A Look Through the History of Domain Names

The world of domain names is vast, and as someone who has been investing in domains for over 20 years, I can tell you that understanding the history of domain names is crucial to your success in domain name investing. 

To help you navigate this fascinating journey, I’ve put together a timeline of events that delves into the milestones in the world of internet domains. 

So, let’s dive right in. 

The Early Days: 1950s – 1970s

The Birth of the Internet

The origins of domain names can be traced back to the 1950s, a time when electronic computers were first developed. This technological innovation brought with it the desire for rapid and centralized communication, as people recognized the potential for computers to exchange information and facilitate collaboration.

During this period, computer scientists and engineers were working on the creation of networks to enable computers to communicate with one another. This quest for connectivity led to the development of ARPANET (Advanced Research Projects Agency Network) in the late 1960s. 

ARPANET was a pioneering project funded by the United States Department of Defense, and it laid the groundwork for modern computer networking.

ARPANET’s first connection was established between computers at Stanford Research Institute (SRI) and the University of California, Los Angeles (UCLA) on October 29, 1969. This connection marked the beginning of networked computing and set the stage for the development of the Internet as we know it today. 

With ARPANET’s success, other universities and research institutions soon followed suit and joined the network, gradually expanding its reach and capabilities.

Email and the Predecessor to Domain Names

In 1971, Ray Tomlinson developed email, which separated a user name from a computer name using the @ symbol. Though not called domain names yet, computer names in email addresses laid the groundwork for what would eventually become domain names.

The Emergence of Domain Names: 1980s

The Switch to TCP/IP

In 1982, ARPANET computers switched to TCP/IP, which allowed for an exponential growth of hosts (computers connected to the Internet). With this growth, the need for a more efficient and user-friendly way to identify and locate computers on the network became an essential requirement. 

Early systems relied on numerical addresses, which were difficult to remember and prone to errors. 

This challenge eventually led to the development of the domain name system (DNS) in the early 1980s, which allowed human-readable domain names to be associated with numerical IP addresses, making it easier for people to access resources on the network.

In other words, to make content easier to locate, the DNS (domain name system) was created to associate a string of letters (domain name) with an IP address.

Top-Level Domains (TLDs)

The challenge of organizing domain names led to the introduction of top-level domains, separated by country, category, and multi-organizations. 

A top-level domain (commonly referred  to as TLD) is the last part of a domain name, such as .com, .net, or .org. 

This came about in 1984, when the Network Working Group, a collective of researchers and engineers responsible for the development and maintenance of Internet standards, published a groundbreaking document called Request for Comments (RFC) 920. 

The author of this research was the renowned computer scientist Jon Postel. RFC 920 proposed a new system for organizing and categorizing domain names on the Internet, which would later become the foundation of the domain name system (DNS) we use today.

At the core of Postel’s proposal was the idea of top-level domains (TLDs), which are the highest level of the domain name hierarchy. TLDs serve as a way to categorize and group domain names according to certain criteria, making it easier for users to find and remember them. 

RFC 920 established seven original TLDs, each with a specific purpose. These were:

.com – Intended for commercial organizations and businesses, .com quickly became the most popular TLD and remains so to this day. The majority of businesses and brands prefer to have a .com domain, as it is widely recognized and trusted by Internet users around the world.

.edu – Designed for educational institutions, such as colleges, universities, and research facilities. This TLD helps users easily identify websites associated with academia and education.

.gov – Reserved for government entities, agencies, and organizations at various levels (federal, state, and local) within the United States. The .gov TLD lends credibility and authority to government websites.

.mil – Exclusive to the United States military, this TLD is used for websites related to the various branches of the armed forces and their associated organizations.

.org – Originally intended for non-profit organizations, .org has since expanded to include various other types of entities, including non-governmental organizations (NGOs), community groups, and even some for-profit entities.

.net – Initially conceived for network infrastructure providers, such as Internet service providers (ISPs) and data centers, .net has evolved over time to become a general-purpose TLD used by businesses and individuals alike.

.int – Created for international organizations and entities that have been established by international treaties, such as the United Nations, the World Health Organization, and the International Monetary Fund.

The creation of these seven TLDs was a pivotal moment in the history of domain names, as it laid the groundwork for the diverse and expansive domain name system we use today. 

