A question that I frequently hear is "Do I really need to have my own domain name?" The one word answer is "YES.". If you put up your site with some of free web hosting services, only company who benefits is web hosting company. The last person who benefits is you. There are a number of reasons why having your own domain name is a must:1) When you have your own domain name, address of your web site will be of form http://www.yourcompany.com. On other hand, if you put up your site on one of free servers, address of your web site will be something like http://www.somefreewebsite.com/yoursite/. Which of these two sounds more professional? Which of these two is smaller and is hence easier to remember? I leave you to make judgement.
2) The only way to make money online is to build up credibility among your customers. Having your own domain name is first step in doing that. Your customers will feel more comfortable buying whatever it is that you are selling if you have your own domain name. It makes your customers feel that they are dealing with a large, established company, rather than with some fly by night operator.
3) When you have your domain name, you can have multiple email aliases of form alias@yourcompany.com. This allows you to assign different email aliases to different functions, all of them pointing to your actual email address. Hence, for example, for questions related to products and services that you sell, you can have an email address like sales@yourcompany.com. For questions related to newsletter that you publish, you can have an email address like editor@yourcompany.com. For comments/suggestions about your web site, you can direct your customers to feedback@yourcompany.com or webmaster@yourcompany.com. Having different email addresses for different functions not only makes it easier for you to filter your email using your email client program (Eudora Pro, Pegasus Mail, Outlook Express etc.), but also gives your customers impression that yours is a large, established company with whom it is safe to do business.
4) Many search engines give a lot of emphasis to home page of a particular domain, i.e. other things remaining same, a home page of a domain will often rank higher for a particular keyword than any other page. When you use some of free hosting services, your index.html page is home page of your site, but not of that domain. Hence in these search engines, your site will find it very difficult to make it to top 20 or top 30, let alone top 10 for some of really competitive keywords. Just think of amount of traffic that you will lose if this happens.