How Does Domain Parking Work?

So what is parking your domain? Parking your domain is an advertising practise used mainly by domain registrars and internet moguls to earn income from type-in traffic to an blank domain. The url will normally resolve to a page consisting of nothing but advertisements or links to affiliate programs. There is typically no useful information of any value to the web user who typically clicks on one of the links just to get away from the page. The domain owner is usually paid based on the number of clicks and the following benefit derived from those clicks.
Is it possible to generate income from domain parking? Yes it is! Some domainers have portfolios of thousands of such sites that produce hundreds of thousands of dollars each year. Some of these portfolios of sites have been reportedly sold for millions of dollars to Venture Capital companies. One Canadian internet mogul has managed to sign an agreement with the government of Cameroon. Cameroon domain names end with a ".cm". Many internet users mistakenly type in ".cm" instead of ".com" and all of the unregistered domain names resolve to a parked domain page consisting of paid links. This person is reported to make millions of dollars each year, his reward for assisting the Cameroon government monetize this phenomenon!
My personal experiments with domain parking programs like Sedo and GoDaddy has been pretty miserable. I had a handful domains with Sedo for a 2 year period and I made roughly 1 cent per month! Not even enough to cover the expense of the domain name registration fee each year. GoDaddy was far worse. I had to to pay between $3.50 and $9.99 per month in order to park your page there. I had just one site for several months but I was unable to make sufficient money to even cover the cost of this fee, even though it wasn't a lot to begin with. I think that if you're a bulk domainer with thousands of sites, you might gain more traction than I did. But I wouldn't bet on it.
Before you think that you'll go out and buy several domains and snowball your domain parking efforts, remember that you're already very late to the party. It's now a very cut-throat playing field and there are several thousands of interent entrepreneurs trying to generate income from domain parking. All of the 3 letter domains are all gone and so are nearly all of the 4 letter domains too! Getting type-in traffic is usually a lot easier with shorter domain names or dictionary words. With Public companies jumping in on the action, there's more than enough money being spread around to buy up all the possible dictionary words and their possible permutations and combinations.
However, you don't need to completely give up on the idea of domain parking. There are still several ways to make some money. Some of them involve generating MFA (made for adsense) sites that have a minute amount of content which draws organic traffic but are heavily optimized for adsense ads. This is substantially more cumbersome than ordinary domain parking and a lot more time-consuming. There are ways to automate this procedure, but many of these methods require a bit of cash outlay for software tools that all generate the same duplicate content for everyone. Making unique content is incredibly critical for ranking high in the search engines and getting organic traffic. There are ways to automate this process without spending any money but thats a new topic for another article.