Unit I: Introduction:

Introduction to Internet: Internet Terminology, History of the Internet, Advantages& disadvantages of

Internet, How internet works.

Electronic Commerce: Definition, types, advantages and disadvantages, E-Commerce transaction on World
Wide Web. Electronic Market-Online shopping, three models of Electronic Market - E-Business.

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1. Internet Terminology
Domain

While every computer has its own unique address, every user using the Internet has a unique address called a
domain. A domain recognizes one or more IP addresses. An example of a domain is weather.com and is part
of the URL such as https://www.weather.com. The standard top-level domains are:

com - Commercial business

edu - Educational institutions

gov - Government agencies

mil - Military

net - Networks organization

org - Organizations (nonprofit)

There are additional top-level domains that are now recognized on the Internet. They include:

aero - Air-transport industry

biz - Businesses

coop - Cooperatives

info - Unrestricted use

museum - museums

pro - Accountants, lawyers, physicians, and other professionals

tv - Television

Some countries use a sub-domain or geographical domain as part of their address. Fox example, an academic
institution such as Oxford University in the United Kingdom can use ac.uk. An example of a URL with this
domain is http://www.ox.ac.uk/.

Browser

A piece of software such as Mozilla Firefox and Internet Explorer that allows a computer to access and
display documents, view pictures, hear sound, and view video clips from the World Wide Web.

E-mail

Mail that's electronically transmitted by your computer. As opposed to snail mail, e-mail sends your messages
instantaneously, anywhere in the world. It has the capability to send messages at any time and to anyone.

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File Transfer Protocol (FTP)

The standard method for downloading and uploading files over the Internet. With FTP, you can login to a
server and transfer files (meaning you can "send" or "receive" files).

Homepage

The first page that is viewed when the browser starts. It is also the page of a Web site that provides the
introduction or content with links.

Hypertext Transfer Protocol (HTTP)

The abbreviation for Hypertext Transfer Protocol. It is the set of rules by which Web pages are transferred
across the Internet.

Internet Protocol (IP) Address

The Internet is composed of local, regional, national, and worldwide computer networks. Each computer on
the Internet can be identified by a set of unique numbers that is called an internet protocol (IP) address. The
IP address is composed of four different numbers separated by periods such as 205.134.120.60.

Link or Hypertext Link

An underlined word(s), phrase(s), or graphics on a Web page that transports the reader to additional or
related information on the Internet.

Uniform Resource Locator (URL)

An addressing scheme that is used on the Internet to locate resources and/or services on the World Wide
Web. Basically the URL is the address of a computer file that has been put on a computer server to access the
Internet.

Web Page

A single hypertext file or a page that is part of a Web site.

Website

A collection of World Wide Web pages or files.

Bookmark - a way of storing your favorite sites on the Internet. Browsers like Netscape or Internet Explorer
let you to categorize your bookmarks into folders.

Cookie - Information (in this case URLs, Web addresses) created by a Web server and stored on a user's
computer. This information lets Web sites the user visits to keep of a user's browsing patterns and
preferences. People can set up their browsers to accept or not accept cookies.

Search Engine - specialized software, such as AltaVista and Yahoo, that lets WWW browser users search for
information on the Web by using keywords, phrases, and boolean logic. Different search engines have
different ways of categorizing and indexing information. Search engines are accessed by typing in the URL of
that engine or using a browser's compilation of search engines in its Internet search function.

Wide World Web (WWW) - A hypermedia information storage system which links computer-based resources
around the world. Computer programs called Browsers enable words or icons called hyperlinks to display,
text, video, graphics and sound on a computer screen. The source of the material is at a different location - a
different file in the same directory, a file in another computer, which can be located anywhere in the world.

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2. History of the Internet

Internet is defined as an Information super Highway, to access information over the web. However, It can
be defined in many ways as follows:

 Internet is a world-wide global system of interconnected computer networks.

 Internet uses the standard Internet Protocol (TCP/IP).

 Every computer in internet is identified by a unique IP address.

 IP Address is a unique set of numbers (such as 110.22.33.114) which identifies a computer location.

 A special computer DNS (Domain Name Server) is used to give name to the IP Address so that user
can locate a computer by a name.

 Internet is accessible to every user all over the world.

