Have you heard about domain names that sold for over a million dollars? Inspired by this, you imagine registering a great domain name, hanging onto it for a while, and then selling it off to become the next multi-millionaire. It could happen, but don`t count on it!

First of all, many of the truly great domain names are already taken. Second, the dot com bust took some of the wind out of inflated domain name prices.

However, you can still make money from domain names if you are sensible in your approach. Here are some suggestions on ways to profit.

1. Informational Sites: Create unique, relevant, fresh content and then profit from it by earning ad revenue by using Google AdSense, Overture. SiteMatch, or any number of ad-based affiliates. 
   
2. Affiliate Programs: Use your domain name to promote an appropriate affiliate program. Either redirect to the affiliate site or write a review that links to them.
   
3. Park Your Domain Names With Ads: You might feel that your name has real potential for resale value. There are companies that will allow you to park your domain on their servers, advertise that your name is for sale, and split advertising revenue with you.
   
4. Affiliate Websites: Create your own website or sell someone else`s product appropriate to your domain name. There are many vendors that give database feeds that can be easily integrated into your shopping cart software.
   
5. Buy Competitor Keyword Domain Names: Some reasons you might want to do this include preventing competitors from using a particular domain name and benefiting from searches some users perform by domain name. (For example, if they wanted to order flowers, they might just type "flowers.com" in their web browser. You could get some traffic and sales this way.)

The trick is to generate traffic for your domain name. That traffic in turn will create revenue. Then, when you go to sell your domain name, you will have a few things going for you.

First, you have traffic. Just as a shopping mall with no traffic results in no sales, so a website must have traffic to generate income. 

Second, you will have a fully developed website. A fully constructed building on a piece of land increases the value of the real estate property. Similarly, the value of your domain name is enhanced by a complete and operating website.

Third, you have income. An income property, such as an apartment building, can be appraised on the basis of its income (as well as other factors). Similarly, the gross income, net profits and cashflow of a website have value. For example, if someone offered you $1,000 for your domain name and website when it was generating $10,000 per day in profits, you would likely laugh at him.

You really can profit from your domain name investments by adding value and properly developing your web properties.