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1.1 INTRODUCTION
A funny one liner about the Internet goes like this ... Give a man a fish andyou feed him for
a day: leach him to usc the Internet and he won't bother you for months.
An exercise started by the Cnited States Department of Defense way back in the 1960's
has become one of the most amazing technological and social accomplishment<; of manki ncl.
Millions of people across the globe are using this complex. interconnected network of
computers for research. information, communication and commercial interests. In this unit
we will learn about the computer networks and the Internet, which forms the basic
technology structure ~md establishes a strong foundation that underlies all electronic business.
We will also learn about connectivity technologies and communication protocols.
1.2 TID~ NTER~ET
The Internet is a worldwide collection of computer networks. cooperating with each other
to exchange data using a common software standard. In simple language, the Internet is a
worldwide network of thousands of computers and computer networks. Millions of people
use the Internet everyday. but only a small percentage of them really understand what the
Internet is and how it works. This large system of interconnected computer networks that
spans the globe, allows you to communicate with other people throughout the world by
means of electronic mail, online newspapers. magazines, chat, download software, buy
product<; and much. much more. Physically, the Internet uses a portion of the total resources
of the cun-ently existing public telecommunication networks. ' Iechnically, what distinguishes
the Internet is its use of a set of protocols called TCPIIP (Tnmsmission Control Protocol
I Internet Protocol).
Many a time~ you may he confused between the Internet and the World Wide Web
(WWW) and feel that they are the one and the same. But they arc not. The Internet is to
the World Wide \<Vcb what Europe is to Frcuu.:e. One is the container, the other is an item
within the container. And along with WWW, the Internet also contains many other
·ubndworks or protocols like I rrrP. Email. FTP, Instant Messenger, P2P, Tel net etc.
QTPJ-----~a~
World Wide Web
~2P
Fig 1.1: The Internet: A collection of subnetworks
Unit 1 The Internet
Who owns the Internet?
Nobody "owns" the Internet- everybody owns "their" piece of the Internet.
Today. the Internet is a public, cooperative and self-sustaining facility accessible to hundreds
of millions of people worldwide. No one actually owns the Interne~ and no single person
or organization controls the Internet in its entirety. More of a concept than <m actual tangible
entity. the Internet relics on a physical infrastmcture that connects networks to other
networks. There are many organi:tations, corporations, governments, schools, private citizens
and service providers that all own pieces of the infrastructure. but there is uo single body
that owns it all.
'Ibe obvious doubt that might come to your mind is. "How docs the entire system work if
no one owns or controls itT'
There are organizations that oversee and standardize what happens on the Internet and
they assign IP addresses and domain names. A few such organizations are the .1\;ational
Science Foundation (~SF). Internet Corporation for Assigned f\iarncs and Numbers
(I CAt~) and InterNIC.
1.3 THE BEGINNI:l\G OF TID: INTERNET

The Internet was conceived by the Advanced Research Projects Agency (ARPA) of the
U.S. Military in 1969 and was first known as the ARPANET. The original aim was to
create a network that would allow users of a research computer at one university to be
able to "talk to" research computers at other universities. This was also to be a military
research network that could survive a nuclear strike, decentralized so that if any locations
(cities) in the U.S. were attacked, the military could still have control of their nuclear arms
for a counter-attack.
The Ji'irst Node on the Internet
Under the research being carried out at ARPANET and research universities, the first
node on the Internet called ·Interface Message Processor (1M P)' was setup at the C nivcrsity
of California, Los Angeles.
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Fig 1.2 : The .First Interface Message Processor (IMP)
Four nodes were later set up at UCLA, Stanford, University of California at Santa Barbara
and the University of Utah.
To test the idea, they set up an IMP at each location and had the l1\1P at UCLA call the
IMP at Stanford. Once the connection was established, researchers made a phone call to
the people at UCI ,A and began to send a simple text string to the Stanford IMP. For lack
of a better term, everyone agreed they would type in ''LOGIN" and sec if the computer at
Stanford would display the information properly. 'Ibis was the dialogue that took place:
Charlie Klein, an undergraduate at UCI ,A and an assistant on the project, took the phone
and typed the letter L on his terminal.
''Did you get the L T' he asked.
''Yes," came the reply from Stanford. Klein then typed the letter 0 .
''Do you see the 0?" he asked.
''Yes, we see the 0 ," replied the Stanford team.
Klein typed in the G, and the system crac;hed ! !!
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Unit 1 The Internet
UCLA
Fig 1.3 : The frrst data being sent over the Internet
The researchers for a brief moment had a glimpse of our Internet future--logins, crashes,
and all!!
Thus the Internet began as a computer network of ARPANET, that linked computer
networks at several universities and research laboratories in the United States.
In 1974, TCP/IP (Transmission Control Protocol/Internet Protocol). the protocol used on

