I’ve been following the domaining industry for a few months now. You know these people. They’re the ones who invented ‘what you need, when you need it’. The low value “parked page” site stuffed with low-quality pay-per-click links, or the “mini-site” with three pages of cursorily-researched content and a whole lot of AdSense.

While it’s often seen as a grand investment strategy– building a portfolio of names and holding them for sale, it’s actually a very weak strategy.

First, your revenue angles are limited. Yes, there are some new ‘Parking Plus’ concepts, like throwing out an affiliate-based store, or slapping a canned forum or wiki onto your dead domain to give it a life, but these often mean handing over a huge cut of an already small revenue stream to the development service. Beyond that, there’s little more than selecting different parking services and hoping that you can find one which generates $8.95 per year to cover the renewal costs.

That’s the sad fact of domaining: most of your portfolio is going to barely cover expenses; if you’re lucky, once a year, explodinghamsters.com will pay for a curry dinner when parked.

Second, you can never enter the search game. Even if you develop a brilliant site atop your parking provider’s toolkit, you will have obvious fingerprints. Your nameservers will be those of the parking firm; the underlying software’s basic nature will be visible. Hell, even the template structure will be obviously betraying that you didn’t own your site. In addition, these sites rarely, if ever, have a high-quality link profile, so even if there aren’t inherent penalties to the site, it won’t meet the search engines’ quality estimates.

Third, you’re generally taking a passive approach to marketing. I note this is especially true with owners of specific types of domains. If you bought a hundred domain names solely because they’re four-letter-long “brandable” .com domains, you can’t really go out there. All you can do is hope someone invents a product, names it something you own the domain for, and will pay premium money because he didn’t do his homework before running the $200,000 media campaign.

Yes, the ‘invented name’ only applies to some domainers, but frequently, those people who have keyword-rich domains, are pursuing a mechanical approach of whatever name has the most exact-match searches on Google, or the highest pay-per-click estimates. Ironically, it’s a strategy which makes you focused on the very search engine who doesn’t want you to rank at all. Naivete is also a factor: will you be able to provide a message on your exact-match domain that will register enough to get that paid click, or just trigger the big-blue-back-button?

So how can you do better? Invest in a complete property. Build a site with fresh content, rather than a parking page, and connect it to a comprehensive link-building campaign. With such a setup, you have an asset– not just a site– one which will draw real search rankings and traffic, and which can potentially be sold to a further user. Yes, it’s a long-term strategy, but one which can pay out much more than a 96-cent monthly parking commission.