CAMBRIDGE, Mass.--(BUSINESS WIRE)--Sedo, the leading online domain marketplace and monetization provider, today announced the launch of IDNX, the industry’s first standardized domain price index. Developed by economist and internet entrepreneur Thies Lindenthal, IDNX uses real estate economic methodology to provide investors with critical insight into the current market value of domains, domain industry trends, and the risk to return ratio of domains as a financial asset.
By indexing more than 200,000 domain transactions over a six year period, IDNX exhibits the strong correlation with standard economic indicators, suggesting that domains are as much an economic asset as real estate, stocks or shares. By allowing comparison to other financial indicators such as the NASDAQ or the stock price of internet giant Google, IDNX clearly shows that the trend lines for these indices follow the same path as the trend line for the domain market.
"IDNX shows that internet domain name prices have an economic foundation - they are not detached from the general economy,” said Thies Lindenthal. “On the contrary, domain price changes are very similar to changes in the NASDAQ 100 stock price index or total revenues from online marketing. This shows that domain name buyers and sellers make economically motivated decisions. Domain prices reveal how investors evaluate current and future business opportunities on the web, making IDNX the fever curve of the internet economy."
The Value of Domains
Internet domain names rapidly gained in value from 2006 through 2007, with prices peaking in November 2007 (+76 percent relative to Jan 2006) before falling by 34 percent in the subsequent 5 quarters. Since then, domain prices regained their strength, climbing to an all-time high in May 2011.
Updated on a monthly basis, IDNX:
- Calculates the latest trends in domain prices;
- Accurately assesses and tracks the value of domains over time;
- Is based on data from more than 200,000 domain sales and more than 100 TLDs.
“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,” said Tim Schumacher, CEO, Sedo. “Domainers who use Thies’ insights and ancillary domain pricing tools to set fair and fixed prices on their domain names, ultimately help make our industry more valued and respected, which in turn, positively impacts 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 Webinar
Sedo’s CEO Tim Schumacher and Thies Lindenthal will be hosting a webinar on August 23rd 2011 to provide a broad overview of the IDNX tool, and best practices on how domain investors can use the tool to make the best domain buying decisions. Please visit the webinar registration page to register for this event.
For more information, please visit: http://www.sedo.com/idnx.
About Sedo
Sedo, an acronym for “Search Engine for Domain Offers,” is the leading domain marketplace and monetization provider. Headquartered in Cologne, Germany and offices in London, England and Cambridge, Mass., Sedo has assembled the world's largest database of domain names for sale, with more than 18 million listings. The success of Sedo's model has attracted a global membership base of more than 1 million domain professionals.
About Thies Lindenthal
Thies Lindenthal is a seasoned internet entrepreneur and researcher, holding a Ph.D. in Real Estate Finance from Maastricht University. IDNX is his newest project, linking two of his most important intellectual playgrounds, traditional real estate research and the economics of the internet.