the Internet was developed. This Internet Protocol is the fundamental software employed
to control the Internet. This protocol specifies how data is routed from one computer to
the other. 'Jbe Transmission Control Protocol verifies whether or not the information ani ved
at the designated computer, and if not, makes sure that the infom1ation is sent again.
Stanford University was one of a few sites of early Internet development where Vincent
Cerf and his colleagues researched and developed the communication protocols that
would later be used for transmitting information across the Internet. Cerf's pioneering
contributions to network technology earned him the title '}'ather of the Internet'. This
project was also sponsored by the United States Department of Defense and the Advanced
Research Projects Agency (ARPA).
During the early years of the 1980s, the Internet became more popular as more sites were
added to ARPANET. Even though the ARPANET had shut down by 1984, the usage of
the Internet was spreading. The Internet was transferred from the ARPANET to the
National Science Foundation (NSF). By this year an estimation of 500 computers were
'connected' (using the Internet).
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The Early Internet
The Internet was completely textual and in black and white. All tasks had to he done by
using commands of computer language. such as UI'\IX, developed by Bell Laboratories in
1972. Users actually had to learn computer language commands to be ahle to usc the
Internet unless they possessed certain computer skills. The use of networks was still limited
only to those groups of people from research and academic communities who could access
those and were developing many creative applications. Between I 979 to 1989 these
network applications were further improved and tested by an increasing number of users.
'!be explosion of personal computer usc during the 1980s also helped more people become
comfortable with computers. In the late 1980s. these independent academic and research
networks merged into what we now call THE JNTflRNh'T
The Early Applications of The Internet
The main goal of the U.S. Military was to usc the Internet for Academic research and
Military research, but the power of this network was soon unleashed during 1970 and
1980. The earliest application of the Internet. E-mail, was born in 1972 when Ray
Tomlinson, a Cambridge. USA computer scientist addressed the first email to himself and
was supposed to have contained the message '"QWERTYIOP''. He used the"@'' to
distinguish between the sender's name and the network name in the email address and
became the man who will be always remembered in history as the man who picked @ as
the locator symbol in electronic addresses. Thus Ray Tomlinson became the inventor
of email, the application that launched the digital information revolution.
Where Internet- networking was once thought of as a computer-to-computer connection,

after e-mail it wa<; considered a connection between one person and another. The National
Science Foundation (NSF) was eventually instrumental in designing an expanded network
that became the basis of the Internet a<; it is known today. Millions of computers worldwide
connected via a vast network that consists of tens of thousands of interconnected sub
networks with no single owner. But it still lacked a personal touch. a-; accessing infom1ation
was not user friendly.
While the Internet was in the later stage of development in late 1990, Tim Bemers-Lee
and a group of scientists in the European Laboratory of Particle Physics (CERN)
were developing a system for worldwide interconnectivity tl1at later became known as the
World Wide Web (\VWW). They said that the WWW ''was developed to be a pool of
human knowledge, which would allow collaborators in remote sites to share their ideas
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Unit 1 The Internet
and all aspects of a common project". Tim Berners-Lee's effort in web development
gave him the title ''}'ather of the World Wide Web".
Tim Berners-Lee invented the World Wide \Veb, defining IITML (hypertext markup
language), HTrP (HypeiH~xt Transfer Protocol) and URLs (Universal Resource Locators).
The Web is based on hypertext, which permits the user to connect from one document to
another at different sites on the Internet via hyperlinks (specially programmed words,
phrases, b:uttons, or graphics). Unlike other Internet protocols, such as FTP and email, the
Web is accessible through a graphical user interface (GUI). This helped the Internet to get
user friendly and it no longer remained a tool to be used by just scientists and researchers
but reached the common man.
The Commercial Internet
The National Science Foundation (NSF) still prohibited commercial network traffic on its
networks. As personal computers became more powerful. affordable and available,
corporate companies increasingly used them to construct their own internal networks.
Although these networks included e-mail software that employees could use to send
messages to each other, businesses wanted their employees to be able to communicate
with people outside their corporate networks.
In 1989, the NSF pcnnittcd two commercial e-mail services, MCI Mail and CompuServe,
to establish limited connections to the Internet. These commercial providers allowed their
subscribers to exchange e-mail messages with members of the academic and research
communities who were connected to the Internet. These connections allowed commercial
enterprises to send e-mail directly to Internet addresses and allowed members of research
and education communities on the Internet to send e-mail directly to MCI Mail and
CompuServe addresses. The NSF justified this limited commercial use of the Internet as a
service that would primarily benefit the Internet's noncommercial users. In 1991, the NSF
eased its restrictions on the Internet commercial activity and began implementing plans to
eventually privatize much of the Internet. Businesses and individuals began to connect to
the Internet in ever-increasing numbers. From 1991 when there were almost one million
connections to 1997 with over twenty million connections.
The Network Access Points
In 1991 , the NSF further eased its restlictions on commercial Internet activity and began
implementing plans to privatize and commercialise the Internet. Over the next few years
the NSF conducted a series of workshops and studies to plan for the transition of the
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NSI-<NET to private industry. The privatization oflntcrnet was substantially completed in

