The word “hosting” does not describe a particular service, but a set of services that offer various functions to a domain name. Having a website and e-mails, as an example, are two separate services although in the general case they come together, so most people consider them as one single service. The truth is, every single domain has a number of DNS records called A and MX, which show the server that manages each particular service - the first one is a numeric IP address, which specifies where the site for the domain address is loaded from, while the latter is an alphanumeric string, which shows the server that manages the emails for the domain name. For example, an A record is 123.123.123.123 and an MX record would be mx1.domain.com. Every time you open a site or send an email, the global DNS servers are contacted to check the name servers that a domain name has and the traffic/message is first forwarded to that company. When you have custom records on their end, the web browser request or the email will then be directed to the correct server. The reasoning behind using separate records is that the two services work with different web protocols and you can have your site hosted by one service provider and the e-mail messages by another.
