One of my favourite magazines, Business 2.0 is running a fascinating story on domain moguls. I have always known that there is money to be made in domain purchase and reselling, but the article blows my mind.

So how do domains make you money? Three ways:
1. They point to a revenue generating, legitimate website
2. They point to a web page filled with Adsense ads from Google (or other ad network). Every time anyone clicks on the ad, you make money
3. You can sell them on to someone who wants them for 1. or 2. above

So how much money is made? A lot.

Kevin Ham is the guy who is profiled in the Business 2.0 article., He trained as a doctor, but quickly figured out where the real money is. He owns 300 000 domains, and makes about $70 million a year.

Him and Cameroon. Cameroon? Yep. It turns out that the country extension for domains for Cameroon is .cm, which just happens to be a common typo for those of us who want to type .com. And now, thanks to Ham, if you type almost anything dot cm, you get taken to an ad page. Kaching, as they say. He shares his profits with Cameroon.

The article outlines his whole story and method – it’s a good read.

And you will be amazed at how much some domains actually cost. I bought this one (of relevance.com) for about $9, But Ham paid $171,250 for hoteldeals.com and $350,000 for greeting.com. Nice.

Personally, I think the days of making money from ad pages is pretty numbered. The trick for these domain owners is to get the “fake” page to feature high on search engine results by fooling the search engines into thinking that the page is full of relevant info. But Google is smart, of course, and is already knocking a lot of them off the front page. As the technology and algorithms improve and suss out the fake pages, the domain owners will have to rely more and more on actual typos to get people to visit their pages.