Goldman Sachs to offer first index for e-commerce firms

Investment bank Goldman Sachs will offer the first index for measuring the performance of electronic commerce sector companies starting next month.

While about 10 different indexes from different investment firms track Internet companies, the Goldman Sachs Electronic Commerce Index will be the only one to focus entirely on e-commerce companies.

The index will "reflect the growth and development of electronic commerce and its impact on the larger economy", said Goldman e-commerce analyst, Mr Rakesh Sood, in a statement announcing the plan.

The index will include 39 stocks, and companies included in the list must generate the majority of their revenue from online sales, provide e-commerce infrastructure, or operate entirely as virtual, rather than "real world" companies.

The move by Goldman is seen by analysts as a reflection of the increasing importance and mainstreaming of e-commerce in the global economy. Goldman says the companies chosen for the index reflect firms it believes have strong growth potential and high volatility.

Indexes cluster a set of stocks and are intended to offer a concise picture of the movements within a given industrial sector.

Goldman Sachs already offers an Internet index of 10 to 15 stocks for trading on the Chicago Board Options Exchange. Stocks chosen for the Internet index must represent companies that have a market cap of at least $1.5 billion (€1.41 billion).