1995, when NSF turned over the operation of the main Internet connections to a group of
privately owned companies.
The new structure of Internet was now based on four Network Access Points (NAPs),
each operated by a separate company.
The NSF awarded contracts for establishment of four NAPs operating at 155 Mbps -
one in New York operated by Sprint, one in Washington, D.C. operated by MPS, one in
Chicago operated by Ameritech and one in California operated by Pacific Bell.
On April 30, 1995. the NSFNET was officially dissolved. At its peak, the NSFNET
connected more than 4,000 institutions and 50,000 networks across the United States,
Canada and Europe.
After it was dissolved, NSF returned to its roots, and retained a core research network
for research called the Very High Speed Backbone Network Service (vBNS), which
went on to form the basis for the Internet2 project. Intemet2 develops and deploys advanced
network applications and technologies for research and higher education, accelerating the
creation of tomorrow's Internet.
The four companies which were now called as Network Access Providers, started
selling Internet access rights directly to larger customers and indirectly to smaller firms and
individuals through other companies called Internet Service Providers (lSIJs). Thus the
Internet now became fully commercialized.
fi'S Activity A:
Write down the different applications that you can run while using the Internet.
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Unit 1 The Internet
.16 Activitv B:
l<ind out the details about how the Internet first reached India and how it wa<; commercialized.
- -- - -----
1.4 COMPUTERNETWORKS
A computer network is a system for communication among two or more computers. These
networks may be fixed (cabled, permanent) or temporary (via modems or wireless).
Computer Networks have rapidly become an integral part ofbi1siness life. They allow a
business to streamline the overall operation and to interact with suppliers and customers
very efficiently.
In many cases computer networks <rre seen as the solution to every problem within business,
and - to some extent- the magic wand to tackle all problems with.
By understanding the different kinds of networks and how they work you will be able to
determine which network will suit your organization's needs best. Some networks arc
rather simple and easy to set up while others are much more complex and will require the
help of a trained professional.
Whilst it is not necessary to understand fully the technical details, it is necessary to understand
in full what precise purpose the introduction of a computer network into an organisation
serves. This is crucial for the project to be accepted by the staff and to help the technicians
to design the network accordingly.
Computer Networks Classification
Computer Networks are classified according to the distance between individual computers
that arc attached to the network. The classification includes the following:
LANs- Local Area Network, a computer network that spans a distance of tens of metres
at the most. I -ANs are very common in offices but can al<>o connect several offices together.
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There is no limit a<> to how many computers are networked for the network to be cla<>sificd
as LAN.
WANs- Wide Area Network, a computer network that spans hundreds of metres to a
few kilometres. Typically a campus spanning network that connect<; different departments
in any University ora larger company is called a WAN.
:MA..~s- Metropolitan Area Network, in essence a computer network that is meant to

span a whole metropolitan area. This concept was very popular in the early 1990s when
various cities envisaged establishing such networks. In practice these networks arc very
rare, and today only the concept survives. 'This is mainly due to the increasingly private
providers that develop networks as opposed to cities and councils taking the development
of such networks into their own hands.
The above classification is purely based on the size of the area that the network covers.
1.5 TECHNOLOGY OVERVIEW

With the growth ofLANs and WANs a new demand started ruising where in interconncctivity
of different networks became extremely crucial for resource sharing. isolated LANs made
electronic communication between different offices or department<> impossible. Duplication
of resources meant that the same hardware and software had to be supplied to each office
or department, as did separate support staff. This lack of network management meant that
no centrali:t.ed method of managing and troubleshooting networks existed.
A new term called internetwork was soon coined.
An internetwork is a collection of individual networks, connected by intermediate networking

devices, that functions as a single large network. Internetworking refers to the industry,
products, and procedmes that meet the challenge of creating and administering intemctworks.
Intemetworking evolved a<> a solution to three key problems: isolated I .At"\Is, duplication
of resources, and a lack of network management.
~Activity C:
Explain the difference between the Internet and the World Wide Web (WWW).
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£S Activity D:
Write down 4 names of organizations whose networks can be classified under LAN and
\VAN.
1.6 PACKET SWITCHED NETWORKS
A packet is a unit of data that is transmitted across a packet-switched network. A packet-

