Latona skeptical about domain market recovery and relaunches Latonas.com as web asset sales site.
Rick Latona has relaunched Latonas.com as a marketplace for cash flowing digital assets.
The site will offer any type of web asset with a cash flow for sale, such as web sites, email lists, and twitter accounts.
Commenting on the current state of the domain name aftermarket, Latona wrote in a blog post today:
It is our opinion that the market won’t recover any time soon, if it recovers at all. We feel that domains just aren’t worth that much anymore and the only way to sell one for a significant amount is to get a little lucky. Many domainers take the “land mine” approach. Meaning, the more domains they have, the more likely someone will step on one of them. This is expensive and ties up a lot of capital. We here at Latona’s aren’t about to go back to building a huge portfolio and waiting patiently for buyers to come to us. It just isn’t our style.
Latona writes that it will only broker specific types of cash flowing web assets:
That’s why we’ve broadened our focus to web properties as a whole but narrowed it at the same time to only properties that generate cash flow and nothing that has an asking price of more than five times annual earnings.
A couple observations:
1. This seems like a high end Flippa site with an added personal brokerage
2. Although Latona says he only wants to sell sites at five times “annual earnings”, I think he’s referring to five times revenue. You should always be careful about revenue numbers. What interests you is the actual cash flow after taking out costs. You should also deduct an expense for how much time the current owner spends maintaining the digital asset.
This will be interesting to watch and I congratulate Rick on his latest move.
Karl Jackson says
I believe Rick may be correct. A domainer from Harvard called and told me he saw several domains I own if developed could be worth many millions.
I now can see that most may not see the vision and worth of certain domains Plus the economy is too slow coming back EXCEPT for “web asset sales” like Rick is saying. I do believe it is time to take the bull by horns and stop waiting for domainers to catch the vision. Just the facts.
Alexander says
It maybe a new direction that works better for Rick. With the success of Flippa, others will want to get into the market, it’s bound to happen. Hope Rick will do well.
With Wordpress and many platforms to help develop domains nowadays, it’s getting more challenging and exciting.
Josh says
Domainer of the Year
Brad says
I am doing find buying and selling domains.
Maybe the issue is self promotion only takes you so far…
Brad
Michael Cyger says
Usually when people say earnings, they mean EBITDA. You can look up the very specific accounting calculation on Wikipedia, or similar.
Boiled down: revenue minus expenses is earnings, since many Internet-based companies don’t have depreciation or amortization.
Andrew Allemann says
@ Michael Cyger –
In the case of a web site you might have amortization of the domain name, but I wouldn’t figure that in. The biggest mistake people make for a web site purchase run by an individual is not calculating the cost of their time.
Michael Cyger says
@ Andrew
Yes, you’re right. Anyone paying more than 5 figures is probably going to give a seller an education about GAAP (Generally Accepted Accounting Principles).
Josh says
@Karl, what are these names?
Why havent you developed them and made hundreds of millions?
The FACTS seem to be something you may no want to hear.
Josh says
@Karl, i couldnt help myself, was curious who this domainer with the potential to be a 9 figure guy was. I came across this post by you just 3-4 weeks ago, guess you changed your mind alread? So what is it, should I buy your names because the economy is coming back or should you hold and make $100M ?
“Karl Jackson permalink
The ecomomy is finally coming back ! Domain sales are climbing. There are a lot of offers now coming in for domains such as: iCloudSearch.com and FanPageAdvertising.com”
Ron says
Rick Latona is a failure, just because he says it means very little, he is a old school hustler, and is always playing an angle, be wary of this guy, his mini site business was a failure, his auction site was a failure, his newsletter was a failure, his watch business was a failure, during this time, he just wants to take some business from flippa.
Rick, stay in school, and get your high school diploma, the domain industry is not calling your name last you checked, try another industry. Nobody cares for you here… has been…
3 Pound Hammer says
Too funny ! Recover? What’s he talking about…. LOL. 🙂
Domain sales have never been hotter for me ; Then again I have never sold to domainers like Rick concentrated on.
