thanks.

Crowdsourcing does not work when the opinions of participants are biased. Sellers tend to over-state, while buyers under-state value. Moreover, if the opinion providers are clueless about value, as in guessing the distance between the earth and the moon, the average of their opinions will remain clueless.

Unlike forum-based crowdsourcing, the judges in GroupValutation are drawn from the pool of domain owners who are on different sides of a transaction at various times. Thus, their incentive is to provide an unbiased option because their long-term interest is in an unbiased valutation of their domain names. Moreover, the number of opinions can be larger than that of forums, a requirement for meaningful average appraisal value.

It should be noted that this is not the first service to specialize in crowdsourcing-based domain name appraisals, but it is the first with a beautiful mechanism.

The post does not explain why you should take the results with a “grain of salt.” As noted above, a large number of biased guess does not result in an accurate average. Thus, the post’s recommendation that the resulting appraisal is “one more data point in a long list of valuation approaches” should be taken with a grain of salt. Moreover, crowdsourcing is the only robust technique to value non-generic domain names, and thus, the only reliable data point. Furthermore, a biased comment can be more harmful than numbers provided by robust estimation techniques.

Nevertheless, GroupValuation will need to monitor the most active users.

As I am not affiliated with GroupValuation, their site does not make it clear whether they are aware of their beautiful solution or whether they don’t think it is important to publicize.

Go GroupValuation. A beautiful first pass!

RT @dnnews: GroupValuation.com Offers Domain Appraisals from Peers – http://tinyurl.com/kn4ngy