Sedo has recently announced the launching of the Internet Domain Name Index to offer unique insight into the domain name market .
You can read the press release after the jump :"Sedo, the leading online domain marketplace, today announced the launch of the Internet Domain Name Index (IDNX), the industry’s first constant quality domain price index for the secondary domain marketplace. The index offers domain name managers and investors unique insight into fluctuations in the domain name market.
Connection between online and offline economy
Developed by Berlin-based economist and internet entrepreneur, Thies Lindenthal, IDNX uses Sedo’s current and historical sales figures data, going back over the last six years. From this data, IDNX can provide domain investors with critical insight into the current market value of domains, as well as highlighting domain industry trends to help determine the true value of their domains.
By indexing more than 200,000 domain transactions over a six-year period, IDNX highlights the connections between the online and offline economy, showing that domain prices have a clear economic foundation. The index exhibits a strong correlation between the domain name market and standard economic indicators, including changes in the NASDAQ 100 index and the stock prices of internet giant Google.
The Value of Domains
Initial findings from IDNX shows that domain names saw a rapid increase in value from 2006 through to 2007, with prices peaking in November 2007 having seen a 76 per cent rise since the start of 2006. Prices then saw a continued decline of 34 per cent over the next 5 quarters, through 2007.
However, since this decline into 2008 domain names have bounced back and seen continued strengthening and climbed to an all-time high in May 2011. This rise has also featured high-profile domain sales such as gambling.com ($2.5 million), vodka.com ($3 million) and the record breaking sex.com ($13 million).
Thies Lindenthal comments: “IDNX shows that internet domain name prices have a clear economic foundation and are not detached from the general economy. On the contrary, domain price changes are very similar to changes in the NASDAQ 100 stock price index, for example. Therefore, domain prices reveal how investors evaluate current and future business opportunities on the web, making IDNX the fever curve of the internet economy.”
Tim Schumacher, CEO for Sedo, said: “Lindenthal’s extensive research on domain pricing validates the domain name market and shows that domain markets are not a fantasy land where dreamers trade esoteric goods at imaginary prices. Domainers who use the insights IDNX offers and ancillary domain pricing tools to set fair and fixed prices on their domain names, ultimately help make our industry more valued and respected. In turn, this will continue to positively impact domain name sales.”
IDNX Methodology
Two general methodologies are commonly used to price non-standardized assets like real estate or art. The first one, the so-called hedonic regression analysis, explains the price of an asset by a set of quality variables that describe the characteristics (hedonics) of that asset. Alternatively, the repeat sales methodology traces individual domains in time, comparing each transaction to previous transactions of the very same asset. While this is generally regarded as the most direct form of making an “apples to apples" comparison, it disregards all information on transactions that are sold only once. IDNX combines the advantages of both methodologies and relies on a so-called Hedonic Repeat Sales methodology, using a hedonic classification of the TLD and otherwise a repeat sales approach.
IDNX will be updated on a monthly basis to include:
- Calculations of the latest trends in domain prices
- Accurately assesses and track the value of domains in real time "
For more details check out Sedo.com