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domain stockmarket
- Thread starter julian
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Interesting, as I remember talking to James about something like this at the AD meet up.
I wonder how long before fund managers buy into domains as serious investment?
I wonder how long before fund managers buy into domains as serious investment?
there is one problem, in that someone has to apply a value to the domain (which is always somewhat subjective) which as a direct result dictates share value etc...
looking at it there are people buying shares in some interesting domains..
looking at it there are people buying shares in some interesting domains..
Some interesting reads on the matter....
http://www.namepros.com/tv-marketplace/435119-http-www-fusu-com-domain-stock.html
http://www.namepros.com/showthread.php?referrerid=23321&t=456166
http://www.namepros.com/tv-marketplace/435119-http-www-fusu-com-domain-stock.html
http://www.namepros.com/showthread.php?referrerid=23321&t=456166
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Back around when this was starting I was talking about a similar project, not fusu, with a few people - one email summed up my issues with the idea of a domain stock market:
After thinking it through I cam to the conclusion that as you say there is never perfect knowledge and thus markets exist, however the manner of the market is the sticking point.
As you say different markets eg. shares, property, art/antiques etc all have different methods which revolve around the item being traded. There are already massive trading arenas for domains (and traffic) - the only difference for this one is the centeralised nature (which Fabulous have kicked off already with their DDN) and multiple investors - it could be argued that the latter already occurs with the various dropclubs sprouting up.
For example I have been speaking to an ex-auctioneer and high end antiques dealer in London who has recently come into domains and has his 'view' on how they ought to be priced, traded and valued. His idea was to create a book along the lines of the yearly journals of sales prices that become the journals that the market is based on, again controlling the information and the use of it allows £ return
This approach is valid in a way, as domains are all unique - it is not like buying a Holden where all of a model are identical - they have different history (older names can be worth more) and the top top names are rare. However, I do not believe a Louis XIV table earns money from people using it, likewise any work on it can actually detract from its value. Thus that model is not a shoe in either.
The same analogy can be expanded for other markets - the point being some aspects do fit the nature of domains, however key bits do not. Like the share market model, most does fit however (I believe) the reason for people taking a punt on shares is not there.
The general concept is a sound one, ie. allow Mr + Mrs Smith in Suburbsville to simply invest variable amounts in domain names via an active market.
The point that needs to be nailed, or a new angle thought of, is how to ensure this keeps occuring. The imperfect market would reason that Mr Smith does not know how domains work and thus the market would make a profit for someone else at his expense. I have no issue with people making money, however if the odds are 100% against then no one will 'bet', yet even if they were 99% there are people out there willing to take a punt.
If you take this forward and ensure (legally or however) that the invested cash is reinvested into domains (tricky, but theoretically doable) this problem would be overcome, however the focus is then on internet microbusiness rather than every domain name out there something which does not have the global scale required.
This is still a stumbling block for me however there must be a solution to this - aspects of the gold markets, shares , property etc all fit but not 100% - but there must be a magic *extra* that will unlock and fit domaining.
As I mentioned when we met up, I am happy to plough time into this, however only if I am 100% convinced on the end result but as you can tell I am not quite there yet due to the above. Potentially this is something you have already come across and worked out, and if so please give fuller information - likewise if I have missed the point somewhere please tell me.
It certainly is an interesting problem that needs tackling, however the fact is this is a new marketplace with 'new' commodities (are they even a commodity?!) to be traded so we need a new ruleset.
Fingers crossed this is a result of me being aware of the big picture of the project and as with most things the devil is in the detail.
Cheers,
Rob
All in all it is an interesting concept, however I do not see it flying with domains as they are not 'stockable' items in the traditional sense.
After thinking it through I cam to the conclusion that as you say there is never perfect knowledge and thus markets exist, however the manner of the market is the sticking point.
As you say different markets eg. shares, property, art/antiques etc all have different methods which revolve around the item being traded. There are already massive trading arenas for domains (and traffic) - the only difference for this one is the centeralised nature (which Fabulous have kicked off already with their DDN) and multiple investors - it could be argued that the latter already occurs with the various dropclubs sprouting up.
For example I have been speaking to an ex-auctioneer and high end antiques dealer in London who has recently come into domains and has his 'view' on how they ought to be priced, traded and valued. His idea was to create a book along the lines of the yearly journals of sales prices that become the journals that the market is based on, again controlling the information and the use of it allows £ return
This approach is valid in a way, as domains are all unique - it is not like buying a Holden where all of a model are identical - they have different history (older names can be worth more) and the top top names are rare. However, I do not believe a Louis XIV table earns money from people using it, likewise any work on it can actually detract from its value. Thus that model is not a shoe in either.
The same analogy can be expanded for other markets - the point being some aspects do fit the nature of domains, however key bits do not. Like the share market model, most does fit however (I believe) the reason for people taking a punt on shares is not there.
The general concept is a sound one, ie. allow Mr + Mrs Smith in Suburbsville to simply invest variable amounts in domain names via an active market.
The point that needs to be nailed, or a new angle thought of, is how to ensure this keeps occuring. The imperfect market would reason that Mr Smith does not know how domains work and thus the market would make a profit for someone else at his expense. I have no issue with people making money, however if the odds are 100% against then no one will 'bet', yet even if they were 99% there are people out there willing to take a punt.
If you take this forward and ensure (legally or however) that the invested cash is reinvested into domains (tricky, but theoretically doable) this problem would be overcome, however the focus is then on internet microbusiness rather than every domain name out there something which does not have the global scale required.
This is still a stumbling block for me however there must be a solution to this - aspects of the gold markets, shares , property etc all fit but not 100% - but there must be a magic *extra* that will unlock and fit domaining.
As I mentioned when we met up, I am happy to plough time into this, however only if I am 100% convinced on the end result but as you can tell I am not quite there yet due to the above. Potentially this is something you have already come across and worked out, and if so please give fuller information - likewise if I have missed the point somewhere please tell me.
It certainly is an interesting problem that needs tackling, however the fact is this is a new marketplace with 'new' commodities (are they even a commodity?!) to be traded so we need a new ruleset.
Fingers crossed this is a result of me being aware of the big picture of the project and as with most things the devil is in the detail.
Cheers,
Rob
All in all it is an interesting concept, however I do not see it flying with domains as they are not 'stockable' items in the traditional sense.
Not the stock exchange
Personally I wouldn't invest my money or my clients money, the stock exchange is the stock exchange and has millions of transactions and a very long history....if someone wants to invest in this way you attack it from a different angle....set up a capital venture firm that specilaises in domain names, get a track record and then float it....I am sure I discussed this with beasty and Mr Bounce
Lee
Personally I wouldn't invest my money or my clients money, the stock exchange is the stock exchange and has millions of transactions and a very long history....if someone wants to invest in this way you attack it from a different angle....set up a capital venture firm that specilaises in domain names, get a track record and then float it....I am sure I discussed this with beasty and Mr Bounce
Lee
I looked at this site around a year ago.
If they still have only 20 names after all this time it's never gonna fly.
Personally I like playing the stock market myself. It's not a bad idea, if sucessful it can boost the domain market.
But they need backings from like ICANN first, and list of regulations to prevent fraud, like someone will sell privatly and run away with both side of the cash.
I say there's potential, as race-horses have share ownership, so why not?
But they need backings from like ICANN first, and list of regulations to prevent fraud, like someone will sell privatly and run away with both side of the cash.
I say there's potential, as race-horses have share ownership, so why not?
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