Registrar Converts Domain ‘Parking Lot’ Into Ad Revenue

Dotster is running keyword advertising on tens of thousands of .info domains it recently registered, creating an instant advertising platform that generates revenue for both Dotster and Google. The strategy marks a shift in registrars' efforts to leverage the huge numbers of customer domains "parked" on their servers, which have traditionally been used to market registrars' in-house offerings.

Dotster is converting these parked domains into revenue from text ads served by Google's AdSense for Domains program. The model doesn't always work perfectly, however, as seen at dotster.info, which displays ads for two Dotster competitors, Register.com and Go Daddy.

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In early January Dotster registered 343,000 .info domains using contact information for its customers who owned those names in .com or .net., following the lead of eNom/Sipence, which grabbed 1.1 million .info domains last September. The .info domains are being offered to Dotster customers, who can "claim" them at no cost for one year. Text ads are served on domains that remain unclaimed or are rejected by the .com owners.

The growth of Internet keyword advertising has allowed speculators (and now, registrars) to create a revenue stream from domains that can attract traffic without any original content. Marchex Inc. recently paid $164 million for a network of 100,000 search-optimized domains displaying Overture ads.

Afilias, which operates the .info top-level domain, offered free .info names to registrars last fall, and now offers the first year for 75 cents per name. The promotion is designed to create a large base of users for .info names, who would then begin paying renewal fees in subsequent years. Registrars have embraced Afilias' offer, with eNom, NameSecure and Hostway also offering .info names for free. The promotions have boosted the number of .info domains to 3.4 million, roughly equivalent with the much older .org top-level domain.

But the "info-cloning" by Sipence and Dotster has triggered complaints from some customers, who say that by registering domains associated with their brands, registrars are effectively acting as cybersquatters. But the scenario is somewhat different from traditional cybersquatting, since the .com owner is the listed registrant.