A subdomain is a domain that is a part of a larger domain under the Domain Name System (DNS) hierarchy. It is used as an easy way to create a more memorable Web address for specific or unique content with a website. For example, it could make it easier for users to remember and navigate to the picture gallery of a site by placing it in the address gallery.mysite.com. In this case, the subdomain is gallery.mysite, whereas the main domain is mysite.com.
A subdomain is basically a child domain under a larger parent domain name. In the larger scheme of the Domain Name System, it is considered a third-level domain used to organize site content. In the Web address example above (gallery.mysite.com), the suffix ".com" is the first-level domain, "mysite" is the second-level domain and "gallery" is the third-level domain.
Uses of subdomains include:
Organizing website content according to the category, i.e., gallery.mysite.com, faq.mysite.com, and store.mysite.com
Sharing the allotted domain space with other users by providing them with subdomains and their own username and password with varying levels of feature access. For example, admin.mysite.com, user1.mysite.com, and guest.mysite.com.
Shortening long links and making them easy to remember. For example, the link "http://mysite.com/offers/bonus/referal_id^56$#9?.asp" can be placed into the subdomain "referral.mysite.com" to make it easier to navigate and remember.
The most common use-case of a subdomain is for creating testing or staging version of a website. Often developers test new plugins and updates on a subdomain staging site before publishing on the live site. You can also create subdomains for particular users on your site like ‘guest.yourwebsite.com’, ‘user.yourwebsite.com’ and more. These subdomains will use your hosting space.
Another common use of a subdomain is to create an online e-commerce store. Often companies want a separate subdomain to handle transactions because eCommerce sites typically require more sophisticated configurations.
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