At the beginning of the Internet, there were as many top-level domains as fingers on your hand. That handful comprises the ones we're all still most familiar with today: com, org, edu, gov, and mil (well, mil isn't very well-known, true). But let's back up.
A fully qualified domain name (FQDN) names a computer, a service, or set thereof, on the Internet. If you're reading this from the blog page, as opposed to the feed, you'll see staringatemptypages.blogspot.com in your browser's address field; that's the FQDN of my blog. That domain name represents a hierarchy, and the top of the hierarchy — the narrowest part, the focal point — is at the end. In this case, staringatemptypages.blogspot.com has no subdomains, is at the bottom of the hierarchy. There are lots of subdomains of blogspot.com besides staringatemptypages.
Now, blogspot.com is a domain name owned by Google (nowadays), and because they own that, they also own all lower-level domains, all subdomains (including this one).
If we peel another layer off, we get to com. Because there's nothing above it in the hierarchy, we call it a top-level domain (TLD). The assignment of subdomains of the top-level domains (which subdomains we call second-level domains) is nowadays a task given to registrars, and the whole thing is managed in the US by an organization called the Internet Corporation for Assigned Names and Numbers (ICANN), and it has assigned the various TLDs to different registrars (the registrar for com is Verisign).
Anyway, back in the old days, long before ICANN, the TLDs had specific meanings and were assigned based on how the organization requesting it fit the fairly specific definitions:
- com: Commercial entities. Note that this didn't equate to commercial use of the Internet, which was strongly discouraged then. At the time, “dot com” usually meant a research arm of a company, or some branch that had a joint project going with a university or government.
- org: Non-commercial organizations that didn't fit in another category.
- edu: Educational organizations, such as colleges and universities.
- gov: Non-military government organizations.
- mil: Military organizations
The TLD net was added early on, for network providers, and the resulting six served us well for quite some time (we'll ignore the country-code TLDs here, because they don't matter for this discussion).
But as the worldwide web came about and things exploded, the registration of domain names exploded as well. The TLDs edu, gov, and mil have remained restricted to their original uses, leaving com, org, and net to cover things — and they're all pretty much unrestricted and interchangeable, though org still carries some small non-commercial connotation.
It became common for a new company to try to register a domain name and to find that the reasonable variations were already taken. Besides, said some, there's no really good reason we should be limited to those six. And so a bunch of others were defined, like info, name, and biz. Some have also been defined and given to registrars that put specific restrictions on their assignment: travel, for example, is only used for domains with travel-related functions (such as travel agents and tourist-information web sites); museum is only for domains associated with museums.
Those changes really opened things up, and I believe it's good to have the special-use TLDs — and more should be added, making it easier for people to find what they're looking for and harder to “bad guys” to fool us. But there's a bad side to all of it, especially when we look at the unrestricted, general-use TLDs.
First, there's the difficulty in sorting out the different TLDs when you're looking for something. One of the most famous cases of that is with the second-level domain “whitehouse”. The US government site for the president and his staff is whitehouse.gov, consistent with the use of the gov TLD. But people aren't used to typing “.gov”, and they often get it wrong. And whitehouse.com is a pornographic web site, which has given many an unwary web surfer a big surprise. Also, whitehouse.org is currently a satirical take-off web site (“The officious website of President George W. Bush”), whitehouse.net is a less-clever joke site poking fun at Bush, whitehouse.biz and whitehouse.info both point to the same “parked” domain that's just a commercial link farm.... You get the point, yes?
Second, suppose I should found a new company called the “Frobozz Magic Everything Company”, and I wanted to register it as frobozzmagic. I see that it's available in com, net, org, biz, and info, so which do I pick. Well, com is the obvious one, because it's what most people think about. But maybe my biggest competitor will see that I did that, and will grab the other four and make them point to his company! Maybe I'd better take all five of them, just in case.
On the other side, suppose I wanted to register frobozzmagicco instead. I see that that domain is already taken in the com TLD. I could register my company as frobozzmagicco.biz (or net, or whatever)... but do I want to? Will people keep winding up at frobozzmagicco.com when they're looking for me, and get frustrated and give up? Maybe I should just pick a different domain name instead.
And that's the problem, and that's (1) why the new TLDs aren't very widely used, (2) why they aren't really solving the problem by expanding the reasonable domain name space, and (3) why opening more unrestricted, general-use TLDs does more harm than good.