Tuesday, October 28, 2008

Domain Parking Vs Domain Development

The "Should I park my domain name and monetize it that way or should I
develop a website?" is a pretty old debate among domainers. And I
believe it's proof that laziness will always win over sensibility.

There are a variety of ways to monetize a domain name. Most domainers
who deal with a lot of domain names like to park their domains at Sedo,
GoDaddy, or other services that help them monetize the name.

Others build made-for-adsense websites that have little real value,
intending to get visitors to click the adsense ads. This is not much
different from parking the domain names.

Very few domain name sellers or speculators develop real websites or blogs on their domain names. Why?

Even though they intend to sell their domain names, they know that this
usually takes a lot of time. Finding a buyer isn't an overnight process
in most cases. Most domains that are finally sold have been owned by
the speculator for years.

Parking those domain names is the way they try to cover their costs of
registering the names year after year. Most of their domain names will
never sell because they want way more than they are worth. Most domain
speculators are hoping for that one big sale, kind of like playing the

During all that time they are holding onto their domain names, they could be building websites, doing affiliate marketing, blogging, and more. The problem is that those things require work. And we all know how much people like work.

Most people who join MLM programs, get involved in domain speculation,
or fall for get rich quick schemes do not want to work. They are hoping
to fall into thousands of dollars without having to do any real work.

This article won't win me any popularity contests among domainers. But
if the truth hurts, too bad. It is not ALL domainers who are lazy.
There are many who work very hard at their profession. They learn to
master the traffic their domain name brings in and make a business out
of it.

This article is more about those who just go out and register a bunch
of domain names they believe are creative, hoping that someone is going
to come along someday and give them a bunch of money for what they
consider to be creativity.

For some it is their second job or hobby. For others it is a habit.
I've known domainers who mortgaged their house to buy a lot of domain
names they will likely never sell for enough to cover the loan.

In my opinion, the smart move is to develop those domain names into real online businesses.
If you own one-word generic domain names that have type-in traffic,
this doesn't apply to you. But if you are like most domainers and you
own a bunch of made up domain names, two and three word domain names,
etc., then you should think about developing those domain names into a

A domain name's real value is in the traffic it generates and what
that traffic may or may not buy based on the keywords that helped them
find that domain or website in the first place.

Let me rephrase it again. Your domain name is not worth anything more
than you registered it for when you first register the name. Once you
analyze the traffic that domain gets, it may or may not increase in

If just parking the domain name gets very few clickthrus for the ads
placed on it, then your domain name is not worth but a few pennies over
the price of registration.

All it proves is that a few people who end up on that domain name will
click an adsense ad. To a business, that means nothing. It doesn't even
prove that any of the traffic generated by that domain name will
actually buy something.

However, if you create a business plan that matches the domain name,
and you develop a website based on that business plan, and people do
actually buy products, services, subscribe, join, or click through to
your affiliates, you show that the domain name you own has business

A business owner is much more likely to buy your domain name if it
has a proven profit potential than if they just think you have a cute
catchy short domain name.

It can be as easy as installing free wordpress software and picking a
free theme for your blog and writing to it daily with original content.

The bonus is that it may also rank well for your keywords if you do it right and know a little about seo and social bookmarking.

If you develop a business model that is just moderately successful and
you add that it has a good ranking for some key phrases, the value of
your domain name is quantifiable and much more appealing to anyone that
may consider buying it from you.

My opinion is based on having developed hundreds of websites and blogs and having bought and sold over 500 domain names.

There are a few people around who have bought and sold more than I have.

There are domainers who have made a lot more money than I have by
monetizing their domain names or by directing the traffic from their
domain names directly to websites that are owned by businesses.

But, again, they have the right domains and tools to do that with.
Making up domain names or owning a bunch of 2-3 word domain names does
not mean you will be one of these. You won't be. Those I referred to in
this article should begin thinking about developing their domain names
if they want them to have any actual value.

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