Anyone who watches a fair amount of American television is likely to be aware that popular
race car driver Danica Patrick is an advertising spokesperson for leading domain registrar GoDaddy.com, although most would probably be hard-pressed to accurately describe the company’s core function.

While domain name registrars play an important role on the Internet, they often work behind the scenes. Here we'll take a look at domain registrars, their function, and the basics for buying a domain.

What is a domain registrar?

A registrar is a commercial entity that markets Internet domain names to consumers, subsequently safeguarding purchasers’ exclusive rights of use. It is a function that is completely separate from the hosting of the actual files that comprise a website, although many registrars also offer that service.

There are roughly 900 domain registrars. As of 2011, GoDaddy.com is the largest, controlling approximately 30 percent of the market, followed by eNom.com, Tucows.com, Network Solutions, and 1&1 Internet.

What is a Domain Name?

A domain name represents an exclusive location on the Internet that can be accessed by individual computers, enterprise servers that host website files, network servers, and other online-enabled devices.

Domain names are organized into about 300 top-level domains (TLDs). These include:

  • .com (U.S. commercial sites)
  • .net (Internet administrative sites)
  • .org (Organizations' sites)
  • .mil (Military sites)
  • .gov (Government sites)
  • .edu (Education - often post-secondary - sites)
  • .int (International sites)
  • .biz (Business sites)
  • .info (Informational sites)
  • .name (Individual/family name sites)
  • .coop (Business cooperatives)
  • .pro (Career/professional sites)
  • .mobi (Mobile sites)
  • .travel
  • .jobs
  • .asia
  • .museum
  • .aero (Air transportation sites)
  • Country-specific TLDs (.au, .ca, .uk, etc.)
By far the most used TLD is .com. However, country-specific domains have continued to grow in popularity. Regional versions of major search engines, such as Google.ca, often give preferential rankings to domains with similar suffixes. Many TLDs sounded like good ideas initially, but never really took off - ever been to a site with a ".museum" domain? (For more on how Google ranks pages, see 3 SEO Tactics That Google Loves.)

The Technical Stuff

Technically speaking, the Internet could function without domain names. To simplify, the Internet runs based on something called TCP/IP. Think of this as the underlying language (or protocol) that allows your computer to communicate with one halfway around the world. Websites are hosted on servers and in order to access a website, you need to know the address of that server. This is referred to as the machine's IP address and it looks like this: 184.72.216.57.

The only reason we have domain names is because humans can remember names much better than long strings of numbers. The IP address listed above is actually for Techopedia.com. Imagine if you had to remember the IP address for every site you liked to visit. The Web just simply wouldn't work.

Next, take the domain name, combine it with that now familiar http://, and you've got what is known as a URL. A URL is special because its unique - there can't possibly be a duplicate because the domain names are parceled out by the registrars. (Find out how this system evolved in A History of the Internet.)

Finally, order is maintained via the Domain Name System (DNS), which, among other functions, translates the alphabetical domain names into numerical IPs. It's like a phone book, but for the routers and networking equipment behind the scenes.

How is a domain name purchased?

Purchasing a domain is simple. Typically, a prospective buyer visits a registrar’s website and searches for the desired domain name. The site will then perform an existing domain name search in the central registry database and quickly notify the prospective buyer of the result.

If the domain name available, the inquirer is free to buy the rights to the domain for a period up to 10 years, at an annual approximate cost of between US$8 and $35, depending on the registrar and the other services purchased at the time.

What if a domain name has already been purchased?

Even if a domain name is already taken, many are still available to be purchased. A quick way to
check is by typing the full name into an Internet browser’s address box and seeing if a "For Sale" page appears.

Sometimes nothing will come up, but the domain will be reserved. In such a case, you can do what is known as a WHOIS search on a domain. This is like a reverse lookup of a telephone number, and it can help you locate the owner of a domain. Domains can be bought and sold, so often people will reach out to owners and privately negotiate a transaction.

That's all kind of painstaking, however. Fortunately, there is a huge secondary market for domains as well. Many private companies offer marketplaces where buyers and sellers can meet up. As of the second quarter in 2011, the dominant company in the industry, Sedo.com, was offering more than 18 million names.

Who oversees domain registrars?

The Internet Corporation for Assigned Names and Numbers (ICANN) was tasked with administrating the central domain name registry, among other Internet-related duties, after taking over for the U.S. government in 1998. The California-based nonprofit organization provides accreditation for domain name registrars, and its 16-member board of directors promulgates the rules that govern the arena.

ICANN authorizes the registration and reassignment of domain names through domain name registrars.

What are some issues involving domain names?

Given the importance of establishing a presence online, the website industry has continuously
faced challenges in regards to attempts to make money by manipulating the system, oftentimes in unscrupulous ways. Among the most litigious issues involves cybersquatting, which is defined as a bad-faith attempt to profit from leveraging a trademark or brand name that belongs to someone else. Individuals and businesses engaged in this type of activity purchase domain names that can easily be linked to a given entity, then offer to sell the domain at an inflated price. As a result, some leading companies have paid exorbitant fees in order to gain control over any domain name that could be identified with their core businesses or products.

Another area of untoward activity involves fraudulent domain name renewal claims. In these
cases, a scammer will contact a business or individual who owns a domain name via an official
looking email stating that the domain name's lease period is about to expire. The email always contains a purchase link, wherein the domain renewal is supposed to be paid. In actuality, all a domain name owner will be doing is giving the scammer money, because the aforementioned payment process has no connection to the actual domain. The U.S. Federal Trade Commission has taken a leading role in policing this and other such cases.

A New Domain

Whether you're looking to start a new website or just wondering how domain registrars work, we hope we've answered some of your key questions here. After all, the domain name system is an important component of the Internet, and one that makes it more user-friendly.