A look at where we’re headed for domain monetization.

It’s no secret that the traditional form of domain name monetization — PPC parking — has seen a decline over the past three years. Nonetheless, this form of monetization is still the best option for most domain names. Certain segments of domain names can do better through other monetization channels, however.

There are basically two different efforts going on in the evolution of domain monetization: traffic building and alternative monetization.

Traffic building involves generating traffic to domain names that receive little natural traffic. WhyPark and DevHub are good examples. These services create content on your domains with the hope of getting search engine traffic. Another example is SmartName, which recently released a content system and also has a “shops” system that populates products onto domains. While all of these may generate some traffic to web sites, they mostly still rely on pay-per-click for monetization. (DevHub has a network of CPM, CPA, and PPC advertisers).

Although these traffic building outfits are interesting, I’m more excited about recent developments in monetization beyond PPC. These solutions typically work best for domains that already have traffic, but aren’t optimized using PPC.

Cost-per-action, or the affiliate model, is certainly an opportunity. PPX is one company trying to marry the affiliate marketing world with domain name traffic.

But a bit further outside the box you’ll find a couple companies to really keep an eye on. I recently wrote a review of Octane360, which sells directory listings and leads on geo-targeted web sites. These fixed-price, monthly listings can far outpace potential PPC revenue and don’t rely on the Google-Yahoo duopoly. The typical domain owner will get about $5 per directory listing sold on his/her site, and most listings automatically renew each month. Two months of one listing covers the annual registration fee.

Case-in-point: My StlDaycare.com domain name made only a couple bucks a year parked. Octane has sold three listings on it, which will generate about $200 a year in revenue. That’s about 100 times what I was making from parking. Do that at scale and it’s a game changer.

Another interesting player is RootOrange. They are taking category-killer generics and splitting the traffic amongst cities, effectively leasing local rights to the domain to a related company in each city. They’re early in the game, and I’m not sure how it will work out. But strategies like this are innovative and promising.

One idea I’ve been kicking around is using domain traffic to capture opt-in email addresses. This doesn’t result in immediate monetization, but instead enables long term, recurring revenue opportunities.

I suspect that, even in five years’ time, pay-per-click parking will remain the top monetization method for domain names. But what happens with alternative monetization techniques will be extremely important to the industry.

Familiar faces top results from survey.

Sedo and Parked.com were selected as the best domain name parking companies in the 5th Annual Domain Name Wire Survey.

Sedo took top honors with 23% of the vote, followed by Parked.com at 18%. Here are the top five vote-getters:

1. Sedo 23%
2. Parked.com 18%
3. NameDrive 13%
4. SmartName 6%
5. DomainSponsor and Google Adsense for Domains 6%

SmartName is new to the list this year. The company has combined its three parking platforms into one, giving customers previously on GoldKey and ActiveAudience access to SmartName. The company has also launched new parking products including content sites and shops.

It’s also interesting to look at the percentage of customers that have used a service that rate it ‘best’. By this measure, SmartName takes home top honors, followed by Parked, NameDrive, and Sedo.

Amongst domainers with 1,000 or more domain names, Parked.com takes first place followed by Sedo.

Rate domain name parking companies at ParkingJudge.com.

Yahoo-Microsoft payday for domainers is finally within view.

It’s getting closer.

Yahoo and Microsoft have announced they’ve cleared U.S. and European regulatory requirements for their search partnership.

The first change will be that Bing’s search results will start showing up on Yahoo search pages. That means one less search engine to optimize for.

The good news for domain name parking is that later this year — or perhaps in early 2011 — the Yahoo and Microsoft advertising marketplaces will merge. This means more advertisers bidding on the same keywords for a bigger slice of the search ad market. That pushes up bid prices and covered keywords, which should mean more money for parked domains. As Yahoo tells it, the combination “will create more advertiser competition for placement and broader keyword coverage, resulting in potentially better monetization for you.”

It’s been a long wait, and we’re not there yet, but it’s getting closer.

Domain parking company to launch Japanese parking platform.

Domain name parking company NameDrive will launch a Japanese-language parking platform tomorrow.

NameDrive has partnered with ICANN-accredited and .JP-accredited domain registrar WIXI to provide the parking program for the Japanese market. It is designed for owners of domain names in Japan or domains using the Japanese language.

Founded in 2005, NameDrive has been one of the major parking companies to embrace Internationalized Domain Names (IDNs), which will be important in the Japanese market. The company says the platform will be the first parking program with full support in an Asian language. The company manages over 1 million parked domains.

When the platform is launched overnight/tomorrow, customers can access the system by selecting the Japanese language option on NameDrive’s home page, or at park.wixi.jp.

Has domain name parking hit bottom?

How much are your parked domain names earning? If you make $20 or more RPM (revenue per thousand visits), consider yourself lucky.

The 5th Annual Domain Name Wire survey shows that 60% of domain name owners are making less than a $20 RPM, and a whopping 40% are making less than $10 per thousand visits.

The good news? Those numbers are in line with last year. Perhaps domain parking revenue has bottomed out? 35% of respondents said their parking revenue in 2009 was similar to 2008. Still, 53% reported a drop in revenue and only 13% an increase.

Nevertheless, domainers remain mildly optimistic about domain parking prospects in the coming year. About 30% think parking revenue will rebound in 2010, a couple percentage points more than think it will continue to drop. 42% think 2010 will be similar to 2009.

To read reviews of domain name parking companies, visit ParkingJudge.com. To read more results from the 2010 Domain Name Wire Survey, visit DomainNameWire.com/survey.