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Chapter 7
E-Commerce: The Internet,
Intranets, and Extranets
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Learning Objectives
• Explain how the Internet functions
• List the features for information exchange that can be
conducted over the World Wide Web
• Explain how the Web facilitates electronic commerce
• Explain basic business models on the Web
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What is the Internet?
• The Development of the Internet
– ARPANET was open system designed for the free
flow of information, but available only to members of
academic institutions and some in 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? (Cont.)
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Growth of the Internet
• Number of servers
– 147 million in mid-2003
• Number of users
– More than 600 million; 10 percent of the world
population
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Growth of the Internet (Cont.)
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Growth of the Internet (Cont.)
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Growth of the Internet
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How the Internet Works
• Definitions
– Uniform Resource Locator (URL)
– Hypertext Transfer Protocol (HTTP)
– Domain Name
– Hypertext Markup Language (HTML)
– Top Level Domain (TLD)
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How the Internet Works (Cont.)
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Internet Domains
• IP Number
• Domain Naming System (DNS)
• A domain name is assigned to each IP address
• Domain names are registered by one of a group of
companies authorized to assign unique names
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Internet Domains (Cont.)
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Internet Addressing
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Static and Dynamic IP Numbers
• Static:
– Servers and many other computers and devices are
assigned a permanent IP number
• Dynamic:
– A computer connected to the Internet intermittently
may be assigned a temporary IP number for the
duration of its connection only
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Common Internet Applications
• Email
• File Transfer
• Newsgroups and Blogs
• Instant Messaging
• Internet Telephoning
• Web Browsers
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The World Wide Web
• Web Software
– HTML and XML
– Web Page Editors
– Java, JavaScript, and ActiveX
– Web-Application-Interfaces
– VRML
– Cookies
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The World Wide Web (Cont.)
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Intranets and Extranets
– Intranet
• 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 (Cont.)
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Intranets and Extranets (Cont.)
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Intranets and Extranets (Cont.)
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Establishing an E-Commerce
Web Site
•
Several Options
1. Installing their own server
2. Contracting with an ISP
3. Contracting with a Web portal
4. Establishing an electronic storefront
5. Contracting with a Web hosting service
6. Using a virtual Web server
7. Setting up a subdomain
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Establishing an E-Commerce
Web Site (Cont.)
• Dedicated Server
– Expensive option with the greatest degree of
control
– Requires expertise
– Specialists needed maintain the server
• Load balancing transfers visitor inquiries from a
busy server to a less busy server
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Establishing an E-Commerce
Web Site (Cont.)
• ISP Site
– Low-fee or free space for individual or business
Web sites.
– Many small businesses avoid this option
– Can give the appearance that such online
businesses are ephemeral
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Establishing an E-Commerce
Web Site (Cont.)
• Web portal
– Limited space and design control
• Electronic Storefront
– Cybermall
• Web Hosting Service
• Virtual Web Server
• Subdomain
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Establishing an E-Commerce
Web Site (Cont.)
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Establishing an E-Commerce
Web Site (Cont.)
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Business-to-Business Trading
• Electronic Data Interchange
• Exchanges and Auctions
• Online Business Alliances
• Application and Storage Service Providers
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Business-to-Consumer Trading
• Advertising
– Unique visitors per month
– Unique visitor pages
– Reach percentage
– Banners
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Business-to-Consumer Trading
(Cont.)
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Business-to-Consumer Trading
(Cont.)
• E-retailing
– Customer Relationship Management (CRM)
– Consumer Profiling
•
•
•
•
•
Auctions and Reverse Auctions
Content Providers
Software Sales
Stock Trading
Distributed R&D
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Business-to-Consumer Trading
(Cont.)
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Rules for Successful Online
Business Transactions
• Target the right customer
• Own the customer’s total experience
• Personalize the service
• Shorten the business cycle
• Let the customers help themselves
• Be proactive
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Successful Business Models
• Niche Retailing
• Selling Hard-to-obtain information
• Click-and-mortar retailing
• Rules for Successful Web Page Design
• E-Government
• M-Commerce
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E-Commerce Practices on the
Internet
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Management Challenges and
Solutions
• Reduced Control over Information Resources
• Reduced Budgetary Control
• Cost/Benefit Analysis
• Scalability
• Security
• Education
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E-Commerce is Every Commerce
• Web technologies have been integrated into the
business world
• Information that flows inside an organization
actually uses the Internet segments of intranets
• Businesses not yet on the Internet will eventually
be there
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Online Annoyances
• Spam
• Pop up Windows
• Adware and Spyware
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Summary
• How the Internet functions
• Information exchange over the Internet
• The web facilitates electronic commerce
• Business models on the Web
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