Earn millions in the domain business? While this prospect may sound exciting, scenarios like that only materialise in the rarest of cases. Nevertheless, buying and selling domain names is still often touted as a lucrative business by those looking to get rich quick. The reason for this is simple: the right domains have been known to fetch up to seven or even eight-figure price tags.
Domain parking offers website owners the chance to earn money with temporarily unused domains, balancing out the costs of hosting in the process. In the website business you often find individual domains that aren’t needed for a certain amount of time. An unused domain still has to be paid for, and domain parking may provide an alternative to selling it. You have to decide between monetary and non-monetary parking. A simple note such as ‘website under construction’ is sufficient and lets the internet user know that the desired page content isn’t available at the moment. Many domain owners go one step further and fill dormant websites with advertisements in order to generate income.
Why you should park an unused domain
High-quality domains are a precious commodity. Many website owners decide to continue operating expired web project domains until a suitable buyer is found. There are many factors that determine the market value of a domain, such as the domain name as well as the top-level domain (TLD). Other factors that play a role include tone, memorability, and concision. Popular TLDs such as .com or .net are more valuable than less common endings such as .biz or .org. It is crucial for the domain to contain industry-relevant keywords. If the domain is easily misspelled, this also has a negative impact on its value. Other factors that need to be considered include:
- The backlink profile
- The search engine ranking
- Existing evaluations
A short BBC documentary explains how domain traders, also referred to as “domainers”, can make hundreds, thousands, or even millions of pounds from buying and selling domains. In this video, find out how some of these entrepreneurs got involved in this big moneymaking business.
Earning money with domains
The business model of domain parking is based on matching landing pages with advertising to unused domains. The content of a promotional offer on dormant websites is thematically selected as a second-level domain. Links are supplied by a specialised parking provider that relies on an advertisement pool of different web partners like Yahoo! and Google. If an advertising link is clicked on by a visitor, the company with the placed ad compensates the parking provider on a pay-per-click basis. The revenue, which the parked domains receive through clicks, is divvied up between the domain owner, the domain parking provider, and the relevant advertising partner of the parking provider.
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Domain parking providers
Those looking to park a domain will find a variety of commercial providers that let you place permanent texts or advertising campaigns on your dormant website. A domain sale can usually be processed through your service provider. Alternatively, some internet provider’s offer domain parking services. There are two options regarding providers:
- Professional domain parking provider: the option of parking a temporarily-unneeded domain is a basic component of the domain business. Popular domain parking providers in the UK include Bodis, Voodoo, DomainSponsor, Skenzo, and Afternic. Depending on the domain parking provider, there are many design possibilities (varying in flexibility) available for the landing page and domain parking templates. In order to generate a higher click rate, domain parking providers define a keyword in the style of the domain name. This allows links to be specifically tailored to the parked domain's visitors and intended information (or products).
- Domain parking via the provider: Some internet service providers, which provide a domain registration service as registrars, offer their customers an uncomplicated domain parking service. Instead of co-operating with advertising partners, these companies often take care of their own advertising. With this set-up, customers that allow their domain to be advertised on are compensated through commission. The parked domain can be reactivated anytime in case it is needed again.
Selling parked domains
Domain parking is normally a temporary solution. Leading domain parking providers offer domain owners the chance to have a ‘domain for sale’ note on the landing page of their parked domain. Domains can also be auctioned off on auction portals. A domain evaluation (usually subject to a charge) can be helpful to develop expected prices. Transferring a domain is a relatively complicated process that should be principally based on a written contract and comprise of a notarial certified transfer of the parked domain to the new owner along with the full payment.
Domain parking and cybersquatting
The underbelly of domain parking is known as ‘cybersquatting’. This involves registering a domain using someone else’s brand with the intent of profiting from it by selling it to the rightful owner. ‘Typosquatting’ (also known as ‘URL hijacking’) involves registering domains that contain typos with financial gain in mind. Misspelled domain names and domains that are similar to existing brand names are often misused as parked domains, and owners profit by picking up some of the web traffic of company sites, online stores, or information portals. Selling overpriced brand name domains and typo domains to the relevant rights holders is another example of such misuse.