THE INTERNET AND
E-COMMERCE
Chapter 1
THE DELL SITUATION

$50 million-a-day online distribution channel

Equivalent to five Amazon.coms

Using channels to market other products
WHAT DO YOU THINK???

Is Dell, as an e-business, running any differently
than a traditional bricks-and-mortar business?
HISTORY LESSON

1454


1800


German Inventor Johann Gutenberg develops the
printing press
Alessandro Volta develops the first batteries
1876

Alexander Graham Bell files patent application for
the first telephone
HISTORY LESSON

1908


1969


Henry Ford introduces the Model T
July 20, Neil Armstrong relays the first message
from the moon
1972

Larry Roberts writes the first e-mail management
program to list, read and receive messages
THE INTERNET

Internet


A global network of computers, communication tools,
and information resources
Where is the Internet located?
WHERE IT ALL BEGAN…

Advanced Research Projects Agency (ARPA)
 A segment of the U.S. Department of Defense
 Developed ARPANET - 1969
 Connected 4 major computers:
 Stanford
 Univ. of California at LA
 Univ. of California at Santa Barbara
 Univ. of Utah

Originally developed to allow ongoing
communication in the event of a nuclear
war
THE CHILD BEGINS TO GROW…

By 1973
 Expanded to dozens of universities
 Over 2,000 users
 First International connection
 University College in London
 Royal Establishment in Norway
GROWTH SPURT

1980’s
Internet expands beyond the original
purpose as a research and scientific
resource
 Commercial activity increases

MATURITY

Today
 File sharing and discussions among
educational and research institutions
 Businesses
 Government organizations internationally
 Over 170 million users in the US
 544 Million users globally
GROUND CONTROL TO MAJOR TOM…

Why controls the Internet?

There is no one authority that controls the
Internet.

Governing groups comprised of companies,
governments, and individuals work together to
define new technologies and how to implement
them
INTERNET ANATOMY

Internet Technology
 Transfer documents
 View graphical files
 Log on to remote computers
 Participate in virtual discussions
TCP/IP ???

Transmission Control Protocol / Internet Protocol

The common language or protocol through
which systems communicate on the Internet

The translator that allows all applications and
devices to speak the same language
TCP/IP

Two-layer program

Transmission Control Protocol


Manages the assembling of messages or files into
smaller packets that are transmitted over the
Internet and received by a TCP layer that
reassembles the packets into the original
messages or files
Internet Protocol

Handles the address part of each packet to
ensure it reaches the correct destination
WORLD WIDE WEB



A uniform organizational structure was needed
before the Internet could become as big and
sophisticated as it is today
The WWW went live in 1991 bringing structure
and organization to the boundless information
available online
The Web is the most widely used segment of the
Internet
WWW OR INTERNET

The two terms are NOT interchangeable

The Internet is the global system of networks
that supports the collection of resources known
as the World Wide Web
PICKUP OR DELIVERY???


Web Browser
 A program such as Safari, Internet Explorer or
Firefox that is used to view, surf, download or
access Web documents
Hypertext Transfer Protocol (HTTP or http://)
 The language that moves hypertext files across
the Internet and defines the rules for
transferring those files

May include, text, graphic images, sound video and other
multimedia
IT’S ALL GREEK TO ME
Web browsers read pages coded in a standard
language such as:

Hypertext Markup Language (HTML)
This language uses tags to structure text into
headings, paragraphs and links.
 Standard language for a Web browser

WHAT’S THE ADDRESS?

Millions of computers, each with its own
identification


Internet Protocol or IP address attached to each
computer
Domain Name
Used in replacement of IP address
 Addressing scheme employing words and phrases to
identify and locate computers on the Internet

IT’S YOU DOMAIN

Uniform Resource Locator (URL)


Indicates the address of a Web site
Two Parts
Hypertext Transfer Protocol
 Domain or server


Suffix

Identifies the category of a Web site
MOST COMMONLY USED DOMAIN
NAME EXTENSIONS
Extension
Type of
Organization
Example
.edu
Educational
Institutions
albany.edu
Univ. of Albany
.com
Commercial
Entities
homedepot.com
The Home Depot
.org
Nonprofit
organizations
redcross.org
American red
Cross
.net
Internet
administrative
entities
earthlink.net
EarthLink
Internet service
provider
.gov
Government
sites
census.gov
U.S. Census
Bureau
THE DEMISE OF THE USPS?


