As someone who has been building websites since 1996, I have a small collection of domain names that I am not making use of. Over the years, I have tried a variety of methods to monetize these domains.

1.) Domain Parking Services. These services allow you to point your domain to their name servers and they show semi-targeted pay-per-click ads on the domain. The level of input you can have related to targeting varies for each service, but most let you provide some keyword suggestions.

Advantages

• It’s Easy. You can pretty much set it and forget it. Most of the parking services have landing pages with high click through rates, so you will not have to spend any time optimizing the site.
• Works with any domain.

Disadvantages

• Unless you have a huge domain portfolio, the parking services will take a sizable chunk of the revenue.
• For some domains, you may not be able to come up with relevant keywords that will pay well.

I have had some good luck with both DomainSponsor and Sedo. There is also a post over at WickedFire recommending a few other domain parking services and DNForum has some great posts on reviewing parking services.

2.) Redirect to Affiliate Programs. Recently, I have been experimenting with redirecting some of my unused domain names to relevant affiliate programs. For example, on CollegePower.com, I wrote up a quick little PHP script to redirect visitors to one of five scholarship programs on Azoogle and HydraMedia. I have also tried this with a few typo domains that are very well targeted to affiliate programs. I am currently redirecting Blinkco.com to the ringtone offers on Blinko.com. I am not yet ready to discuss my results with this technique, but I certainly see some potential here.

Advantages

• With well-targeted affiliate programs, this can be more profitable than parking services.
• With a simple redirect script, you can test multiple affiliate programs/offers on one domain.

Disadvantages

• Not all domains will have an affiliate program that is a good fit for it.
• You must remember to change up the site if the offer that you are running expires.

3.) Domain Resale. One of the best techniques I have used to monetize my unused domains is to resell some of my holdings. After I sit on a domain for a year or two, I usually consider reselling it if I will not start using it within the next six months. When selling my domains, I have had success using DNForum, Webhostingtalk, and Sitepoint forums. If you find the right buyer, you can get a good price for your domain. For example, I have sold techcoupons.com and webhostinglab.com for a few hundred dollars each. This was a huge return on my initial investment.

Advantages

• Lump sum of cash upfront
• Reduces your overall domain portfolio which can be good if your unused domains distract you from focusing upon your mains sources of revenue.

Disadvantages

• May require some time investment to find interested buyers.
• Obviously, you can no longer use the domain after you sell it.

4.) Build an Automated Aggregator Site. I do not have much experience with this, but I have seen unused domains monetized by setting up blogs that republish (scrape) RSS feeds from other sites. The scrapper blog is then loaded with Adsense and affiliate programs. I am toying with the idea of doing this on TheKnicks.com.

Advantages

• Ability to build audience and repeat visitors
• Potential for multiple revenue streams (ex: Adsense and affiliate)

Disadvantages

• Limited traffic from search engines because you will be penalized for duplicate content.
• Will take some time to set up site.

A domain name portfolio can be a great asset to an Internet marketer. I encourage you to build up that portfolio and continue to not be afraid experimenting with different monetization techniques on your domains. Even if your unused domains earn just enough to cover your annual renewal fee, you will be ahead of the game.