To get to a Web site, you have to click on, or type in, its name in a Web browser. The name of the Web site is technically referred to as a URL (Uniform Resource Locator) and looks something like this:
http://example.com.
A URL consists of two parts, the "http://" which tells the browser to use the HTTP protocol to get to your site, and your site's name, "example.com" which is technically called the site's domain name. A domain name is a human-understandable and unique name for your site.
Notice that a domain name consists of a series of strings separated by dots. Each string within a domain serves to make the overall domain name unique. For instance, suppose there are two companies called "MyCo Corporation," one in the US and another in India. They could be assigned the domain names myco.us and myco.in. Thus, both companies have the string "myco" in their domain name, but the suffix "us" or "in" makes them unique. For more information about URLs, see http://www.ietf.org/rfc/rfc2396.txt.
To keep things manageable, the Internet authorities have created a set of top-level domains such as "com", "net", "org", "edu" and so on. Domain name registrars are given control over one or more of these top-level domains.
Anyone who wants a top-level domain contacts a domain name registrar and asks them to register a domain name. The registrar ensures that the domain name is unique, and for a small fee, registers the domain name. For instance, if MyCo Corporation wanted to own the top-level domain name myco.com, it could contact a domain name registrar and ask to register the domain name myco.com. Once this is done, MyCo could set up a Web site using the name myco.com. There are many domain name registrars, and some of them, like register.com are very popular.
When you type a URL into a browser, your computer contacts the computer on the Internet (also called a host) that contains the Web site with that name. For example, if you type http://myco.com in your browser, your computer has to contact the computer that hosts the myco.com Web site. It does so by sending a packet (a small amount of data) to the myco.com computer saying "show me the main page of the myco.com Web site". The myco.com Web site replies with the main page. To make this work, the Internet has to somehow transmit packets from your computer to the computer that hosts the myco.com Web site. While the myco.com computer is easily identified by its unique domain name, it is really much easier to transmit the packet if the destination is identified by a number rather than a name. The number that corresponds to a domain name is called a computer's IP address, for example 129.31.212.144.
Every computer on the Internet and every Web site must correspond to an IP address. Your Web site hosting company will provide you with a set of IP addresses that you can allocate to the Web sites that you create. For more information about IP addresses, see http://www.iana.org/ipaddress/ip-addresses.htm.
There are two ways to host domains. The first is to create the domain with its own IP address. This is called IP-based hosting. You must create IP-based domains if the domain needs anonymous FTP and its own secure-site (SSL) support.
The second way to host domains is to create a domain that shares the primary IP address of the server. This is called name-based hosting. Name-based domains receive most of the benefits of an IP-based domain without occupying an IP address.
The standard set of server applications is available to IP-based and name-based domains, except SSL encryption. SSL is not supported for name-based domains.
IP addresses happen to be scarce resources. To conserve IP addresses, you can arrange to have many sites share the same IP address.