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Domain names are used in various networking contexts and application-specific naming and addressing purposes. They are organized in subordinate levels (subdomains) of the DNS root domain, which is nameless. The first-level set of domain names are the top-level domains (TLDs), including the generic top-level domains (gTLDs), such as the prominent domains com, net and org, and the country code top-level domains (ccTLDs). Below these top-level domains in the DNS hierarchy are the second-level and third-level domain names that are typically open for reservation by end-users that wish to connect local area networks to the Internet, run web sites, or create other publicly accessible Internet resources. The registration of these domain names is usually administered by domain name registrars who sell their services to the public.
Individual Internet host computers use domain names as host identifiers, or hostnames. Hostnames are the leaf labels in the domain name system usually without further subordinate domain name space. Hostnames appear as a component in Uniform Resource Locators (URLs) for Internet resources such as web sites (e.g., en.wikipedia.org).
Domain names are also used as simple identification labels to indicate ownership or control of a resource. Such examples are the realm identifiers used in the Session Initiation Protocol (SIP), the DomainKeys used to verify DNS domains in e-mail systems, and in many other Uniform Resource Identifiers (URIs).
An important purpose of domain names is to provide easily recognizable and memorizable names to numerically addressed Internet resources. This abstraction allows any resource (e.g., website) to be moved to a different physical location in the address topology of the network, globally or locally in an intranet. Such a move usually requires changing the IP address of a resource and the corresponding translation of this IP address to and from its domain name.
Domain names are often referred to simply as domains and domain name registrants are frequently referred to as domain owners, although domain name registration with a registrar does not confer any legal ownership of the domain name, only an exclusive right of use.
This article primarily discusses the group of domain names that are offered by domain name registrars for registration by the public. The Domain Name System article discusses the technical facilities and infrastructure of the domain name space and the hostname article deals with specific information about the use of domain names as identifiers of network hosts.
 Top-level domains
The top-level domains (TLDs) are the highest level of domain names of the Internet. They form the DNS root zone of the hierarchical Domain Name System. Every domain name ends in a top-level or first-level domain label.
When the Domain Name System was created in the 1980s, the domain name space was divided into two main groups of domains. The country code top-level domains (ccTLD) were primarily based on the two-character territory codes of ISO-3166 country abbreviations. In addition, a group of seven generic top-level domains (gTLD) was implemented which represented a set of categories of names and multi-organizations. These were the domains GOV, EDU, COM, MIL, ORG, NET, and INT.
During the growth of the Internet, it became desirable to create additional generic top-level domains. As of June 2009, there are 20 generic top-level domains and 248 country code top-level domains. In addition, the ARPA domain serves technical purposes in the infrastructure of the Domain Name System.
During the 32nd International Public ICANN Meeting in Paris in 2008, ICANN started a new process of TLD naming policy to take a "significant step forward on the introduction of new generic top-level domains." This program envisions the availability of many new or already proposed domains, as well a new application and implementation process. Observers believed that the new rules could result in hundreds of new top-level domain to be registered.
An annotated list of top-level domains in the root zone database is published at the IANA website at http://www.iana.org/domains/root/db/ and a Wikipedia list exists.
 Second-level and lower level domains
Below the top-level domains in the domain name hierarchy are the second-level domain (SLD) names. These are the names directly to the left of .com, .net, and the other top-level domains. As an example, in the domain en.wikipedia.org, wikipedia is the second-level domain.
Next are third-level domains, which are written immediately to the left of a second-level domain. There can be fourth- and fifth-level domains, and so on, with virtually no limitation. An example of an operational domain name with four levels of domain labels is www.sos.state.oh.us. The www preceding the domains is the host name of the World-Wide Web server. Each label is separated by a full stop (dot). 'sos' is said to be a sub-domain of 'state.oh.us', and 'state' a sub-domain of 'oh.us', etc. In general, subdomains are domains subordinate to their parent domain. An example of very deep levels of subdomain ordering are the IPv6 reverse resolution DNS zones, e.g., 22.214.171.124.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.ip6.arpa, which is the reverse DNS resolution domain name for the IP address of a loopback interface, or the localhost name.