switched network is an interconnected set of networks that arc joined by routers or switching
routers. The most common packet-switching technology is TCP/IP, and the Internet is the
largest packet-switched network. Other packet-switched network technologies include
X.25 and IPX/SPX (the original Novell NetWare protocols).
The concept of a packet-switched network is that any host computer connecting to the
network can, in theory, send packets to any other host computer. The network is said to
provide any-to-any service. The network typically consists of multiple paths to a destination
that provide redundancy. Packets contain header information that includes a destination
address. Routers in the network read this address and forward packets along the most
appropriate path to that destination.
Packets have a header and a data area. The header holds the address and routing
information. Think of a packet as an envelope in which the destination address is written
on the outside of the envelope and data goes inside.
A single transmission may require hundreds or thousands of packets. For exan1ple, a large
file is broken up into many small pieces that are inserted in the payload area of packets.
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'lbis scheme helps overcome transmission problems. If a glitch occurs. only one packet
may be affected. Then it is necessary to only retransmit that one packet rather than the
entire file.
1.7 INTERNETPROTOCOIB
- - - - - - - - - - -- - - - - - - - - - - -- - - - -
The Internet protocols arc the world's most popular open-system (nonproprietary) protocol
suite because they can be used to communicate across any set of interconnected networks
and m·e equally well suited for LAN :md WAN communications. The Internet protocols
consist of a suite of communication protocols, of which the two best known are the
Transmission Control Protocol (TCP) and the Internet Protocol (IP). The Internet
protocol suite not only includes lower-layer protocols (such as TCP and IP), but it also
specifies common applications such as electronic mail, terminal emulation and file transfer.
You will get a broad introduction to specifications that comprise the Internet protocols.
You will learn IP addressing and key upper-layer protocols used in the Internet.
The global Intemet is a success because ofTCP/IP. Every computer on the Internet must
have a unique address. JP supports unique addresses by way of a hierarchical addressing
scheme. An IP address is a unique number that contains two parts: a network address and
host address. The network address is used when forwarding packets across interconnected
networks. It defines the destination network, and routers along the way know how to
forward the packet based on the network address. When the packet arrives at the
destination network, the host portion of the IP address identifies the destination host
IP Addressing
The version ofiP that has been in use for the past twenty years on the Internet, is Internet
Protocol version 4, abbreviated ll,v4. It uses a 32-bit number to idcntify the computers
cormectcd to the Internet. This address is called an IP address. Example of an IP addrc..~s
: 202.54.10.1. Computers do all of their internal calculations using a ba..~ie 2 (or binm-y)
number system in which each digit is either a 0 or 1. IPv4 uses a 32-bit binary number that
allows over 4 billion different addresses (2' 2 =4,294.967,296). While the number probably
exceeded the world's population when the Internet was initially being developed, the
proliferation of personal computers and the development of the web significantly expanded
the role of the ''mother of all network-;". With the boom of networks, PDA's and IP based
phones, the demand for IP's increased so immensely that we started falling short of this
existing pool of billions ofiP addresses. In 1992, the Internet Architecture Board (TAB)
began work on a replacement for the current version of IPv4. By 1995 TAB finalized a
new version oflP that is rcfen·ed to a~ 1Pv6. It is currently being evaluated as an experimental
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Unit l The Intcmct
pottion of the Internet. Under 1Pv6 source and destination, addresses were expanded to
128 hits. It is expected that this IPv6 will overcome all the short falls of 1Pv4 and also
make a considerable technology advancement in routing operations, but it will he many
years before the new protocol moves from an experimental status into production.
Private IP addresses
To overcome this problem of the shortfall of IP's, network engineers have devised a
number of stop-gap techniques to stretch the supply of IP addresses. One of the most
popular techniques is subnetting, which is the usc of reserved private IP addresses within
LANs and WANs to provide additional address space. Private IP addresses are a series
of IP numbers that are not permitted on packets that travel on the Internet. In subnetting,
a computer called a network addre..4i!S translation (NAT) device converts those private
IP addresses into normal IP addresses when it fmwards packets from those computers to
the Internet.
The Internet Assigned Numbers Authority (lANA) has reserved the following three blocks
of the IP address space for private networks (local networks):
10.0.0.0 - 10.255.255.255
172.16.0.0- 172.31.255.255
192.168.0.0 - 192.168.255.255
These IP's should not be used on the Internet. NAT devices arc required to connect
private networks to the Internet. The NAT device will have at least one "real" or publicly-
reachable address, and will route traffic destined for the public Internet through that address.
Private IP addresses also provide a basic form of security as in a typical network

configuration of this type, it is not possible for the outside world (Internet) to establish a
connection directly to a host using these addresses.
IP Address assigning
Today IPaddresses arc assigned by five non-profit organisations called the Regional Intemet
Registry (RIR).They arc the American Registry for Internet Number (ARIN),Mrican
~etwork Infromation Center (AfriNIC), the Reseaux IP Europeens (RIPE),
Regional Latin-American and Caribbean IP Address Registry (LACNTC) and the
Asia Pacific Network Information Centre (AP~IC). These registries a-;sign and manage
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IP addresses for various parts of the world. ARJN for North America, AfriNIC for Africa,
LACNIC for Latin America and the Caribbean, RIPE for Europe, the Middle :East, and
central Asia, and APNIC for countries in the Asia-Pacific area. These organizations took
over the IP address management tasks from the Internet Assigned Numbers Authority
(lANA) which still maintains its role to allocate TP addresses from the pools of unallocated
addresses to the RIRs according to the established needs.
1.8 NTERNET SERVICE PROVIDERS

