What is a Domain Name, and How Does it Work?




Editorial Standards

At Your Simple Hosting, we adhere to our editorial standards to provide accurate and trustworthy information. As an affiliate, we may earn a commission from qualifying purchases – Read our editorial standards for more details.

For beginners, getting a wraparound of how websites work and especially things like domain name and other technical elements, is challenging.

Given that getting a Domain is the first step to owning your website, it is essential to understand the whole process and how to go about it. Understanding the fundamental technical aspects will also allow you to pick through different options and undertake your SEO efforts from an informed position.

Devices on the Internet have a unique address, and this is called an IP address, for example, But this is not an easy address to remember. This is where a domain name helps; it translates the IP to a name, it is a lot easier to remember google.com instead of

What is a Domain Name, and How Does it Work?

This article breaks down the various aspects of a domain name and how it works. It will serve as a straightforward guide on everything you should know. 

What is a Domain Name, and How Does it Work?

A domain name is the address of your website. It is what provides the location of your website. As an often-used analogy explains, if your website is the house, then the domain name is the address. It is what people type in browsers when looking for your website.

To understanding how domains work, you need an idea of IP address and the Domain Name System (DNS). An IP address is series of numbers separated by full stops which identify individual computers and servers on the internet. An IP address looks like this;

Since the internet is an extensive global network, computers use IP addresses to identify and communicate with each other and, in the process, retrieve data. However, since remembering seemingly random numbers is difficult, domain names became a needed solution. 

Since the computers still need the IP address to communicate, the DNS translates the domain names into an IP address. This address belongs to the server that is hosting the website. The server is then contacted, and the website is served to the computer that made the request.

The Internet Corporation for Assigned Names and Numbers (ICANN) is responsible for running the DNS. The ICANN is a non-profit organization that maintains the DNS databases and creates and regulates domain registrars. It also establishes policy over the use the domain names.

When a user enters a domain name in a browser, the computer first checks its cache to see if it has previously requested that domain name. If it has not or the cache is cleared, it will contact the local DNS often provided by the user’s internet provider. If there are no records for the domain name in the ISP cache, the computer moves to look for name servers associated with the domain name.

Web hosting companies manage the name servers, which contain the records of domain names for the websites they host. The name servers map domain names to the IP addresses. So, once a computer locates the name servers, the hosting company takes the requests to the specific computer hosting the website. The requested web page is then sent back to the browser that first made the request.

Brief History of Domain Names 

Domain names first started in the mid-1980s. The first domain name registered was symbolics.com on 15th March in 1985.

In that same year, five more domain names were registered:

  • bbn.com
  • think.com
  • mcc.com
  • dec.com
  • northrop.com

Initially, you could register domain names for free. However, in 1995, the National Science Foundation awarded Network Solutions, a tech consulting company, to charge for registration.

From 1995, domain names were first sold starting from $100 for two years of registration. By the end of the third quarter of 2020, there were 370.7 million domain names registered.

How a Domain Name Differs from a Website and Website Hosting

While a domain name and a website are closely related, they are not the same thing. Your domain name is a web address ideally for a website. On the other hand, the website is a collection of web pages related and linked to one other made available online. The web pages share a common and unique domain name for them to be a website.

So, you can have a domain name without a website, which you have to build. On the other hand, you cannot have a website without a domain name. The next crucial aspect is web hosting. It is where your web files are stored.

It is the actual computer (server) that holds your website’s files so that they can be accessed online. Therefore, to have your website online, you need to start by finding a domain name, registering it, and finding a web hosting company from where you will build your website and launch it online.

You can get your domain name from a different company and get your web hosting from another company. However, most companies like Bluehost provide both services. Thus, you can register your domain name and host your website from the same account, making your website’s management more manageable.

Difference Between A Domain Name and URL

A domain name and a URL are similar, making the two appear the same. However, there is a difference here too. A domain name is the actual name of a website like verisign.com.

On the other hand, a URL is a complete web address directing the web browsers to a specific web page online. It stands for Uniform Resource Locator and contains instructions and details, including the domain name that guides the browser on a path to the retrieve web page. An example of a URL is; http://www.verisign.com/domain-names/online/index.xhtml.

Different Types of Domain Name Extensions

Domain names consist of the website name and domain extensions. Domain extensions come in different types, and you need to use one that best reflects your purpose. According to IANA, there are over 1500 domain extensions in existence. Domain name extensions come to follow the hierarchical nature of the DNS. You have the top-level, second-level, and third-level domains.

Top-Level Domains

These are the extensions listed at the highest level in a domain name system. The main options in Top Level Domains (TLDs) are

  1. Generic Top-Level Domains: Generic Top-Level Domains are quite common, with the most popular ones being .com (for commercial), .org (for organizations), and .net (for network). Other options are not so popular and usually not advisable to use, including; .biz (for business), .info (for information) and .agency and .club, and others.
  2. Country Code Top Level Domains: This kind of domain is reserved for specific countries and is often used by websites targeting people in that country. They end with the country’s ISO code. Examples include; .be for Belgium, .uk for the United Kingdom, .br for Brazil, and .ke for Kenya.
  3. Sponsored Top Level Domains: These TLDs have a sponsor, usually agencies or organizations, to represent a certain community served by the domain extension. For example;
  • .mil (restricted to military entities)
  • .int (for international agencies)
  • .gov (used by government agencies)
  • .edu (used by educational institutions)

Second-Level Domains

These come after top-level domains in the hierarchy. They are often used with country code top-level domains. They are found between the dots for example, .co.ke, .co.uk, etc.