Second-level (or lower-level, depending on the established parent hierarchy) domain names are often created based on the name of a company (e.g., microsoft.com), product or service (e.g., gmail.com). Below these levels, the next domain name component has been used to designate a particular host server. Therefore, ftp.wikipedia.org might be an FTP server, www.wikipedia.org would be a World Wide Web server, and mail.wikipedia.org could be an email server, each intended to perform only the implied function. Modern technology allows multiple physical servers with either different (cf. load balancing) or even identical addresses (cf. anycast) to serve a single hostname or domain name, or multiple domain names to be served by a single computer. The latter is very popular in Web hosting service centers, where service providers host the websites of many organizations on just a few servers.
The following example illustrates the difference between a URL (Uniform Resource Locator) and a domain name:
- URL: http://www.example.net/index.html
- Domain name: www.example.net
- Registered domain name: example.net
As a general rule, the IP address and the server name are interchangeable. For most Internet services, the server will not have any way to know which was used. However, the explosion of interest in the Web means that there are far more Web sites than servers. To accommodate this, the hypertext transfer protocol (HTTP) specifies that the client tells the server which name is being used. This way, one server with one IP address can provide different sites for different domain names. This feature goes under the name virtual hosting and is commonly used by web hosts.
For example, as referenced in RFC 2606 (Reserved Top Level DNS Names), the server at IP address 126.96.36.199 handles all of the following sites:
 Allowed character set
Domain name registrations have traditionally only been allowed for names that consist only of letters, digits and the hyphen (-) from the ASCII character set, as in hostnames. The full stop (dot, .) is used to separate DNS labels, the hierarchical components in a domain name.
This character set excludes numerous characters commonly found in non-English languages, and does not allow multi-byte characters necessary for most Asian languages. The Internationalized domain name (IDN) system, which permits such characters, has been developed and many registries allow such names.
The underscore character is permitted in names used in the domain name system, and is frequently used to ensure that a domain name is not recognized as a hostname, as in the use of DNS server records (SRV), for example. Other naming systems often used in conjunction with DNS, such as NetBIOS, allow it.
 Official assignment
The Internet Corporation for Assigned Names and Numbers (ICANN) has overall responsibility for managing the DNS. It administers the root domain, delegating control over each TLD to a domain name registry. For ccTLDs, the domain registry is typically installed by the government of that country. ICANN has a consultation role in these domain registries but cannot regulate the terms and conditions of how domain names are delegated in each of the country-level domain registries. On the other hand, the generic top-level domains (gTLDs) are governed directly under ICANN, which means all terms and conditions are defined by ICANN with the cooperation of each gTLD registry.
Domain names are often seen in analogy to real estate in that (1) domain names are foundations on which a website (like a house or commercial building) can be built and (2) the highest "quality" domain names, like sought-after real estate, tend to carry significant value, usually due to their online brand-building potential, use in advertising, search engine optimization, and many other criteria.
A few companies have offered low-cost, below-cost or even cost-free domain registrations with a variety of models adopted to recoup the costs to the provider. These usually require that domains be hosted on their website within a framework or portal that includes advertising wrapped around the domain holder's content, revenue from which allows the provider to recoup the costs. Domain registrations were free of charge when the DNS was new. A domain holder (often referred to as a domain owner) can give away or sell infinite number of subdomains under their domain name. For example, the owner of example.edu could provide subdomains such as foo.example.edu and foo.bar.example.edu to interested parties.
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As domain names became interesting to marketers because of their advertising and marketing potential, rather than just being used to label Internet resources in a technical fashion, they began to be used in manners that in many cases did not reflect the intended purpose of the label of their top-level domain. As originally planned, the structure of domain names followed a hierarchy in which the TLD indicated the type of organization (commercial, governmental, etc.), and addresses would be nested down to third, fourth, or further levels to express complex structures, where, for instance, branches, departments and subsidiaries of a parent organization would have addresses in subdomains of the parent domain. Also, hostnames were originally intended to correspond to actual physical machines on the network, generally with only one name per machine.
As the World Wide Web became popular, site operators frequently wished to have memorable addresses, regardless of whether they fit properly into the structure; thus, because the .com domain was the most popular and therefore most prestigious, even noncommercial sites began to obtain domains directly within that gTLD, and many sites desired second-level domain names in .com, even if they were already part of a larger entity where a subdomain would have been logical (e.g., abcnews.com instead of news.abc.com).
