Markets In Everything: Domain Names


It seems that where anything is bought and sold, certain rules are true:

A new index launched on Wednesday shows for the first time that even domain names can offer a window into the economy, just as stocks do.

The first-ever domain pricing index, which was created by economist Dr. Thies Lindenthal, joins the ranks of similar economic indicators that track everything from consumer products and homes to truck loads.

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.

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