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Chapter 7
The Internet, Intranets,
and Extranets
Management Information Systems, Second Edition
Effy Oz
Learning Objectives
 When you finish this chapter, you will
 Know what the Internet is.
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 Know the features for information exchange that
can be conducted over the World Wide Web.
 Understand how the Web facilitates electronic
commerce.
 Be able to generate basic ideas for new business
ventures utilizing the Web.
 Appreciate the major risks and limitations of using
the Web for business activities.
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What is the Internet?
 The Development of the Internet
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 ARPANET was an open system designed
for the free flow of information, but
available only to members of academic
institutions and some of the defense
industry.
 U.S. government decided to split the
network into a civilian one and a military
one.
 Civilian network became the Internet
 Internet is now a network of networks.
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What is the Internet?
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Figure 7.1 The Internet connects millions of servers.
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What is the Internet?
 Growth of the Internet
 Number of servers
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 From a few hundred in 1993, to more than 43,000,000
by mid-1999
 Number of users
 More than 200 million; increased rapidly during 1999
 Commercial Online Services
 Companies like America Online provide “online”
service to paying subscribers on their private
networks.
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What is the Internet?
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Figure 7.2 World growth of the Internet
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What is the Internet?
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Figure 7.3 The number of Internet domain servers
continues to grow
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Internet Domains
 A domain name is assigned to each IP
number.
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 Internet servers are grouped into
different domains.
 Domain names are registered by one of
a group of companies authorized to
assign unique names.
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Internet Domains
Figure 7.4 Examples of
Internet address
suffixes
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Internet Domains
 What’s on the Internet?
 E-mail and file transfer
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 News groups
 Internet Relay Chat (IRC)
 Telephoning on the Web
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The World Wide Web
 Hypertext transfer protocol (HTTP)
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 Allows shared communication of text, fullcolor graphics, tables, forms, video, and
animation
 Hypertext Mark-Up Language (HTML)
 Code for tagging Web files for display
 Browsers
 Software to access the Web
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The World Wide Web
 Creating Web Files
 HTML
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 System of standardized “tags” that format elements text,
graphics, and animation
 Web page editors
 Translate well-known or intuitive commands into code
 Java, ActiveX, and XML
 Web scripting languages
 Common Gateway Interfaces (CGI) and Forms
 Allow a computer that is accessing a particular Web site
to have some similar functions
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The World Wide Web
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Figure 7.5 How a CGI works
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The World Wide Web
 Frames
 Sections of a Web page that let a browser explore a site in
different ways on the same page
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 VRML (Virtual Reality Modeling Language)
 Standard for describing interactive three-dimensional
scenes delivered across the Internet
 Cookies
 Special file a Web site saves on the surfer’s hard disk so
the site can remember something about the surfer later
 Creating Your Own Web Pages
 Search the Web for HTML tutorials
 View and study the source document of a Web page
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Intranets and Extranets
 Intranet
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 A within-organization computer network
that uses Internet technologies to
communicate
 Extranet
 Uses Internet technologies to facilitate
communication and trade between an
organization and its business partners,
such as suppliers
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Intranets and Extranets
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Figure 7.6 An
intranet, an
extranet, and the
Internet from an
individual user’s
perspective
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Intranets and Extranets
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Figure 7.7 Internet, intranet, and extranet potential for
productivity enhancement
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Intranets
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Figure 7.8 Savings resulting from the Internet, intranet, and
extranet e-commerce
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Establishing a Web Site
 Site Name
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 Points of Presence
 Line Capacity
 Site Maintenance
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Establishing a Web Site
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Figure 7.9 Transfer times of a 10-MB file by different media
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Business on the Internet
 Business-to-Business Trading
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 Electronic Data Interchange
 Exchanges and Auctions
 E-catalogs
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Business on the Internet
 Business-to-Consumer Trading
 Advertising
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 Portals
 Free Internet applications
 E-Shopping






E-Payment
Auctions and reverse auctions
Selling content
Selling software
Data push
Stock trading for all
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Business on the Internet
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Figure 7.10 Web-shopping benefits
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Business on the Internet
 Web Demographics
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Figure 7.11 Estimated unique visitors to individual Web sites
during 8/09/99-8/15/99
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Business Considerations
 Web Costs
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 The least costly sites are those constructed
simply to showcase the company’s
products or services.
 The most expensive sites are those
designed to enable electronic commerce.
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Business Considerations
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Figure 7.12 The average cost to a company offering a Web site
for electronic commerce
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Business Considerations
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Figure 7.13
Do’s and
Don’ts in
Web site
construction
for
commercial
purposes
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Business Considerations
 Risks to Organizations
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 Computer viruses
 Interception of passwords and codes by an
unauthorized hacker
 Interception of charge account numbers
 Illegal or socially objectionable use of a site
 Potential misrepresentation
 Risks to Consumers
 Eavesdropping and interception
 Misrepresentation
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The Nations:
Who is on the Net?
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 While the U.S. is leading in developing
new technologies for the Net, other
nations are not far behind.
 Finland has the highest ratio of Internet servers to
users.
 Israeli companies are heavily involved in
developing high-quality Internet phone software.
 Singapore’s government has invested over $2 billion
in state-of-the-art technology infrastructure.
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The Nations:
Who is on the Net?
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Finland
U.S.
Australia
Canada
Netherlands
Singapore
Britain
Germany
Israel
Hong Kong
25
50
60
70
90
125
130
180
185
310
Japan
Taiwan
South Africa
South Korea
Brazil
Thailand
Indonesia
China
India
470
850
930
1,550
8,000
15,000
87,000
561,000
1,200,000
Source: Network Wizards; Killen & Associates, 1997.
Figure 7.14 The number of citizens per Internet server
around the world
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Ethical and Societal Issues
Road Bumps on the Electronic Superhighway
 Free Speech
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 From the advent of the Web,
‘inappropriate’ material has been posted
and disseminated throughout the world.
 There have been calls to sensor what is
transmitted, especially pornography,
violence, and racial slurs.
 Spamming
 Flooding a party’s e-mail box with
messages as a means of protest is
disruptive.
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