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Parked domains are just what you might think they are: Domain names you own and have registered, but aren’t currently using. They’re not actively associated with any hosting, website, or email services. They’re out of use, or “parked.”

What are the benefits of domain parking? Usually, a parked domain is a domain that you think may be of value to you or your business in the future, but you aren’t quite at the point when you can (or want to) make use of it. Maybe it’s a brand you want to trademark in the future, or maybe it’s a domain name similar to your business name that you want to keep out of the hands of competitors (or cybersquatters).

So, there are a number reasons why you may want to own a domain name that isn’t associated with a website. Indeed, parked domains are a very common feature throughout the World Wide Web. As it usually happens in real life, though, parking isn’t free. It’ll usually cost you, in the form of a separate fee by a hosting or “parking space” provider.

That fee, however, is usually minimal. You’ll need to check with your hosting provider to see what kind of parked service is available to you, and what it will cost. Also, check out what kind of placeholder the hosting service uses. A placeholder is a simple page put up by the hosting company, usually featuring an “under construction” or “coming soon” sign, to let visitors know that the domain name is taken, but does not yet feature a website.

In the current age of eCommerce, almost all of these parked domain placeholders are “monetized”, meaning that they feature advertisements. Blame that on Google AdSense. Just as it’s revolutionized almost every other aspect of online business, Google is changing the nature of parked domains by turning simple placeholders into a showcase for ads, thereby “monetizing” the parked domain. These ads are typically auto-generated, determined by a search keyword associated with the parked domain name. That search keyword helps bring in visitors using the Google search engine, and these visitors, according to the AdSense business plan, will then (hopefully) click on the ads.

The end result is that a revenue stream, no matter now minimal, is created from what was once simply blank, wasted space. However, there’s some controversy over this practice. Google was even sued earlier this year in a class-action suit claiming that the AdSense ads were ineffective and riddled with errors. Essentially, Google stands accused of charging customers for ads that don’t work. Whether that’s because the ads were faulty, or because the art of directing traffic through parked domains is still too undeveloped to really work, remains to be seen.

Either way, this practice of using parked domains to generate ad revenue is having an enormous impact on the industry as a whole. Some have even speculated that, since “monetizing” amounts to a sort of rudimentary web hosting in and of itself, Google AdSense will eventually bring about the end of domain parking as we know it.

But we’re not quite there yet. And until that day comes, domain parking remains an important fixture of online business, and an almost inevitable part of growing your brand through domain name purchasing.

Next up: Diversifying your base URL with subdomains.