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The Art of Selling: When To Get Out & When To Hold

Like with stocks, websites are a similar business with many entrepreneurs flipping them left and right for huge profits. So many times have we seen companies offer millions, even billion for that next great up and coming website. The big question is, what you the owner/founder should do? Should you taken the money and run or should you develop the website to earn huge profits and then sell the site later on for even more. This is a huge decision that many owners constantly fight with, it's the same problem investors have on deciding whether or not they should sell their shares. We believe more times than less it's better to take the same route and sell and take the money and run. You can do something amazing with that cash and have stability and don't have to worry about whether or not your site is going to become the next big thing.

We have seen many examples in the past of owners making the right decision and selling a website that's value later crashed significantly. Look at Marc Cuban, who sold his website, Broadcast.com, to Yahoo in 1998 for $5.9 billion in stock. This deal made Marc Cuban the owner of the Dallas Mavericks and a well-known investor and billionaire. He is a great example of why you should take the money and run. Below we take a look at some other websites and what their owners should or should not do.

MySpace.com

How popular did MySpace use to be? Everyone remembers the days where we use to waste countless hours updating our profiles, spying on friends, etc. MySpace use to be what Facebook is today, it was one of the top web sites on the internet and a revolutionary leader. MySpace introduced the world into the importance of social networking and the concept of having 'friends' online. The owner/founder was the infamous Tom, who everyone has to be friends with upon joining MySpace. Tom will always be known for selling out and taking the money at the perfect time, a true heist/highway robbery of Rupert Murdoch's News Corp who paid $580 million for MySpace. In 2007, two years after the sale Yahoo offered Murdoch an insane offer of $12 billion in stock for what was then still hot and growing, MySpace. Later to his regret, Murdoch turned down that offer a decision that would cost him dearly later on. Fast forward and MySpace is nothing near of what it use to be. In a few short years, MySpace has become the laughing stock of the social media world. It's number of active users has dropped significantly, it's presence online is not once it use to be as besides Music MySpace is hardly used. The even more significant drop is the current value of MySpace. Present day, MySpace was sold for a pathetic price of $25 million to an investment group by News Corp. In the end, New Corp invested $580 million dollars only to then turn down the opportunity at $12 billion dollars and then eventually walk away with only $35 million. Rupert Murdoch must be kicking his pants about this acquisition. Just think about what would have happened if Murdoch did in fact accept Yahoo's bid and sell MySpace for $12 billion. I think we should have seen a shuffling of Yahoo's upper management a lot sooner than we did. Tom however is living the life and the founder of MySpace all walked away winners, another great example of why you should sell when you get the opportunity.

Twitter

Twitter has quickly become a world phenomemon. There is not a day that goes by where we don't see someone quoting a Tweet, analyzing one, or a celebrity being criticized for what they wrote. The Founders of Twitter are great innovators and when it comes to creativity their skills are amazing but when it comes to running a business I believe they fail on may levels. One of these days they need to write a business plan and actually start making money but in the meantime they are still loving the cool factor Twitter has and it's huge popularirty. The problem is websites only stay cool for so long. Ask Rupert Murdoch about this and he will tell you how the coolness factor doesn't last forever. While it's cool not to make money at first long-term it's not. Twitter turned down an offer from Google for $10 billion, something I was shocked by. Why not take the money, be set for life, and still use the cash on hand to accomplish all your goals and dreams? If Twitter doesn't figure out a way to make money and capitalize off their great popularity they are going to deeply regret it and find themselves in a similar position as MySpace falling from once being valued at over $10 billion dollars to a measly $35 million. While $35 million is still a nice chunk of change, it's not the same as billions and doesn't give you the same flexibility to do whatever you want. Twitter is now valued at $8 billion dollars, however continued problems with their business model and lack of high revenues is putting a damper on their overall valuation and making them not so attractive to companies as they once were. Also new competitors such as Facebook and Google+ have been making it more difficult and tough to continue to be both profitable and 'cool'. In the meantime, I think the owners of Twitter need to think about selling a lot more serious than they once have in the past, that is if their are still an serious bidders out there.

Google

Unlike Twitter and MySpace, Google defies the odds on websites and has stayed cool for well over a decade. Google itself has become a tern in the dictionary and a site billions of people use on a daily basis.  They have found great ways to make money and have done it successfully for quite some time. They have also always been staying cool by acquiring new companies and buying lots of start-ups gaining everyone's attentnion. Instead of looking to be bought out, Google has developed into the company all tech startups wish to be attracted by. Google is a world renowned innovator and have become one of the largest technology companies in the world.

Facebook

Facebook has become the world's largest social network in the world with over 750 million active users. Their is not a day that goes by that many users don't check their accounts, often users spending hours on hours chatting with friends, checking out photos, reading what people have to say. It's so popular that Goldman Sachs valued the company at over $50 billion dollars, with a real business model. Facebook is being sought after by many of the world's largest internet companies. It's become the biggest thing in today's society and Mark Zuckenburg, founder of Facebook, has become a well known figure for his past and for his drama filled days of starting the Facebook. The big thing he needs to finally do is make Facebook a huge revenue generator. While MySpace failed at this, Facebook still has an amazing opportunity to become the next Google and rule the internet world.  As for expectations of any sort of sale, I think Mark Zuckenburg is to proud driven to ever sell his beloved start-up. I believe he is to scared of what they might make it into or the fact that they might make it into the next Google that he holds onto it, controlling it solely on his own. This is another reason Facebook has avoided an IPO for so long, Zuckenburg doesn't want a board of directors he has to report to, or investors he has to impress, and most of all report the real numbers of what Facebook is doing.

If you owned any of the web sites above, would you have taken the money and run… or continue to build out your company and potential networth?