Whereas in the old days squatters would hold domains hostage to sell them to the highest bidder, the new strategy is to attract as much traffic as possible and serve up ads that generate a revenue stream thanks to targeted, pay per click advertising such as Google’s AdWords.
There are a number of approaches to capturing this traffic but the basic ones are:
1) Register domain names that people might type (or mistype) directly into a web browser and put up bogus content (this has the interesting effect of making the ads more likely targets for visitors)
2) Pounce on expiring domains which might already have an audience (as you point out) and serve up ads.
3) Load your domain’s site with content that might get ranked high in a search engine, better yet use SEO (search engine optimization) techniques to make sure it ranks high!
Even though only a small percentage of visitors will click on the ads, this is effective for the same reason that makes spam profitable – even if very few people actually pay for spamvertised products it only takes a small percentage, say 0.001% conversion, to make a lot of money when you send out millions of e-mails. And bandwidth and hosting are so cheap these days that serving up tons of ads to web browsers not an economic impediment to making this work. Finally you don’t even need to sell product to get paid, a system like AdWords will pay you every time someone clicks through an ad.
Look for those kinds of pages, with not very useful content but lots of relevant ads, to become much more common in the next year or two. So next time you come across a page that seems slightly relevant to what you are looking for but in a wierd, pre-canned content kind of way, don’t be surprised: Just remember how much money is in this!
Hopefully one of these days someone will invent the equivalent of anti-spam to protect us from these sites. Lets get to work.
This post was inspired by Tod Maffin over at CBC Radio One who pointed out the confusion being generated among users by this new money making strategy! Thanks Tod!