Domain Name System (DNS) parking is a method of registering a domain name before its official use. It is a business strategy to secure domain names for future use or resale to others for a profit.

DNS parking is also known as “domain parking.” Think of it as buying a limited edition car that you only intend to use on a specific special occasion. As such, it will stay parked in your garage until that day arrives.

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How Does DNS Parking Work?

DNS parking occurs when a hosting service provider registers a domain name with the Internet Network Information Center (InterNIC) but does not use it for a website. That domain name is, therefore, not yet active. But because it has been registered or is owned by someone, no one else can use it.

What Are the Uses of DNS Parking?

DNS parking can benefit domainers or those who earn a living from buying and selling domain names in several ways, such as:

Reselling Domain Names

Some domain names can rake in tons of money when sold. An example would be hotel[.]com, which was reportedly sold for US$11 million. While earning this much can be a long shot, buying and selling domain names can bring domainers a decent amount of money. That is the main idea behind domaining, after all.

Managing Domain Name Maintenance Expenses

Domaining is big business, and most domainers typically own multiple domains that can be hard to track. Many may not know that fees associated with domain use can add up, so domainers choose the less expensive option—DNS parking.

When you have an active domain, aside from registration costs, you also have to pay for other services, including hosting, design, technical maintenance, Secure Sockets Layer (SSL) certification, and additional plugins. The costs vary depending on the type of website you are maintaining. If you have a blog, the expenses can be minimal, ranging from US$300–500 a year per website. But if you have an e-commerce site, you need to shell out at least US$1,000 a month for maintenance and add-ons.

A parked domain, meanwhile, would only cost US$7–15 to maintain annually that includes a host of additional services, such as WHOIS privacy, malware scanning, 24 x 7 support, and email spam protection. Some providers like GoDaddy even offer domain parking services free of charge. The catch is it will use your domains for their ads.

Reserving Domain Names for Future Product Launches

In some cases, webmasters develop websites offline. That means purchasing a domain name and keeping it parked until they are ready to launch the site.

Preventing Cybersquatting

Most big-name brands employ DNS parking as a means to protect against cybersquatting—the illegal practice of registering and using domain names that are highly similar or confusingly identical to those of trademarked brands. We have, after all, seen phishers and scammers use the top brands to lure victims in. In response, companies have been buying their domain names’ lookalikes to keep cybercriminals from using these against them.

Take a look at Google. It not only purchased and registered google[.]com but also lookalikes, such as gogle[.]com. That way, when users mistakenly type its web address, they would still be redirected to the real Google site.

DNS parking is a viable business strategy. It offers some advantages, but you have to make sure that you follow best practices to not lose valuable money from purchasing some inactive domains. Do extensive research on how best to monetize DNS parking.