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I just registered a domain through discountasp.net. When I upload an asp.net web application, in order for me to run it, I need to install the folder the web app is located in as an application. I am still unclear on why this needs to be done? Can someone provide an explanation.

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is some good initial reading.

Making it an application will allow it to spawn worker threads that are isolated from other applications on your web server (assuming they are using different pools). This is good for security and performance. It's really a lot more in depth that that, but it's a good starting point.

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