A Comprehensive Guide to Domain Names

Website addresses are simple, but keeping them that way is an incredible feat. Each website address or domain name must correspond to one IP address. There must never be overlap or duplication. In this article we’ll explain the organizational system behind domain names, the domain name system (DNS), how to buy a domain, how to sell one, and much more.

NASA photo of grid

What is the Domain Name System (DNS)

The Domain Name System (DNS) is a hierarchical naming system that translates human-readable domain names (e.g., www.google.com) into numerical IP addresses (e.g.,, which computers use to communicate with each other over the Internet. The DNS makes it easier for users to access websites without needing to remember complex IP addresses.

It’s not complicated, but it is absolutely crucial that the system runs flawlessly. That’s where ICANN comes in.

What Is ICANN and How do they Distribute Domain Names?

ICANN (Internet Corporation for Assigned Names and Numbers) is the regulatory body responsible for overseeing the distribution of domain names. It manages the qualifications for companies to become accredited Domain Registrars, which are businesses authorized to sell and register domain names to the public.

ICANN ensures that there is no overlap in domain assignments and helps maintain the stability and security of the DNS. You can’t buy a domain name from ICANN, you must purchase your domain through an accredited domain registrar, like Godaddy or Epik.

What are the Three Components of a Domain Name?

1. Top-Level Domain Name (TLD): The TLD is the part of the domain name to the right of the dot, such as .com, .org, .net, etc. It was originally intended to categorize domains based on their purpose (e.g., commercial, non-profit), but nowadays, many TLDs are not strictly regulated, and their popularity and value can change over time.

2. Second-Level Domain Name: This is the main part of the domain name, like “google” in www.google.com. It represents the specific name chosen by the owner and is associated with an IP address.

3. Third-Level Domain Name: The third-level domain is optional and represents subdomains, such as “www” in www.google.com. Third-level domains are not registered separately because they are usually created by the domain owner through the domain registrar’s control panel.

How to Buy a Domain

Well, you don’t technically buy a domain. A domain name cannot be purchased directly from ICANN. You must use a domain registrar when purchasing a domain name. There are lots and lots of good registrars out there. It is important that you pick a reputable one, because they will be responsible for registering your domain name each year. Your domain name is only yours as long as you keep paying your registration fees. There are two ways to purchase a domain name.

1. Purchase a domain from a registrar.

2. Purchase a domain through a web host.

Annual Domain Registration

Once you’ve purchased a domain name, it’s only yours as long as you pay to register it each year. You can prepay up to ten years in advance.

Who Can Sell a Domain Name?

ICANN-accredited Domain Registrars are authorized to sell domain names to the general public. These companies go through a rigorous qualification process set by ICANN to become accredited registrars. There are thousands of accredited Domain Registrars worldwide, and they can set their own prices for domain names.

Who Decides the Price of a Domain Name?

The wholesale price of a domain name is negotiated between ICANN and the top-level domain registries. However, the price that consumers pay for domain names is determined by the accredited registrars in the open market. Each registrar can charge different markups based on market forces and the perceived value of the domain name.

What are Premium Domain Names and How Does Their Pricing Work?

Premium domain names are domain names that are considered more valuable due to their short length, keyword relevance, or brandability. There are two types of premium domains:

1. Unregistered Premium Domain Names: These are domain names that have not been purchased yet but have been identified by the registry as having higher value. The registry will typically charge a higher price for these premium domains.

2. Registered Premium Domain Names: Once a domain is registered, the owner can set the price for selling the domain. They may ask a fixed rate, sell it through an auction, or negotiate the price with interested parties.