Evolution

The concept of Internet was originated in 1969 and has undergone several technological & Infrastructural
changes as discussed below:

 The origin of Internet devised from the concept of Advanced Research Project Agency Network
(ARPANET).

 ARPANET was developed by United States Department of Defense.

 Basic purpose of ARPANET was to provide communication among the various bodies of
government.

 Initially, there were only four nodes, formally called Hosts.

 In 1972, the ARPANET spread over the globe with 23 nodes located at different countries and thus
became known as Internet.

 By the time, with invention of new technologies such as TCP/IP protocols, DNS, WWW, browsers,
scripting languages etc, Internet provided a medium to publish and access information over the web.

3. Advantages and disadvantages of Internet:-

Internet waves almost every aspect of life, one can think of. Here, we will discuss some of the advantages of
Internet.

 Internet allows us to communicate with the people sitting at remote locations. There are various apps
available on the web that uses internet as a medium for communication. One can find various social
networking sites such as: Facebook, Twitter, Yahoo, Google, Flickr, Orkut.

 One can surf for any kind of information over the internet. Information regarding various topics such
as Technology, social studies etc can be surfed with the help of a search engine.

 Apart from communication and source of information internet also serves a medium for
entertainment.

 Internet allows us to use many services like: Internet Banking, Online shopping, Email etc.

 Internet provides concept of electronic commerce that allows the business deals to be conducted on
electronic systems.

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Disadvantages: -

However, Internet has proved to be a powerful source of information in almost every field, yet there exists
many disadvantages discussed below:

 There are always chances to lose personal information such as name, address, credit card
number. Therefore, one should be very careful while sharing information.

 Another disadvantage is the spanning, spanning, corresponds to the unwanted e – mails in

bulk. This e – mails serve no purpose and lead to obstruction of entire system.

 Virus can easily be spread to the computes connected to internet. Such virus may cause your
system to crash (or) your important data may get deleted.

 There are various websites that do not provide the authenticated information. This leads to
misconception among many people.

4. How internet works.

When you turn on your computer and type a domain name in the browser search bar, your browser sends a
request to the DNS server to get the corresponding IP address. After getting the IP address, the browser
forwards the request to the respective server.

Once the server gets the request to provide information about a particular website, the data starts flowing.
The data is transferred through the optical fiber cables in digital format or in the form of light pulses. As the
servers are placed at distant places, the data may have to travel thousands of miles through optical fiber
cable to reach your computer.

The optical fiber is connected to a router, which converts the light signals into electrical signals. These
electrical signals are transmitted to your laptop using an Ethernet cable. Thus, you receive the desired
information through the internet, which is actually a cable that connects you with the server.

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Furthermore, if you are using wireless internet using wifi or mobile data, the signals from the optical cable
are first sent to a cell tower and from where it reaches to your cell phone in the form of electromagnetic
waves.

The internet is managed by ICANN (Internet Corporation for Assigned Names and Numbers) located in the
USA. It manages IP addresses assignment, domain name registration, etc.

The data transfer is very fast on the internet. The moment you press enter you get the information from a
server located thousands of miles away from you. The reason for this speed is that the data is sent in the
binary form (0, 1), and these zeros and ones are divided into small pieces called packets, which can be sent at
high speed.

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 Chapter-II

Electronic Commerce: Definition, types, advantages and disadvantages, E-Commerce transaction on World
Wide Web. Electronic Market-Online shopping, three models of Electronic Market - E-Business.

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1. E-Commerce definition, types, advantages and disadvantages

E-Commerce or Electronics Commerce is a methodology of modern business, which addresses the need of
business organizations, vendors and customers to reduce cost and improve the quality of goods and services
while increasing the speed of delivery. Ecommerce refers to the paperless exchange of business information
using the following ways −

 Electronic Data Interchange (EDI)

 Electronic Mail (e-mail)

 Electronic Bulletin Boards

 Electronic Fund Transfer (EFT)

 Other Network-based technologies

Features

E-Commerce provides the following features −

 Non-Cash Payment − E-Commerce enables the use of credit cards, debit cards, smart cards, electronic
fund transfer via bank's website, and other modes of electronics payment.

 24x7 Service availability − E-commerce automates the business of enterprises and the way they
provide services to their customers. It is available anytime, anywhere.

