Domain name investing is becoming a fairly popular way to make a lot of money on the Internet. It's relatively simple to get involved in and can pay rather big dividends for a very small investment. Understanding what it is and how it works can open the door for lucrative returns.
Domaining, as it is often called, involves nothing more than buying website domain names and parking them through parking services or selling them to others. The prospect takes a little time to master, but the returns can be worth the effort. The financial returns tend to come in one of two different ways - ad revenue or resale value.
Starting out in domaining involves buying website names and having them registered and parked or reselling them to other investors. How much of a return an investor will make will depend on the traffic a particular domain name pulls in or how sought after the name tends to be by others.
There are several ways to determine what kinds of domain names to buy and register. The most common ways center on "type-ins" or "typos." Typos are nothing more than sites whose names are similar to other existing websites or brand name products. The typo sites obtain natural traffic when people accidentally mistype website names or brand name product names into their search engines. This kind of buying tends to be a little tricky, most especially when brand name products are being used. Many investors don't like the typo route because of potential legal issues that can arise. Another option is to buy actual "type-ins." These are names that reflect common web searches. For example, "babygirlclothing" or other real terms and words that are used in searches are used for the domain names. This route is considered more above board. A final option for picking sites is to find those that were formerly used and still have traffic and backlinks. Buying these and parking or reselling them can return decent rewards.
There are many options to go about buying and selling domain names. Some people buy domain names in bulk from places like Moniker.com and then research them to see if they have money-making potential. Other options include going through domaining forums, such as NamePros.com or DNForum.com. These sites are used for buying and selling domain names. These are traded just like real estate might be bought and sold. It is a buyer beware kind of world though. Not all deals come through in the end. Some sites offer a seller and buyer ranking system to enable buyers to check out the integrity of a transaction. Other options for protection include escrowing the money through a payment service, which I prefer.
Arriving at the real value of a domain name can be the hardest part of this venture. The price and value tends to hinge on what a buyer believes a name is worth. Buyers can, however, request revenue and traffic reports in some cases to help them figure a fair price.
After domains have been chosen and purchased, there are several ways to actually make money off them without doing too much work. Parking service sites are the most common way to achieve this. These services let investors "park" their sites with little or no content. This means the sites will pop up as a result of an Internet search. Although content doesn't come along with a parking package, a landing page can have text ads. The owner of the domain will get paid for the returns on the ads. Another option for making money involves nothing more than selling the names to other investors for further development or for them to park themselves.
There are a few rules of the road for parking services, such as Sedo and Parked.com, that need to be kept in mind. While these services will allow text ads on parked pages, they don't allow for a lot of backlink generation. They expect traffic to come in through natural, organic means. This means by accidental hits, normal searches or backlinks that were present from the past. It is possible to have pages taken down by parking services if they are generating more traffic than what comes naturally.
The practice of domaining is a fairly simply way to make money on the Internet. It doesn't take a lot of work to get involved with. Becoming a master of the practice does take some time. Although some forms of the practice are considered unfair and even shady, the overall practice is not and it does work to make a lot of people a fair amount of money.
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