Every webpage on the internet can be considered to be a piece of electronic real estate. There are “shops” that sell stuff; there are “clinics” that offer advice, and there are “rooms” where people can meet to chat and spend time together.

And just like in real life, these electronic estates too, have their own addresses. Like a real home they can be under construction before they are open to the public. They might need renovations or new features might need to be added.

When a brick-and-mortar business moves to a new location and changes its address, it leaves a sign at the old site letting its customers know where they should go to continue getting their service. The same practices can be applied on websites on the internet too. When it comes to the e-real estate, there are two phrases that are related to the real-world concepts. They are “Domain Pointing” and “Domain Parking“.

Domain Pointing

Domain pointing is the term applied to instance when visitors are “pointed”, or led to, the right website that the webmaster or developer requires them to go to.

For example, let us assume a blogger started his blog one of the many popular and free blogging sites. Over time, the blog grew in popularity and he decided that, instead of using the default second-level domain name that was assigned to it by the host, he would be better off by branding it using his own name (and making his work – and him – look more professional) by buying a domain name and associating the blog with it.

Now, some top webhosting sites like iPage offer free domain names with their very fairly priced hosting packages. The blogger would buy the package, get the domain name and move the blog to its new host. If all goes well, as soon as visitors type in the new domain name, the blog’s home page would be displayed – just like it was on the original blogging site.

But sometimes (mainly due to directory configurations), the domain name needs to be told which page it should load when the URL is typed in. If the home page is in another directory, for example, it is configured to “point” to the correct directory in which it should go to search for it.

Another example could be if the blogger simply bought the domain name and configured it to point to the original, free blogging site – without having to purchase any hosting or needing to move files from one server to another.

This comes in handy when too much configuration, time and even money has been put into the blog and it wouldn’t make sense to move it to a new host where everything would have to be done all over again. It also cuts down on the risk of having moved everything only to find out that the hosting is incompatible with the technology and configurations of the blog.

Although domain pointing might sound like a complicated procedure, it is far from that. Webhosting providers like HostGator make it a breeze to setup domain pointing. Even a first-time domain owner can, with a few clicks, point a domain name to any required site.

Domain Parking

In real life, when a house is left empty there is a chance that it might be taken over by squatters. Some may leave immediately once they have been told to vacate the premises while others will be the cause of a lengthy and costly legal battle.

Similarly, on the internet too, there are “squatters” who take over someone’s domain name and refuse to relinquish it. When asked to do so, some might be willing to do so without a fuss while others will ask to be paid for their troubles.

There are people out there that actually make a living out of squatting on domains. They buy up domain names that belong to companies or celebrities and keep them until they are asked return them to their rightful owners. They then ask for sums of money depending on how big a profile the company or individual has.

Many countries across the world have set out laws that make it illegal to squat on a domain name for financial gain or malicious reasons. Some squatters have used the hijacked sites to post negative messages against the companies while others have used them to display fictitious messages with the intention of having them mistaken for ones coming from the rightful owners of the domain. But, despite the intensive effort to rid the internet of such folly, the practice of squatting is still practiced widely.

So, what can be done? Well, the easiest thing to do would be to secure the house and keep it under lock and key until the owners can move in.

Companies or individuals can make sure their domain names aren’t squatted upon by buying them, even if they aren’t going to put them to immediate use. They can simply put up a temporary page and “park” the domain until they are ready to launch the website. An “Under Construction” or “We will be here soon” message will suffice to let visitors know that they are at the right address and that they should come back at a later time to check if the site is up.

In the meantime, the domain owner can also make money off of a parked site. GoDaddy, for example, offers domain name owners a chance to make money by having ads displayed on their parked domains. Called the CashParking plan, every time a visitor visits and clicks on an ad the owner gets paid up to 60% of generated revenues.

When Both Pointing and Parking are used

Squatters also make money by buying up domain names that have different TLDs (top level domains). If a company is using the .com TLD they buy the other ones (.org, .net etc.) and pretend to be the real deal. That is why it is always advisable to buy as many TLDs of the same domain name as possible (in some cases they even buy up misspelled domain names in the hope that they will be able to attract unknowing visitors who type in URLs erroneously).

A company that has bought more than one TLD with its domain name can make them all point to the principal one. The TLDs that aren’t visited quite often, or by that many users, can be parked and used to generate money.

Conclusion: It is better to buy as many TLDs as possible (and have them point to the main domain TLD) to avoid having them being taken over by squatters. Those that aren’t in use don’t have to sit idle – they can be parked and then used to generate money.