Electronic Commerce and the Internet Chapter 6

Chapter Objectives Describe what the Internet is and how it works Explain packet-switching and TCP/IP Describe basic Internet services and the World Wide Web Explain the differences between –Internet-based electronic commerce –Intranet-based electronic commerce –Extranet-based electronic commerce

The Internet A worldwide network of networks Uses a common protocol to communicate Not owned by a single person, organization, or country

Growth in Internet Servers

What You Will Find on the Internet Information –Text, video, audio, graphics –Databases, technical services, software People –Electronic mail –Newsgroups

How Does the Internet Work? Packet-Switching Technology Connecting Independent Networks TCP/IP Internet Services The World Wide Web

Packet-Switching Technology Data sent in small standard sized chunks called “packets” Packets have headers with addresses of sending and receiving computers Users take turns sending packets Packets reassembled by the receiver

Packet Switching

Connecting Independent Networks Router: fundamental building block of the Internet –Has a processor, memory, and network interface –Has no software –Connects LANs to backbone WANs –Forwards packets from one network to another –Determines best routes for packets to travel

TCP/IP Transmission Control Protocol –Breaks information into data packets –Reassembles packets when received –Checks for lost packets Internet Protocol –Each computer given a unique IP address –User name and IP address separated

Routers Enable Different Paths between Networks

Internet Services Telnet File Transfer Protocol (FTP) Listserv Usenet Archie WAIS Gopher

The World Wide Web The most powerful Internet tool Accessed via a Browser –A simple user-friendly interface Web pages –Identified by a URL (Uniform Resource Locator) –Created with Hypertext Markup Language –Use hypertext to link to other pages

Technologies Enabling Internet Communication ISDN (Integrated Services Digital Network) –International standard for digital data communications –Uses existing twisted pair cable T1 Service –Leased lines from long-distance carriers ATM (Asynchronous Transfer Mode) –Method of transmitting voice, video, and data over high speed LANs

Electronic Commerce The on-line exchange of goods, services, and money It has no geographical or time limitations EDI available for over a decade Internet based transactions overtaking EDI

A Model of Electronic Commerce

Three Modes of Electronic Commerce

Exploiting Internet-based Electronic Commerce New rules of electronic commerce –Web site must be aesthetically pleasing –Web site must be easy to use and fast –Web site must motivate people to visit, stay, and return –Advertise your presence on the Web –Learn from your Web site

Intranets as First Step into Electronic Commerce Using the Internet for internal operations Unwanted users blocked from entry Reasons for popularity –Provides inexpensive, quick, international telecommunications infrastructure –Improves product/service quality and decreases costs and cycle time –Is a wise intermediate step in preparing for full electronic commerce

From EDI to Internet-based Extranets Using the Internet to support dealings with other firms Trend toward Extranets rather than EDI