First of all check whether any network adapter is installed in your computer or not (Start > Settings > Network and Dial – up Connections). In the window try to find out whether an icon naming Local Area Connection is there or not. Right click over it and check the properties. Check whether the adapter is install (the adapter name will be there to confirm installation) and if it is not installed go to Add/Remove Hardware install section and open it (My Computer > Control Panel > Add/Remove hardware)

Now in the window check the option Add/Troubleshoot a device and then click next. It will take time to search the different Hardware components of your computer.

Now select add a new device and click next. And select the option no I want to select the hardware from the list. Click next select network adapters from the list and then click next.

Now from the manufacture list select Microsoft and as a result in the right column you will find network loop back adapter. Select this and install by clicking the next button. Actually Microsoft has provided a facility to install a dummy of it. So no need to purchase it from the market.

After successful installation of this adapter you can also install different clients, services and protocols according to your suite. Check the option show icon in the taskbar when connected. After successfully doing this process you will find an icon of two overlapped computers in your taskbar at lower right corner.

Right click on that icon and select status than click on properties button. As a result a new window will open.
From the new window highlight Internet protocol (TCP/IP) and click on properties button. In the properties section click on the advanced button. Here you can add or remove different IP address. This process will be very useful when you will develop more than one website on the same computer. And by this you will be able to assign different IP addresses to different websites.

Now I will show you how to assign domain name to your computer. For this first of all run the command dcpromo from the start menu. This will bring you the Active Directory Installation Wizard. I will not describe it fully here, just follow the on screen instruction and go ahead.

After the successfully installation of Active directory Service computer will reboot itself. Now go the administration section (My Computer > Control Panel > Administrative Tools). Here you will see some new icons of Active Directory. Any way just double clicks the DNS server icon and makes a new zone. In the new zone try to make some domains and host. You can also create aliases. These are the address by which your website will be accessed.