I loved picking up some of his assets at the Sedo auction. I got some great deals and it just felt like Rick Latona was just giving up and throwing in the towel, accompanied by a negative attitude towards the domain market to boot. Most people diss something when they fail. I think that is what happened to Rick. He’s not a failure, he just failed with domaining, IMO, but he’s a hustler and he’ll make a comeback.
Just because it did not work out for him as a domain sales team approach, that is, buying domains from weaker domainers and selling them to other domainers, does not mean the domain market has softened. The domain market only softened between domainer to domainer sales, not end users. If anything end user sales are now stronger with more serious offers coming in all the time now. I don’t have any months without five figure offers and I only have about 3,000 domains. Just ask Frank Schilling. He says sales have never been hotter, with the average sales at 23K now, of which most of them he said are mediocre domains. Check out DomainNameSales.com to see his domain sales notations down the page.
Rick just got his business plan wrong by concentrating on domainer to domainer sales. He once told me some years ago that he does not understand domainers. I NEVER thought of Rick as a domainer since he never had the desire to be in this market. He also told me he never worked the domain drops. That’s just simply not a domainer. Nothing against that, but his heart was never in it, IMO.
Anyhow, I think he’s a nice guy and I wish him the best of luck with Harvard and his new business. I’m not sure how he thinks he can be successful at both at the same time. That’s just too much work for anyone to do, but I wish him luck.
Ron says
I remember Rick Latona held many adult names, that sector really tanked, single word, and 2 word generic domains, especially industry, or product related will always thrive, as they can be built out, and have end user market capability, every cash flow online business, needs a solid domain behind it, so he is contradicting himself, I would not take investment advice from Rick Latona, I can only imagine how much money he has lost in the past few years… margin man must be on him…
Jon says
Latona does seem like a jack of too many trades, who made the big mistake investing in live domain auctions business. I am guessing he lost a lot of money with that. And I personally do not care for him for his Philippino lowball whois spamming operation. Old school hustler sounds just right.
Ron says
Personally I would like to see Latona leave the world of domains, and websites entirely…
All he has ever done is try to bring short term hype, to pump a business, then he bails, what happend to all those aieou.com or whatever minisite customers who were promised free hosting, free updates, and the world for $199, another epik blunder…
I hope domainers, and investors, stay away from Latona and his cheese factory… enough is enough, lame is the name of Latona’s game… Do us all a favor Rick, stay in school, and learn to build a successful business that isn’t bankrupt 2 weeks later… nobody going to collateral domains for 10% interest a month, fool’s gold is what this dude is selling.
Michael says
I could imagine Rick is best at what he started out doing: Selling used cars.
Snoopy says
There is some truth to the need to focus on cashflow. However I think the market has recovered significantly in terms of sale prices, it is nothing like 2007 but it is nothing like 2009 either. Parking has continued to decline and that is still a heavy burden on the entire industry.
Having said that Rick Latona seems to have done badly domains himself which is where all this seems to stem from, that is more to do with a poor business plan than market conditions in my view. eg inability to price domains at a point to where they’d sell, expensive live auctions that never got traction and the like.
personal experience says
For all you guys that make tons of money to end users tell us where you are selling them? Don’t say Sedo or Afternic. Common put your money where your mouth is with where/how you are selling these names. The truth please.
Josh says
@personalexperience, I never even owned a computer until near mid 2000. I have been fairly successful I think, reselling mainly. It’s called hard work and smarts. It can be done and I do in over and over for 6-7 years now.
multiple LL .com NN .com Generics and so on. And btw I started it ALL witha $500 purchase.
TheFactory says
It is hard to believe this guy, he has failed so many times, and we are supposed to believe that buying/selling an online business at 5 X yearly is some great business model no one ever thought of?
The general market rule for revenue sites is 1 X yearly…..that’s the market.
Jon says
Latonas problem is he is trying to apply his pawn shop liquidator mentality to truly premium assets – domains like data.com and social.com.
Latona is going to have exactly the same problem with his current biz.
Say I have a website running on cruise control making me stable $20K a year. So Latona is going to do me a favor and find a buyer at up to 5 years income, so up to $100K. Say it sells for $100K, after Latonas commission and taxes I have $50K. I put this $50K in the bank and I make whopping $500/year income. So I just traded $20K/year in income for $500/year in income. Thank you so much Latona; where do I sign up.