Over the years, the list of TLDs has grown significantly, with hundreds of new generic and country-specific TLDs introduced to accommodate the ever-changing needs of the Internet community.

The Commercialization of the Internet: 1990s

Domain Registration Goes Public

In 1990, the Internet began to transition from a network primarily used by academic and research institutions to a commercial phenomenon that would transform the way people communicate, access information, and conduct business. 

This shift was driven in part by the release of the World Wide Web, which was developed by Tim Berners-Lee in 1989.

As the internet gained popularity and expanded its reach, the demand for domain names grew exponentially. Businesses recognized the potential of having a unique online presence that could be easily accessed by anyone around the world. 

To accommodate this growing demand, domain registration was opened to the public in 1990, allowing anyone to register a domain name for their website or email address.

With the advent of public domain registration, the process of obtaining a domain name became more accessible and user-friendly. This marked a significant milestone in the history of domain names, as it created opportunities for individuals and businesses to be present on the internet.

By 1995, Network Solutions was granted the ability to charge for domain name registration, with prices starting at $100 for a two-year registration.

As domain registration became more popular, a variety of companies and organizations saw the business opportunity, and began offering domain registration services. This made it easier for users to secure their desired domain names. 

This also led to the development of a secondary market for domain names, that is, domain name investing, as investors and speculators began buying and selling domain names in hopes of turning a profit.

The Dot-Com Bubble and its Aftermath: 2000s

The Dot-Com Crash

The dot-com era, which occurred between 1997 and 2001, was a significant event in the history of the Internet and domain names. 

The 1990’s saw a rapid rise in the number of Internet-based companies, commonly referred to as “dot-coms” because of their .com top-level domain (TLD) usage. Many of these companies were startups that emerged as the Internet was experiencing explosive growth and capturing the interest of investors.

The dot-com boom was fueled by excessive speculation, as investors poured money into Internet companies with the expectation that they would quickly grow and generate significant profits. 

This led to a stock market bubble, with the share prices of many dot-com companies reaching unsustainable levels. Keep in mind that many of these start-up companies had unproven business models and were not generating any revenue, however due to the excitement surrounding the internet’s potential, they were receiving massive amounts of investment capital.

In the early 2000s, the bubble burst, and the stock market experienced a sharp decline in value, particularly in the technology sector. As a result, many dot-com companies went bankrupt or were forced to scale back their operations significantly. 

By 2004, it was estimated that over 50% of Internet-based companies had failed, marking the end of the dot-com era.

This so-called dot-com crash had a direct impact on the domain name market, particularly the sales of .com TLDs. 

During the boom years, there was a rush to register .com domain names, as businesses and investors alike sought to capitalize on the perceived value and prestige associated with owning a .com domain, however, when the bubble burst, the demand for .com domains temporarily decreased, and investors became more cautious.

Despite the dot-com crash and the temporary depression in .com TLD sales, the Internet continued to grow and evolve. The lessons learned during this period helped shape the development of more sustainable business models and practices for Internet companies. 

The Truth in Domain Names Act

Like most things in life, there were the more shady entrepreneurs that took advantage of the internet by luring visitors to websites using deceptive domain names.

Deceptive domain names refer to website URLs that use well-known brand names, popular characters, or terms that may attract unsuspecting users, to click on them, with the expectation that they would land on a particular website, but instead users are taken to adult websites containing explicit content, often to their surprise and dismay.

This became such a big issue that in 2003, the United States Congress passed a law called the Truth in Domain Names Act. This Act was launched to address the growing concern related to deceptive domain names that intentionally misled users, often taking them to pornographic websites without their consent.

The Truth in Domain Names Act aimed to protect Internet users, particularly minors, from being exposed to inappropriate content through these deceptive practices. 

The law made it a criminal offense to knowingly register, create, or use a domain name with the intent to deceive users into viewing obscene material. This law also helped to raise awareness about the issue of misleading domain names and the need for Internet users to exercise caution when navigating the web. 

While deceptive domain names still exist, the Truth in Domain Names Act has played a role in curbing their prevalence and protecting users from unwanted exposure to explicit content.

Record-Breaking Domain Sales and the Rise of Domain Investing: 2010s

Domain Sales Milestones

From 2010 the valuation of internet domain names started making headlines, as numerous high-value domain sales were being registered. 

