One of my visitors recently asked me whether he could create multiple websites with a single domain name. My experience with new webmasters is that such questions usually indicate a certain amount of confusion about the various terms used by webmasters and about the entire process of creating a website. I shall attempt to answer the question in this article, and hopefully clear up any misunderstanding.
A domain name is simply a name like "thesitewizard.com". You pay a domain name registrar an annual fee for the right to use that name. A website is, on the other hand, a set of documents placed on a computer that is permanently connected to the Internet. When you associate a domain name, like thesitewizard.com, with that set of documents, others can view them by simply using a web browser to go to that domain. For example, when you connect to thesitewizard.com using your browser, you end up on this website, and you can read articles that I make available here for others to read, like the one you're currently looking at.
You can do a lot of things when you buy a domain name of your own. For example, if you own a domain like "google.com" (which you can't, since someone has already bought it), you can make "gmail.google.com" point to a different website from (say) "www.google.com". These names, "gmail.google.com" and "www.google.com", are just subdomains of the main "google.com". That is, once you own the main domain, like google.com, you can add any number of subdomains you want, and have them point to different websites. Alternatively, you can also have them point to the same website if that's what you prefer. For example, both thesitewizard.com and www.thesitewizard.com point to the same website.
To make subdomains on your website, you will need the cooperation of your web host. A web host is simply the company that owns the computer where you place your website. You need a web host because your own computer isn't permanently connected to the Internet. Even if it is (eg, because you never turn off your computer), your broadband provider will usually not allow you to host a website using that connection. There are also a number of other complications involved, so it's simplest to think of a web host as a necessity if you want to create your own website.
Many (if not all) commercial web hosts will let you create subdomains and associate them with a new website (or the same website). This may or may not involve the payment of a additional fee per subdomain; it varies from web host to web host. You do not however have to "buy" a subdomain; once you own the main domain, all its subdomains belong to you.
It's also possible to avoid using sub-domains entirely and still create multiple websites on a single domain. For example, if you own a domain like "example.com", and you want each member of your family to have their own website on that domain, you can have each person create his/her website and place it in its own folder. So, for example, Tom may have his website in "www.example.com/tom/" while Dick has his in "www.example.com/dick/", and Harry in "www.example.com/harry/". You can create any number of folders this way, each associated with a different website.
Having said all that, before you rush out to create multiple websites using a single domain name, you should probably also know that there are pros and cons to it. For details about the advantages and disadvantages of this practice, please read the article Should I Start My Site Under a New Domain Name or as a Subdirectory (Or Subdomain) Of My Existing Site?.
In addition, since such a question usually means that you are not entirely clear about what is involved in setting up a website, I strongly recommend that you take a look at How to Create Your Own Website: The Beginner's A-Z Guide. The article was written for the newcomer and explains step-by-step what is involved in making a website from start to finish. With such an overview, you will have a better understanding of the whole process, and hopefully find things less confusing.
The steps to getting your own domain name, as well as where you can buy one is described in How to Register Your Own Domain Name. However, unless you already know what to do after you get a domain name, you should really start with the beginner's guide mentioned earlier, since it will go through, in a systematic manner, the relevant things you need to do to get started quickly.
All the best for your website-making adventure!
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