Increasing the relevance of ads is not the only way that Google has been improving its advertising-based revenues lately. "The Washington Post" ran an article a few days ago about the money to be made in typosquatting. Typosquatting is when somebody buys a domain name that is very close to another company's trademark, such as dearthlink.net.
Basically, the person who is typosquatting is trying to gain Internet traffic from someone else's good name. If the owner of the trademark sues, or files for arbitration with the International Corporation for Assigned Names and Numbers (ICANN), they can usually get the domain assigned to themselves. It's illegal under trademark law. But typosquatting is widespread, and what people are doing with the domains has shifted thanks to search engine advertising affiliate networks (such as Google's).
It works like this: about 15 percent of traffic to various domains is actually typed into the address bar these days, rather than being reached through a search engine or a bookmark. When somebody makes a typo, they end up at the purchased domain. The person who bought the domain might have "parked" it with a domain parking firm. The firm creates a placeholder site which it fills with ads from various Internet ad networks...such as Google's. When web surfers come by the sites and click the ads, advertisers pay the search engine ad networks, and the networks pay the domain name owners. One would expect the domain name parking companies to collect a fee from the domain name owners for setting it all up.
The monetary risk to the typosquatting domain owners is minimal, with domains going for $6 or less. Indeed, a purchaser can drop a domain within five days and not even pay the fee. This gives them a few days to try out the domain with ads and see whether they'd get a return on their investment -- if not, they simply drop the name. According to GoDaddy.com, there were 30 million domain names registered worldwide last month, and more than 90 percent were dropped.
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