How Does A Domain Name Work?

written by

Joe Uddeme

Joe Uddeme

How Does A Domain Name Work?

There aren’t many people today who don’t know what a domain name is – but few actually understand how they really work. In this post, NameExperts.com Director Joe Uddeme explains what’s going on behind the scenes.

 

A domain name is what you type when you want to visit a website. For example, you type “Google.com” into your web browser, and it takes you directly to Google to search for stuff. But a lot happens behind the scenes to ensure the domain name you type takes you to the correct website.

In fact, it’s all pretty complicated – and interesting, too. If you want to buy a premium domain name worth in the tens or even hundreds of thousands, having clear insight into what you’re actually paying for might be a good idea. This article will explain what happens and demystify how the world of URLs and the web works.

Key takeaways:

  1. Understanding the different components of a domain name
  2. Proven ways to buy a domain name
  3. Domain name facts and FAQs

Typewriter with words 'name search' on piece of paper to illustrate article about what makes a domain name

 

How A Domain Name Leads You To A Website On the Internet

The Internet is an extensive network of computers connected to each other via cables; each computer on this network can communicate with others. Every computer is identified by a unique Internet Protocol (IP) address, which consists of four numbers separated by periods, e.g., 192.168.1.2.

Graphic showing the elements of a domain name

Each website is hosted by a specific computer or server. When you want to visit that website, you need to point to the IP address of the computer hosting it. But IP addresses are difficult to remember. Imagine you had to memorize the unique IP addresses of all the websites you visit; that’ll be impossible, which is why domain names were invented.

A domain name is a human-readable name pointing to a specific IP address on the web. Whenever you type a domain name into your browser, it queries a vast database called the Domain Name System (DNS) and gets the corresponding IP address of the website you want to visit.

The Domain Name System is akin to a phonebook in your home containing your friends’ names and phone numbers. You don’t remember all your friends’ phone numbers; you just need to know their names. Whenever you need a specific number, you check for the name and get it.

This is precisely what the Domain Name System accomplishes; you type a domain, and it gives the correct IP address to your web browser. Your browser fetches the data from the server using that IP address and shows it to you.

 

Parts Of A Domain Name

domain name has three main parts: top-level domain (TLD), second-level domain, and subdomain.

Graphic explanation showing the components of the nameexperts.com domain name

1. Top-Level Domain

The top-level domain (TLD) is the last segment of text in a domain name. The most popular TLDs you should be familiar with include

  • .com
  • .net
  • .co
  • .edu
  • .org

Yet, there are over 1,500 TLDs you can choose from. A lot of them are assigned to specific countries, such as;

  • .uk (United Kingdom)
  • .tv (Tuvalu)
  • .br (Brazil)
  • .ca (Canada)
  • .cn (China)
  • .de (Germany)

There are many other random TLDs such as .website, .book., .dog, .attorney, and .band. A popular one today is the .ai domain name, which has been a hit with tech companies.

2. Second-level domain (SLD)

This is the middle part of the domain name. It is a unique word or phrase identifying the website you want to visit. This part of the domain plays the biggest role in branding an online business. It’s also important in search engine rankings.

3. Subdomain

A subdomain is the part that comes before the main domain. They are attached to the main domain and separated by a period, e.g., blog.example.com, support.website.com.

Subdomains function like independent websites but are attached to the main site. For instance, you can have an online store or a blog attached to your main business site.

 

Who Manages the Domain Name System (DNS)

The Internet Corporation for Assigned Names and Numbers (ICANN) is the agency responsible for managing the global domain name system. It is a nonprofit organization that enacts policies for creating and managing domain names. It permits companies called domain registrars to sell domain names on its behalf.

Technically, you don’t own any domain that you use. You’re leasing it from ICANN (via your domain registrar) and controlling it as long as you renew the registration. If your registration expires, another person can take control of the domain – although with a little effort it’s possible to secure a domain name forever (sort of).

 

How To Buy A Domain Name

To buy a domain, you can head to any domain registrar’s website and check if someone else has not registered the domain name you want. If so, you can immediately pay for it and start using it.

If the domain name you want has already been registered, don’t fret. You can hire a domain name broker to help you trace, contact the owner, and negotiate a possible purchase. Domain brokers have experience arranging domain sales, so they’ll help you pay a fair price for the domain you want.

