do any work.

One reason I had not seriously though of selling before was that my hope was to build up so it was huge site, and then eventually sell it for a crazy inflated price like all the other Internet deals we all read about. If other similar sites could sell for $20 million, why couldn’t mine? So, when the initial deal seemed dead, I shopped it around to companies like Google and Yahoo, but they all seemed to want bigger, more developed sites. They wanted sites with members, and sites with a much more professional design. was more of a fixer-upper type site for them, and they were not looking for that. I did almost make a deal to sell it for $5 million to a small company that ran some sites similar to, but that fell through because they buyer was having some business problems and needed to focus on other things.

Then after several months of not having any interest in the site, a company I had previously contacted about buying my 9000 domains emailed me to say they might be interested just in Then that same week my original buyer emailed me to tell me he was now ready to make a deal, and this time it would be all cash. At this point I was willing to let go of the dream of selling for an insanely high price, and settle for selling to whichever of my 2 potential buyers would pay the most for it.

My realistic goal was to sell for enough so I could put the money in the bank and live off the interest (bank CD rates were around 5% back then). I estimated that $5 million was an ideal amount for this, keeping in mind that I had to pay big taxes on this sale, and possibly a broker’s commission (depending on which buyer I sold to). I also included 170 related sites in the package because these were sites linked to, or shared content with, plus they all linked back to And, whoever ran could easily run these sites because they were setup similar to how was run. Also, if did not sell these sites, the new buyer might decide to remove the links to these sites from, and traffic to them would go way down and they would not be worth that much anymore. These sites added around $5000/month in net income, making the total net income around $40,000/month for all the sites I was selling. Losing this $40,000/month in income would mean my company would have almost no profits left, so that is why I had to make sure to have enough in the bank to live on after selling.

The initial offers from each of the 2 buyers were in the $3 million range, but by having them bid against each other over a 2-3 week period, I was able to get the new buyer up to $4 million and the original buyer up to $4.5 million. I had to pay a 10% broker’s commission on the deal with the original buyer though, so that made both offers about the same. What eventually made me decide to go with my original buyer was that even though I thought the new buyer was a much better fit for, they wanted 6 weeks due dillegince, meaning they needed 6 more weeks to look everything over and they could back out for any reason during that time. The original buyer, knowing they might get outbid, offered to give me a $500,000 non-refundable deposit and the rest in 3 months, as long as I was willing to put the domains in escrow (to protect them from me running off with their $500,000) until the deal closed. If for some reason they backed out, I would get to keep their $500,000. This all sounded fair to me, so I took the deal. The deposit part appealed to me because with big deals like this, many times things go wrong, this way I would at least have $500,000 from all of this. And, if I had $500,000 in the bank, I actually would not care nearly as much about selling anymore, and I maybe would have kept it. Putting and the 170 sites into escrow was actually something I worried a lot about, because although I was getting a $500,000 deposit, there was still some risk. We choose to handle the escrow, but I worried what might happen if they went out of business during those 3 months, or if they got sued, or something else bad like that happened. I could potentially lose almost everything. assured me they had protection against stuff like that, but there was nothing they could have said that would have made me feel 100% secure about it. After the 3 months though, the buyer paid as planned and the deal closed.

There are also some other reasons I sold:

1. was a very Web 1.0 website. It did not have social networking, user uploaded videos, blogs, or Facebook/Myspace/Twitter integration, or anything all the more modern sites now have. It even had pretty much the same look and format it had 10 years ago. I was always scared to change this too much because was such a big success, and I worried any big changes I made might cause the site to not be popular anymore. Also, I am now 40, and although I know about all the latest Web 2.0 stuff, I am not really into it like most younger people are. could easily have stayed the same for another 5 years, but eventually it would get too out of date if I didn’t update it. A new owner could easily do all these changes, and maybe make a lot more money from it.

