What is a Domain Name?

Let’s start by clarifying a common misunderstanding about domain names, which is the assumption that, a domain name is in the form www.anyname.com! This is not true. When you acquire a domain name, the purchase is actually made on the right most two sections of the domain name which are “anyname.com” . Hence, “www.anyname.com” is only one of the many variations that you are entitled to have with “anyname.com” (for no additional fees). To understand this and other very important domain concepts more clearly, let’s look at the 4 main parts of a domain name:

….Hostname.Sub-domain.Second-    ..Level Domain.Top-Level Domain.

Let’s have a closer look at each part and you will soon realize the benefits of understanding each of these concepts:

TOP-LEVEL Domain

A top-level domain (also referred to as TLD) is the rightmost portion of a domain name. For example “com” is the top-level domain of www.anyname.com.
All domains must have a top-level domain which is a way of identifying the type of organization that holds the name. Also note that there are  two types of TLDs: gTLD and ccTLD.
gTLD refers to Generic Top-Level Domains such as .com, .net and, org. Below is the explanation for the most popular gTLDs:
.com  Stands for “commercial” and was originally created for business sites. Currently, this is the most recognized top-level domain in the world and any person or organization may register a domain name with a “.com” extension.
.net Stands for “network” and was originally created for network and internet service providers. Although “.net” is not as popular as the trendy “.com” extension, it is an alternative for those individuals or organizations who cannot find their ideal domain name with the “.com” extension. There are no restrictions on who can register a “.net” domain.
.org Stands for “organization” and was originally intended for non-profit organizations. Currently many non-profit organizations still use this extension for their domain name however “.org” is no longer restricted and any company or individual can register this domain.
.edu Stands for “education” and intended for four-year colleges and universities in United States.
.gov Stands for “government” and is designated for agencies and branches of the United States Federal Government. State and local governments in the United States are, however recommended to use the “.us” top-level country code domain.
.mil Stands for “military” and is designated for United States military entities.
ccTLD refers to Country Code Top-Level Domains which are assigned to all countries and their dependencies. Some examples are “.us” for United Stats, “.ca” for Canada and, “.uk” for United Kingdom. New gTLDs such as .NOM, .INFO, or .WEB may be introduced sometime in the near future.

SECOND-LEVEL Domain

This is the portion of the domain name that is immediately to the left of the Top-Level Domain and after the period. Therefore, in our www.anyname.com example, “anyname” is the Second-Level Domain. This part of the domain name is what you register by or on behalf of registrars (or owners) in a Top-Level Domain Registry.

 SUB Domain

This is an optional part of a domain name that can be placed immediately to the left of the Second-Level Domain after the period. This is a very useful option that can save you from unnecessary purchase of additional domain names to fulfill various areas of your online business. For instance if you have a shopping section on your website, you may want to promote this division with a specific address while still branding your original company domain name. Online businesses who are not fully aware of the sub-domain system would try and purchase a new domain name such as “shopanyname.com” and start promoting www.shopanyname.com. In many cases this is a waste of money, resources and time that is spent to find a name that is available! A much more viable alternative is using your optional sub-domains. Remember that you only register the top two levels of a domain name such as “anyname.com”. Therefore, there are no additional fees or registrations for the addition of sub-domains and this is a process that is between you and the party that hosts your website. Take a look at the following well known websites and how they have used the sub-domain system to distinguish their various divisions:
Yahoo Finance Section: finance.yahoo.com

MSN Shopping Center: eshop.msn.com

AOL Email Service:
aolmail.aol.com
So, in our original example you would use “shop.anyname.com” as opposed to www.shopanyname.com! There are no www’s used at the beginning of any of the names for simplicity but you do have the option to do so (see Hostname for explanation, below).
It should also be noted that you can assign more than one subdomain, or in other words, use a multiple-level sub-domain system as well. The example below demonstrates this option:
“admin.shop.anyname.com” for use by the administration department.
You may have also noticed that some countries have taken advantage of this system to organize domain names into cities, states and provinces.
 For United States, this is in the form of: anyname.city.state.us or anyname.stat.us
 
For Canada it is: anyname.city.province.ca or anyname.province.ca
Typically these regional domains are much cheaper to register and sometimes even free. However, they do have certain disadvantages such as being lengthier and less familiar to general public. On the other hand, they may also be a very good choice for companies and organizations that would like to be recognized geographically.

HOSTNAME

Finally, let’s look at the last part of a domain name, which is the leftmost section after the sub-domain and the period. This part is also optional and is called “Hostname” because it is often used to indicate the name of the server (a special computer) that runs the website or any other functionalities of the site. Traditionally, websites have the hostname as “www” to indicate that the website is residing on the web server. This is a computer that makes the website accessible to the world. Naturally, the addition of “www” to the beginning of your domain name is highly recommended as most Internet users automatically type it in their browser as part of the domain name. However, you should also be aware of the fact that other additional domain variations are also available to you that may have marketing and organizational advantages.
For example Yahoo site can be accessed whether you type “www.yahoo.com” or “yahoo.com”. In the same manner, MSN site can be accessed whether you type “www.msn.com” or just “msn.com”. This not only has the advantage of simplifying the domain name but also makes sure that both situations access the site.
Other examples would be the case where a website is hosted by multiple computers. This is why sometimes when you type in your browser a domain name, it automatically changes to www1.anyname.com or www2.anyname.com or some other variations. “www1″ and the other hostnames indicate the name of the particular server that you have accessed.
Hostname, may not be a significant issue for smaller online businesses, however as a companies website grows and gets more complicated, hostnames will become very useful.
(src:domainsillustrated.com)