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Addon domains hosting is similar to virtualization. You can host multiple domains or multiple websites on a single account which are basically setup as sub domains on the main domain but the domains you add as a addon domain gets parked on top of the subdomain. You can see website of the sub domain when you type your addon domain in browser bu the URL never changes as it continues with addon domain in the browser.

Parked domain on main domain shows website of the main domain. Similarly parked domain on the subdomain would show website of subdomain. Domain which is parked on subdomain is called addon domain.

Apache configuration needs to know what directory to call when someone opens a particular website in the browser and in case of addon domains, it will load the subdomain. Your addon domain is added as an alias for that subdomain.

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