FoxBusiness.com just covered the new Domain Pricing Index (IDNX) Sedo.com released yesterday with economist Dr. Thies Lindenthal, in an article entitled “Can Domain Names Predict the Next Recession?”
FoxBusiness goes on to say:
“The index, called the IDNX, was calculated using data from SEDO, the world’s largest virtual marketplace for domain names, including more than 200,000 domain transactions over the last six years. Since it will be updated on a monthly basis, the index opens a new door to the economy that has never before been.”
“It provides a reliable benchmark for domain name traders and investors looking for information on price trends, returns and fundamental risk of Internet domain names,” he said in a note on the IDNX web site.
Not Just a Cloud-Cuckoo-Land
“Domain markets are not a cloud-cuckoo-land where dreamers trade esoteric goods at imaginary prices,” Lindenthal said. “The strong correlation shows that domain name buyers and sellers make economically motivated price decisions.”
“Domain prices rapidly gained in value from 2006 through 2007 before peaking in September of that year prior to the recession. Not surprisingly, so did the Nasdaq.”
“Shortly after, when valuations across the board started to fall, both tumbled. The biggest drop was in the heart of the recession between September 2007 and January 2009, with the IDNX and Nasdaq sliding about 31% and 50%, respectively.”
“Both started to gradually rebound in the first half of 2009 and now sit at their highest valuation since the IDNX began tracking domains in 2005.”
“While the two are neatly aligned, the IDNX always seems to stay ahead of the Nasdaq and remains stable when compared with Google (GOOG), showing it is less volatile in the face of severe economic headwinds. Google’s stock plunged a whopping 59% from September 2007 to October 2008.”
“The index’s launch comes a month after the Internet Corporate for Assigned Names and Number [ICANN] overwhelmingly voted to increase — by an unknown amount — the number of domain endings that include .com, .net and .org from the current 22.”
“Industry experts have predicted the release, slated for sometime next year, will spark a virtual gold rush, with companies and entrepreneurs alike trying to scoop up new domain names in a bid to protect their brands and expand their reach over the web.”
“While it’s hard to tell the kind of effect a flush of hundreds of new domain endings will have on the new index, Schumacher predicts it will have little impact on overall prices.”
“My gut feeling is it won’t change much,” he said. “Only some may actually get some traction.”
The article is great coverage for the domain business especially in it discussion of domain names as investment quality assets, which we all know them to be.
Congrats.
Either there is indeed an uptick in interest for domain names over the past few months, or else we’re just incredibly lucky. We have a small portfolio of 180 domains.
We’ve sold this week (money has yet to be collected):
Broadscape.com ($4,500)
Vegas.VC ($12,000)
LasVegas.VC ($2,500)
Offers this week, yet declined by us:
Together.TV
VSN.TV
CollegeFootball.ws
SandCastle.co
coCASINO.co
“Can Domain Names Predict the Next Recession?”
Right now a blind monkey with its head up its ass could predict the next recession/depression because it ain’t that far away 😉
(not that the last recession ever finished)
200,000 domain transactions is a pretty small amount to draw any firm conclusions from.
If they could seperate those sold to real end users that actually start up a business from those bought buy domainers (who may buy hundreds) then it would give a better indication to the state of the economy IMO
..not that we need a better indication, how many for sale signs on property do you see when you drive around your neighborhood ?
It’s possible it might be a relevant signal, kinda like the “Rolex Index”.
I know a guy who owns a hotel in Florida. They started to notice ‘something was wrong’ with consumer behavior a full two years before the markets finally did.
This is great news, really. It could grow into a widely used tool.
If the recession comes again than it will bring a huge disaster for marketers
Hi,
“I thinks”…. 😉
The only Index you need is the ‘Obama Index’… in office now, we are already in a recession (if you have not happen to notice)…. huge recession already on the horizon…4 more years of Obama after 2012… a huge recession is going to seem like the ‘good old days’…
Peace To All!
‘D’
We are running an index for domains for more then a year, other then IDNX, Domainsindex does not only take into account sales but many other factors that influence the value of domains, also we provide indices for many of the TLDs as well for particular segments of the industry, have a look
“The only Index you need is the ‘Obama Index’… in office now, we are already in a recession (if you have not happen to notice)”
How about the “Rich Index” – If the rich are getting richer then the poor MUST be getting poorer.
“Today more wealth is in the hands of the wealthiest Americans than at any other time in modern U.S. history. An analysis of income-tax data by the Congressional Budget Office a couple of years ago found that the top 1% of households own nearly twice as much of the corporate wealth in the United States as they did just 15 years ago.
While the average income for the poorest Americans has barely grown over the past several decades, the incomes of the wealthiest Americans have absolutely exploded as the following chart demonstrates….”
businessinsider.com/not-everyone-is-hurting–the-rich-get-richer-as-the-income-inequality-gap-explodes-2010-3
@ coCASINO.co Give us a hint on how you get offers and how you promote your domains, tnx 😉
@Michael Marcovici where did you get your data?