Making Money Through Domain Parking

Why work hard to generate money when domain parking takes almost no effort and pays well? Your choice: work on a domain to generate an income or NOT work on a domain and still generate an income. It’s a difficult choice!

Domain parking is one method of earning money from domaining. It’s sweet in that it involves comparatively little work compared with developing a website or selling domains, yet can provide a good income. It scales incredibly well, allowing you to profit from thousands of domains, whereas realistically no one could ever develop that many domains. Despite this, many newcomers to domaining have a lot of misconceptions about domain parking. To help, this article covers some of the basics of domain parking.

“What is Domain Parking?”
Domain parking is pretty simple, really. You let a parking company display ads on your domain. The parking company normally has a contract with Google or Yahoo! to use their ad feeds. A visitor to your domain clicks on an ad, the advertiser pays Google or Yahoo!; Google or Yahoo! pay a share of the revenue to the parking company, who pays a share of the revenue to you.

“How Do I Park My Domains?”
After your buy or register a domain, you will need to register with a parking company (and eventually it makes sense to register with several parking companies if you are serious about domain parking). The parking company will tell you how to use their service. Normally, this is through changing your name servers. The parking company will also give you options to target the ads that appear on your domain, for instance, by setting a keyword for the ads.

“How Do I Get Traffic To My Parked Domains?”
Aaaah. Finally, we’ve run into the catch. Parking companies strictly prohibit you from doing anything that would increase traffic to your domain. Sending traffic to a parked page (for instance, through advertising, link building, etc.) is against all parking companies terms of service. The logic behind this is that Google and Yahoo are trying to get their ads in places where they don’t already control the traffic – not recycling traffic that already exists.

Parking is for domains that have pre-existing traffic (normally through direct navigation). This normally means generic dot com’s and generic ccTLDs, typos, and domains that were once websites.

The key to success in making money from parking is owning domains that get natural traffic. Without the traffic, there is, well nothing. Parking isn’t about getting traffic to domains – it is about monetizing pre-existing traffic. To make money from parking, you need to research buying domains that already have traffic (by using various tools available, such as Alexa, Google external tool, etc).

Tip: If a domain doesn’t get traffic, there is no sense in parking it. In fact, I would generally recommend against it, as parking a domain can increase the chances of a UDRP happening if the wrong ads appear on your domain.

“What parking companies are there?”
Domain parking is a very competitive industry, so there are a lot of choices available for you to park your domains. Here is a list of the main parking companies (in no particular order):

1. Parked.

2. TrafficZ.

3. HitFarm.

4. Sedo.

5. NameDrive.

6. DomainSponsor.

7. Fabulous.

8. DomainSpa.

9. 19 Parking.

10. WhyPark.

11. Active Audience.

12. SmartName.

13. Bodis.

14. Skenzo.

15. Domain Embarking.

16. Sendori.

17. DotZup.

18. Revenue Direct.

19. GoDaddy.

20. ParkQuick.

21. GoldKey.

22. Park Logic.

23. iMonetize.

24. Parking Panel.

25. Parking Dots.

“How do you choose a parking company?”
Yes, that list above is somewhat overwhelming. The best way to do this is through trial and error. For someone just starting out, learning the ropes, and with only a few domains, Sedo may be the place to start parking. Park your domains there for a couple of weeks to get a baseline for performance. Then, you can play around with keywords and altering layouts to see if you can increase revenue. After that, you can move your domains around to other parking companies to compare performance.

Different parking companies have different strengths. For instance, NameDrive does well for my .uk domains and I’ve heard that they are good for a lot of the European ccTLDs. Sedo is reputed to pay well on adult domains.

“How Do You Increase Parking Revenue?”
This boils down to trial and error. Look at keyword lists to find out what keywords pay best in your domain’s niche. Try different ones out to see if that makes a difference.

As well, each parking company also offers different layouts for your parked pages – different ones work best for different niches. Test them out and see what works best for your domain.

Also, move your domains to another parking company. Some parking companies perform better for some niches.

Finally, if you earn enough money from parking, you can always approach your parking company and ask for a larger revenue share.

“Is parking revenue declining?”
From everything I have seen and heard, there is a strong downward pressure on parking earnings. To a certain extent, you can offset this by aggressively testing and moving your parked domains to better layouts and to parking companies that convert more effectively, as well as negotiating higher revenue shares.

A lot of people seem to think that parking revenues are declining because the parking companies are getting greedier. While everyone wants to earn more money, myself included, I think that the parking industry is far too competitive for this too happen. People can — and do — switch parking companies all the time. There are simply too many alternatives available for any parking company to start getting too greedy.

