What is a parked domain and what are the benefits?

If you’re looking for an explanation of what a parked domain is and its benefits, it can be difficult to find everything you need to know in one place. The concept of a parked domain is easy to understand, but it can get complicated. There is an entire industry around parked domains.

Where this article differs from others is in the smaller details. By the time you’re done reading, you’ll know all about parked domains, but you’ll also know the benefits of setting up a domain and why there’s such a big market for parked domains.

What is a domain?

Let’s start with the basics first. A domain is the identifier used to represent a website, app, or email. For example, YouTube is a website that we all recognize, but the domain for YouTube is www.youtube.com. Essentially, the domain is the web address.

What is a parked domain?

A default domain is registered for the purpose of assigning that domain name to a website. For example, www.youtube.com sends you directly to the YouTube website.

However, a parked domain is registered for the purpose of preserving that domain so that no one else owns it. The domain itself may not point to content, but by owning a domain you can ensure that no one else takes it from you.

someone can buy a domain through many different domain registrars. It’s as simple as looking for a domain on a website like GoDaddy and buying it when it’s available. For this reason, parking a domain can be very important.

There are many reasons why it makes sense for a business to park a domain, as well as other options for those with a keen eye for good domain names. Let’s talk more about this in the next section.

The benefits of a parked domain

To fully understand the benefits of a parked domain, imagine two different scenarios. One from a company and one from a domain reseller. Let’s start with a company’s mindset first.

Let’s say you own YouTube and you know that some of your users are from the UK. Many UK websites use unique .co.uk domains and some websites have regional specific versions of their websites that use .co.uk instead of .com.

Because YouTube wants to ensure that users from the UK visit their actual website, YouTube buys and parks the domain Youtube.co.uk. On the back, they can set it up so that Youtube.co.uk automatically redirects to the main Youtube.com website.

Buying the domain YouTube.co.uk will still allow visitors from the UK to find YouTube and YouTube will prevent a bad actor from buying the YouTube.co.uk domain. If another individual owned YouTube.co.uk he could be using it to spam users with ads, trick users into passing on their real YouTube credentials through phishing attemptsor require YouTube’s owners to pay them a large sum of money to transfer the rights to the domain.

These are just a few examples of the benefits of a parked domain for a business. But there are also more examples.

Let’s say you are Marvel and are working on a new movie with the character Quicksilver that you want to release in 2 years. If you plan to run a marketing campaign that uses the domain quicksilvermovie.com, you should buy and park that domain so you can use it later before the Quicksilver name becomes popular.

If rumors started spreading about your movie early on and you hadn’t bought your domain yet, someone else could buy it and that could hurt your marketing campaign.

There are also other great advantages to parking for-profit domains. In fact, there is an entire industry around making a profit from buying and reselling domains. These days it can be difficult to get a good domain to sell because the market is so competitive.

But let’s say you got into the business early on and bought the domain chicken.com. Over the lifetime of the internet, the number of people around the world who are curious about what happens when you type chicken.com into the address box must be quite high. So how would anyone capitalize on such an opportunity?

Monetize Parked Domains

One of the main methods of monetizing parked domains is by placing ads on them. So when someone visits your website, they will show ads that may be related to the name of the website.

There are services that specialize in monitoring traffic and displaying relevant ads on parked domains. For example, top.com specializes in all things domains, and they have generated over $500 million in revenue from ads on parked domains.

Advertising on parked domains isn’t the only way to monetize either. Domain resellers will often buy reputable websites and then resell them for a profit. Companies will pay a lot of money to access some domain names, so it can be profitable to hold domains if possible.

In fact, there is such a thing as a domain broker – a hireable assistant that helps you track down and negotiate with the owners of unique domains. Some domains have sold for several million dollars in the past. But who would pay that much for a domain? Below are some examples.

Hotels.com sold for $11 million in 2001 to help build a global hotel search website. At the time it seemed like a large sum of money, but 11 years later David Roche, president of Hotels.com, said, “Now we look back and think, what a bargain.”

Tesla.com sold for $11 million with great effort in 2014 as a marketing attempt by Tesla, Inc, as they felt that teslamotors.com did not fit their overall future plans for the company.

There are many other examples throughout history that explain how valuable it can be to own and park certain domains.

Overview

Hopefully our explanation of what a parked domain is and how they work has been helpful. Do you have any other questions about parked domains? Then leave a comment below.

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