Examples include, Sex.com which was sold for $13,000,000 in 2010 and Voice.com, sold for $30,000,000 in 2019.

These high-priced domain sales demonstrate the potential value of domain names as digital assets and showcase the potential for significant returns on domain investments.

Incredible figures right? Here are some more record-breaking domain name sales:

here are some more examples of record-breaking domain name sales:

• Insurance.com: Sold for $35.6 million in 2010.
• CarInsurance.com: Sold for $49.7 million in 2010.
• Internet.com: Sold for $18 million in 2009.
• 360.com: Sold for $17 million in 2015.
• Insure.com: Sold for $16 million in 2009.
• Fund.com: Sold for $9.99 million in 2008.
• Hotels.com: Sold for $11 million in 2001.
• FB.com: Sold for $8.5 million in 2010, purchased by Facebook.
• We.com: Sold for $8 million in 2015.
• Beer.com: Sold for $7 million in 2004.

The Expansion of TLDs

In 2014, the domain name landscape underwent a significant change with the introduction of more than 100 new generic top-level domains (gTLDs). 

Before 2014, the number of TLDs available was limited, with most people and businesses opting for popular TLDs like .com.

The introduction of these new gTLDs greatly expanded the possibilities for creating new websites and offered more options for individuals, businesses, and organizations to choose from when registering a domain name.

Some of the new gTLDs included industry-specific extensions like .photography, .restaurant, or .shop, while others catered to geographic locations, such as .nyc, .london, or .tokyo. This expansion provided users with the opportunity to create domain names that were more descriptive and relevant to their specific needs.

For domain investors, this surge in new gTLDs presented an exciting opportunity to diversify their portfolios and invest in domain names that had the potential to become valuable assets. With a wider array of options to choose from, domain investors could target niche markets, capitalize on emerging trends, and secure domain names that were previously unavailable under the limited set of TLDs.

The introduction of these new gTLDs also had the effect of leveling the playing field in the domain name market. With more options available, it became easier for newcomers to enter the market and secure desirable domain names without having to compete with established players who had already claimed the most sought-after .com domains.

Overall, the addition of over 100 new gTLDs in 2014 not only expanded the possibilities for creating new websites but also opened up new opportunities for domain investors, fostering innovation and competition in the domain name market.

The Chinese Domain Investment Boom

In 2015, Chinese investors poured millions of dollars into the domain name industry, igniting a buying frenzy in numerics and acronyms. This led to a significant increase in the value of premium numeric domains and CHIPs (Chinese Premium Domains).

Numeric domains are domain names that consist solely of numbers, such as 12345.com or 8888.net. These domains are particularly appealing in the Chinese market because numbers hold cultural significance and are often associated with luck, prosperity, and other positive attributes. 

For example, the number 8 is considered particularly auspicious in Chinese culture, making domains with multiple eights highly valuable.

Acronym domains, on the other hand, are those that consist of a series of letters, such as XYZ.com or QWE.net. These domains are often sought after because they can represent a wide range of meanings, making them versatile and valuable assets for businesses and organizations.

CHIPs, or Chinese Premium Domains, are domain names that are particularly appealing to Chinese investors. These domains typically consist of short sequences of numbers, letters, or a combination of both. CHIPs exclude vowels and the letter ‘V’, as they are less desirable in the Chinese market due to language and pronunciation preferences.

This trend demonstrated the global nature of the domain name market and highlighted the importance of understanding regional preferences and cultural factors when investing in domain names.

You never know to whom a domain name can be considered extremely valuable, and it’s important to recognize the potential for certain types of domain names to be valuable based on market demand and cultural factors.

Conclusion

Understanding the history of domain names is essential for anyone looking to excel in domain name investing. From the early days of the Internet to the dot-com bubble and the rise of domain investing, the journey of domain names has been nothing short of fascinating. 

I truly hope this extensive guide through the main events in the history of domains has provided you with some valuable insights and a foundation for you to start your domain name investment journey. 

Remember, an informed investor is a successful investor. 

Now let’s keep the momentum going with the next guide on domain name investing. Next up we take a look at the organizations who handle the infrastructure and resale market of domain names.

For the full list of knowledge articles head on to our Domains Investment Hub.