Why park domains? Why buy 3 char domains?

[indemand]

This has always confused me, so I figure now is a good time to reduce my ignorance a little

My way of doing things is to pick a solid domain name, create a website, do some promoting, put in ads etc, and get a monthly check. My traffic comes from the search engines finding the content I have created and sending people interested in that content.

1) Some people here park their domains at places like sedo. And make decent money I am assuming or why would they be doing it. Usually parked domains have a single page with ads. Where does their traffic come from? Wouldn't it be more profitable to develop a site than simply parking or it is a matter of time/energy versus payback?

2) I just looked over an auction for a bunch of 3 character domains...selling from say $400 to $600. These domains are short...which is nice...but things like izv.com or 2hx.net ...etcetc......assuming people are going to park these domains once they acquire them....where do they make their money back? No keywords in the domain, parked so no site....

Just a couple of things that have always made me wonder

Thanks for any replies, I appreciate you taking the time to educate the perplexed hehe

[JEsports]

Originally Posted by indemand

This has always confused me, so I figure now is a good time to reduce my ignorance a little

My way of doing things is to pick a solid domain name, create a website, do some promoting, put in ads etc, and get a monthly check. My traffic comes from the search engines finding the content I have created and sending people interested in that content.

The first thing to learn about is determining if a domain has natural "type in" traffic. A domain that already has natural traffic gives you more options in which to make income. When you purchase a domain that does not have natural type in traffic or little type in traffic, then the option you have chosen for development, promotion, etc .. is a good method for potential income.

Originally Posted by indemand

1) Some people here park their domains at places like sedo. And make decent money I am assuming or why would they be doing it. Usually parked domains have a single page with ads. Where does their traffic come from? Wouldn't it be more profitable to develop a site than simply parking or it is a matter of time/energy versus payback?

A lot of "domainers" have a multitude of domain names in which (I'm sure you can imagine) can be a very time consuming and relatively expensive task to develop all of them. In these cases, a lot of people choose to "park" these domains at different parking services to make income without spending "development" money in doing so. Also, a lot of these parking companies will pay higher multiples of revenue than you could make developing a website containing google ads or ypn, etc... The parking revenue a person makes generally depends on the domain quality, portfolio quality, keyword of the domain, etc.

Originally Posted by indemand

2) I just looked over an auction for a bunch of 3 character domains...selling from say $400 to $600. These domains are short...which is nice...but things like izv.com or 2hx.net ...etcetc......assuming people are going to park these domains once they acquire them....where do they make their money back? No keywords in the domain, parked so no site....

LLL or LL domains are generally more valuable because of there rarity .. there are a limited number of these available and they are extremely valuable to end users. They are short, marketable and easy to remember for a company to use in branding there product. These factors among others make these domains very valuable.

[aZooZa]

Your way of doing things is the best way. It's much better to develop your own site to monetise any traffic, rather than park and take a potential 33% of the spoils. LLL.coms have value because of their rarity and the potential for resale as acronyms. A lot of people park at Sedo as it offers the potential to sell your domain; however if you're developing yourself you can do that anyway, and bypass their commission and lengthy payment periods.

Advice: Stay with what you're doing

Edit: Crossed with JEsports

[indemand]

Gotcha. Appreciate the replies guys, the rarity thing makes sense, if I had never heard of IBM I might think IBM.com isn't worth much...but to them of course it's worth a fortune.

The other points make sense as well I just hate to think my not understanding something is costing me potential good things hehe

Hope your Christmas was excellent and the New Year is even better!