Whether or not you really need a domain name will depend what you want.
If your goal is just to have a place to share your thoughts, family photos, resumé or the neat links you've collected, you don't really need to spend money on a domain name. You can get a free blog (online journal) through Blogger, Wordpress or a number of other services. For photos only, you can share photos online and for free with Flickr, Photobucket and many other sites. Resumés might be better uploaded to a job service like Monster, craigslist, etc. You can share your favorite links more effectively via social bookmarking services like Del.ic.io.us, StumbleUpon, and more. If you really want your own website, you can get free hosting (a place on the web to put your content), then use a URL redirection service to get a short URL (link) that you can pass on to your friends and family.
If you want a business website, or intend to attract large amounts of visitors, a domain name would be a smart investment. Domain names ending in "com" are your best bet, since most Web surfers are in the habit of typing "com" after everything. You'll want to make sure that the name you want isn't already taken. Be safe and use Internic's official WHOIS database to check.
The companies that register domain names are called registrars.
There are many and they offer a wide range of pricing plans and options. There
are also companies that buy registrations in bulk from registrars, then resell
them. These are called resellers. To find out if a company is a reseller or a
registrar, you can look them up in the ICANN-Accredited
Registrars list.
Keep in mind that the lowest price isn't always the best deal.
The wording of your contract can be crucial to your website's future, so read
it carefully. Ease of use is also an important factor. Check ahead to what's required,
for instance, to update your registrant information. You may want to use a registrar
based in your country, just in case you ever have to call their offices.
When you register a domain name, you'll be required to provide your name, address, phone number, email address and other information. This information will be made available to anyone who wants to look it up. Some people may have good reason to want to keep their information private. Many domain registrars offer privacy services for an additional fee.
If you're going to sign up with a paid
hosting service (providers of space for your site), they will usually register your domain for you. While this makes the process painless, make sure that the registrar they use is one you'll be happy with.
If it seems like every domain name you want is already taken,
it's time to either come up with a more unusual name or to look to domain
brokers. These handle the sale of domains that have already been registered. Many listings invite you to make an offer. Don't be shy about starting low.
When you purchase a domain name from a broker, remember that it's already attached to a registrar. If there are problems with that registrar, you may have to transfer the domain elsewhere, and that costs money. Your best bet is to research the registrar in advance of your purchase.
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