Simply put domain parking is the registration of a particular domain name that is not immediately put to use as an active domain for a website. This can happen for several reasons including saving the name for use by a business, or more recently to use the domain to both generate income through search re-direction or outright sale.
In the early days of the web, a lot of users raced online to secure a domain for their business or a hobby they enjoyed. They would lock down a domain name in the hopes of creating an amazing homepage to later expand their business reach onto the web and also to protect the name from others that might claim it. This was a purely strategic business move that made logical sense as the early internet matured and grew. These domains would later be developed and expanded by these companies into full-fledged branding and sales outlets.
Other more clever entrepreneurs had the brilliant idea that if they grabbed a bunch of domain names that were unique or reflective of well-known brands, they could sell these later to others for a profit.
This worked well during the early days of the web as there wasn’t a lot of trademark law being applied to the web and most companies would rather write a check to recover a domain from someone than start a lengthy lawsuit. As the web matured, so did the online legal trade and this practice died out due to stronger copyright protection being extended to domain names as well as most major companies flexing their marketing muscle onto the web. Since then there has been a trend to snag other unique domain names that are not directly trademarked but would lend themselves to a great business segment. Some examples of this are sites that use words like stamps, dating, boats and other obvious distinctions.
These could later be sold to companies trying to dominate a particular category and were easy to remember for users. All of these techniques discussed so far have been speculative in nature and basically parked the name in the hopes of someone wanting to purchase it in the future for their specific use. Most of these sites have a basic “under construction” page on them that did little more than advertise them for sale.
In recent years there is another trend that has emerged for making great money with a good domain name. In addition to parking a clever name for future sale, users are using the page to advertise directly for others and to re-direct searches and are being paid for the traffic they generate for those sites. Domain parking purely for advertising or pass-through income is a relatively new phenomenon and can be a very lucrative practice.
If you are clever enough to select and secure the perfect domain name and get your landing page high enough in the search stack on one of the major engines you can make a bundle from this relatively passive activity. For this to work best, you need to generate massive traffic through the page to attract advertisers. There is even a term that has emerged for this type of business model called “Domineering” and it is wildly popular today.
To generate income from this strategy, simply come up with a clever domain name and register it. Next, apply some basic search engine optimization techniques to your homepage to raise it’s ranking on the search engines. Generate enough traffic to make it interesting to advertisers and then place their ads on the page to redirect people hitting your page to theirs and be paid for either the click-through or on a percentage of the sale the customer eventually makes from the advertiser’s website.
A whole industry has emerged to support this business model and there are companies that will help you improve and execute on every phase of the process. There are even sites like whypark.com that specialize in hosting, developing, promoting and marketing a parked domain for you. For a small monthly fee, they take all of the guesswork out of the process and ensure you an easy return on your investment and fewer hassles than doing it all yourself. So now that you know the process, put on that thinking cap and grab a domain of your own and get in on the newest internet gold rush.