When To Sell?

It’s very hard to time the market. I generally feel that if you are inclined to sell the business (instead of working for 7-10 years to build something large and capable of being a public company), then you should sell when they buyers are knocking down the door. I’ve always said that venture backed companies are bought, not sold.

I was reminded of that this morning when I saw the news that Digg is likely to be sold to either Google or Microsoft for between $200mm and $225mm. That’s a fantastic outcome, no doubt, and I have always been rooting for Kevin and his backers from Greylock. But Arrington goes on to say that the sale price is less than the $300mm that Digg’s bankers at Allen & Co were floating last year.

So I went to comScore to see what Digg’s traffic trends look like. Here are the worldwide UVs.


And here are the US-only UVs:


So Digg’s awesome growth over the past three years may be flattening out. That makes sense. There are only so many social news junkies out there. A slowing growth rate doesn’t mean that Digg is a bad business. It’s probably becoming a better business because they are probably monetizing it better than ever these days. Both Google and Microsoft could justify the $200mm-ish purchase price and get a good return on it, the way that New York Times has gotten a very good return on About.com. In fact, I think The New York Times would be a better buyer for Digg than either Google or Microsoft because they are all about news.

But regardless of who buys Digg, it’s clearly a good time to be selling it. Maybe last year would have been an even better time. It’s never clear when the perfect time to sell is until it’s passed.

#VC & Technology