One of the least known internet business models revolves around ad revenue from the ownership of domain names. The revenue comes from the small percentage of people, between 5-10%, who guess the address of what they are looking for instead of using a search engine. The owners of these addresses place pay-per-click ads which are often relevant to the domain name. While the business model may appear to prey on lost internet surfers, there is some utility in providing relevant links to what the user has expressed interest in. Critics of this system claim that these “squatters” are preventing legitimate websites from getting prime domain names. The debate is likely to continue. 

The interesting aspect is the sheer size of the industry. NameMedia, the largest company, is reported to have 725 000 domain names with a further 1.4 million independently placed web sites in its portfolio. This brings over 60 million monthly visitors along with $60 million in ad revenue for NameMedia. The “direct search” industry is expected to grow to $1.1 billion in 2007. A hefty chunk of the $17 billion plus internet ad industry.