On a basic level, domain names are important because the Internet's addressing scheme is not very effective without them.
Each computer on the Internet has an Internet protocol (IP) address:
But domain names are much more than just a technical shortcut. A short, memorable domain name can make the difference between creating a successful Web presence and getting lost in cyberspace.
A domain name adds credibility to your small business. Having your own domain name makes your company look professional. If you publish your site through an ISP or a free Web hosting site, you'll end up with a URL such as www.yourisp.com/-yourbusiness. This generic address does not inspire confidence in a customer like a www.yourcompany.com domain name does. And since many people don't yet trust the Internet and e-commerce, you'll want to do what you can to prove that your small business deserves their money. If you're not willing to pay the money to register an appropriate domain name, why would consumers think you'd put any effort into creating valuable products or services?