Shorter, and therefore more memorable, domain names are thought to have more appeal. As a convenience, methods were implemented to reduce the amount of typing required when entering a web site address into the location field of a web browser. A website found at ''http://www.example.org'' will often be advertised without the http://, since the HTTP protocol is implicitly assumed when referring to web sites. In many cases, web sites can be also be reached by omitting the www prefix, as in this given example. This feature is usually implemented in DNS by the website administrator. In the case of a .com, the website can sometimes be reached by just entering example (depending on browser versions and configuration settings, which vary in how they interpret incomplete addresses).
The popularity of domain names also led to uses which were regarded as abusive by established companies with trademark rights; this has become known as cybersquatting, in which a person registers a domain name that resembles a trademark in order to profit from visitors looking for that address. To combat this, various laws and policies were enacted to allow abusive registrations to be forcibly transferred, but these were sometimes themselves abused by overzealous companies committing reverse domain hijacking against domain users who had legitimate grounds to hold their names. Such legitimate uses could include the use of generic words that are contained within a trademark, but used in a particular context within the trademark, or their use in the context of fan or protest sites with free speech rights of their own.
Laws that specifically address domain name conflicts include the Anticybersquatting Consumer Protection Act in the United States and the Trademarks Act of 1999 in India. Alternatively, domain registrants are bound by contract under the UDRP to comply with mandatory arbitration proceedings should someone challenge their ownership of a domain name.
Often email phishing scams will abuse subdomain names to appear to be a legitimate site. For instance, an email might purport to be from Bank of America, and include a link to a fake login screen hosted on http://www.bankofamerica.com.abc.def.ghi.jkl In this case, the actual domain is ghi.jkl, but appears at first glance to be bankofamerica.com.
 Generic domain names—problems arising from unregulated name selection
Within a particular TLD, parties are generally free to register an undelegated domain name on a first come, first served basis, resulting in Harris's lament, all the good ones are taken. For generic or commonly used names, this may sometimes lead to the use of a domain name which is inaccurate or misleading. This problem can be seen with regard to the ownership or control of domain names for a generic product or service. By way of illustration, there has been tremendous growth in the number and size of literary festivals around the world in recent years. In the current context, a generic domain name such as literary.org is available to the first literary festival organization that is able to obtain the registration, even if the festival in question is very young or obscure. Some critics argue that there is greater amenity in reserving such domain names for the use of, for example, a regional or umbrella grouping of festivals. Related issues may also arise in relation to noncommercial domain names.
 Unconventional domain names
Due to the rarity of one-word dot-com domain names, many unconventional domain names, domain hacks, have been created. They make use of the top-level domain as an integral part of the Web site's title. Three popular domain hack Web sites are cr.yp.to, blo.gs and del.icio.us, which spell out "crypto", "blogs" and "delicious", respectively.
Unconventional domain names are also used to create unconventional email addresses. Non-working examples that spell 'James' are email@example.com and firstname.lastname@example.org, which use the domain names m.es (of Spain's .es) and mes.com, respectively.
 Premium domain names
In the business of marketing domain names, "premium" domain names are often valuable, and have particular characteristics that are used in the domain appraisal process. For example, the names are short, memorable, may contain words that are regularly searched on search engines, and/or keywords that help the domain name gain a higher ranking on search engines. They may contain generic words, so the domain has more than one meaning.
Very short .com domains are valuable as their number is limited. Among the 26 single-letter second-level domains, few are registered because the Internet Assigned Numbers Authority reserved them in 1993. Those that were already registered were not recalled.
 Resale of domain names
The business of resale of previously registered domain names is known as the domain aftermarket.
Various factors influence the perceived value or market value of a domain name. They include 1) the natural or "organic" traffic that can be attributed to web surfers typing in a domain name in their web browser as opposed to doing a search for the site through a search engine. 2) Branding Opportunity. The ability to have a term recognized and easily recalled as a brand for a company or entity. 3) Re-sale value. The ability to spot trends and predict the value of a name based on its length (short is preferred), clarity, and commercial use. The word "loan" is far more valuable than the word "sunshine".
