A typo domain name is a registered domain name which capitalize on typos for gaining "natural" and free traffic. Typo domains are also registered by legitimate owners of main domains for helping consumers and preventing typosquatting.
Typo domains can be found by the way of dedicated typo tools.
When a web user does the matching typo in a browser address bar, it produces a visit. The visit is then monetized through different means (affiliates program, domain parking, sponsored links, MFA, etc..).
Thus, a price of $242,400 has been paid for the domain Mortage.com a common typo for "mortgage", his owner hoping to repay it by the way of $4 clicks.
A typo domain may be based upon trademark domains (typosquatting) or generic terms.
The potential revenues associated with typo domains is declining because web users are using less and less browser address bars for the benefit of search engine search box. When a typo is made within a search box, the user is usually redirected to the good domain.
Another reason for the potential decline is lawsuit risks for typosquattting. There is now well-established case laws in this field.
Some of the typo domains registered by Amazon for protecting his brand: