How Are The Most Experienced Online Entrepreneurs Making Their Money Today?

Have you heard of domaining?

No?

Well you are not alone. It’s an area of online money making which is shrouded in secrecy.

Domaining, or domaineering as it is sometimes known, is the business of acquiring domain names and monetising them through advertising. The leading domainers (or domaineers) have acquired thousands of domains names over the past five to ten years and are making millions of dollars.

But why is this subject of interest to online publishers?

The reason is the domain name entrepreneurs have always been at the cutting edge of monetisation on the web.

To understand what’s happening today you need step back in time to look at how domaining evolved.

Back in the 1990’s there was a rush to buy .com domain names and some people accumulated hundreds of them. At this time there were no easy ways of making money from these domains, and the registrar fees were often up to $100 a year.

As many of these early domain investors were students they were desperate to find a way of paying their annual bills so were continually talking to each other and looking for ways to make money.

Then late in the 1990’s a company called GoTo.com came to their rescue. It started to sell advertisements which website owners could put on their own sites. If these ads were clicked on the website owners would get a small share of the ad revenue.

Overnight domain owners had a way of making (a small) passive income from their domains with little effort.

This opportunity expanded in 2003 with the launch of Google Adsense.

Being paid for displaying pre-sold ads suddenly went from the small domaining community to being mainstream.

This led to a few entrepreneurs buying thousands of domain names with the intention of putting dozens of pay-per-click ads on each page. Their thinking was that if just one ad was clicked on each site every day, the cumulative income would quickly add up. This activity became known as domain parking and the pages that were created were referred to as link farms.

In the early days, Google liked these sites because they were generating a lot of ad revenue, but gradually their attitude started to change. There were so many link pages created, that they started to clog up the search results pages and internet users became very frustrated at being continually presented with websites just made up of ad links.

So back in 2006 Google started to proactively weed out these pages from search results. If the discussions in the forums are anything to go by this decision has resulted in income from parked pages halving over the last eighteen months.

Traditional domain parking is being wiped out.

So what are these domain investors doing now?

The answer is developing their domain names into niche websites which focus on making money from a combination of advertising and affiliate revenue.

The first trend down the development route was into minisites. These tended to be one to ten page static websites focused on a single niche subject. These sites made their money from a combination of advertising and affiliate links.  

These minisites started to get the domains back into the search engine rankings and making money again.

But things are moving on again.

Google, who accounts for 80% of all search traffic, is now becoming very focused on finding the best possible content for any given search phrase. To enable them to do this they use over 100 criteria within their search algorithm, including how many third party websites link to a site, the frequency of updates, the consistency of content, and much more, to award a quality score to a site. The better the quality score, the better the search results page position and the greater the amount of traffic the site will receive.

As minisites tend not to be updated regularly and have little reason to attract links, they are falling down the results pages and their traffic is declining. As a result their revenues are drying up. There is little chance that this trend will be reversed.

Where to Next for Domainers?

All the talk in the domaining world is now about moving away from creating hundreds of sites with small revenue streams to creating a few sites that dominate their niche. The three phrases that are now being banded about are specialisation, scale and multiple revenue streams.

The savvy online entrepreneurs are moving from running dozens of static minisites to focusing on one or two niche ‘destination sites’.

They have realised that they need to regularly create unique content and build a relationship with their visitors so they can make money from them not once, but many times.

This is what we have been saying for the last couple of years.

Every content website owner should target a single well-defined niche and focus on dominating it through the quality and relevance of the content.

At SubHub, where we specialise in helping content publishers build money making websites, we have seen a rapid increase in the number of domain investors who are looking to build world-leading specialist content websites.

This is where the money is. Jump on the bandwagon; its starting to pick up speed.