The title of this post might have caught your attention (or it may have turned you off, but, well, curiousity won...), but this blog is not about to turn nasty. However, variety is the spice of life and I'm excited to share more stories on general economic issues. Did you ever wonder what the value of a domain name is? Sex.com sold for $13mln. in November 2010. But, what would be the value of www.green.com (that domain might actually be for sale)? Or www. energyefficiency.com (under construction, so might be for sale as well)?
My friend Thies Lindenthal just launched IDNX.com, the first internet domain name index. In this true novel project, he exploits statistical techniques used to construct real estate price indexes (like those marketed by S&P Case/Shiller) and applies those techniques to a massive sample of domain names that sold since the beginning 2000. Surprisingly, the value of domain names follows the development of the NASDAQ, but is a little less volatile:
To quote Lindenthal: "...the domain name index can serve as a benchmark for domain name traders and investors looking for information on price trends, returns and fundamental risk of internet domain names. It thereby increases transparency in the market for this newly emerged asset class." Wow, domain names as a tradable asset class? Well, this index is certainly a first, very important step into determining the price of domains, and if it can be priced, it can certainly be traded...
Check out the coverage of Fox Business on IDNX.com.