An ISP, called <m Intemct Service Provider, is a company that provides connectivity options
for accessing the Internet and related services. Generally an ISP charges a monthly access
fee to the customers. The customer then ha-; access to the Internet for a limited or unlimited
number of hours. although the speed at which this data is transferred varies widely.
Connecting to the Internet
You may use many different ways to connect to an ISP, but the simplest way to connect is
using your computer, modern and telephone line.
Firstly. you will need to have access to a Personal Computer (PC). The minimum
requirements for a PC to establish internet connection are that it must have a modem, at
the very least a 486 processor, 64MB RAM active memory, 100MB of hard disk space
available. a browser (the software the PC uses to access the internet), a monitor, a keyboard
and a mouse.
Optional equipment includes: a printer, a soundcard, speakers, a video camera and a

document/ image scanner.
The PC dealer would be the best to advise you of which computer is best suited to your
needs in terms of functionality, price and case of use. The beginner who wants to type
letters, send e-mail and surf the web will have different needs than the experienced
pro&rrammer who wants to design web pages with interactive, cartoon style video clips
and to send 200 MB files from here to Chicago.
A modern connects your PC to the Internet using a telephone line. The modem (some PCs
have an internal modem already installed), plugs into one of the port<; (sockets) usually at
the rear or the side of the PC and the customer simply plugs in the phone line.
The customer uses the home telephone line to connect to the Internet, along with the login
and password provided by the ISP when they have signed up for a dial-up plan and have
the relevant equipment including the software.ll1is is by far the easiest method to connect
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Unit 1 The Internet
to the Internet. After your computer dials into the Internet service provider you will hear a
dial tone, a series of touch tones, a couple of rings, a click and a series of screeches
bouncing back and forth at different pitches. This is called 'handshaking,' whereupon
your PC and modem arc negotiating with the Internet Service Provider's (ISP's) modem.
The modems look at the line quality for a moment. they handshake and then they negotiate
the very best (data exchange) speed possible at the time.
Accessing the Internet
When you are not connected to the Internet and if you try to open a website you get an
error indicating that the page is not found or connectivity is not established. But as soon as
you arc connected to the Internet by authenticating your user name and password, the
entire Internet Pandora opens in front of you. So there must be something different happening
to your computer because of which the Internet is accessible to you.
A~ soon as your account is authenticated, the ISP assigns you an IP address from its pool
of addresses which becomes your own identity on the Internet till such time that you are
connected to the ISP. Thus you become a part of the Internet and contribute your share of
owning the Internet.
The ISP assigns two types of IP addresses
• Dynamic IP's
• Static IP's
Dynamic IP's : A dynamic IP address is a number that is assigned to a computer by an

Internet service provider to be its temporary address on the Internet. These are the IP's
which are allocated to any dial-in user who dials to the ISP's POP (Point Of Presence).
Static IP's :A static IP address is a number that is assigned to a computer by an Internet

service provider to be its permanent address on the Intemet. These are the IP's allocated
to the machines which are running round the clock and are connected to the internet and
are dedicated machines.
2S Activity E:
Find the IP address currently assigned to your machine. Perform an exercise of assigning
a private static n) address to your machine.
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Internet connectivity options and speeds
The dial-up modem is one of the cheapest and the most common option to connect to the
Internet. The other media by which you can connect to the Internet are ISDN , DSL,
Cable, Leased Line, Satellite services, RF connectivity, Wi-Fi, Wi-Max connectivity etc.
Dial-up Modem
The dial-up modem connects at an average speed of 56K or kilobit<; per second which
means 56 thousand bits (Os and ls) passing through the line per second. But tlus is a big
limitation for some users who need or want a lot of data transfen-ed quickly. Another
linlltation- one usually doesn't receive full56K access due to line 'noise' -static or other
intermptions that limit the data through-put. This is particularly common in mral areas.
Digital switches and fiber transmission improves line quality, but this requires the replacement
of all the wires to your building, and that won't happen overnight. Better performance is
possible through higher levels of service and digital transfers.
ISDN I DSL I Cable
Three major types of high speed connectivity have emerged in the last few years and ~rre
increasingly available across the country. ISDN (Integrated Services Digital Network),
DSL (Digital Subscriber Line) and Cable.
ISDN is like a modem service that involves a dial up, but it uses a high quality line capable
of higher performance data transfer up to 256KB/second and higher. It is falling out of
favor due to cost and being replaced by the digital services desctibed below.
Improvements in electronic hardware have allowed conventional phone lines to accept

