The commercial domain name industry has been around since the 1990s but many people may be unaware of what goes on behind the scenes. There are some people who believe that the Internet revolves around .com; most people are unaware of the numerous players involved when they type in someone’s website address into their Internet browser.
Just like other industries, the domain industry has suppliers, wholesalers, retailers and resellers. The presence of multiple specialized organizations serves to create a robust, competitive domain name marketplace.
It’s a world not a lot of business-owners understand, and that can be risky: with a company’s success increasingly tied to its Internet presence, it behooves any leader to get to know what’s really involved in the domain name business. So, to shed some light, here is a look at what goes on behind the scenes.
First, some acronym soup
The domain name industry has its own oversight body. Founded in 1998, the Internet Corporation for Assigned Names and Numbers (ICANN) is a non-profit organization that coordinates the global domain name system and assists in creating policies to maintain the Internet’s stability. A department of ICANN known as the Internet Assigned Numbers Authority (IANA) is responsible for managing the root of the Domain Name System (DNS) and the numbering system for Internet Protocol addresses (IP addresses). Before ICANN was created, IANA was managed principally by Jon Postel at the Information Sciences Institute under a U.S. government contract. Today ICANN operates under a “multi-stakeholder model” with an elected board from around the world.
There’s a difference between registries and registrars
Two types of organizations are responsible for getting domain names into the hands of end-users: registries and registrars.
A registry is responsible for managing a top-level domain, or TLD (what you see after the “dot”). Each registry maintains an official list of the registered domains under a TLD, together with technical DNS information (the zone file) and registrant contact information (the WHOIS database).
Until recently, a registry would typically manage just one or perhaps a handful of domain extensions. However, with the recent launch of many new top-level domains, some registries are responsible for hundreds.
For example VeriSign is the current Registry for .com and .net as well as .name and two country code TLDs (.tv and .cc). A company called Donuts is a Registry that has applied for 300 new domain extensions and by the end of July 2014 has already launched 139 new domains such as .discount, .expert, .coffee, .technology, .singles or .land.
A registry may also operate its TLD directly, or it may engage a third party, known as a backend operator, to assist it. A backend operator can provide the necessary technical infrastructure, allowing the registry to concentrate on other important areas such as marketing. For example, the .club Registry, Famous Four Media (.trade, .bid and .webcam) and more, use Neustar as the backend registry operator. Neustar has been the backend Registry Operator for .biz, .tel, .co, .us and a number of other domains for many years. With more than a thousand new domain extensions currently being launched, various new registries are flocking towards backend operators to assist them.
A registrar, by contrast, handles the retail component of domain names and works with registries and backend operators to deliver domain names to end users. Registrars may also engage resellers to reach as many potential customers as possible. Additionally, registrars may offer services such as web hosting, email, digital security certificates, and privacy services.
How a domain name ends up in your hands
In order to create a seamless experience for end-users, registries and registrars communicate and work closely with one another. Systems are integrated via application programming interfaces (APIs) to ensure that finding and registering a domain name can be done in real time.
For example, my company (Webnames.ca) works with numerous registries to offer different domain extensions to businesses and the general public. When someone wants to register a .ca domain, we communicate with the Canadian Internet Registration Authority (CIRA) which operates the .ca registry to secure that domain name for the customer. Our systems synchronizes with CIRA’s to determine whether a domain name is still available or not, and registers the domain name on a customer’s behalf.
Domains are registered on an annual basis for up to 10 years for most extensions. If you want a website or email addresses to go with the domain name, you will then need to purchase those services separately. Many organizations—including mine—offer all these services as package deals, which can be an affordable way to go.
The infographic below explains in greater detail how the domain industry works. Read it and you’ll be better prepared to understand what you’re buying when you invest in your company’s web domain.
Cybele Negris is president and co-founder of Vancouver-based Webnames.ca Inc., Canada’s original .ca registrar and one of the country’s leading providers of web hosting and other Internet solutions. She is a veteran of the PROFIT/Chatelaine W100 ranking of Canada’s Top Female Entrepreneurs.