 Advertising / Marketing − E-commerce increases the reach of advertising of products and services of
businesses. It helps in better marketing management of products/services.
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  Improved Sales − Using e-commerce, orders for the products can be generated anytime, anywhere
without any human intervention. It gives a big boost to existing sales volumes.

 Support − E-commerce provides various ways to provide pre-sales and post-sales assistance to
provide better services to customers.

 Inventory Management − E-commerce automates inventory management. Reports get generated

instantly when required. Product inventory management becomes very efficient and easy to
maintain.

 Communication improvement − E-commerce provides ways for faster, efficient, reliable

communication with customers and partners.

Traditional Commerce v/s E-Commerce

Sr. No. Traditional Commerce E-Commerce

Information sharing is made easy via electronic

Heavy dependency on information
1 communication channels making little dependency on
exchange from person to person.
person to person information exchange.

Communication/ transaction are done in Communication or transaction can be done in

synchronous way. Manual intervention is asynchronous way. Electronics system automatically
2
required for each communication or handles when to pass communication to required
transaction. person or do the transactions.

It is difficult to establish and maintain A uniform strategy can be easily established and
3
standard practices in traditional commerce. maintain in e-commerce.

Communications of business depends upon In e-Commerce or Electronic Market, there is no

4
individual skills. human intervention.

Unavailability of a uniform platform as

E-Commerce website provides user a platform where
5 traditional commerce depends heavily on
al l information is available at one place.
personal communication.

No uniform platform for information E-Commerce provides a universal platform to

6 sharing as it depends heavily on personal support commercial / business activities across the
communication. globe.

Advantages of E-Commerce

E-Commerce advantages can be broadly classified in three major categories −

 Advantages to Organizations

 Advantages to Consumers

 Advantages to Society

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Advantages to Organizations

 Using e-commerce, organizations can expand their market to national and international markets with
minimum capital investment. An organization can easily locate more customers, best suppliers, and
suitable business partners across the globe.

 E-commerce helps organizations to reduce the cost to create process, distribute, retrieve and manage
the paper based information by digitizing the information.

 E-commerce improves the brand image of the company.

 E-commerce helps organization to provide better customer services.

 E-commerce helps to simplify the business processes and makes them faster and efficient.

 E-commerce reduces the paper work.

 E-commerce increases the productivity of organizations. It supports "pull" type supply management.
In "pull" type supply management, a business process starts when a request comes from a customer
and it uses just-in-time manufacturing way.

Advantages to Customers

 It provides 24x7 support. Customers can enquire about a product or service and place orders
anytime, anywhere from any location.

 E-commerce application provides users with more options and quicker delivery of products.

 E-commerce application provides users with more options to compare and select the cheaper and
better options.

 A customer can put review comments about a product and can see what others are buying, or see the
review comments of other customers before making a final purchase.

 E-commerce provides options of virtual auctions.

 It provides readily available information. A customer can see the relevant detailed information within
seconds, rather than waiting for days or weeks.

 E-Commerce increases the competition among organizations and as a result, organizations provides
substantial discounts to customers.

Advantages to Society

 Customers need not travel to shop a product, thus less traffic on road and low air pollution.

 E-commerce helps in reducing the cost of products, so less affluent people can also afford the
products.

 E-commerce has enabled rural areas to access services and products, which are otherwise not
available to them.

 E-commerce helps the government to deliver public services such as healthcare, education, social
services at a reduced cost and in an improved manner.

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Disadvantages of E-Commerce

The disadvantages of e-commerce can be broadly classified into two major categories −

 Technical disadvantages

 Non-Technical disadvantages

Technical Disadvantages

 There can be lack of system security, reliability or standards owing to poor implementation of e-
commerce.

 The software development industry is still evolving and keeps changing rapidly.

 In many countries, network bandwidth might cause an issue.

 Special types of web servers or other software might be required by the vendor, setting the e-
commerce environment apart from network servers.

 Sometimes, it becomes difficult to integrate an e-commerce software or website with existing

applications or databases.

 There could be software/hardware compatibility issues, as some e-commerce software may be

incompatible with some operating system or any other component.