Subdomains (Third Level Domains)

Subdomains are an extra part of the domain name and serve as a sub-category of your primary domain name. Search engines view subdomains as separate websites. You can create a subdomain once you have registered a domain.

Most websites use subdomains to separate their stores and blogs from the main site. For example, if the main site is mysite.com, you can have subdomains like blog.mysite.com or store.mysite.com.

Where to Get Domain Names

ICAAN is the organization that manages domain names and has the power to approve or reject new extensions. It also manages the functions of domains and can shut them down should they flout ICAAN rules.

However, the organization does delegate to registries the roles of controlling the major extensions to entities known as registries. These companies become responsible for overseeing and maintaining the databases domains under their extensions and make them available through the WHOIS tool.

Registries then designate registrars which need an ICAAN accreditation to operations. Then, registrars can sell the domain names directly to the end customer or use resellers like web hosting companies to sell them. Resellers do not have a contractual obligation with ICAAN but instead do the registration of domain names on behalf of the registrants, i.e., the end customer. 

Some of the leading domain registrars include;


  • Currently manages over 10 million domain names worldwide
  • All purchased domains come with a free WHOIS guard,24/7 support, and two months email
  • Has several cheap TLDs for budget clients 

Check out NameCheap’s latest offers.


  • Offers a wide range of TLDs with over 25 country code TLDs
  • All purchased domains get free Let’s Encrypt SSL Certificate, domain transfer lock protection 
  • Control over DNS management 

Check out Domain.com’s latest offers.


  • It is the world’s largest domain registrar, with over 78 million domains globally
  • GoDaddy also provides web-hosting 
  • Offers plenty of cut-price deals 

Check out GoDaddy’s latest offers.

Google Domains

  • Does not offer discount prices 
  • Provides an easy and faster way of domain registration

Check out Google Domains’ latest offers.


  • Excellent user experience for quick domain registration 
  • Provides an assortment of apps and services and easy integrations

Check out Hover.com’s latest offers.

Cost of Domain Names 

The cost of domain names varies from free to millions of dollars. Some of the most expensive domain names of all time include;

  • CarInsurance.com for $49.7 million
  • VacationRentals.com for $35 million
  • Voice.com for $30 million
  • Insure.com for $16 million
  • Hotels.com for $11 million

Generally, though, domain names cost between $10 to $15 a year. You still have an option for free domain names from hosting companies. The free domain name is provided as part of their hosting packages lasting for a year or the initial subscription. Top hosting companies that offer free domain names include;

  1. Bluehost – You get a free domain name for the first year if you sign up for an initial term of 36 months
  2. GoDaddy – They offer a free domain for all their hosting plans. The domain name remains free for the plan’s duration from 12, 24, or 36 months
  3. InMotion Hosting -provides a free domain name and SSL certificate for the first year
  4. DreamHost – provides a one-year free domain with any annual hosting package except for the starter plan

Some of the factors that determine the regular domain pricing include

  • The popularity of domain name
  • Type of domain extension
  • Domain registrar you use
  • Length of registration term, with some registrars offering discounted rates for extended periods

Rules for Registering a Domain Name

There are several rules which guide how you can create and register a domain name. Your domain registrar will also inform you of any other restrictions that come with the specific type of domain name. The general rules and regulations are;

  • You can only use numbers, letters, and hyphens for your domain name. All other forms of punctuation are restricted, so you cannot use them
  • While you can have multiple hyphens in the domain name, you cannot use a double hyphen at the beginning and end of the name
  • You can only use a full stop for grouping the domain hierarchies separating the extensions from the domain name—for example, qwerty.co.uk
  • Domain names are not case sensitive, so if someone types DOMAIN-NAME.COM, it is the same as domain-name.com
  • You can have a number at the beginning and the end of the domain name
  • A domain name can only have between 2 and 63 characters before the full stop punctuation
  • Some Internationalized Domain Names TLDs allow you to register websites using special characters and accents like æ, and å
  • Some companies have trademarked their name, which means you cannot use them in your domain name

Besides these general guidelines, ensure you follow the domain-specific regulations the registrar gives you.

How to Choose Your Domain Name 

In picking your domain name, observe the following tips;

  • Use the name of your business and the keywords you want your site to rank to boost your SEO
  • Keep it short and easy to remember. Ideally, use a maximum of three words and make it unique and memorable
  • Use names that are easy to spell and not long ones or those with multiple spellings
  • Where possible, avoid using numbers and hyphens as it may confuse your visitors
  • Do your research to avoid using similar names with popular sites that have different TLDs. It may affect your ranking and also lose your site traffic
  • Think of a name that you will use in the long term since changing names will affect your SEO and traffic
  • Use the right domain extension that reflects the nature of your organization and target audience

Once you understand these basic details of a domain name, you will not have a problem setting and running your website. The biggest challenge is choosing the name, and the tips above should help you with that. Once you have a name, find an excellent hosting company, and you will be on your way to an exciting journey as a website owner.

About the author

Leave a Reply

Your email address will not be published. Required fields are marked *

Share via
Copy link
Powered by Social Snap