Good News, Bad News

[A D]

The good news: Today, Sedo announced that both Reuters and Bloomberg will be adding Sedo’s domain price index, IDNX, to their list of covered financial markets. What this means: greater exposure for domain names and their investors and a ‘legitimization’ of domains as an investment opportunity. Reuters and Bloomberg are both highly respected financial channels; [...]

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[000]

Thanks for bringing this news to our attention.

placing the IDNX next to the Nasdaq is nothing short of a PR coup for Sedo and domain investors everywhere.

It would be a coup but the IDNX is not readily visible on public pages http://www.reuters.com/finance/markets or http://www.bloomberg.com/markets/ or sub pages, much less next to the IXIC (NASDAQ.) Sedo's press release states that: "IDNX can only be viewed by those with valid Bloomberg or Reuters accounts." Any publicity is good, so limited access is better than none.

the IDNX doesn’t offer any input on real-world valuations of domain names.

The IDNX meets its design intent as a broad market domain price index. Individual name appraisal is an unrelated quixotic task.

It can only tell potential investors that domain prices are going up.

It's a historical chart that does not address future prices.

What these prices are going up in relation to is still obscure.

The benchmark is clear: IDNX=100, January 2006.

DNJournal’s weekly sales lists are a far better indicator of market sentiment.

The IDNX does not measure or model market sentiment. Sentiment and price often diverge.

Potential investors stand to gain little from an index actual domainers never use.

The investor's ability to gain from the data hinges more on data validity than domainer usage.

 

[Stian]

This is HUGE! Seriously, this is a giant step towards "legitimizing" domain name trading on the same level as trading stocks and commodities. HUGE!

By adding IDNX to their market watch, Reuters/Bloomberg are basically saying that not all domainers are cybersquatters (like media often call all of us) and that it is just as legit as trading other commodities.

 

[Biggie]

This is HUGE! Seriously, this is a giant step towards "legitimizing" domain name trading on the same level as trading stocks and commodities. HUGE!

By adding IDNX to their market watch, Reuters/Bloomberg are basically saying that not all domainers are cybersquatters (like media often call all of us) and that it is just as legit as trading other commodities.

the other side of that coin is....

they may be saying, "ooooh, look at all the names we can reverse hijack, using the funds at our disposal"


or "how come their trading transactions aren't being taxed like ours"


or " if there is so much volume of trading, how come it isn't regulated?"


exposing your azz and what you in to... ain't always an "all" good thing

 

[RustyK]

So do we move our portfolio there into Sedo?.

 

[leo]

Interesting.

 

[katherine]

The problem is that domain names are not commodities.
If all domain sales were reported and the sales channels were representative, it would be a start. But we are not there.
So it's more a toy than a scientific tool.

It's one more attempt at introducing liquidity in a market that is intrinsically non-liquid. It also makes domain investing more 'legitimate'.
I know people are trying but... what I would want is actionable intelligence. We already know (more or less) which extensions sell well. What else ?

 

[keyword]

I agree its good and bad news at the same time (watch this space!)

 

[ImageAuthors]

IDNX does provide information that domainers should pay attention to. It quantifies the price trends for various TLDs relative to their own past and to each other. And it shows a strong coupling between domain prices and other measures of economic health. From the vantage point of non-domainers, this means that domains in general can be a robust investment. And, of course, this latest news of reputable financial players embracing IDNX means more exposure, good or bad.

IDNX tends to be criticized for what it's not. And what it's not is most of what people involved with domains care about--namely, an accurate indicator of particular domain values. You can track the price of corn over time on a graph and show that corn has real investment value that correlates with economic health in other respects. But domains aren't cobs of corn. In fact, no 2 domains are the same species. And, while domains in general (or domains that SELL in general) have value that can be tracked, a huge percentage of domain trading is invisible; and most domains have only negligible value and will never sell. The IDNX is like a chart that shows the average price of paintings over time. Yes, it goes up and down. But the real story lies in the difference between a Picasso and a kindergarten finger painting.

Isn't that the problem? Most financial trading -- and most financial indices -- involve some homogeneous species of corn cob. And whatever domains are, they ain't that.

 

[sashas]

But the real story lies in the difference between a Picasso and a kindergarten finger painting.

That nail. You hit it right on the head.