Hi DotMeDomains,
I'm very much against parking and often don't even bother parking many of the domains I own. So selling + developing are the way to go!
I do alot more selling than developing currently, although I'm hoping to change that in the near future. Development is costly not only financially, but also in terms of time (hours that could have been used selling domains).
Hands down the most profitable is development if you have a really good idea... Facebook alone is probably worth more than every domainer on here's domains combined!
I've been working on my first major development for the past 4 months now. Site design is easy, it's the content which really takes alot of time to come up with. Plenty of great webmasters in developing countries can be outsourced for $5-$10/hour, but it takes more than good looks for a site to really take off. Hiring (good) content writers is extremely expensive and most domainers (who aren't necessarily good content writers) are stuck doing this themselves -- probably explains why we see so few developed domains.
We need not look further than the domain industry to see some very successful companies that were once "little guys" like us: Sedo, Afternic, Godaddy, or how about eBay?
The odds are stacked against anyone trying to replicate that level of success, but one thing I can say for certain is that a heck of alot more people have become millionaires from developed sites than from parking revenue.
