Chapter 2
Technology Infrastructure:
The Internet and the World
Wide Web
Technology Overview

Basic technology structure for electronic
commerce = computer networks and Internet.

The computers in these networks run such
software as - operating systems, database
managers, encryption software, multimedia
creation and viewing software, and the
graphical user interface

The Internet - the hardware that connects the
computers together and the hardware that
connects the networks together
Packet-Switched Networks

Local area network (LAN) = network of computers
close together – example?

Wide area network (WAN) = network of computers
connected over a great distance – example?

Circuit switching - used in telephone communication
–from a central location.

Internet uses packet switching - files broken down
into small pieces = packets - labeled with their origin,
sequence, and destination addresses.

Computers that decide how best to forward each
packet in a packet-switched network = ‘routers’.
Routing Packets
Data Transmission
Protocols
•
•
Protocol = collection of rules for formatting, ordering,
and error-checking data sent across a network.
Open architecture has four key rules contributing to the
success of the Internet.
• Independent networks should not require any
internal changes to be connected to the network.
• Packets that do not arrive at their destinations must
be retransmitted from their source network.
• Router computers act as receive-and-forward
devices - they do not retain information about the
packets that they handle.
• No global control exists over the network.
Internet Protocols

Transmission Control Protocol (TCP) and Internet
Protocol (IP) - two protocols that support the Internet
operation = TCP/IP.

TCP controls the disassembly of a message into
packets before it is transmitted over the Internet and
the reassembly of those packets when they reach
their destination.

IP specifies the addressing details for each packet
being transmitted.

IP addresses allows over 4 billion unique addresses
for computers to connect to the Internet.
Domain Names

Make the numbering system easier to use, an
alternative addressing method that uses words
was created.

An address, such as www.course.com, is called
a domain name.

The last part of a domain name (i.e., ‘.com’) is
the most general identifier in the name and is
called a ‘top-level domain’ (TLD).
Top-level Domain Names
Other Protocols

Hypertext Transfer Protocol (HTTP) - set of rules for
delivering Web pages over the Internet.

Simple Mail Transfer Protocol (SMTP) - specifies the
exact format of a mail message.

E-mail program running on a user’s computer can
request mail from the company’s main e-mail computer
using the Post Office Protocol (POP).

Interactive Mail Access Protocol (IMAP) same basic
functions as POP, but includes additional features.

Multipurpose Internet Mail Extensions (MIME) - allow the
user to attach binary files to e-mail.
Internet Utility Programs

Special utility programs developed to verify
network information since there is no central
control of the Internet

Examples :
 Finger allows users to obtain limited
information about other network users – who
is logged on, when, etc
 Ping tests the connectivity between two
computers connected to the Internet.
 Tracert, a route-tracing program, sends data
packets to every computer on the path
(Internet) between your computer and
another computer and clocks the packets’
round-trip times.
Internet Utility Programs
Internet Applications
Electronic Mail
• Most popular form of business
communication – surpassing the telephone,
conventional mail, and fax in volume.
• Able to send documents and other
information as attachments.
• Disadvantage - Spam (or bulk mail) and
computer virus delivered to your computer
as email attachments.
Internet Applications
Internet Applications
Telnet
• An application that allows you to log on to a
remote computer that is attached to the
Internet.
• It allows the user to run software that doesn’t
have a Web interface on a remote computer.
• As more companies place information on
Web pages (accessible through any Web
browser), the use of Telnet will continue to
decrease.
Internet Applications
Internet Applications
FTP
•
•
•
File Transfer Protocol
Defines the formats used to transfer
files between TCP/IP-connected
computers.
Full privilege FTP allows remote
uploading and downloading of files.
Internet Applications
Markup Languages and the
Web

Web pages are marked with tags to indicate the
display and formatting of page elements.

SGML (Standard Generalized Markup
Language) is a meta language, which is a
language that can be used to define other
languages.

HTML and XML are both derivatives of SGML.
Markup Languages and the
Web
QUESTIONS

What are the two primary protocols on which
the Internet is based?

What protocol(s) are used to send e-mail and
which to receive e-mail?

What three Internet applications were
developed in the early days of the ARPANET?

What Meta language was HTML and XML
derived from?
HTML Tags

An HTML document contains both document
text and elements.

Tags are codes that are used to define where
an HTML element starts and (if necessary)
where it ends.

