Chapter 7 E-Commerce: The Internet, Intranets, and Extranets

Management Information Systems, 3rd EditionEffy Oz

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Chapter 7E-Commerce: The Internet,

Intranets, and Extranets


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Learning Objectives

• When you finish this chapter, you will – Know what the Internet is.

– Know the features for information exchange that can be conducted over the World Wide Web.

– Understand how the Web facilitates electronic commerce.

– Be able to generate basic ideas for new business ventures utilizing the Web.

– Appreciate the major risks and limitations of using the Web for business activities.


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What is the Internet?• The Development of the Internet

• ARPANET was an 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.


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What is the Internet?

Figure 7.1 The Internet connects millions of servers.


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• Growth of the Internet– Number of servers

• From a few hundred in 1991, to more than 115,000,000 by mid-2000

– Number of users• More than 200 million; increased rapidly during 1999

• Commercial Online Services– Companies like America Online provide “online” service

to paying subscribers on their private networks.


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Figure 7.2 World growth of the Internet


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Figure 7.3 The number of Internet domain servers continues to grow


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Internet Domains

• 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.


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Internet Domains

• What’s on the Internet?– E-mail and file transfer– News groups– Internet Relay Chat (IRC)– Telephoning on the Web


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The World Wide Web

• Hypertext transfer protocol (HTTP)– Allows shared communication of text, full-color

graphics, tables, forms, video, and animation

• Hypertext Mark-Up Language (HTML)– Code for tagging Web files for display

• Browsers– Software to access the Web


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The World Wide Web

• Creating Web Files– HTML

• System of standardized “tags” that format elements text, graphics, and animation

– Web page editors• Translate well-known or intuitive commands into code

– Java, ActiveX, and XML• Web scripting languages

– Common Gateway Interfaces (CGI) and Forms• Allow a computer that is accessing a particular Web site to

have some similar functions


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The World Wide Web

Figure 7.6 How a CGI works


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The World Wide Web

– Frames• Sections of a Web page that let a browser explore a site in

different ways on the same page

– VRML (Virtual Reality Modeling Language)• Standard for describing interactive three-dimensional scenes

delivered across the Internet

– Cookies• Special file a Web site saves on the surfer’s hard disk so the

site can remember something about the surfer later

– Creating Your Own Web Pages• Search the Web for HTML tutorials• View and study the source document of a Web page


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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


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Figure 7.7 An intranet, an extranet, and the Internet from an individual user’s perspective


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Figure 7.8 Internet, intranet, and extranet potential for productivity enhancement


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Establishing a Web Site

• Site Name

• Points of Presence

• Line Capacity

• Site Maintenance


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Business on the Internet

• Business-to-Business Trading

• Electronic Data Interchange

• Exchanges and Auctions– E-catalogs


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• Business-to-Consumer Trading– Advertising

• Portals• Free Internet applications

– E-Shopping• E-Payment• Auctions and reverse auctions• Selling content• Selling software• Data push• Stock trading for all


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Figure 7.14 Web-shopping benefits


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Business Considerations

• Web Costs– The least costly sites are those

constructed simply to showcase the company’s products or services.

– The most expensive sites are those designed to enable electronic commerce.


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Figure 7.16 Do’s and Don’ts in Web site construction for commercial purposes


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Business Considerations• Risks to Organizations

– Computer viruses– Interception of passwords and codes by an

unauthorized hacker– Interception of charge account numbers– Illegal or socially objectionable use of a

site– Potential misrepresentation


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• Risks to Consumers

– Eavesdropping and interception

– Misrepresentation


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The Nations:Who is on the Net?

• While the U.S. is leading in developing new technologies for the Net, other nations are not far behind.– Finland has the highest ratio of Internet servers to users.

– Israeli companies are heavily involved in developing high-quality Internet phone software.

– Singapore’s government has invested over $2 billion in state-of-the-art technology infrastructure.


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Ethical and Societal IssuesRoad Bumps on the Electronic Superhighway

• Free Speech• From the advent of the Web, ‘inappropriate’

material has been posted and disseminated throughout the world.

• There have been calls to sensor what is transmitted, especially pornography, violence, and racial slurs.

• Spamming• Flooding a party’s e-mail box with messages as a

means of protest is disruptive.

Documents

Chapter 7 E-Commerce: The Internet, Intranets, and Extranets