Ok, I feel like an idiot.

What pros and cons are there to using forwarded domains?

Lets say anytown-communities dot com is my site

I can add a community subdirectory anytown-communities dot com/main-street/index.php

And then purchase another domain name from Godaddy main-street-homes dot com and forward it to the above subdirectory.

It is a very easy and inexpensive way to host multiple sites off of one hosting account.

Is it worthwhile to promote these forwarded/ masked domains?

Are there any reasons not to use these forwarded domains?

Do the Search Engines look at them any differently than a normal domain name?

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Coastal Delaware Real Estate Sales
REHOBOTH BEACH CONDOS | REHOBOTH BEACH REAL ESTATE | REHOBOTH BEACH MOBILE HOMES
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Coastal,

IMO the two reasons to have a domain without its own content are to own the domain so others cannot and to have a domain that is similar to one you already own in case someone enters the wrong URL in their browser's address bar.

The SEO benefits of having a second domain accrue when the domain is not forwarded, but rather, when it has its own unique content related to your other domain(s).

For example, mydomain.org forwarded to mydomain.com keeps someone else from infringing on your "web space" and puts people who are looking for your domain but look in org instead of com.

In this example, (I may be wrong) but I don't believe from my own experience, there is any search engine benefit you will gain.

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Rick Wheat, Wheatworks Software, LLC
CustomCalcs.com : Marketing Software with Your Brand

I don't know of any SEO benefits, but forwarded domains have been a great advantage for my Google AdWords campaigns. The consumer searches for and sees ads for a specific community in our market area. The text and the URL link in my ad also has that community name in it. They see my ad as more relevant and specific to their needs than the other more generic ads and search results. So they click my ad, and they get forwarded to a very community specific page on my web site, where they can immediately search for homes in that community, not to yet another generic real estate agent home page. I have clearly and simply met their expectations, with a minimum of fuss, so they stay on my site, and many eventually register for more information and/or services.

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Ron Goodman, GRI, REALTOR®
Prudential Colorado Real Estate
Denver Colorado Real Estate: Highlands Ranch, Parker, Littleton, Castle Rock
Adwords for Real Estate: PPC Setup Services & Consulting