Sedo launches domain pricing index
Sedo has launched Internet Domain Name Index, a research project that shows long-term domain pricing trends and compares the data to larger economic trends.
Using January 2006 prices as a baseline, the IDNX index will be updated monthly showing how much, relatively, domains are selling for on the secondary market.
Currently, domains are valued at 183% of January 2006 prices, for example.
The index uses something called a “hedonic repeat sales methodology” to come up with its numbers. No, I don’t know what that means either.
However the numbers are arrived at, the conclusions are quite interesting, showing that domain prices rise and fall in lockstep with the financial markets.
In this graph, the green line is the IDNX number and the blue one represents the value of the Nasdaq 100.
“The strong correlation shows that domain name buyers and sellers make economically motivated price decisions,” researcher Thies Lindenthal concludes. “Domain markets are not a cloud-cuckoo-land where dreamers trade esoteric goods at imaginary prices.”
Sedo expects domainers to use the index to adjust their portfolios’ changing values over time.
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