Domains are nonmaterial goods. When sold, the only transaction taking place is transfer of domain rights from one user to another. Barring any form of copyright or trademark violation, virtually any domain name can be bought or sold. Generic domain names, such as car.com or computer.com, are not legally protected and can therefore theoretically be reserved by anyone.
Domain names put a friendly face on hard-to-remember numeric internet addresses. Every computer on the internet has a unique internet protocol (IP) number. A domain name represents one IP number or more. For example, the IP number for the domain name whitehouse.gov is 220.127.116.11. The whole purpose is to give users an easy-to-remember handle so that when sending an e-mail to, let's say, the President of the United States, you can type firstname.lastname@example.org instead of the more unwieldy email@example.com.
If you get a domain name that describes your company's business or name, people can remember the name easily and can return to your site without having to consult their documents. In fact, if you get a good name that describes your product or service, you might even get people who were trying their luck by typing "www.yourproductname.com" in their browser.
Next are third-level domains, which are written immediately to the left of a second-level domain. There can be fourth- and fifth-level domains, and so on, with virtually no limitation. An example of an operational domain name with four levels of domain labels is sos.state.oh.us. Each label is separated by a full stop (dot). 'sos' is said to be a sub-domain of 'state.oh.us', and 'state' a sub-domain of 'oh.us', etc. In general, subdomains are domains subordinate to their parent domain. An example of very deep levels of subdomain ordering are the IPv6 reverse resolution DNS zones, e.g., 18.104.22.168.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.ip6.arpa, which is the reverse DNS resolution domain name for the IP address of a loopback interface, or the localhost name.
I’ve tried to be charitable to Verisign in my reading of Site-Finder-gate. Even then it seems quite clear that they were deep within the grey areas of their contract with ICANN, and that they knowingly acted against the spirit of the Internet that they’d been entrusted to build. That said, I respect the hustle — Verisign were, and continue to be, a publicly traded company with a responsibility to deliver value to their shareholders, and this quasi-bait-and-switch was a pretty inspired way to do it.