What Is Domaining?
Domaining is the process of buying, selling and monetizing domain names. This includes all kinds of domain names – from names that are yet to be registered, to names that have “expired” i.e. have not been renewed by their previous owners.
See the Domain Name Life Cycle for more information on how everything works.
What Domaining Is Not
It’s important to note the difference between domainers and cybersquatters. Domainers abide by the law and do not aim to register names that are trademarked or could mislead consumers in any way. Cybersquatters, on the other hand, intend to register names that are trademarked or could be confused with the domain names of other companies! Their aim is to virtually extort money out of the companies whose trade marks or domain names are similar to those registered or acquired by the cybersquatter. See also Domain Squatting.
As you might imagine, cybersquatters usually end up facing legal action and having their domains taken away from them. So cybersquatting is not a business I recommend! (If you’re in doubt over a given name, check the various trade mark databases – such as that at the United States Patent and Trademark Office (uspto.gov) – and/or obtain legal advice before proceeding.)
Typical strategies used by domainers to make money include:
1. Buying a name and then “parking” it with a domain name parking company. “Parking” essentially means pointing the domain name to a third‐party’s website which is owned and operated by the parking company. This website generally includes only one or two pages and displays content and advertising designed to appeal to visitors to that domain name. The parking company enables you to choose a keyword or keyphrase based on the likely traffic to the website and displays content and advertising based on that keyword or keyphrase. Depending on the parking company, you can choose between different layouts and graphics, and may be able to upload your own content. You make money by having visitors click on the advertisements on the site, and the parking company takes a cut (generally the majority!) of each payment per click.
2. Building a “content” website where you feature free content such as a blog or articles, and display advertisements and/or affiliate links. You make money every time a visitor clicks on such advertisements and/or buys through your affiliate links.
3. Building a product or service website where you aim to sell products and services to people who visit the website.
4. Parking the domain with (pointing it to) one of the domainer’s existing sites, which may be a content website or a product/service website.
5. Selling the domain name to someone else. This might be another domainer, broker or corporation.
Although each of the above can be lucrative strategies, most domainers generate income through parking their domains and, at some point, selling them. So much so that “domaining” is often interpreted as buying, parking and selling domains (rather than buying domains and building fully‐fledged websites around them). Indeed, throughout this report I will generally refer to domaining only in the context of buying, parking and selling.
Why do domainers mainly focus on buying, parking and selling? Aren’t they likely to make more money per domain name if they build a fully‐fledged site around it? The reason boils down to what is the optimum use of one’s skills, money, time and other resources. For example, building content and product/service websites involves a certain skill set… while the process of finding money‐making domains requires a totally different skill set. To become an expert in finding the right domains, optimizing them for the purposes of parking, and selling them at a good price, you need considerable knowledge, skill and experience. That only comes with devoting as much time as possible to those activities. You just won’t develop that kind of expertise if you’re too busy creating websites, products and services. Likewise, by becoming an expert, you will inevitably discover that buying, parking and selling domains is the best – i.e. the most income generating – use of your time. You will simply make more money by doing more of these activities, than by spending some of your time on these activities and some of your time on other activities. In other words, if you work a 40 hour per week, you’ll make more money by spending those 40 hours analyzing, buying, parking and selling domains… than allocating some of that time to domaining and the remainder to building websites and creating products.
Of course, you may be able to achieve the best of both worlds if you partner with someone who builds and optimizes content websites or creates product/service websites around the domains you find. But you are still better off spending your time finding, analyzing, buying and working out the best strategy to monetize them, rather than doing else.
Now, although I’ve said that most high‐earning domainers make their money by acquiring, parking and selling websites, they often park their domains and then may, or may not, choose to sell them.
Put it this way, even if you find a great domain name that could be worth thousands of dollars, you are often wise to park it – and generate a steady stream of income – than let it get de‐listed by the major search engines (if it’s still ranking) or lose value while you try to find a buyer. Of course, there are some domains that may not make money from parking, in which case you have no choice but to wait.
However, even if your primary goal is to sell the domain, you may actually increase its value by parking and optimizing its revenue potential.
Nevertheless, in many cases you will simply make more money parking a domain than by selling it and trying to use the proceeds to find another domain to sell. It comes down to determining which strategy brings about the highest return on investment (ROI) over a given time frame. Traffic and Conversion Generating income – whether from a parked domain or your own website – is about getting the maximum volume of traffic, and having as much of that traffic as possible perform certain actions that make you money.
For parked domains and content sites (including “Adsense sites” which generate income by running ads from Google’s Adsense network), such actions are clicking on ads. For each click, you earn a certain amount of money. For content sites running affiliate offers, those actions are clicking on affiliate links and/or buying the product or service being offered. For product / service sites, the actions include people opting in to a mailing list and buying a product or service. Each instance of a visitor performing the desired action is a conversion.
Therefore, your aim, as a domainer, is to maximize your conversion rate – the percentage of traffic that performs the desired action. So, if you’re parking a given domain name, you want to increase the number of visitors who click on the ads displayed on your website.
