Particular IP addresses are often quite limited as far as mobility; they are allocated to particular users (or organizations) in blocks, often quite large, which means that in order to move a single IP address from one physical location to another you would have to move all the other addresses in the block as well.
A domain name allows the assignment of an entirely portable (and more memorable) alphanumeric string as an alias to any particular IP address. A domain registrant (i.e. the person registering a particular domain name) has essentially complete control over exactly what IP address is referred to by that domain; changes to the domain name record often take effect in minutes or hours, though in theory they can take several days to propagate across the internet.
This is an important feature in the world of commercial web hosting, because the ability to move a web site from one physical location to another without changing the domain name (and hence the URL) means that web site owners are not essentially "held hostage" to a particular web hosting company.
A secondary purpose for using domain names rather than IP addresses is that it allows IP addresses – which are increasingly scarce, and will be in short supply until IPv6 begins to supplant the current standard of IPv4 – to be shared by multiple users, as in name-based web hosting.
When you type a domain name into any application (web browser, ftp client, telnet, etc.), the operating system translates the domain name into an IP address, a multi-step process. First the system checks the local DNS cache to see if that address is already known. If not, the system makes a request to its network DNS server – for those using Network Address Translation, this would be your gateway router, in which case the router repeats the process and defers to its network DNS server(s) if it doesn't know the address. The process repeats indefinitely until someone recognizes the domain name or else the master domain name system (I'm less clear about the details here) says it doesn't know either, in which case you get a message that the domain name could not be resolved.
Assuming the domain name is resolved, all subsequent communication uses the IP address rather than the domain name, although certain types of communication may also include the domain name for reference (e.g. name-based web hosting depends on knowing the domain name in order to correctly deliver the correct web site out of several which may be hosted at the same IP address).
- AboutUs.org (wiki): free directory about (eventually) every domain name in the world, that anyone can edit.
- 2007-12-01 Firms Fight Back in Site Name Game "Mike Denning, VeriSign's general manager of digital brand management services, said 50 percent of his larger clients' domain portfolios -- which include about 10,000 domains -- are defensive domains. MarkMonitor, a domain registrar and brand management company, said 90 percent of its clients' portfolios are defensive domains. .. Many of these defensive domains are registered by companies trying to prevent disgruntled customers from gaining attention through a "gripe site," typically a domain with the trademarked name of the offending company with descriptive suffixes or prefixes. Some of these sites have become quite successful..."
- Part of HTYP's purpose is to facilitate commentary on the activities of various companies. "Gripe sites" serve much this same function, but tend to be very one-sided and not very interactive. HTYP allows discussion to take place from all sides (including rebuttals from the company, should they take it upon themselves to respond), and removes the necessity of finding a good "gripe domain" (as well as the legal liability of possibly being sued for trademark infringement).