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Yun Ye, the successful “parked domain”

Yun Ye is a “domainer.” He is, in fact, the world’s most successful domainer, a pioneer in a highly lucrative industry based on buying, selling and developing domain names. Ye holds over 100,000 domain names that was making him more than $20 million a year in revenues – $19 million in profits. Ye sold his domain empire in November 2004 to publicly traded Seattle-based Marchex  for, get this, $164 million. Since then, Ye has never been heard from again

He was a programmer and used custom software to buy domains in the 1990’s to early 2000s’. He and his company, Ultimate Search Inc managed to get the best domains by employing a system of “Drop Catching” which involves buying up sites which people gave up on or forgot to pay the fees on (Something which sites like Pool and Snapnames are doing today). He bought single keyworded domains, typos to random worded domains.

In the mid ’90s, the domain market was all about speculation – buying desirable Web addresses, such as business.com, in the hopes that one day a big company would buy it for a huge amount. However, people like Ye soon discovered that almost any domain name could become a money maker thanks to PPC companies like Google and Yahoo.

At the beginning he was making money from buying and selling domains, until paid searches and domain parking was introduced which is a system where an advertiser pays only when someone clicks on an advert on your site. He then later sold his portfolio to Marchex.
Marchex has developed from a series of investors to a local search company. They bought the domains, linked them up with advertisers who support local information services, Yelp and Localese sites to match relevant data to their domains.

How does a domainer make money? They rely on the 15% of web users who don’t use search engines but instead just type in a web address. A good domain name can make hundreds, even thousands of dollars per day for its owner. For example, Cellphones.com makes an average of $1,300 a day just from people typing in the URL. The money comes from park domain PPC services like Google AdSense for domains. Google doesn’t advertise their domain service much because domainers seem to operate in some kind of shadowy world.

Yun Ye and his practices were notabily well hidden. He operated under the site of noname.com and owned sites such as: childabuse.org, traditions.com, Beijing.com, cuisine.com, MiamiMotels.com, DetroitResorts.com, oscarnet.com…

I had a little chat with a domainer on my AIM list. He owns over 6,000 domain names that pulls in over 1 million unique visits per month. He pays $1,000 per month to host the domains across a half dozen different ISPs. He also pays over $50,000 to renew the domain names every year. Spending over $60,000 a year to run a one-man web business may seem high, but it’s peanuts compare to what those names bring in.

I touched on this at the Most Expensive Domains, but there is a prestige in owning a single keyworded preferably dot.com domain. The secret of how they make money is from type-in traffic, using the example of:
==“Looking to buy candy? Type in Candy.com, a page filled with links to candy-related products comes up. Click on one of the ads and the advertiser pays Google, which in turn sends a share to the Candy.com owner.”

He does say the game is getting harder however. With the $164 million sale of Ye’s domains and other high dollar acquisitions, cost of buying new domain names have been skyrocketing. While the increasing cost of buying new names slows down his domain buying, it also increases the value of the domain names he currently holds.

He later sold his domain portfolio to Marchex, who paid $164 million back in 2005. The reason why he sold his portfolio could have been due to the pressure he faced from companies/individuals who felt he was “cyber-squatting” names. He’s now become a recluse, but is probably still based in Vancover, Canada or in Hong Kong.

Domainers are also a good reason you should have your domain names set to auto-renewal. Failure to do so may result in a domainer taking your name. I hold a few dozen domain names myself and right now, they just have a GoDaddy parked page on it. I think it’s time to switch them to Google AdSense for domains. If you wish to get into the domain business, then check out this Site Point article on how to find money-making domains.

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1. Make Money with Parked domain