While the volume of traffic and conversion rate are both important, what really matters is how much money you make. When it comes to parking, there are three (3) key variables: traffic, the pay‐per‐click amount or rate you receive and the conversion rate. As will be discussed below, one parking company may attract less traffic or offer lower pay‐per‐click rates, but still earn you more income than another, simply because it has a higher conversion rate.
DNForum is one of the most popular domain name forums on the Internet. It’s a must read for any serious domainer.
DNForum was started by Dan Gessler, a teenager in Virginia, USA. In 2002, the website was averaging around 12,000 banner views a day and around 750 unique visitors a day.
Dan sold in the forum, reportedly for a few thousand dollars, to Greg Ricks from Texas. In a controversial move, Greg introduced paid memberships. The result was an increase in revenue with many of the DNF faithful staying on board.
In 2003 the forum was purchased by Adam Dicker, who still maintains it today under the name DotComGod.
Ed Russell has been active in the domain industry since 2004. In August 2005, he was a founding member of the NameDrive domain monetisation platform. Since its launch, Ed has been instrumental in NameDrive’s rise through the ranks to their current position of strength in the international domain market. Under his direction, ND now host over one million domains worldwide and have gained recognition as one of the premier parking companies.
OVT Matcher allows you to import lists of domain names and see if they are present in the Overture results for Jan, Feb and March 2007.
* You can work offline without an internet connection.
* Very fast.
* Automatically extracts domain names from drop catching lists.
* You can export data to the clipboard or text formats such as csv.
Cost: US$199 with free updates.
A clickstream is an electronic log or record of a users Internet activity. It includes HTTP data such as URL’s visited, browser type, how long a user accessed a web page, referrer details etc. ISP’s typically do not sell your name, but do identify you as a specific user.
Many ISP’s resell clickstream data to Internet marketing companies. The price per user, per month has been reported as US$0.40 cents.
Petros began domaining back in 2004 from his home in the Czech Republic. He is currently contracted as a buyer broker by large companies, being paid to identify large portfolios.
In 2005 he joined DNForum and is a regular contributor and Exclusive Lifetime member.
In 2007, Petros created OVT Matcher, a domaining tool that allows you to scan huge lists of domain names for the Overture scores in January, February and March 2007.
Simon has a long history in IT and the Internet. Back in the late 1980′s he was using BBS’s on a 300 baud modem reading messages from around the world on Fidonet. He first started using the Internet in 1989 along with a growing number of people who were accessing it via Unix boxes and clunky old VAX mainframes.
While at University studying Computing and Management (before the web took off), he recalls using gopher and downloading shareware via FTP from sites such as simtel20 at White Sands Missile Range and from archie.au in Australia. In 1993 he saw Mosaic released, which later became Netscape.
In 1994 Simon registered the domain name (inform.com.au) while working for a company in developing a proprietary graphical online service, similar to that of Compuserve. Back then there was no Melbourne IT, ICANN didn’t exist and there were no industry bodies such as auDA. The registration was done in part, by calling up Robert Elz at Melbourne University. This was because “inform” was a dictionary word, and under “Roberts rules”, couldn’t be registered. After calling, emailing, printing and faxing paperwork, the domain was eventually registered.
In 1995, Simon had an idea about creating a national ISP. This led him to acquire the domain name isp.com.au along with a contract to operate as an ISP using the infrastructure of Labtam (who later became Access One and then OzEmail). ISP became one of Australia’s first ISP’s with points of presence in every state and territory.
In early 1997 he built a niche search engine and portal around one of his domains which he later sold in 2002 for an undisclosed amount. After taking a few years off, Simon wrote a best selling book in the category of Internet safety and became a regular contributor to Australian Personal Computing magazine.
Since then, Simon has worked for many large regional and global companies in the areas of Information Security, Fraud Prevention and Operational Risk. He has also managed large portfolios of domain names on behalf of these companies.
After spending many years developing his own strategies and proprietary tools for domaining, Simon co-founded Domainer Income in 2007.
• 2002 – Executive VP of High Impact Sites Inc.
• 2003 – Purchased DNForum from Greg Ricks.
• 2006 – Joined iREIT as Executive VP and a member of the Board of Advisors.
• 2007 – Appointed as “VP Domain Aftermarket” at Godaddy.
Typo domains and the practice known as “typosquatting” is the registration of common misspelled domain names. For example, “mortgeges.com” instead of “mortgages.com”.
Some typo domains can generate a lot of type-in traffic but they may not be a good long term investment. Depending on the domain name, there could be several issues ranging from potential trademark and legal issues, through to national security issues.
Trend watching is a long term strategy and can be very lucrative.
The concept is that you anticipate what domains are going to become popular and register them first. To watch trends successfully, you need good sources and a very creative mind.
The most effective way to start trend watching is to pick a few niches that you are comfortable with. Then subscribe to a few blogs, press release sites and other intelligence sources, then read, read and read! Watch for new standards, technologies, and emerging products. Once you hear of a current trend, quickly buy up relevant domains. Remember that not all trends will pan out and it is important to diversify your holdings so that you are not focusing too heavily on one trend.
When it comes to trend watching, you need to be very careful about the possibility of infringing on trademarks. If you think a domain name could have trademark implications, then don’t register it.