data transfers at high rates using the technology called "DSL" or Digital Subscriber Line.
At 1.5 megabytes per second, the data transfer rates arc almost fifty times faster than the
fastest modems. Two ·navors' ofDSL are available, ADSL and SDSL. Of the two,
SDSL is the more powerful performer and businesses generally choose it over ADSL.
I Iowevcr, any DST, service is only available in larger metropolitan area<; so far, a':> it requires
that the phone company or other ISPs to have installed special hardware in their operational
offices.
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Unit 1 The Internet
Cable companies are offering high performance services through 'modems' that link through
high speed optical fibre lines. These high speed fibre lines provide an excellent speed and
minimum losses. These services require that you have cable connectivity upto your house
or office. Generally DSL or cable connectivity is referred to as Broadband access
connectivity.
I .cased Lines or Leased circuit'i
Leased Line connection, you are directly wired into the Internet using high-speed lines,
and you arc "on-line" twenty-four hours a day, seven days a week. These leased line
circuits usc the existing conununication network of telecom companies for providing Internet
access.
Leased Line cmmectivity is great if you arc a corporate or a business with a number of
users.
Satellite services
This is another category of connectivity that uses satellites as a wireless method and provides
the most promise for those in rural areas that need higher capacity. No land infra-;tructurc
is needed except the receiver. To provide Internet access using the satellite, you do not
need any telephone lines or cable network, but instead you use a satellite dish for two-way
data communications. It has an upload stream and download stream where upload speed
in one-tenth of the download speed. Satellite connection is some times unidirectional and
is meant for downloading data using the dish antcm1a, but you arc also connected by
phone line to the Internet for uploading information.
RF Connectivity
RFis commonly used in the wireless communications industry to describe equipment using
radio frequency waves to transmit sounds and data from one point to another. In Internet
~onnectivity, RF equipment is used to transmit data signals using radio waves instead of
data cables or telephone lines. Typically you need an antenna on your side as a client
antenna and this hac; to have a clear line of site to the ISP's transmitting tower. '!bus a clear
iinc of site is needed for this connectivity option to work.
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l~
cr::I!!!!iJ
Worlcstatlon Thelnternet
!•cool
Customer Premise
Equlpment ,....,,;;II'
¥-ttt~m
Transmit&
Rec«we Tower
Customer Site
Anteanit
Fig 1.4 : Connectivity using a dish antenna and RF tower.
Wi-}'i, Wi-Max connectivity
WIFi is the wireless way to handle networking. It is also known as 802.11 networking and
wireless networking. The big advantage ofWi-Fi is its simplicity and mobility. You can
connect computers anywhere in your home or office without the need for wires. The
computers connect to the network using radio signals, and computers can be up to 100
feet or so apart. To establish Internet connectivity using Wi-Fi you need a desktop PC or
laptops which are Wi-Fi enabled by installing a Wi-Fi card. To access the Internet using
this card you will need to look for a hotspot.
A hotspot is a connection point for a WiFi net:\vork. It is a small box that is hardwired into
the Internet. The box contains a radio that can simultaneously talk to up to 100 or so Wi-
Fi cards. There are many WiFi hotspots now available in public places like restaurants,
hotels, libraries and airports. You can also create your own hotspot in your home.
Wi-Max operates similar to Wi-Fi but comes over the problems of speed and distance.
Wi-Fi operates upto a maxin1um distance of 100 feet, but Wi-Ma'<. can provide coverage
to a very large area as big as 50 kms.
PS Activity }':
Describe the different ways of connecting to an ISP and suggest a suitable connectivity
option for a university with a lab of 50 computers.
--- - - - - -- - - - -
18
u nit l The Internet
Deciding the ISP & the connection speed
Now you may ask- 'How am I going to decide how to connect?'
It mostly depends on your budget and the availability of a specific service in your area.
'This is always changing and due to deregulation, more and more types of businesses can
provide you with access services.
The connectivity speed will depend on your usage and the number of people accessing the
Internet. Fig. 1.5 shows you a guideline of different speeds and the naming used for each.
Fig 1.5 : Comparative connection speeds
19
c-Busincss
1.9 GLOBAL INTERNET CONNECTIVITY

Evety computer that is connected to the Internet is part of a network, even the one in your
home. I jkc our earlier example, from home you may usc your modem to dial a local
number to connect to your Internet Service Provider (ISP). At work, you may be part
of a local area network (I ,AN), but you most likely still connect to the Internet using an
ISP that your company has contracted with. When you connect to your ISP, you become
part of their network. The ISP may then connect to a larger network and become part of
their net\vork. The Internet is simply a network of networks.
The..-;e networks connect together in many different ways to form the single entity that we
know as the Internet.
Most large communication companies have their own dedicated backbone connecting
various regions. In each region, the company has a Point of Presence (POP). The POP
is a place for local users to access the company's network, often through a local phone
number or dedicated line. But there is no one overall controlling the network. Instead,
there are several high-level networks connecting to each other through Network Access
Points or NAPs.
T1
Line
Home
F'ig 1.6 : Backbone Internet connectivity