In an HTML document, each tag is enclosed in
brackets (<>).

A two-sided tag set has an opening tag and a
closing tag.
HTML Tags
HTML Tags
HTML Links

Hyperlinks are bits of text that connect the
current document to:
• another location in the same document
• another document on the same host
machine
• another document on the Internet

Hyperlinks are created using the HTML
anchor tag.
Scripting Language and
Style Sheet Capabilities
 Web
designers can use the
OBJECT tag to embed scripting
language codes in HTML pages
(this is also called client-side
scripting).
 Scripts can execute programs on
computers that display those
pages.
HTML Editors

HTML documents can be created in any
general-purpose text editor or word processor.

Sophisticated editors can create full-scale,
commercial-grade Web sites with database
access, graphics, fill-in forms, and display the
Web page along with the HTML code.

Microsoft FrontPage and Macromedia
Dreamweaver are examples of Web site
builders.
HTML Editors
Web Clients and Web
Servers

Your PC is a Web client in a worldwide clientserver network.

Web software is platform-neutral, which allows
your PC to communicate with different types of
computers easily and effectively.

Computers that are connected to the Internet
and that contain documents made publicly
available are called Web servers.

The word ‘server’ is used to describe several
types of computer hardware and software.
Web Clients and Web
Servers
Web Client-Server
Architecture

Client-server architecture is used on LANs,
WANs, and the Web.

The computers that perform the server function
usually have more memory and larger, faster
disk drives than the client computers they
serve.

Web pages containing many objects can be
slow to appear in the client’s Web browser
because each page element requires a
separate request and response.
Two-Tier Client-Server
Architecture

The basic client-server model is a two-tier
model - it has only one client and one server.

A typical request message from a client to a
server consists of three major parts (a request
line, optional request headers, and an optional
entity body).

A server’s response to a request message also
consists of three parts (a response header line,
one or more response header fields, and an
optional entity body).
Two-Tier Client-Server
Architecture
Three-Tier and N-Tier
Client-Server Architectures

A three-tier architecture extends the two-tier
architecture to allow additional processing to
occur before responding to the client’s request.

The third tier usually includes software
applications that supply information to the Web
server.

Higher-order architectures (those with more
than three tiers), are called ‘n-tier’ architectures.
Three-Tier and N-Tier
Client-Server Architectures
Intranets and Extranets
Intranets
• An intranet is an interconnected network (or
internet – small “i” intended) that does not
extend beyond the organization that created
it.
• Intranets are an extremely popular and lowcost way to distribute corporate information.
• An intranet uses Web browsers and Internetbased protocols (including TCP/IP, FTP,
Telnet, HTML, and HTTP) and often includes
a firewall.
Intranets and Extranets
Extranets
• Extranets are intranets that have been
extended to include specific entities
outside the boundaries of the
organization (business partners,
suppliers, etc.).
•
An extranet can be a public network, a
secure (private) network, or a virtual
private network (VPN).
QUESTIONS

If a Web server interacts with a
database, how many tiers would there
be in this client-server architecture?

What is a network called that uses
Internet protocols and applications but
is only available within a single
company?
Chapter 3
Selling on the Web:
Revenue Models and
Building a Web Presence
Revenue Models for
Selling on the Web

6 types
Web catalog
 Information sales
 Advertising-supported
 Advertising-subscription mixed
 Fee-for-transaction
 Fee-for service

Revenue Models for Selling
on the Web

Web catalog model
 Similar to mail order catalog revenue model.
 A Web site replaces or supplements print catalog
distribution with information on its Web site.
 Customers can place orders through the Web site
or by telephone.
 Examples : Computer manufacturers – Dell,
Gateway, Apparel Retailers - Eddie Bauer, Land’s
End, L. L. Bean, Talbots, Flowers and gifts - 1800-Flowers, General Discounters

Information sales
 Sells information or other digital content
 Examples : Lexis-Nexis (legal information),
Proquest (documents)
Revenue Models for Selling
on the Web

Advertising-supported business model
 Charge for advertising and the money is spent
on maintaining the site
 Examples : Web Portals, Newspaper publishers
, Employment Sites

Advertising subscription mixed model
 In this mixed model, subscribers pay a fee and
accept some level of advertising.
 Examples : The New York Times , The Wall
Street Journal, The Reuters wire service,
Business Week , ESPN
Revenue Models for Selling on
the Web


