Chapter 7 E-Commerce The Internet Intranets and Extranets

Chapter 7 E-Commerce: The Internet, Intranets, and Extranets Management Information Systems, 4 th Edition 1

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 Management Information Systems, 4 th Edition 2

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 Management Information Systems, 4 th Edition 3

What is the Internet? (Cont. ) Management Information Systems, 4 th Edition 4

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 Management Information Systems, 4 th Edition 5

Growth of the Internet (Cont. ) Management Information Systems, 4 th Edition 6

Growth of the Internet (Cont. ) Management Information Systems, 4 th Edition 7

Growth of the Internet Management Information Systems, 4 th Edition 8

How the Internet Works • Definitions – Uniform Resource Locator (URL) – Hypertext Transfer Protocol (HTTP) – Domain Name – Hypertext Markup Language (HTML) – Top Level Domain (TLD) Management Information Systems, 4 th Edition 9

How the Internet Works (Cont. ) Management Information Systems, 4 th Edition 10

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 Management Information Systems, 4 th Edition 11

Internet Domains (Cont. ) Management Information Systems, 4 th Edition 12

Internet Addressing Management Information Systems, 4 th Edition 13

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 Management Information Systems, 4 th Edition 14

Common Internet Applications • Email • File Transfer • Newsgroups and Blogs • Instant Messaging • Internet Telephoning • Web Browsers Management Information Systems, 4 th Edition 15

The World Wide Web • Web Software – HTML and XML – Web Page Editors – Java, Java. Script, and Active. X – Web-Application-Interfaces – VRML – Cookies Management Information Systems, 4 th Edition 16

The World Wide Web (Cont. ) Management Information Systems, 4 th Edition 17

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 Management Information Systems, 4 th Edition 18

Intranets and Extranets (Cont. ) Management Information Systems, 4 th Edition 19

Intranets and Extranets (Cont. ) Management Information Systems, 4 th Edition 20

Intranets and Extranets (Cont. ) Management Information Systems, 4 th Edition 21

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 Management Information Systems, 4 th Edition 22

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 Management Information Systems, 4 th Edition 23

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 Management Information Systems, 4 th Edition 24

Establishing an E-Commerce Web Site (Cont. ) • Web portal – Limited space and design control • Electronic Storefront – Cybermall • Web Hosting Service • Virtual Web Server • Subdomain Management Information Systems, 4 th Edition 25

Establishing an E-Commerce Web Site (Cont. ) Management Information Systems, 4 th Edition 26

Establishing an E-Commerce Web Site (Cont. ) Management Information Systems, 4 th Edition 27

Business-to-Business Trading • Electronic Data Interchange • Exchanges and Auctions • Online Business Alliances • Application and Storage Service Providers Management Information Systems, 4 th Edition 28

Business-to-Consumer Trading • Advertising – Unique visitors per month – Unique visitor pages – Reach percentage – Banners Management Information Systems, 4 th Edition 29

Business-to-Consumer Trading (Cont. ) Management Information Systems, 4 th Edition 30

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 Management Information Systems, 4 th Edition 31

Business-to-Consumer Trading (Cont. ) Management Information Systems, 4 th Edition 32

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 Management Information Systems, 4 th Edition 33

Successful Business Models • Niche Retailing • Selling Hard-to-obtain information • Click-and-mortar retailing • Rules for Successful Web Page Design • E-Government • M-Commerce Management Information Systems, 4 th Edition 34

E-Commerce Practices on the Internet Management Information Systems, 4 th Edition 35

Management Challenges and Solutions • Reduced Control over Information Resources • Reduced Budgetary Control • Cost/Benefit Analysis • Scalability • Security • Education Management Information Systems, 4 th Edition 36

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 Management Information Systems, 4 th Edition 37

Online Annoyances • Spam • Pop up Windows • Adware and Spyware Management Information Systems, 4 th Edition 38

Summary • How the Internet functions • Information exchange over the Internet • The web facilitates electronic commerce • Business models on the Web Management Information Systems, 4 th Edition 39