Quick Chat With Brad Mugford, DataCube.com

1) When did you first start getting into domains and why?

I have been online since 1996, but did not consider domains as an investment vehicle until much later.

By 2006 I only owned around 40 domains that I had registered starting in the late 90’s.
These domains were mainly used for development projects.

What turned me on to domain investing was when I let (3) LLLL.com expire on accident. After doing some research I was able to find out how much the domains sold for at auction.

The numbers surprised me. I knew domains had value, but had no idea what quality domains were selling for. This led me to see the opportunity in domain investing.

Since that point in time I have been buying and selling domains consistently.

2) What was the first domain you registered?

The first domain that I hand registered that I still own is Infad.com (1999). There is no real meaning behind it. It was just a brandable name I came up with at the time for my tech company.

3)How is business at DataCube and how do you feel about the overall domain market?

My sales have increased every year since I started investing in domains. I rarely sell to domainers though as the vast majority of my sales are to end users.

There are two domain markets – Reseller & End User

Reseller- Overall, right now the domain reseller market is struggling. One major problem is the lack of liquidity.

I think many people were drawn to domains as investments because they see it as easy money. This is no longer the case.

There is still plenty of money to be made but it takes more effort and skill now than ever.

End User – The end user market is as strong as ever. I get a constant stream of inquiries via contact forms, SEDO, whois, etc.

There are still plenty of big sales going on, but at this point the vast majority of end user sales fall in the $1K – $5K sweet spot.
Afternic and SEDO reported sales will confirm that.

4) What do you specialize in and what have you had the most success buying and selling?

I specialize in end user sales – however I don’t really have a specific niche that I deal in.

We buy domains with end users in mind, so I am interested in any domains with commercial value that I think I can sell. I generally stick to the Big 3 (COM/NET/ORG). Those extensions are not going anywhere. They have global awareness, usage, and credibility.

I will consider other extensions as well depending on the quality of the keyword. The worse the extension, the better the keyword needs to be.

I believe a top 500 keyword in an extension like .BIZ/.INFO is far more likely to find a buyer than the 20 millionth best .COM.

5) How do you think the new tlds will change the domain industry?

I could write an entire novel on my opinions on the gTLD program, but I will keep it simple.

The program was not passed by popular demand, or for the greater good, it was passed to make ICANN a lot of money.

I see the entire program as a solution to a problem that does not exist.

Some people will make a lot of money (Registries / Registrars / Consultants / Lawyers) and others will lose a lot of money.

It seems to me like the new extensions are mainly a game for the 1%.

For the average person all there is going to be is confusion.

When people are confused they go back to what is known.

6) Will you be a buyer of any domains in any new tlds?

I have no plans to purchase any at this point because as an investor it doesn’t make sense.

Even current extenstions like .CO (1.3M regs) and .INFO (8M regs) that have limited awareness and usage.

There is hardly any resale value outside the top handful of keywords.

These new extensions exist to make money.  They are not going to just give away their best assets.

If you judge by the past, the initial launch of an extension is among the worst possible investments you can make.

Most times a landrush price paid is the highest a domain will ever sell for.

7) How do you feel the ever growing mobile Internet and apps will affect domain values?

Some people seem to see mobile internet or apps as a threat to domain names.  I don’t. I still see a major need for domain names on a daily basis. Apps will never replace domain names.

If you go around any major town you will see thousands of small businesses with domain names.

Are all these companies going to have apps?  Does a plumber in Boston really need an app? Apps and domain names both fill a role.  They compliment each other.