Fee-for-transaction model
 Receives a fee for facilitating a transaction.
 Examples : Online travel agencies, Stock brokerage firms,
Automobile Sales, Insurance Brokers, Event tickets, Real
estate and mortgage loan brokers, Online banking and
financial services
Fee-for-services model
 Fee is based on the value of the service provided.
 Range from games and entertainment to financial advice
and the professional services of accountants, lawyers and
physicians
 Online Games - site visitors must pay to play these games,
Concerts and films - companies will provide streaming video
of concerts and films to paying customers, professional
services - laws preventing professionals from extending their
practices to the Web
Creating an Effective Web
Presence




Businesses always create a presence in the physical world by
building stores and office buildings.
The only contact that customers and other stakeholders have
with a firm on the Web is through its presence there.
Creating an effective Web presence can be critical for even the
smallest and newest firm operating on the Web.
A Web site can perform many image-creation tasks very
effectively, including:
 Serving as a sales brochure
 Serving as a product showroom
 Showing a financial report
 Posting an employment ad
 Serving as a customer contact point
Achieving Web Presence
Goals




Different firms - establish different Web presence goals - Coca
Cola and Pepsi have developed different Web presences.
It conveys the image the company wants to project.
An effective site is one that creates an attractive presence that
meets the objectives of the business or other organization.
Possible objectives include:
 attracting visitors to the Web site
 making the site interesting enough
 convincing visitors to follow the site’s links
 creating an impression of corporate image
 building a trusting relationship with visitors
 reinforcing positive images of the organization
 encouraging visitors to return to the site
The Toyota Site

The Toyota site is a good example of an
effective Web presence.

The site provides:
 a product showroom feature
 links to detailed information about
each product line
 links to dealers
 links to information about company
The Toyota Site
Meeting the Needs of Web
Site Visitors


Successful businesses on the Web realize that every visitor to
their Web site is a potential customer.
People who visit a Web site are there for a reason.
 to learn about products or services that the company offers,
 to buy the products or services that the company offers,
 to obtain information about warranty service, or repair
policies for products they have purchased
 to obtain general information about the company or
organization
 to obtain financial information for making an investment or
credit granting decision
 to identify the people who manage the company or
organization
 to obtain contact information for a person or department in
the organization.
Trust and Loyalty

When customers buy a product, they are also buying
a service element.

A seller can create value in a relationship with a
customer by nurturing customers’ trust and
developing it into loyalty.

Customer service is a problem for many corporate
sites.

A primary weak spot for many sites is the lack of
integration between the company's call centers and
their Web sites.
Rating E-Business Web
Sites

Two companies routinely review electronic
commerce Web sites for usability, customer
service, and other factors.

BizRate.com provides a comparison
shopping service and offers links to sites
with low prices and good service ratings
for specific products.

Gomez.com provides scorecards for
electronic commerce sits in specific
categories.
Web Site Usability

Firms are now starting to perform usability
testing of their Web sites – examples :
Eastman Kodak, T. Rowe Price, and Maytag

Putting the customer at the center of all site
designs is called a customer-centric
approach to Web site design.

Electronic commerce sites are encouraged
to focus on the customer’s buying process
rather than the company’s perspective and
organization.
QUESTIONS

What are the key objectives an
organisation should have for its Web
site?

What is the goal of usability testing?
Identifying and Reaching
Customers

An important element of corporate Web
presence is connecting with site visitors
who are customers or potential
customers.

Mass media is a one-to-many
communication model, the Web is a
many-to-one communication model, and
personal contact is a one-to-one
communication model.
Connecting with Customers




Most businesses are familiar with two ways of
identifying and reaching customers: personal contact
and mass media = communication modes.
Some experts also distinguish between broadcast
(TV, radio, etc) and addressable media (direct mailing
)
The Web is an intermediate step between mass
media and personal contact.
Using the Web to communicate with potential
customers offers many of the advantages of personal
contact selling and many of the cost savings of mass
media.
QUESTIONS

What is addressable media?

What is prospecting?

What is the model in which
communication flows from one
advertiser to many customers?
EXERCISE

Go to the Web and choose 1 local site
for each revenue model.

Explain how the site matches the
model.
ASSIGNMENT
Due date : 7 March 2004
 10%
 Choose any e-commerce site and
review it.
 In your review, include items 1, 2, 3, 5,
6, 7, (pg 28) and revenue model used.
