A little digression…I responded on NamePros to a question regarding type-in traffic and Overture with Extension, and decided to post an extended answer here.

The domainer's Holy Grail is to have a portfolio of thousands of traffic domains. What does this mean?

A traffic domain is such a domain that has natural, so-called "type-in" traffic. This means that people type the domain name in their browsers when they are looking for information on the Internet. In this case, they are looking specifically for the sort of information that is related to the domain name itself.

Say, you own the domain RedCopperWidgets.com.

Let's assume that Red Copper Widgets are the latest craze in entertainment gadgets. People will be searching the Internet for these things. Now, most people will go to Google and type "red copper widgets" to search for relevant results. But a percentage of people will type "redcopperwidgets.com" directly in their browser address field. This percentage is surprisingly high - it is estimated to be anywhere between 5% and 30%.

Why do people do that? Because they want instant information, they don't want Google to tell them which pages to go to, or don't want to go through all the results to find the information they need. People assume that the corresponding dotcom domain is the place to go for information on red copper widgets. Often they are right, after a fashion. Many times these type of domains are "parked", which means that they display a page consisting solely of advertisements related to red copper widgets. This works both ways: The surfers are happy because they will instantly see links that are relevant to their search, and the domainer will receive a certain payment each time a visitor clicks on one of these commercial links.

This means that whoever owns the domain redcopperwidgets.com is going to make a nice profit by just having registered or purchased redcopperwidgets.com.

Domain registration costs only about $8 per year. Therefore a domain need only make a little more than $0.02 per day to cover its own registration renewals. Anything above that is profit.

The rest is just math. Say you find 100,000 domain names that make just $0.05 in parking revenue per day. Subtract the renewal cost of $0.02, and you have $0.03 of profit per domain name per day. Multiply that by 30 to get about $1 per month. Multiply that by the number of your domain names and you have $100,000 of profit per month, by just letting the domain names sit there without actually doing any work yourself.

Incredible, huh? Not so. There are many domain investors who actually own portfolios of hundreds of thousands of traffic domains, and this is exactly how their business thrives.

If it was easy, everybody would do it, right? Sure - that's why nearly all traffic domains are already reserved. But new trends appear all the time, new gadgets, new phenomenons, and if you have a decent portfolio of names, you could be sitting on the next iPhone.com.

Meanwhile, the smart domainer analyzes the potential of the domain names he/she intends to purchase - from all angles. One way to do this is to check for potential type-in traffic.

One way to do that is to go to EstiBot.com and check the domains with the bulk Type-in Traffic Checker.

Here's how to interpret the results:

Overture with extension (or wordtracker with extension) is used to evaluate potential type-in traffic.

It's not the same as Overture for the keyword.

For instance, lacus.mobi has Overture (for "lacus") of 2,950 per month.

Lacus.mobi has Overture with extension (for "lacus.mobi") of zero per month.

Therefore, the Overture with extension (OVT w/ext) is zero and it is not listed in the EstiBot type-in traffic checker results, because only the ones with OVT w/ext are listed.

This means that people are unlikely to type in "lacus.mobi" in their browser and the domain is unlikely to have much type-in traffic.

This is not a surefire way of determining type-in traffic, but it's the best that's available with the current resources.

Having plenty of OVT or Wordtracker with extension usually means that there is a good chance that the domain will have direct, type-in traffic.

Lack of type-in traffic does not necessarily mean that the domain is bad. It just indicates that PPC parking for the domain is not necessarily a significantly profitable venture. The domain may still be good for other reasons.

I know that many domains that have zero "OVT w/ext" still make a good profit with PPC due to backlinks, and such type-ins that OVT / Wordtracker don't cover - most of my traffic domains have no OVT w/ext.

Therefore, the type-in traffic checker should be used as an indicator only. If the OVT w/ext is very high, it is statistically significantly indicative of a high probability of some type-in traffic. If it is zero, it is unlikely, but not impossible, that the domain has type-in traffic.

Type-in traffic is important, because if you have converting type-in traffic for a domain, the domain will be profitable. Say your domain makes $1 per month in type-in conversions. All you have to do is acquire 30,000 of such domains and your revenue will be $30,000 per month.

Needless to say, almost all such traffic domains have already been registered. Nevertheless, it's still possible to find them, especially in ccTLDs and IDN domains.