E-Mail
 Electronic mail
 Quickly becoming the preferred method of
communication throughout the world
FTP
 File Transfer Protocol
 Allows a user to obtain files over the
Internet
POP QUIZ HOT SHOT
1.
Who monitors the operations of the Internet
2.
What is a Web browser and what does it do?
3.
What can you tell about a site from the domain
name?
4.
What is ARPANET, who created it, and what
was its original purpose?
CONNECTING TO, SEARCHING, AND USING
THE INTERNET
ISPS AND WEB HOSTING SERVICES

Internet Service Provider (ISP)


A company that provides other companies or
individuals with access to or a presence on the
Internet
Web host providers

Allow customers to house their Web-site documents
on the company’s servers
ISPS

Over 7,000 Worldwide

More than 60% are US Companies

Choosing an ISP
Reliable service
 Type of connection needed

GETTING CONNECTED

Dial-up Connections
Most commonly used when the Internet first became
accessible to the public
 Uses an analog modem to transmit computer (digital)
data over phone lines
 Pros:



Available to more people
Cons:
Slower speeds
 Phone not available during use

BROADBAND CONNECTIONS

Digital Subscriber Line (DSL)
Provided by phone company
 Operates over standard phone lines
 Pros:

10 times faster than standard dial-up modem
 Phone line still available during use


Cons:
More expensive
 Availability limited in some areas


Also known as a T line
BROADBAND CONNECTIONS

Cable Modem Service
Requires Cable modem and network interface
 Pros:

Faster speeds
 Higher quality audio/video streaming quality


Cons:
More expensive
 Limited availability in some areas

BROADBAND CONNECTIONS

Integrated Services Digital Network (ISDN)
Oldest form of Broadband
 Operates over phone lines and fiber optic circuts
 Pros:

4-times faster than dial-up
 Most reliable


Cons:

Can cost up to $100 per month
BROADBAND CONNECTIONS

Satellite Broadband Connection
Uses a satellite to transfer data through a dish or
antenna at home or in a business
 Pros:

Available in more rural areas
 10 to 20 times faster than dial-up


Cons:
Expensive
 More equipment

WIRELESS INTERNET

Wireless Internet
Uses radio waves to transmit data
 Ranges of several hundred feet indoors to ten mile
outdoors


Wireless Internet Service Providers (WISP)

Examples Boingo and Pronto

Offer wireless Internet access to the public
SEARCH ENGINES
The phonebooks of the Internet
 Use key words to access lists of documents
containing the key words
 Search Tips

Symbol
+
Function
Example
Finds pages
with all words
+NPR+car talk
--
Finds first key
word, but not
second
DreamweaverXM 2004
““
Find a specific
phrase
“Colorado
River Rafting”
SEARCH TOOLS

Internet Directory

A comprehensive listing of Web sites


Examples: Yahoo and MSN
Crawler-based Search Engine

Use an automated computer programs to scan
Internet databases in search of new or revised Web
pages

Example: Google
POP QUIZ PART DEUX
1.
Why would someone choose a cable modem over
a dial-up connection?
2.
Where can you find a Wireless ISP? How can
you access one?
3.
Why would you use the more heavily trafficked
search engines?
4.
Name and describe the two types of Internet
search tools.
FINALLY, ECOMMERCE…
IT ALL GOES BACK TO FUNDAMENTALS

Buying something new?


How do you make your decisions?
Electronic Commerce (eCommerce)
The conducting of business and communication
transactions by electronic means.
 This makes it possible to save time and in most cases,
save money.

SAY WHAT?

Simply put


eCommerce refers to purchases made from online
stores, also referred to as virtual or cyber stores.
Examples
Buying a book from Amazon
 Lowes purchases power tools through the
manufacturer’s web site
 You participate in an online auction

EVOLUTION

Electronic Communication

Samuel F.B. Morse


1960s


1866
Satellite Transmissions
1991

National Science Foundation lifted restrictions on
commercial use of the Internet
EVOLUTION
“e-Commerce is to the Information Revolution what
the railroad was to the Industrial Revolution.”
-Peter F. Drucker
CHARACTERISTICS OF E-COMMERCE

Transcends geographic boundaries

Levels the playing field


Provides avenues for new methods of advertising,
selling, and distribution
Example: A custom jewelry maker in Ireland can
now sell to customers in the U.S.
CHARACTERISTICS OF E-COMMERCE


Many businesses have developed an online
presence
Bricks-and-Mortar Business


A business with an actual physical location or
storefront
Multichannel Retailer

A retailer that sells its products via traditional
channels as well as online
CHARACTERISTICS OF E-COMMERCE

Pure-play retailers

Sell primarily through the internet
WHY SO POPULAR?


Companies reported increases in sales in the
hundreds of percents after taking their business
online.
e-Commerce is the fastest growing form of
commerce in the world

Major changes in:
Markets
 Industries
 Individual businesses
 Society

PURPOSE OF E-COMMERCE

Basic goal – reach and transact customers using
electronic means.
Supplement revenues
 Increase product recognition
 Reach new customers
 Increase efficiency

Transmitting orders
 Transaction processing
 Payment processing
 Communication with customers on order status

POP QUIZ 3 ½
1.
How can the introductory and permeation
stages of the computer revolution be
differentiated?
2.
How has e-Commerce changed business?
3.
What jobs have been created by e-Commerce?