When you connect to the Internet, your computer becomes part of a network.
Here's an example. Imagine that Company A is a large ISP. In each major city, Company
A has a POP. The POP in each city is a rack full of modems that the ISP's customers dial
20
Unit 1 'Il1e Internet
into. Company A leases fibre optic lines from the phone company to connect the POPs
together.
Imagine that Company B is a corporate ISP. In each major city Company B also has a
POP. Company B builds its own network of fibre optic cables and offers connectivity to
all its customers over cable. Company B is such a large company that it runs it' own fiber
optic lines between its buildings so that they are all interconnected.
In this ammgement, a.ll of Company A's customers can talk to each other, and all of Company
B's customers can talk to each other, hut there is no way for Company .Ns customers and
Company B 's customers to intercommunicate. Therefore, Company A and Company B
both agree to connect to NAPs in various cities, and traffic between the two companies
flows between the networks at the NAPs.
In the real Intemet, dozens of large Intemet providers interconnect at NAPs in various
cities, and trillions of bytes of data flow between the individual networks at these points.
The Internet is a collection of huge corporate networks that agree to all intercommunicate
with each other at the NAPs. In this way, every computer on the Internet connects to
every other.
Fig 1.7 : A bird 's eye view of data flowing on the Internet
21
e-Business
A bird's eye view of the Internet looks something like this with a huge amount of data
flowing across the globe. (Refer to Fig 1.7)
l.lO SUMMARY
In this unit you have been introduced to the ba<;ic concept<; of the Internet and its working.
The Internet started way back in 1969 as a research project by the US military but today
no one actually owns the Internet.
You also saw how the first data was sent over the Internet. The commercialization of the
Internet finally took place in early 1990 and different ISP's started offering Internet
connectivity to business organizations and the general public.
This chapter has laid a foundation for you to understand the future topics on Internet and
£ -commerce.
1.11 SELF -ASSESSMENT QUESTIONS
Q1. Study the Internet Service Providers in your area and categmise them based on the
medium of connectivity.
Q2. Analyse the network in your work place and list down the IP series used in your
LAI\.
22
c-Busincss
2.1 INTRODUCTION
As discussed in the first Unit, origin of the Internet consisted of only a few computer
systems associated with the C .S. Department of Defence and other institutions. As the
number of connections grew, a form of identification wao; needed to properly access the
various computer hosts. A more effective system soon emerged to regulate and maintain
the domain paths throughout the network. This gave birth to the Domain Name System
(DNS). The World Wide Web (www) soon came into existence and the WEB that we
know of today was formed. In this unit we will learn about the domain names, their
registrations, working on HTML and exploring how to make WebPages. We will also
learn about different web browsers and web client<;.
2.2 DO.MAI~ NAMES
A domain name is a company's unique identity on the worldwide Internet. To do business

on the web, you will need at lea<;t one domain name- an online address that lets people
get to your website.
All computers, or servers, connected to the Internet arc identified by a unique number
called an Internet Protocol address (IP address). A typical n> address appears in the form
202.54.10.xxx.
The domain naming system assigns unique names to the IP addresses since names arc
generally easier to remember than numbers. A domain name is a way to identify and locate
computers and resources connected to the Internet. No two organizations can have the
same domain name.
A domain name usually appears in the form yourcompany.com. It can be used as a