2. I never did any direct ad sales for, I just used the major ad networks such as Google and Casalemedia. A new owner could make double or triple the ad income by selling ads themselves, or reformating the site to have higher paying ad formats, so it was worth more to somebody else.

3. I was constantly having to think of new sites to create for After creating over 200 sites like that, it became a lot harder to think of new ideas. I could have just stopped adding sites to, but I worried what effect that would have on traffic.

4. There were some tax advantages for selling. I was able to structure the deal so I sold my entire company, instead of just selling my websites, which allowed me to pay around 1/2 as much in taxes as most people would pay. If I had just sold, it would have been treated like any other income, where I would have had to pay 30%-40% in state and federal taxes on it. But, by selling my company it was considered a captial gain, like when you sell shares of stock in the stock market. Capital gains are taxed at much lower tax rates. Most buyers don’t like deals to be setup this way though because it makes it much harder for them to deduct the purchase price on their own taxes. If they buy a website, they can deduct it, of if they buy a company they can’t.

5. I felt like I had been in a casino for the past 10 years. Every day was a gamble, and I could lose it all at anytime. It was thrilling, but also exhausting. It was a nice feeling to walk away from the table with money in my pocket.

6. My entire company was run by me, so if I ever died, it would be very hard for somebody else to take over for me. My servers would eventually shut down (from non-payment or computer problems) and my sites would be almost worthless. Somebody could try to liquidate everything quickly, but it would be a hugely discounted prices. Now if I die, my wealth will be easily transferred to my family.

7. When I looked into selling in 2007, I was eager to try to close a deal quickly because I was pretty sure the economy was soon going come crashing down, and I wanted to sell before that happened. I did not think my websites would get hurt much by a bad economy, but in a recession there are a lot less companies spending big money to buy websites, and the sales that do take place are at fire sale prices, so I wanted to avoid that.

So, that was the end to this chapter of my life. But, things did not go exactly as planned. More on that in future blog postings.

34 thoughts on “The Psychology of a Multi-Million Dollar Sale (

  1. GenericDomainMarket

    Thank you for sharing and congrats on such a great deal!

    BTW, since you who are running your company (yourself) after the sale of & even before that. Why you didn’t focus on a couple of big websites instead of running hundreds?

    1. admin

      Yes, looking back I should have focused on only big sites. But, at the time it was hard to know which sites would take off, so I wanted to play it safe and have lots of sites that were making money. Since I sold, I have launched very few new sites and instead am just focusing on building up my existing sites, and trying to make a few of them really big (mainly,,,. and

  2. Pritish


    I read the whole story and am wondering how you managed so many domains. I have only 10 and I can never focus on all at the same time. I have also sent an email to you. If possible please provide me an idea which one I should focus on. I work from home and have time for my domains. But I always wonder, which one I should be focusing on.

    BTW it was a great story. I guess all the readers and specially domain guys will have a lot of encouragement by reading this.


    (from India)

    1. admin

      Back before parking companies existed, I used to manually put affiliate links and search engine results on each of the domains. Once parking companies came long, I just parked them. The sites I create usually have nothing to do with me owning a particular domain. I create new sites based on new ideas I have.

      The problem with parking though is that unless you have a huge number of domains, you will never make a lot of money from it. Parked domains get hardly any search engine traffic and traffic does not grow over time. Developing the domains at least gives you a shot at hitting it big in the SEO lottery and getting a lot of traffic.

  3. Marc

    Thank you so much for sharing your interesting story. I was able to glean a lot of wisdom from it.

    And your down-to-earth candor is very refreshing. I can tell you are a very pragmatic person. I have bookmarked your website and will be sure to return regularly.

    I’m new to domaining and own a portfolio of 125 domains, plus two content sites I am developing with unique keyword-focused content in my spare time.

    So far I’m only making a profit from my two content sites.

    Since I have a Science background many of my domains deal with emerging technology, such as: nanotechnology, photovoltaics, robotics, and sustainability.

