So you either want to sell as it nears the that peak, or you have to be ready to stick out the trough of sorrow and invest a lot of time into finding a way to grow and monetize it.
So if you have some great vision for how you can turn this into something awesome, super-popular, and monetizable and you want to invest the time in it, you should go for it.
But if not, you're probably going to get some very good offers over the next few days--especially compared to how little time you've invested. If I were you and wasn't totally in love with the site, I'd get out while the offers are good and invest that money into your other businesses. Then when your next site goes viral, you'll just have to wonder how to get it back up ASAP, not how to afford doing so :)
But according to Crunchbase, formspring raised a $10MM series B just over a month ago (well after the decline was obvious). I wouldn't be surprised if some of that went directly into the founders' pockets.
Possibly. And if not there's a good chance that they'll do ok after an exit anyway. But they've already spent a year of their lives doing Formspring fulltime, and they'll probably spend a few more years. So Mark needs to decide whether he wants threewords.me to become a major part of his life for several years. If he does, he should keep it. But if not, now's a much better time to sell than after months of putting it on the back burner and having the viral traffic subside.