Domains are the home addresses of the World Wide Web. Each and every internet presence can be reached under a globally unique, explicit address consisting of a domain name and a top-level domain (TLD):
www.domainname.tld
These addresses are decentrally assigned through a network information center (NIC). This issuing agency is responsible for allocating domains within a defined territory of the DNS (domain name system). The DNS is structured hierarchically, so when it comes to the top-level domain, .com, for example, everything that is located to the left of this top-level domain is subject to the rules of a corresponding NIC, which in this case is the company, Verisign.
So how do businesses and private individuals obtain the rights of .com domains? Registries like Verisign offer TLDs at regulated prices to domain name registrars (e.g. GoDaddy.com), which in turn go on to sell these acquired domains to private individuals and businesses. However, such domain registrations are only possible for domain names that haven’t been claimed yet. Those who are interested in purchasing an already-occupied domain name need to find its current owner and offer them a price for it. We’ll show you just how this process works in the following paragraphs.
Registering a domain is a quite simple undertaking and only takes a few minutes of your time. Once you’ve thought of an appropriate domain name, the first step involves checking whether or not the address is available. Domain providers often have a corresponding search mask set up specifically with this task in mind. After a search is executed, results will appear indicating the status of the desired domain name’s availability; generally alternative proposals are also suggested in case your preferred domain name and top-level domain have already been assigned to a different owner. Domain allocation operates on a first-come, first-served basis, making succinct and catchy word combinations under popular top-level domains, like .com or .net, a highly sought after commodity. In 2013, ICANN (Internet Corporation for Assigned Names and Numbers) introduced a series of new top-level domains (TLDs) to combat issues arising from such scarcity.
Once a registration for an available domain is submitted with the registrar, an application is submitted to the NIC responsible for managing the desired domain’s corresponding top-level domain. Here, an exhaustive register is administered; this ‘WHOIS’ database is where all user data, including contact information, is stored. Even domain users that have assumed complete responsibility for all content appearing under a given address are not considered to be domain owners. Instead, domain registrations are based on rental or lease contracts containing yearly or monthly fees that go on to help finance technical infrastructure maintenance. Any profit that a user makes with their web project listed under such a domain remains with them.
While we often speak of buying domains, what’s actually being bought and sold are the rights to use these domain names; it would be more accurate to describe these transactions as rentals or leases. A domain is ‘sold’ when a registered domain owner transfers their rights of use to a ‘buyer’. This, however, doesn’t make them a domain owner. The buyer is merely transferred the rights and responsibilities from the previous owner, including the monthly or yearly user fees. In order to purchase a domain’s rights of use, perspective buyers first need to locate the desired domain’s current owner. For sites with popular top-level domains like .com, .org, or .net, etc., owner information can be found through ICANN’s WHOIS search. Alternatively, private registrars, such as IONOS, also offer services that help users zero in on this information. But it’s not always the buyers who take the initiative; commercial providers specialized in domain trade often offer their contact information on the home pages of available domains. This phenomenon is known as domain parking. Additionally, there are numerous platforms available that link prospective buyers and sellers with one another.
Once both buyer and seller have agreed upon a price and payment method, a purchase agreement is made. This should always be in written form and include the formalities necessary for the transaction: buyers are then required to register themselves in their respective NIC WHOIS databases as the new owners. This requires a signed trade request form to be handed in.
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