A parked domain is a domain that has no website with some useful content but only displays some ads related to the domain name. Why would someone register a domain and not make a great website? Simply because he is only interested in getting some fast income from the domain. This may work or may not.
To park a domain you need no hosting. Parking is usually offered with the registration service at many registrars and there are many specialized services that offer domain parking. There are two reasons when it makes sense to park a domain. If the domain was used before, then there are probably many links pointing to this domain. This means that some users will follow the link and instead of getting a “Page not found” error they will land on a page with some ads related to the domain name.
The other, more important reason for parking a domain is when the domain is some popular keyword or search term. Many people usually intentionally on unintentionally type directly into the address bar of the browser. The browser tries to find the website and automatically appends the.com domain. If there is a domain with this search query the browser will display the associated website.
If the domain is parked you will get a “strange” page with some ads probably related to the domain name. There will be no useful content. And because you are curious you are likely to click some of those ads. This is it. This is the shortest way to get somebody to click the ad. Of course, since there is no content such parked domain does not rank in search engines.
If you have some attractive domain that gets some traffic then creating a simple website with some useful content is a far better option. Not only the website will be indexed in search engines, the user visiting this domain will get some useful content and will not leave the site immediately. You still have the possibility to put some ads on this site and they will more likely complement the content and not stand out.
You don’t have to be an expert in web design to set up a simple website. With the help of some popular CMS like WordPress or Joomla, it is very easy to quickly create a website. And anybody can write some text about almost anything. You don’t have to be an expert in this field, you only need to find resources, study them and then you can easily write about it. Domain parking might be an easy way to do something with the domain. But a far better approach is to create a simple website and offer some useful content.