Back to selling premium domain names, if you want to broker truly premium domain names, you MUST bring in motivated end users, preferably several end users bidding against each other. If you can not bring in motivated end users, then you offer zero value and you will fail just like Latona.
Realistically, domain brokers will not be needed much for future premium domain sales; most of them will be end users contacting domain owner directly.
Ron says
Jon is exactly right, Rick Latona thinks domainers are stupid people who will consign him money making domains & sites, and expect to firesale them to other domainers, this is a muddy business, that needs much verification, everyone, and their dog pretends to be a domain broker these days…
@ Personal Experience, if your portfolio of domains is good enough, yes, the bids will come to sedo, and afternic for your domains, do not magically register a whole bunch of domains, and expect magic bean type offers at sedo all day, it takes years to learn how a single letter can make a good domain, bad, different phrases, etc… it is a science, sometimes you do get lucky with a bad domain, but you really have to do your homework, and it is always better if the end user contacts you, as you have the edge in the negotiation process.
I followed Rick’s newsletter, even submitted some names that they allowed into the letter, but they expected me to price my premium domains down to below market, which I wouldn’t do, then pay him a high commission on top, taking a further hit, Latona has diluted his name, and it has become more of a pump, and dump penny play, hardly worth turning heads anymore.
Amused says
Latona’s arrogance hit an all-time low point
with his infamous announcement that he treated
his domain clients by ‘knocking them off their
high horses’.
Anyone notice that every one of his projects
from that time on were total disasters ?
Possibly something to do with no one wanting
to deal with an arrogant prick ?
Had any dealings with Toby Clements, now
relaunching Rick’s old mailing list ?
It’s Latona’s arrogance all over again, but
without any discernable intelligence or
quantifiable experience.
Ron says
Latona let your daddy help you with your new school project, this guy is like the circus is coming to town, and he has a new freak show, in 2 days everyone will yawn, and forget about him, onto the next town, blah Latona!
Rob says
Good on him for finally speaking some well covered up truths about the domain industry. Now I have read all the above comments, but think about this: for every ONE serious domainer who REALLY knows the true value that can be achieved on a particular domain (perhaps like only SOME of the people here), there are hundreds if not thousands of fools who think they can make a killing on often relatively worthless domains. THAT’S WHAT HARMS THE INDUSTRY.
And the “land mine” approach term is the perfect analogy – thousands of average or less domains are being hoarded and priced at ridiculous amounts, most of which will realistically never sell. Even if some don’t agree about the 5 times earnings rule, asking 10-1000 times is a bit heavy, yes?
He may have not gained huge support/admiration from many domainers but he has at least spoken some truths. The domain industry does need this.
Snoopy says
“So Latona is going to do me a favor and find a buyer at up to 5 years income, so up to $100K. Say it sells for $100K, after Latonas commission and taxes I have $50K. I put this $50K in the bank and I make whopping $500/year income. So I just traded $20K/year in income for $500/year in income. Thank you so much Latona; where do I sign up.”
/////////////////
This is pretty bad math. He takes 10% commission does he not? So the seller would need to be paying 45% tax to be left with 50k (unlikley).
Secondly the 20k income currently earned with be taxed as well. So it will be somewhat less than 20k in reality.
Thirdly having money in the bank earning 1% is entirely different in risk compared to running a website.
Funny the one poster claims 5 years is way to high and the next way too low. One poster must be wrong.
Domainer Extraordinaire says
>Domainer of the Year
That’s for sale to the highest bidder.
Ron says
Berkens put Latona in his place today, not everyone can own generic domains, small and mid sized businesses will pick up the hoarded mid level domains, and it is happening, many of them are $2-5k sales, we see them week, after week, there will always be johnny come lately, but Latona lost alot of credibility with his words.
bernard says
Just LOL ! One of the famest domainer to announce that domain name business is more or less dead. What a surprise 😉
He really helps us also understand that website development turns a domain into a profitable asset: wow!
And Andrew writing: “This seems like a high end Flippa site with an added personal brokerage”, this is a joke as today!
Sam says
As soon as he said this he started sending out a lot of emails (using his domains as email addresses, but sent by someone else) trying to acquire more domain names. Looking for a deal?