When a company or organization wants to use the Internet, they must decide whether they want to do it by directly attaching to the Internet system or whether they will use another company to supply the connection. Many companies choose to use another company, called a service provider, because it reduces the amount of equipment, administration, and costs involved. If the company or organization wants to directly connect (and sometimes when they are using a service provider), they may want to have a unique identification for themselves. For example, ABC Corporation may want to have electronic mail through the Internet addressed to them as "abc.com." The name helps identify the company or organization to the sender.

To obtain one of these unique identifiers called a "domain name", the company or organization sends a request to the body that controls access to the Internet: the Network Information Center, or NIC. If the NIC approves the company’s name, it is added to the Internet database. Domain names must be unique, to prevent confusion.

The part of the name that comes last (such as ".com") is the domain identifier. These are the seven domain names established by the NIC:

.arpa	an ARPAnet-Internet identification
.com	commercial company
.edu	educational institution
.gov	any governmental body
.mil	military
.net	network service providers
.org	anything that doesn’t fall into one of the other categories

The NIC also allows special letters to identify the country of the company or organization. Designators exist for all countries in the world, such as ".ca" for Canada and ".uk" for the United Kingdom.

Not all companies that are outside the U.S. have country identifiers. To some extent, the date of registration may affect the use of the country identifier, as companies that joined the Internet when it was still relatively uncrowded would have been given a standard identifier. Also, some non-U.S. corporations use a U.S.-based company to register for them, giving them a choice of using a country designator or not.

The Domain Name System (DNS) is a service provided by the TCP/IP family of protocols that helps in the addressing of messages. When you address mail to bozo@clowns_r_us.com, the DNS system translates this symbolic name into an IP address by looking up the domain name in a database. DNS lets you forget about those IP addresses, allowing much simpler names: the domain name. The usual syntax for sending a message to a user on the Internet is username@domain_name, as the "bozo" example shows. (DNS doesn’t have to run on top of TCP/IP, but it usually will on Linux systems.)

If a company decides not to get their own domain name but will use an on-line service (such as CompuServe or America Online), a unique domain name is not needed. Instead, the domain name of the service provider is part of the address. A user is then identified by a name or number of the service provider, such as 12345.123@compuserve.com.

In practice, when you send a symbolic name to DNS, it doesn’t check the user’s actual host, otherwise there would be millions of IP addresses in the database. Instead, DNS is concerned with only the network part of the address, which it translates to the network IP address and sends out over the network. When the receiving network’s Internet machine receives the message, it uses an internal database of its own to look up the user’s host and takes care of that part of the trip.