 

Tips For Choosing A Domain Name

  • It should be short and simple. Longer domain names are more difficult to remember. Try and choose a strong domain name that will match your business goals and ambitions.
  • Avoid using hyphens and numbers in the domain name.
  • Use keywords related to your line of business. This helps improve your branding and search rankings.
  • A .com TLD should be your first option. If that isn’t available, use other popular TLDs such as .co and .net. The more popular the TLD is, the easier it will be to promote.

Google search box to denote the importance of a domain name

 

Frequently Asked Questions about Domains

How long can I register a domain name for?

The maximum registration period for a domain name is 10 years. But you can renew it every 10 years and keep control of the domain.

What is a premium domain name?

They are high-quality domains that people often buy to flip for a higher price later. Demand for premium domains is high, and the price increases over time, making them good investments.

Can you sell your domain name?

Yes, you can sell your domain name anytime you want to. You can do that yourself or enlist a domain broker to find a buyer for the best price.

How do you find the owner of a domain?

You can identify a domain’s owner by querying the public WHOIS database, which contains contact information about the registered owner of every domain.

What happens if I don’t renew my domain name?

Registrars usually give a 30-day grace period in which you can reclaim the domain. Your domain will be auctioned on the market if that period runs out.

 

About the author

Joe Uddeme is Director and Principal of Name Experts, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Contact us at: [email protected]

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Domain Flipping: Our Tips For Buying and Selling Domain Names For Profit

Long before crypto trading, people were making speculative digital bets on domain names. Buying and selling them for profit is still popular, but, as NameExperts.com Director Joe Uddeme warns, you need to approach ‘domain flipping’ carefully.   Wouldn’t it have been great to be ahead of the curve back in the 90s when the internet was in its infancy? With a little foresight and not very deep pockets, you might have snapped up Lime, Lyft, Uber or WeWork.com. And you might even have stolen the march on existing brands such as Shell and Verizon, who both reportedly had to settle with savvy individuals who had registered those domain names. Buying a domain name to trade can be a fascinating – and potentially lucrative – pursuit, but there’s lots to learn before you start reaching for the credit card. This article will rapidly bring you up to speed with the world of buying and selling domain names for profit. Key Takeaways Start with a realistic budget – and stick to it Work out what may have value today and tomorrow How to find out if the domain is for sale Build interest and sell your domain   Step 1: Set Your Budget Define a budget that’s suitable for investing in domain names. While some people can spare only $100, others have no worries investing $10,000. The rule of thumb is to only invest an amount you can lose without headaches. Every investment carries risks, so avoid putting critical amounts into assets.   Step 2: Look For Names That Have Value Simply put, you want to find domains that would be a valuable asset to your buyer (read our post on how to value a domain name). If you were buying a domain for your business, company or hobby, what would you look for? Is the domain you just bought something you would actually use? Try to put yourself in the buyer’s position to make sure that any domain you buy has value. It is also helpful to stick to an area that you’re familiar with. Ask yourself, what kind of domains are other people in this industry buying? Would you buy this name if you were in that position? How much would this domain help them get found online or give them authority in their industry? The top-level domain (TLD) also contributes significantly to a domain name’s value. “.com” is the most common TLD, and domains ending with this suffix tend to be more valuable than others because of high demand. However, there are other valuable TLDs, such as .net, .co, .ai, and .org. What are the best types of domain names to buy? The types of domains that increase your chances of succeeding in domain name flipping include: Local: Domain names tied to specific locations, e.g., cities and towns, tend to have higher demand than others. For example, if you reside in Caldwell, you can target domain names like Caldwellcoffeeshop.com, Caldwellrestaurant.com, Caldwellbakery.co, etc. Short: Shorter domains command higher prices than longer domains because they are easier to remember. Customers find it easier to recall shorter domains, so businesses are willing to pay more for them. Keyword-focused: Domains containing keywords are more likely to sell than those without. Look for domains containing keywords about different businesses and services, e.g., AffordablePlumbing.com, CheapPhoneRepairs.net, CarRepairs.com, etc. Step 3: Stay Focused You’re aware there are already millions of domains registered. But there are also endless combinations of available domains to register. If you’re looking for a key tip in regards to buying and selling domains for profit, you should start by narrowing your focus a little bit. As mentioned above, you should start by thinking about a topic or industry you’re familiar with. 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With enough attention and audience, you can proceed to the next step and start thinking about selling the domain. Step 8: Determine Your Domain’s Value You have successfully attracted attention to your domain and are ready to sell. First, you must determine a fair value for the domain. You don’t want to underprice the domain and leave much money on the table or, inversely, overprice the domain and not find a willing buyer. Here are critical questions to help you determine your domain’s value: Does the domain receive any traffic? The higher the volume of traffic to a domain name, the more valuable it is. Showing proof of high traffic can fetch your domain a substantial price. Does it generate any income? If your domain name already generates income from advertising or any other method, it becomes easy for an interested buyer to value it. You can sell the domain for many multiples of its revenue. 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He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Contact us at: [email protected]