Generic domain names have sprung up in the last decade. Certain domains, especially those related to business, gambling, pornography, and other commercially lucrative fields of digital world trade have become very much in demand to corporations and entrepreneurs due to their importance in attracting clients.
There are disputes about the high values of domain names claimed and the actual cash prices of many sales such as Business.com. Another high-priced domain name, sex.com, was stolen from its rightful owner by means of a forged transfer instruction via fax. During the height of the dot-com era, the domain was earning millions of dollars per month in advertising revenue from the large influx of visitors that arrived daily. The sex.com sale may have never been final as the domain is still with the previous owner. Also, that sale was not just a domain but an income stream, a web site, a domain name with customers and advertisers, etc. Two long-running U.S. lawsuits resulted, one against the thief and one against the domain registrar VeriSign . In one of the cases, Kremen v. Network Solutions, the court found in favor of the plaintiff, leading to an unprecedented ruling that classified domain names as property, granting them the same legal protections. In 1999, Microsoft traded the name Bob.com with internet entrepreneur Bob Kerstein for the name Windows2000.com which was the name of their new operating system. 
One of the reasons for the value of domain names is that even without advertising or marketing, they attract clients seeking services and products who simply type in the generic name. This is known as Direct Navigation or Type-in Traffic. Furthermore, generic domain names such as movies.com (now owned by Disney) or Books.com (now owned by Barnes & Noble) are extremely easy for potential customers to remember, increasing the probability that they become repeat customers or regular clients. In the case of Movies.com, Disney has built a stand-alone portal featuring branded content. More and more large brands are beginning to employ a more comprehensive domain strategy featuring a portfolio of thousands of domains, rather than just one or two.
Although the current domain market is nowhere as strong as it was during the dot-com heyday, it remains strong and is currently experiencing solid growth again.  Annually tens of millions of dollars change hands in connection with the resale of domains. Large numbers of registered domain names lapse and are deleted each year. On average, more than 25,000 domain names drop (are deleted) every day.
An estimate by an appraiser is always the addition of what they would like a domain to be worth together with the effective/expected/desired revenue from the web content. Some people put value on the length of the SLD (name) and other people prefer description capability, but the shorter an SLD is, the less descriptive it can be. Also, if short is crucial, then the TLD (extension) should be short too. It is less realistic to get a domain like LL.travel or LL.mobi than a domain travel. LL or mobi. LL. This illustrates the relativity of domain value estimation. It is safe to say that the revenue of web (content) can be easily stated, but that the value of a domain (SLD.TLD aka name.ext) is a matter of opinion and preference. In the end, however, any sale depends on the expectations of the domain seller and the domain buyer.
A webmaster creating a new web site either buys the domain name directly from a domain name registrar, or indirectly from a domain name registrar through a domainer. People who buy and sell domain names are known as domainers. People who sell value estimation services are known as appraisers.
 Domain aftermarket prices and trends
Domain name sales occurring in the aftermarket are frequently submitted to the DN journal. The sales are listed weekly and include the top aftermarket resellers which include but are not limited to Sedo, Traffic (auctions), Afternic, NameJet, Moniker and private sales.
To date, and according to Guinness World Records and MSNBC, the most expensive domain name sales on record as of 2004 were:
- Business.com for $7.5 million in December 1999
- AsSeenOnTv.com for $5.1 million in January 2000
- Altavista.com for $3.3 million in August 1998
- Wine.com for $2.9 million in September 1999
- CreditCards.com for $2.75 million in July 2004
- Autos.com for $2.2 million in December 1999
The week ending January 27, 2008, DNJournal reported that CNN, a cable news channel purchased iReport.com for $750,000. The high price for iReport.com, as in "I Report," was because it was branded by CNN as CNN's news crowdsourcing prior to the purchase of the domain name. Likewise, AltaVista was branded as a search engine prior to the high purchase price of the domain name.
 Popular domain prefixes - "E" and "I"
In addition to a domain placing value on the shortness of the word, ease in spelling, commercial appeal, and organic capacity to generate natural traffic, today's domain names are being valued for the branding potential. The domain name sale iReport although not an organic or dictionary term alone, is actually preferred as a highly brandable term, in that it is has a popular pre-fix "i" which indicates the "report" to be online.
The prefixes and dashes between words were once considered second, but now due to brandability, if the term is a commercial term, a prefix is often preferred. Example eLoans markets with an e to indicate to its potential customers that a loan may be obtained online.
