Domain Parking Vs Domain Development

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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 lottery.

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 business.

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 value.

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 potential.

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.

You can read more about domain selling, domain buying, and domain name development at Chris McElroy aka NameCritic's Personal Blog or at the SEO Service Provider Blog