    Question 1: Do you think emerging tech domains might be a good way to invest in what will in 5 or 10 years be the newly born premium generics as those new terms become semi-household names in the world’s lexicon? And do you know of any domainers who specialize or have portfolios of emmerging tech domains?

    I own a few which I think may bring top dollar from industry buyers in that timeframe, but they are definately more speculative and require patience to hold with little to no fundamentals supporting name value currently (I know I probably broke a cardinal rule of domaining by registering the below emmerging domains without a developed market – but they were bought as speculative ground floor investments in anticipation of future developments…risky I know…like I said I’m a domain newbie;^)

    Here’s a few examples of my nano domains. Am I a fool for registering these even if I can afford to eat the losses for years to come?

    Several are related to the inevitable health problems that will increasingly make news as nanoparticles in numerous products become inhalation hazards for workers and the public.

    Question 2: Do you have any experience with

    I just transferred my entire domain portfolio to them because it seems a big step above’s plain old parking (which earned mere pennies for me).

    I like WhyPark because they allow you to automate content and monetization via their article feeds and PPC ad network. Plus I can add my own unique keyword-focused content pages too (which I definately want to do since I fear search engines will penalize for having duplicate content in the form of their widely distributed articles).

    Any thoughts on how successful a rich content site COULD be with WhyPark? Or will my domains be automatically hobbled because the search engines will see whypark in my DNS settings and rank them lower despite rich content?

    I would love to hear any advice you have.

    1. admin

      Yes, I think buying domains that you think will be big topics in years to come is a great way to invest. For example, I bought a bunch of HDTV domains when I first heard about it, and also a bunch of cloning domains when cloning sheep (Dolly) started getting publicity. But, it does cost a lot to renew all those domains each year, so it is important to try to put some content on them to get them listed in the search engines at least, so you get some income from them.

      No, I have never used, but I have read about them. It is certainly worth a try over Sedo. Some people have had good luck with minisites (like from at, other people say they make just as much from traditional parking. No matter what, it is always worth trying new parking type services. If you do spend time using WhyPark’s customization tools to make your sites unique, then that might work out really well. Most of what I have read is from people who just use the standard minisites that services like WhyPark automatically create.

      I don’t think you will get penalized for using whypark dns, but duplicate content could hurt you. See details at . But, I hardly get any search engine traffic to my parked domains (at companies such as Sedo), so I don’t think you can really lose much traffic from this. You can always switch back to Sedo if there are problems, and Google will reindex your pages.

  4. Marc

    Thanks for your advice.

    I too did some checking into cloning domains around 7 years ago and I can recall coming upon some great generics which I for whatever reason didn’t get around to registering unfortunately, then later realized they had been grabbed (maybe by you! ha)

    By the way, if you don’t mind me asking, what do you think about this domain?:

    I own it and feel it could be an emmerging premium tech TLD especially as searches for that term increase over time.

    Intuitive Surgical’s da Vinci surgical robot is a smash hit and a harbinger of what’s to come in a big way (or so I’d bet my bottom dollar).

    Thanks for all your selfless sharing.

    1. admin

      Yes, I like a lot. That could be a big industry soon.

  5. Porter

    That was an awesome read. It’s very inspiring to see an quick overview of how your built your company, and how you eventually sold it. Were you at any time banking a certain percent of your earnings? If you set aside $20k a month, that would have been nearly a quarter a million a year. I assume you were living a rather luxurious lifestyle with $30-$40k profits a month.

    Question for you, when you first started your company, was the only site, and did you decide that it would be the main site? If so, did you then build other sites, and eventually evolve I have a site right now, and I want it to be my main site. I do however think that owning other domains and pointing the traffic all to one main site is the way to go. Did you just keep purchasing sites, knowing that would always be the center of attention? If you have any posts about this, or any info, email me at, I’m eager to read/hear about it.

    Either way, you now get to sit back and do what you want with life, and have enough money to comfortably do so. Again, awesome read, thanks for sharing.

