Domain Name Parking Firms Are Very Profitable

Domain name parking firms are willing to pay $100s per purchased client.

Ever wonder why so many domain name parking firms are popping up? It’s since this is a very profitable business. In fact, domain parking firms are willing to pay $100s to acquire clients, if these firms’ bid prices on Yahoo (NASDAQ: YHOO) are any indication.

I recently added a campaign for domain name parking in Yahoo! Search Marketing. I added the keywords “domain parking” and “domain name parking” and then let Yahoo tell me what I’d need to bid in order to expect having one of the “top listings” for the search term. The number isn’t for the weak of heart: I need to bid between $6.81 and $116.35 per click! If you consider that parking firms can convert 1 in 10 visitors, that means they’re willing to pay between $68.10 and $1,163.50 per user at these bid prices.

Yahoo considers ad quality in its calculations of necessary bid prices for top positions, so I tried a few different ads using actual parking firms’ URLs and the results were similar.

The bid prices for the term “domain name” were $4.16-$15.04.

Of course, no two domainers’ portfolios are worth the same. Parking firms need to market to the top domainers to get the biggest bang for the buck.