Non-Technical Disadvantages

 Initial cost − The cost of creating/building an e-commerce application in-house may be very high.
There could be delays in launching an e-Commerce application due to mistakes, and lack of
experience.

 User resistance − Users may not trust the site being an unknown faceless seller. Such mistrust makes it
difficult to convince traditional users to switch from physical stores to online/virtual stores.

 Security/ Privacy − It is difficult to ensure the security or privacy on online transactions.

 Lack of touch or feel of products during online shopping is a drawback.

 E-commerce applications are still evolving and changing rapidly.

 Internet access is still not cheaper and is inconvenient to use for many potential customers, for
example, those living in remote villages.

2. E-Commerce transaction on World Wide Web

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3. Three models of E-Commerce

E-commerce business models can generally be categorized into the following categories.

 Business - to - Business (B2B)

 Business - to - Consumer (B2C)

 Consumer - to - Consumer (C2C)

 Consumer - to - Business (C2B)

 Business - to - Government (B2G)

 Government - to - Business (G2B)

 Government - to - Citizen (G2C)

Business - to - Business

A website following the B2B business model sells its products to an intermediate buyer who then sells the
product to the final customer. As an example, a wholesaler places an order from a company's website and
after receiving the consignment, sells the endproduct to the final customer who comes to buy the product at
one of its retail outlets.

Business - to - Consumer

A website following the B2C business model sells its products directly to a customer. A customer can view
the products shown on the website. The customer can choose a product and order the same. The website
will then send a notification to the business organization via email and the organization will dispatch the
product/goods to the customer.

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Consumer - to - Consumer

A website following the C2C business model helps consumers to sell their assets like residential property,
cars, motorcycles, etc., or rent a room by publishing their information on the website. Website may or may
not charge the consumer for its services. Another consumer may opt to buy the product of the first customer
by viewing the post/advertisement on the website.

Consumer - to - Business

In this model, a consumer approaches a website showing multiple business organizations for a particular
service. The consumer places an estimate of amount he/she wants to spend for a particular service. For
example, the comparison of interest rates of personal loan/car loan provided by various banks via websites.
A business organization who fulfils the consumer's requirement within the specified budget, approaches the
customer and provides its services.

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Business - to - Government

B2G model is a variant of B2B model. Such websites are used by governments to trade and exchange
information with various business organizations. Such websites are accredited by the government and
provide a medium to businesses to submit application forms to the government.

Government - to - Business

Governments use B2G model websites to approach business organizations. Such websites support auctions,
tenders, and application submission functionalities.

Government - to - Citizen

Governments use G2C model websites to approach citizen in general. Such websites support auctions of
vehicles, machinery, or any other material. Such website also provides services like registration for birth,
marriage or death certificates. The main objective of G2C websites is to reduce the average time for fulfilling
citizen’s requests for various government services.

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4. E-Business

E-business is a general term that encompasses all forms of using digital information and communication
technologies to support and optimize business processes. In contrast, e-commerce describes only the online
trading of products and services, and is therefore only a subsection of e-business.

Components of electronic business

The core components of e-business are information, communication, and transaction. Business partners use
digital networks (i.e. public or private communication networks) to conduct business processes using
innovative technologies to improve efficiency. Three key areas are particularly important for e-business:

 E-procurement: the electronic sourcing of products and services by companies, focused on reducing
costs and effort.
 Online stores: the electronic sale of products and services via appropriate platforms, such as online
stores.
 Online marketplaces: electronic commerce via digital networks, connecting the buyers and suppliers
of products and services.
 There are also two further areas of e-business:
 Online communities: electronic communication network between individuals and organizations,
which supports data and knowledge sharing as well as the preparation of transaction decisions.
 Online companies: electronic business cooperation for connecting individual company services,
resulting in a virtual business with a common transaction offer.

Function of electronic business

The most important role of electronic business is “electronic value creation” – the generation of electronic
added value. The forms of electronic added value are usually distinguished in the following way:

 Structuring value: an online offer achieves an overview of a large quantity of information

 Selection value: an online offer provides specific database information upon request

 Matching value: an online offer makes it possible to merge inquiries from supplier and buyers more
efficiently

 Transaction value: an online offer makes a business more efficient

 Coordination value: an online offer allows different providers to better combine their services

 Communication value: an online offer improves communication between different consumers

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