    1. admin

      I was paying around 40% in taxes (Federal, State, Social Security, etc.) so my after tax profit was more like $20,000/month. That is still a lot of course, but for a few years I used that profit (after living expenses) to payback past debts, and before that my company as a whole was not making that much money. I had a lot of other expenses which were not all directly related to, but were because owning made me a big company and I was constantly expanding. For example I had a lot of employees and contractors and servers which I did not need just to run, but I needed to keep building new sites and growing. When I sold and those 170 other sites I decreased my company expenses by around $15,000 month and only 1/2 of that were expenses the new owner ended up assuming.

      What it comes down to is that before the sale, I was constantly building new sites, buying sites, adding programmers, and all the typical things a growing company does. Since the sale, I have pretty much stopped all that and I just focus on the sites I already have, and that requires little cash.

      So, at the time I sold I had around $200,000 in the bank, and that would have grown over the coming years, but probably by more like only $100,000/year, since much of my “profits” I would have reinvested into my business to try to make more money. Maybe in 10 years I could have then sold this much bigger business for $45 million instead of $4.5 million, but there was also the risk things could change and I would lose it all, or die, or whatever. Plus, I don’t really need $45 million (although it would certainly be nice).

      In answer to your other question, no I had no idea when I started it would be my main site. That is why I built so many other sites over the years, because I was not sure what would become big. I knew would be my most popular site, but that does not always translate into making a lot of money. Looking back though i should have focused much more on growing so I could have sold it for much more money.

      The main thing about having one big site ( was that that pretty much any site I created or bought would do well as long as I associated it with (like linking to it from Or, if I linked to from the new site, at least it would send more traffic to my main site, even if the new site did not make money on its own.

  6. Internetual Domain Forum

    great to hear your story
    i remember when your sale was posted on dnf and you posted once i think and then was never seen again. i remeber thinking did you just take cash and run off into sunset
    thanks for a great post, fascinating stuff. hope i will be where you were in 2007 in a couple of years!

  7. Hitnamer

    If you think that was a lot of money, check out and read the press release below:

    Game Vendors scramble to purchase

    A record-breaking domain sale is expected to lift suppressed dot com prices as major game vendors scramble to purchase prior to the launch of the worlds first 3D console by Nintendo in June of this year.

    See press release:

    The auction is currently running at and industry experts are suggesting a 5 to 6 figure sale, which would be a very welcomed boost to this one time booming industry.

  8. Sandy Utah Chiropractor

    You have such an inspiring story. Hopefully people who do business in the internet would come across your article. And yes you’re right, “there is nothing like having lots of money in the bank”.

  9. lee m

    Hi .. great story.. (I found your post and link over at new found names today and followed you here! ;))

    I am in a very similar position. I have built and developed my two main sites for 6 years now, and for last 3 to 4 years they have been delivering between $15 and $20k per month (mainly profit!).. I am at the point where I am thinking of selling… as I feel I have taken them as far as I can, and to maximise revenue from all the imps that are being wasted I think you need to look at ad sales staff etc.. and being developer it’s not how I feel I want to go about things.. managing staff etc..

    Any pointers on where I could look to sell a site with strong established revenue and good potential for growth? (it’s in stocks and financial sector)..

    Been searching and only seem to find what seem like dodgy brokers or flipping auction sites.. (flippa etc).. I think what I have needs a more profesional sales push.

    Thanks .. would really appreciate any links or ideas you could chuck my way 🙂


    1. admin

      I think the best way to sell a big domain or site is through the well known brokers, like or or They all frequently do million dollar+ sales.

  10. lee m

    Thanks for the quick reply.. I knew of but never looked at others.. Will look today.

    Was your eventual sale a stressful process?..

    1. admin

      It was not too stressful, but that is probably because I was also fine with keeping my sites if the sale fell through. Also, I had 2 buyers bidding against each other, so I was pretty sure one sale would close. And, once I could see that I probably was going to sell the site, I was a lot less stressed running it, because I stopped doing new projects, which was what caused most of my stress.