Rather, the revenue downturn is likely due to other factors, such as Google and Yahoo! paying out smaller shares to the parking companies, the general bad economy, and the fact that advertisers can now opt out of advertising on parked pages.

“Is Domain Parking Evil?”
There is a lot of commentary in the blogosphere about domain parkers being evil, useless, lowlifes. Actually, come to think of it, there is a lot of commentary in the blogosphere about domainers being evil, useless, lowlifes. However, even many domainers claim that parked domains are useless and the general public does not like them.

My developed websites get a 5 to 10% click through rate on the ads and my parked pages get a 50% plus click through rate. From that, it seems to me that people are finding what they are looking for on parked pages.

The fact of the matter is – the traffic is already coming to the parked pages. You have a choice of showing your visitors nothing, or parking the domain and giving your visitors what they are looking for. How that can be evil is beyond me.

As well, parked pages provide more choice to consumers – they can choose from several companies offering what they want, versus just one company if a website were there.

In real life (is there such a thing?) people pay good money for publications like Autotrader, which are not much more than a bunch of ads. Is Autotrader evil? I certainly never heard anyone make that claim. Claiming that putting a version of that online makes it evil smacks of jealousy to me, more than anything else.

“What does the future of domain parking hold?”
It is really hard to say, and any statements would be highly speculative. There is no doubt that changes are going to happen with domain parking. When the changes do occur, they will likely happen fast. A prominent domainer with a knack for predicting the future is rumored to have said: “Personally I would expect Google to pull the plug on the domain channel in it’s current form and I would expect that to happen at anytime.”

Most, if not all, facets of domaining are high risk, potentially high reward, and domain parking is no different. I think that the key to being successful with domain parking is to choose domains that have the largest amounts of type in traffic (well, that and obviously buy the domains for a good price). If you do that, you will weather favorably any changes that happen to domain parking. The fact of the matter is that regardless of what happens to domain parking, your targetted traffic will still be there. That traffic is valuable and won’t go to waste – new ways will spring up to monetize it.

3 Letter Dot Com’s Continue Their Downward Spiral

As far back as June 7, I warned that LLL.com domains were going to fall and that it would be wise to sell them.  People laughed.  At that time, the cheapest three letter dot com domains were going for $7,600.  On June 26, LLL.com domains started falling, with several sales in the $7,100 region.  On July 2, LLL.com crashed below the psychological $7K barrier, with QVK.com selling $6,730 – and I continued to encourage people to sell.

Now the floor has finally fallen out.  On Wednesday, DNJournal reported that OLU.com sold for only $5,002.  That was shocking – and many people stated it was simply the venue at which the domain was sold.  But today the evidence came in with overwhelming strength at the GreatDomains auction – eqw.com sold for $5,211, fvz.com sold for $5,100, ouj.com sold for $6,350, wzu.com sold for $5,200, xag.com sold for 3,933 EUR ($5,778), and yxl.com sold for $6,700.

I’m sure there will be the usual round of excuse making for these results.  But the fact is, in June if you offered anyone $5K for even the crappiest LLL.com, it would have been considered a lowball offer and laughed at.  Now, these domains are routinely selling for this amount in highly publicized auction events.

As for the future, I do not think that the bottom has been hit yet.  My recommendation is the same as it has been over the last three months:  sell any three letter dot com domains that you own, sooner rather than later.

Canadian Domain Laws – What Domainers in Canada Need to Know

This has been a banner year for Canadian domains.  The year has seen record sale after record sale being recorded with the four highest ever .ca sales closing.  Jobs.ca sold for $600,000, and Emplois.ca, CV.ca, Banks.ca, GMX.ca, and Interview.ca all closed for solid five figures.  An active secondary market has launched, and even Godaddy has opened a Canadian office and is offering .ca domains.  There have even been blogs launched dedicated solely to the .ca market.

Despite this, very little has been written about Canadian domain laws.  To get a better understanding of the legal situation facing Canadian domainers, I contacted Canada’s leading domain lawyer, Zak Muscovitch, and asked him a few questions.  Zak was the successful lawyer in the famous CheapTickets.ca case, which was the first domain dispute under the CDRP where a domain owner won, and which was fought all the way up to the federal court of Canada.  Zak has also worked on more domain disputes than any other lawyer in Canada.

Fortunately, Zak agreed to answer my questions.  Here is what he had to say:

1. Please provide a brief biography so that my readers know who you are.

I am a domain name lawyer located in Toronto, Canada. I have been practicing domain name law since 1999. I have acted for domainers all over the world in countless domain name disputes and have assisted many domainers with domain name sale and monetization deals.

