The Internet Domain Name Index (IDNX) is an interesting idea (Sedo as well as the person behind it, Thies Lindenthal, definitely deserve credit) but as a domainer, it’s important to know how to interpret it.
If you treat it as a tool that gives you an overview of let’s say the domain transaction situation as a whole then yes, it can be and is quite useful. If however you are treating it as a tool that gives you specific information about one of your domains or about a portfolio, you are making a mistake in my opinion.
You see, domains are *not* commodities.
A good example would be gold, which is a commodity for one simple reason. Let me just put it this way: if George has one ounce of gold and John has one ounce of gold, none of them can say “my ounce of gold is better” or “my ounce of gold is worth more” because an ounce of gold is… well, an ounce of gold
It’s interchangeable, which means that if George gives John his ounce of gold and John gives George his ounce of gold, none of them lost or gained anything. They’re in the exact same situation as before, each person owns one ounce of gold.
Domains on the other hand are not commodities and I will try to explain why. Let’s assume George owns MNA.com (random example of a triple premium LLL dot com) and John owns NMA.com (another random example of a triple premium LLL dot com). In our case, despite the fact that both domains are LLL dot coms with 3 premium letters, they don’t have the same value.
For example, what if there are 10 times more companies with the acronym “MNA ” than there are companies with the acronym “NMA”? That would be a great argument in favor of the fact that MNA.com is worth more as well as for the fact that the two domains are *not* interchangeable.
For example, let’s assume a company is called My New Automobile and wants the domain MNA.com. Could that company use NMA.com instead just because it’s also a LLL dot com with 3 premium letters or even more so, because it has the exact same letters as the other domain (just in a different order)? Of course not because “New My Automobile” doesn’t exactly make all that much sense
As can be seen, even domains which may appear interchangeable at first sight actually aren’t.
Therefore, it’s fairly safe to say that domains are not commodities.
For that reason, an index cannot tell you if your domain is worth more or less than last year because there are a lot of variables involved. For example, maybe the LLL.com market will go down in value this year (I’m not saying it will, it’s just an example) but if a new technology/concept called “MNA” will appear, then the domain MNA.com will most likely be worth considerably more than it was last year.
As a conclusion, I’d say that IDNX represents a very interesting tool when it comes to let’s say the domain market as a whole but it cannot and should not be used as a tool that tells you how much *your* domains are worth.