  11. lee m

    Yeah I guess when your mind is ready to sell and it’s all falling into place it would be more of a relief than added stress 😉

    Thanks again.. hopefully I can offload my main sites this year or next, as I too would like some cash in the bank.. (40 soon!)


  12. anunt

    You guys bought from me…if i had known that you guys got paid $4M, i would have asked for more $$$…LOL

    1. admin

      I don’t recall ever buying I have only bought a handful of domains ever, so I think I would remember. Plus, I am not the current owner of the domain and have nothing to do with the content on it.

  13. Medical domains

    A very inspiring story and I hope to follow in your footsteps. I am a Licensed Professional Counselor and started about a month ago.

    I am already very high in the search rankings for (counselor domains for sale, psychiatrist or psychologist domains for sale etc). As a domain guy, should I just sit back and wait for the Psychologists of the world to figure out that their customer base has moved online, or should I start an email campaign to enlighten them?

    Got any good sales letter techniques or ideas?

    Just curious.


    1. admin

      I think it would be worth it for you to try sending out some emails. The chances are small that psychologists will find your site on their own. I have never sent out emails to sell my domains thoough, so I don’t have any suggestions.

  14. Medical domains

    Thank you for your feedback.

    I think I will go direct to consumer by email……as a mental health professional to a fellow colleague.

    Throwing it our there……… would you proceed if you were me?

    1. admin

      You should try using domain brokers also, like,, and

  15. Afif

    Wooh, nice story.
    I always wondered on how people unlike you could have stayed with the same site for more than a decade. I had recently finished investing in a near 5 figures to a site of mine, domain purchase, design, code + site development and suddenly when I was left with only marketing to do I collapsed mentally.

    If you have some tips to avoid mental stress exhaustion do share it. ^^
    I am still in my early 20s but I have been involved in site development since 7 years ago.


    1. admin

      I had over 200 other sites and 9000 other domains, so although was my main focus I never got sick of working on it. Also, it was a fun site, so that helped. I think running more than one site, or at least trying to think up new ideas for sites, keeps things interesting.

  16. Michael Salem

    So, I’m very curious about what you think of my website

    My partner and I recently started this website and we’ve always seen as a type of inspiration. We’re really aiming just to provide high quality flash games and tournaments so the users can compete with each-other. Our goal is to one day be as large as your company was and I’m just looking for some advice/opinions.

    Truly an inspirational story!

    1. admin

      Your site looks great. I like the design a lot, very clean and friendly. There are so many game sites out there, I am not sure what you can do to get noticed. did well mainly because it got a huge amount of type-in traffic and search engine traffic from having a great domain name. But, in general, I know many game sites do very well, so hopefully yours will take off.

  17. Michael Salem

    Thank you for responding. We’re trying to be very different from all those other game sites. We create everything from scratch and code custom features that will attract users(hopefully).

    Being only 19, and my partner being 20, we have much to learn and we’ve found that SEO is the best route so far, as you mentioned. We’ve only been live for 3 months but we appear on the home page for 3 keywords ex(fun games online) and other ones just like that.

    You really nailed it on the domain name!

    I have a question though, did all of your income from come from Adsense and Casalemedia? If so, that was a ton of traffic you were getting!

    1. admin

      About 95% of the income was from Adsense and Casalemedia. About 5% was from affiliate programs, where I would link to a site from the main page of and make money from that. Many times these affiliate links were links to sites I would have linked to anyhow, so they looked like all the other links on the site.

  18. Andy

    Very helpful that someone would share this information, thanks! You said how much you were making, but you didn’t say anything about stats. Per month, could you reveal how many visitors/pageviews (US/global)?

    1. admin

      Back in 2007 when I sold it, was getting around 2 million visitors a month and around 6 million page views. I think around 80% of that traffic was from the USA.


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