Domain names cannot be left inactive, it is illegal. Domain parking is a way to both keep your domain name while you’re preparing to use it and/or a way to generate income from your parked domain name.
You may use domain parking in several ways:
1. While waiting to use an inactive domain simply point it to another active domain.
2. If you have a domain that is reserved, but not yet being used, you may let people know you plan to use it in the future by leaving a sign like “Under construction” on it.
Either way the domain is active with a purpose. Because they are not set up to make you any money, these uses may be referred to as “non-monetized domain parking”.
Another way to use domain parking is allow relevant advertising to be placed on it. Used in this manner, no matter what you do with it in the future, you have the opportunity to earn money from the ads, by way of pay per click traffic. This is sometimes called “domaining”.
Domains that have expired are likely to have a lot of traffic before people figure out that the site is gone. Therefore, these sites are prime candidates for a parked domain with advertisements. This is a win-win situation where if a customer clicks on one of the advertisement, you get paid and your customer gets more information about something he or she is interested in.
Because both you and the web host both earn money from domain parking, it is usually offered for free, requiring only that you have an account with the host.
Parking sites to generate income is done so that people who click on the advertising have done so because they reached the site in an honest search for the product then made their own choice to click on the advertising. This traffic is also referred to as “type-in traffic.” Be aware of click fraud, if you set up this type of domain and tell all of your friends to click on ads to make money your web host is likely to know because of the way they track the links, and they are likely to take action. Be sure to carefully read your web host’s policy on traffic.
Some people do not view domaineering a legitimate business. Such people find it annoying to reach a website, only to find it full of advertising. If you decide to develop and register domain names this way, be aware that it may have negative, as well as positive, consequences.