Now its not a sure thing but Domain Parking or some call it Squatting has paid off for many a company willing to fork out the money required to suck up a couple thousand or hundred thousand domains and sit on them.

This is not a task for the unprepared or small guy. Its more a professional income generator that requires not only understanding of the domain policy but also management of servers to host.

The way it works is a large company willing to invest the resources will set up scripts to find available domain names based on a formula. Short urls with real names and other keyword factors are included. Once the list is generated it is used to perform WhoIs searches to verify vacancy and then the domain is purchased in bulk.

Just like any other hosting process each domain will need a dns entry but often unlike most websites the content of the site will be generated by script.

If you are starting off you might be able to get away with managing a few thousand hosts by yourself if you can manage the payments you are more then halfway to your goal.

Self hosters will need to setup advertising contracts.

Google Adsence has a Domain Advertising option but when you are dealing with thousands of sites you are more likely to set up your own server and generate code based on the domain that is being visited.

Anyway like we were saying HostGator they are a large hosting company that doesn’t really market domain names like GoDaddy … they have approximately 12,000 domains that they manage and each brings in about $2 a month for a grand total of $20-25,000 a month in revenue.

After they account for the domain cost and the cost of management and hosting they probably endup with $120,000 a year just for sitting on these domains.

An added benefit would be to offer the domains for auction or direct sale.

If you are not willing to build a site on a domain that brings in $15 a year in revenue then selling it for 2 or 10 times that is probably worth it.

Again this process is not worth it if you will be buying only a few hundred domains but if you are willing to put in the time and money it will generate a profit.

Think of it like a Dollar Store they don’t sell expensive items but they sell a lot of small things that all add up in the end.

Remember that the next time you hit a domain and see a page full of link ads.