Image looking over a person's shoulder to indicate anonymity when securing a domain name
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Buying the right domain is much easier when you have a knowledge of the industry so that you choose something that will 1) actually sell, or 2) be a great domain for your business. If you know fishing, for example, you’ll know just the things your fellow marlin hunters will be searching for. Is there a domain name available that fits? Start your domain name search based on keywords related to the things you’re familiar with. If you KNOW it’s going to be valuable, it will be much easier to sell. Check the strength of a keyword with tools like Google Trends or Keyword Planner or similar SEO tools. We highly recommend working with a domain broker who knows the marketplace. They’ll be able to give helpful suggestions and help you avoid costly mistakes. We do NOT recommend targeting a prospective domain buyer based on their potential economic status. Targeting a certain demographic that you don’t know anything about could be an expensive error. You might also be missing specific rules associated with the industry you’re going after. The bottom line is, you won’t make any money if your buyers can’t use the domain you bought. Know Your Audience If you understand your audience, you’ll be able to really generate sales of domains you buy. If you’ve got a great domain, you can hold onto it for years and probably make a decent profit. Maybe you’ve already monetized the domain with an active website and put in some great SEO efforts – things that can help make your domain worth a lot more to a potential domain buyer. These types of well researched domains can end up paying for themselves. Talk to a domain broker. The industry’s big-hitters will have the knowledge you’re looking for and be able to steer you in the right direction for domains that will actually benefit the buyer. Domain Seller Tips Evaluate Your Domain It is so important that you actually have access to domains that would be a valuable asset to domain buyers. Put yourself in the buyer’s shoes. Would the domain name you’re selling actually be beneficial to a business or organization? Similarly, if you’re the one buying, have a domain broker assess the value of the potential domain. Would having this domain make it easier for clients to find you? Will having that particular domain make it easier to rank higher on search engines? Would your profits increase based off of this particular domain name? Don’t buy anything without knowing its true value. Get Your Domains Out There There are many different avenues for getting your domains out to potential domain buyers. Again, we suggest doing a little research. If you’re using a respected source, you’ll have a much better chance of getting your domains sold. The best suggestion we have is to work with a sell-side domain name broker who knows the market. You can also use a distribution network to make sure you’re getting the right domain in front of the right buyer. Maybe you already know who might benefit from the domain name? Start a conversation and convey that you already understand what the domain is capable of achieving. However, if you don’t already have a place to show off your domain, partnering with a domain buying and selling brokerage business will take the pain out of everything and increase your chances of a profitable sale. Choosing the right broker If you’ve purchased one or more premium domain names and want to sell them, why leave anything to chance? Working with a broker who spends every day in the market is the way to go. Not only do they buy and sell millions of dollars worth of domains every year, they also have a network already established. They might have a long list of buyers and sellers lined up before you even set up a meeting. Domain brokers are able to accurately assess the value of potential domains, and also help negotiate on your behalf. They also know all the paperwork and legal processes that come with buying and selling domains, which means that you don’t have to worry about any of it. Look for one with a strong track record, ideally one that can demonstrate experience in high-level transactions. Global experience can be helpful, too, especially if you want to secure the international TLDs for a specific name.   About the author Joe Uddeme is Director and Principal of Name Experts, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Contact us at: [email protected]

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