Andy Sweet

Kevin Leto recently wrote down his thoughts on the development / parking debate for domains. Really, really solid stuff. So solid that Rick Schwartz got Kevin’s permission to post it on his blog. You can see it here…

Summary - Domain parking can certainly make money. It can even make a lot of money for high quality domains. Enough people directly type in domains as a form of search that single domains can make the owner millions a year.

But what if that owner developed that domain in to a working, high quality site? I don’t think anyone can disagree with what Kevin says. I also firmly agree with it as it directly relates to my business model.

I don’t own any monster domains. Right now, I just don’t have the money for it. But what I do own are close to a thousand smaller, targeted, quality domains that bring a few visitors/month/domain. I’m in the traffic accumulation game. Doesn’t sound like rocket science, does it? The traffic accumulation game has been around since the beginning of the commercial internet. Business burned themselves out by spending millions of dollars ‘acquiring’ traffic with the plan to somehow monetize that traffic at a later date. As we all know, that led to the downfall of the first wave.

But still, isn’t that what it’s really all about? Well, sort of. As Kevin points out, parked domains may have traffic but they don’t have CUSTOMERS. They’re really just transfer points on the way to another domain. They may or may not ever return if they’re satisfied by their ultimate destination. By building a site with a satisfying user experience, people are inclined to revisit multiple times, provide their email addresses for newsletters or discounts and they might also refer friends and family to that site.

My whole business is based on what I call VPU (value per unique). How much money do you make per month and how many unique visitors did it take to get there? It’s blending an average, but go with me here. It’s inclusive of however you choose to monetize your traffic. Per click, per impression, per action, whatever.

Example 1: Frank Schilling - A legend in the domain business.To say he’s a just a parker would be to underestimate him. But still, all of his domains (to my knowledge) are parked. There’s a great write-up about him this month over at Ron Jackson’s Domain Journal. He’s got something like 250,000 domains. He gets 30 million unique visitors per month and makes somewhere north of $20 million per year. If you do the math, he gets 360 million uniques per year. Chop up the $20 million over those uniques and his average VPU is worth about $.06 Hey, clearly it works for him.

Example 2: Jeremy Schoemaker. Shoemoney writes one of the most popular blogs about making money online. On his site, he has a picture of him holding up an Adsense check for $132,000.00. That number represented one month’s earnings for him from Google. It was made via one of his ringtone sites. According to a post of his, he averaged about 75,000 unique visitors per day that month. About 2.25 million for the month. That’s an average VPU of…. about $.06.

That’s not to say that you will automatically have a VPU of $.06 if you park or use Adsense. ** sidenote: I happen to think Adsense is one of the poorest payouts, but I’ll explain that in another post** I think that number is pure coincidence. But it does give you a baseline. If you take that number, how many unique visitors does it take you to get to a comfortable position? 5,000 uniques per day will get you to $100,000 per year. Sure, that seems like a lot of traffic on a daily basis. But what if you spread that over 500 microsite domains? Now you need each to average 10 unique visitors per day per site. Some sites will be in the hundreds or thousands and some will be in the single digits. But you just need to get to 5,000 per day. If you can find a way to make your VPU higher than $.06 you get there quicker.

A great thing about a site that people come back more than once is that you have the opportunity to extract value from them on multiple occasions. It will snowball and now you’ve got the recurring visitors along with all the new unique visitors that are finding your sites for the first time!

Yes, it’s more work than just parking. A lot more. But I don’t happen to own the top quality domains that can deliver that volume of traffic on just the type-in and I don’t have the money currently to acquire them. What I DO have is the knowledge to generate traffic from development and some moderately good domains that will help me achieve my goals.

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