The two primary prefixes are "E", for electronic, and "I", for Internet. Both indicate the word or phrase to be accessible online. Because of that, in terms of branding, an i or e combined with a commercial term are highly desirable. In domain sales typically an e has been preferred, and i slightly less in terms of demand. eBrooklyn sold for approximately $2500 whereas once it would have been available to register at the price of a domain name (which ranges from $8 to $30 us dollars depending on the registrar). The rapidly increasing use of prefixes in conjunction with main dictionary and or commercial terms is here and for some predominantly internet based companies, or high technology, high profile companies, the prefix is now preferred.
One of the details that make a domain with a prefix more valuable for a brand, is the ability to simply promote the name without the use of ".com" in the promotion. If a domain owner had report.com he would be forced to use the .com to indicate it was on the net at that address, however a domain name with a one letter prefix does not need to use the ".com".
Someone could promote "iReport" as a brand, and assuming it was a world class brand, visitors would know they could find it at "iReport.com without seeing the .com. However if it was a .net, it would be wise to state iReport.net. This option to simply state the name of the company or entity is particularly valuable in that it is brief and clear in indicating that a report can be either made or found on the "i"nternet.
eLoans similarly does not have to state "eLoans.com". eLoans, in the minds of most is clearly an online entity offering electronic loan applications.
Some alternative domains that avoid the use of ".com" in their promotion are "WebMD" as the word web as a prefix suffice to indicate the information is online and likely at a .com extension.
 Branding with a domain name
Brands are greatly affected by the ability of the company to obtain the matching domain name. If a company builds a brand around a name to which it does not own the domain name, it can end up directing traffic to another domain owner's site. If it is a competitor, this would be a problem.
Today's advertising development of a great brand is strictly confined to the availability to synchronize the brand with a domain name. Any confusion might result in a competitor gaining valuable internet traffic and possible customers.
 Domain name confusion
Intercapping is often used to emphasize the meaning of a domain name. However, DNS names are case-insensitive, and some names may be misinterpreted in certain uses of capitalization. For example: Who Represents, a database of artists and agents, chose whorepresents.com, which can be misread as whore presents. Similarly, a therapists' network is named therapistfinder.com. Another example is powergenitalia.com, the website of an Italian power generator company. In such situations, the proper meaning may be clarified by use of hyphens in the domain name. For instance, Experts Exchange, the programmers' site, for a long time used expertsexchange.com, but ultimately changed the name to experts-exchange.com.
Leo Stoller threatened to sue the owners of StealThisEmail.com on the basis that, when read as stealthisemail.com, it infringed on claimed (but invalid) trademark rights to the word "stealth". 
 See also
- ↑ "Introduction to Top-Level Domains (gTLDs)". Internet Corporation for Assigned Names and Numbers. http://www.icann.org/en/tlds/.
- ↑ RFC 920, Domain Requirements, J. Postel, J. Reynolds, The Internet Society (October 1984)
- ↑ "List of top-level domains". ICANN. http://data.iana.org/TLD/tlds-alpha-by-domain.txt.
- ↑ "32nd International Public ICANN Meeting". ICANN. 2008-06-22. http://par.icann.org/.
- ↑ "New gTLS Program". ICANN. http://www.icann.org/en/topics/new-gtld-program.htm. Retrieved 2009-06-15.
- ↑ ICANN Board Approves Sweeping Overhaul of Top-level Domains, CircleID, 26 June 2008.
- ↑ Sex.com Settles With VeriSign
- ↑ Windows2000.com owner sells domain to Microsoft
- ↑ 9.0 9.1 Domain name sells for $2.75 million
- ↑ Steal This v. Stealth Is: Community Technology Collective Bullied Over Misreading of URL
- IANA generic TLD
- IANA Two letter Country Code TLD
- ICANN - Internet Corporation for Assigned Names and Numbers.
- Internic.net, public information regarding Internet domain name registration services.
- RFC 1034, Domain Names — Concepts and Facilities, an Internet Protocol Standard.
- RFC 1035, Domain Names — Implementation and Specification, an Internet Protocol Standard.
- UDRP, Uniform Domain-Name Dispute-Resolution Policy.