Domaining, as it is often called, involves nothing more than buying website domain names and parking them through parking services or selling them to others. The prospect takes a little time to master, but the returns can be worth the effort. The financial returns tend to come in one of two different ways - ad revenue or resale value.

Getting started in domain name investing involves buying the site names, registering them and then either parking or reselling the sites. How much money one can make depends on the traffic flow the domain name pulls in naturally or how sought after the name happens to be by others.

There are several ways to determine what kinds of domain names to buy and register. The most common ways center on "type-ins" or "typos." Typos are nothing more than sites whose names are similar to other existing websites or brand name products. The typo sites obtain natural traffic when people accidentally mistype website names or brand name product names into their search engines. This kind of buying tends to be a little tricky, most especially when brand name products are being used. Many investors don't like the typo route because of potential legal issues that can arise. Another option is to buy actual "type-ins." These are names that reflect common web searches. For example, "babygirlclothing" or other real terms and words that are used in searches are used for the domain names. This route is considered more above board. A final option for picking sites is to find those that were formerly used and still have traffic and backlinks. Buying these and parking or reselling them can return decent rewards.

There are many options to go about buying and selling domain names. Some people buy domain names in bulk from places like Moniker.com and then research them to see if they have money-making potential. Other options include going through domaining forums, such as NamePros.com or DNForum.com. These sites are used for buying and selling domain names. These are traded just like real estate might be bought and sold. It is a buyer beware kind of world though. Not all deals come through in the end. Some sites offer a seller and buyer ranking system to enable buyers to check out the integrity of a transaction. Other options for protection include escrowing the money through a payment service, which I prefer.

Determining the real value of domain names can be the hardest part of this type of business. It generally comes down to what the buyer thinks the name is worth. Buyers can sometimes request revenue and traffic statements.

Once domain names are chosen and purchased, there are a few options for actually making money off these sites with little to no work. Parking services are the most common route for making this happen. These services allow people to "park" their pages with little or no content. This means the pages will pop up as a result of an Internet search. While content doesn't go along with the package, the landing page can have text ads. The domainer that owns the domain gets paid for the returns on those ads. The other option is to simply sell the domain names to those who want them for further development of their own websites or to reap natural ad revenues.

Parking services like Sedo and Parked.com have their own rules domainers must follow. Although these services do allow text ads on parked pages, they tend to frown on backlink generation. They expect that traffic that comes in will be of natural, organic means. Simply put, they want accidental hits, normal Internet searches or existing backlinks to drive traffic. If site owners do too much to generate traffic, their pages can be taken down.

The practice of domaining is a fairly simply way to make money on the Internet. It doesn't take a lot of work to get involved with. Becoming a master of the practice does take some time. Although some forms of the practice are considered unfair and even shady, the overall practice is not and it does work to make a lot of people a fair amount of money.