2.  How did you get interested in domain law?

I applied to 50 intellectual property law firms for my first job in law and got hired doing personal injury.  I was lamenting this while having a beer and reading the newspaper in a local pub when I came across an article about a local artist who was being sued by two of Canada’s largest corporations, Bell and Torstar, over his registration of Toronto2.com. The companies were the owners of Toronto.com. The article said that the defendants needed a lawyer. I offered to take on the defense, pro bono. We won. You can read about the case here.  I still have a gorgeous painting that I received in appreciation for my services and the defendants and I are now lifelong friends.

3.  What is the law regarding registering trademark domains in Canada?

The best concise summary of the law in Canada was provided by Justice Blenus Wright in another precedent setting domain name case that I won, Black v. Molson. Douglas Black was a PhD student at the University of Toronto who had registered Canadian.biz.  He was taken to the National Arbitration Forum by Molson, the huge Canadian brewery. They claimed that Black was not entitled to the domain name since they had a trademark for “Canadian”.  The NAF Panelist, Robert R. Merhige, Jr. (1919 – 2005), was a distinguished jurist appointed by Lyndon Johnston and was even a World War II fighter pilot.  Unfortunately, his decision in this case was wrong, and Molson won, believe it or not, at the NAF.  I called up Douglas Black and told him that he had to appeal, and that I would take on the case for him.  Justice Wright, in his written opinion  said:

“Simply because a domain name is identical or similar to a trademark name should not result in the transfer of the domain name to the trademark owner.  In my view, unless there is some evidence that the use of the domain name infringes on the use of the trademark name, a person other than the owner of the trademark should be able to continue to use the domain name.”

That, in a nutshell, is the law in Canada, thanks to Justice Wright.

4.  How does the Canadian dispute resolution process work?

It’s very similar to how ICANN UDRP’s work for .com’s, etc.  Basically, the Complainant needs a trademark and must show that the registrant has no legitimate interest in the domain and registered the domain name in bad faith.  All contested cases are ruled on by three-member panels paid for by the Complainant.  The Complaint and Response are submitted by email and a written decision comes out several weeks later.  You can read the Canadian Domain Name Dispute Resolution Policy here.  There are some major flaws with the process but there is no review of the current Policy planned by CIRA at this time.

5.  How common are CDRP proceedings?

Not very common. There have only been 107 CDRP decisions to date (to August 2008). I acted for the Respondent in the very first CDRP case where a Respondent won.  It was called Cheap Tickets v. Emall. It eventually wound its way all the way up to the Federal Court of Appeal of Canada where we won again. You can read the final decision on the case.

6.  What are the practical differences between the CDRP and the UDRP?

This is a very complex area that would need a more thorough and complex answer.  One glaring example is that under the UDRP, “preparations to use a domain name for a web site” is considered a “use”.  In Canada, under the CDRP, there is no express provision that considers “use” to include “preparations to use”.  This is an important distinction because it means that you must erect a web site immediately upon registration, or risk being found to have “no legitimate interest” in the domain name because you haven’t used it. This flaw became apparent in the recent CanadaVisa.ca case (which I won nevertheless).

7.  Are there any other relevant laws that Canadian domainers need to be aware of?

There are lots of laws that could affect Canadian domainers, including both American and Canadian laws. One law that domainers should pay attention to is the US law, the Digital Millenium Copyright Act.  It has “Notice and Takedown provisions” that apply to US-hosted web sites. You can read about it here.  That’s why I always recommend that my Canadian clients to try to use a Canadian web site hosting service with Canadian-located servers, and even use a Canadian domain name registrar.

A Canadian domain name registrar comes in handy because of the governing law clauses in their registration agreements. They also come in handy when an ICANN UDRP is commenced, because the Complainant must agree to submit to the jurisdiction of either the location of the domain registrant, or his registrar, in the event of an appeal.  If both are in Canada, then any subsequent legal proceeding should generally be in Canada. This is to the Canadian registrant’s advantage.

8.  If you were in charge, what changes would you make to the CDRP to make it fairer to both trademark holders and domainers?

There are a number of things I would do. The first thing I would do is immediately hold consultations on revising the CDRP. I would also ensure that the panelists reflected a broader mindset and background.

9.  What future developments do you see in this area of law?

I think .ca domainers will have to get together to protect their interests more at CIRA and in the courts. Otherwise, it’s the trademark owners and their lawyers who will continue writing the rules of the game.

10.  How does Canadian tax law treat income from domaining?

That’s a question for a tax advisor, so I won’t comment on it other than to say that income is income.

Thanks again Zak for taking your valuable time to help Canadian domainers understand domain law in Canada!