custom email address, such as sales@yourcompany.com, or as an address on the World
Wide Web, such as www.yourcompany.com. Domain names operate much like phone
numbers or street addresses.
Every company or organization that wants to be on the internet will register a domain
name for usc as their on-line identity or name that clients (customers, all Internet users) will
usc to access on-line services such as the organization's website or email system.
The Beginning- Domain Name
In 1972 the U.S. Defense Information Systems Agency created the Internet Assigned
~umbers Authority (IANA). lANA wa<; responsible for assigning unique 'IP addresses'
to each computer connected to the Internet.
26
Unit2 The Web
By 1973, the Internet Protocol or IP addressing system became the standard by which all
networked computers could be located. Greater numbers of users networking with each
other created a demand for a more simple and easy-to-remember system than the bulky
and often confusing IP system of long, cumbersome strings of numbers.
Researchers and technicians at the University of\Visconsin who developed the first 'name
server' in 1984 answered this demand. With the new name server, users were no longer
required to know the exact path to other systems. This gave birth to the current addressing
system in use today.
A year later the Domain Name System was implemented and the initial top-level domain
names (TLD's) , including .com, .net, and .org were introduced. Suddenly 121.245.078.2
became 'company.com'.
The World Wide Web, Inter~'IC, and the public domain
1990 onwards, the Internet exploded into commercial society and was followed later by
the release of the World Wide Web by originator Tim Berners-Lee and CER.t~. Soon the
first commercial service provider began operating and domain registration ofJicially entered
the public domain.
Initially the registration of domain names was free, subsidized by the National Science
Foundation through IANA, but by 1992 a new organization was needed to specifically
handle the exponential increase in flow to the Internet. IANA and TheNational Science
Foundation NSF jointly created lnter~IC, a quasi-governmental body mandated to
organize UJ?.d maintain the growing DNS registry and services.
Overwhelming growth forced the NSI; to stop subsidizing domain registrations in 1995.
lnterNIC, due to budget demands, began imposing a $100.00 fee for each two-year
registration. The next wave in the evolution of the DNS occurred in 1998 when the U.S.
Department of Commerce published the 'White Paper'. This document outlined the
transition of management of domain name systems to private organizations, allowing for
increased competition.
ICA~N and the spirit of the Internet
That same year, the Internet Corporation for Assigned Names and ~umbers (ICAl'I"N)
was formed. This non-profit, private sector corporation formed by a broad coalition of
:he Internet's business. technical, and academic interest~ worldwide is recognized as the
..global consensus entity to coordinate the technical management of the Internet's domain
27
e-Business
name system, the allocation of IP address space, the a~signment of protocol parameters,
and the management of the root server system."
One of ICANN's primary concerns is to foster a greater spirit of competition within the
domain registration industry. Where before there wa.;; only a single entity offering registration
services, ICANN ha~ now accredited a number of other companies to add to the global
domain name database. This is called the Shared Registration System.
The exponential growth
Each domain name is made up of a series of character strings (called ''labels") separated
hy dots. The ''."Dot represents the ROOT Server. The right-most label in a domain name
is referred to as its "top-level domain" (TLD). The DNS forms a tree-like hierarchy. Each
TLD includes many second-level domains (such as "yahoo" in "www.yah<X).com"): each
second-level domain can include a number of third-level domains ("mail" in
''mail.yahoo.com"), and so on.
•-'."' root
.F ig 2.1: The Hierarchical Domain ~arne System inverted tree structure
Generic TLDs
In the 1980s. seven Generic TLDs called as gTLDs (.com, .edu, .gov, .int, .mil, .net, and
.org) were created. Domain names may be registered in three of these (.corn, .net, and
.org) without restriction; the other four have limited purposes.
28
Unit 2 The Web
Over the few years, various discussions occurred concerning additional gTLDs.leading to
the selection in November 2000 of seven new TLDs for introduction. These were introduced
in 2001 and 2002. The seven new TLDs arc (.biz, .info, .name, .pro, .aero ..coop, and
.museum).
With the increasing demand for domain names and new registrations. TLDs with two
letters (such as .in, .de, .mx, and .jp) have been established for over 240 countries and
external territories and are referred to as "country-code" TLDs or "ccTLDs".
Before the rise of the Web, the largest concentration of domain name registrations was
;mder the .edu TLD (as of March 1993). The Internet's rapid growth after 1993, however,
rndically altered the distribution of domain names across TLDs. Until at least 1997, .com
attracted the large majority of new domain name registrations. Most of the users rushing to
take advantage of the Web were businesses. and .com wa~ the only explicitly commercial
try-level domain.
Thus. the .corn 1LD became the dominant place for domain name registration worldwide
in the mid-1990s, which by the late 1990s became reflected in popular culture through
phrases such a~ a ''dot corn company" (or simply a "dot com'') or "dot com economy.''
Table 2.1 : Total domains registered under the top-level domains 1993-2005
. .
Top-Level March February February January January January
Dm1ain 1993 1996 1998 2002 2004 2005
-
~ .aJDl
(:00 23200) 1879501 22746754 262(J7922J 33351738
.;edu 1100 200) 4194 7012 7284 7480 I

I -
I !I
.trg 500 1700J 134860 2484886
.
I 2775728 3307122.
I
..:ad 200 llOOJ 13(i)79 3988975 4349336 5324213 I
.
I
.biz 499410 I I
914761 1087952.
. --
.info I
6h7473 1085133 I 3333660
l ..
I
TOTAL 2400 262000 21546341 30414510 35340170 46412165
I
-.3 DOMAIN NAMES REGISTRATION

·( ur domain name is more than just an address. It serves as a marketing tool and can
29
e-Business
signal to potential customers the nature of your business. Having your own domain name
projects a professional image for your operation. One of the benefits oflntemet is that it
creates a level playing field for sma11 and medium-sized companies. Having your own
domain name projects the image of an established business operating online in a professional
manner. Before you can sL:'lrt using a domain name. you need to register it with a domain
name registry. The registration process is simple and fairly automatic, but you need to
ensure that someone else hasn't already acquired the name you want.
Choosing your Domain Name
One common question you may face as an individual or a corporate is "what is the right
domain name for me?" With so many different TLD's and ccTLD's it really becomes
difficult to choose the right domain name. Lets first try to understand what a few TLD's or
the suffixes stand for
.com , for commercial enterprises

.cdu for educational enterprises
.gov for governmental agencies
.net for network-related entities
.org for nonporfitorganizations
.mil for US department for Defence

.biz for businesses
.info for infom1ation providers
.co.in for commercial enterprises in India
.ac.in for academic enterprises in India
Just like the suffix'· .in'' which ha'i been reserved for India, we have many such suffixes
reserved for other countries like .jp for Japan ..de for Germany- Deutschland, .uk for
lJnited Kingdom etc.
you can get many more deL:'lils ofTLD's and ccTLD's at www.icam1.org
So depending upon your need you can select the appropriate sufflX. Most businesses
world wide have already chosen a .com suffix for their business. In fact registrations for
.corns have outnumbered any other by ten to one.
Next the actual nmne. If your business nan1e is available as a domain name, you '11 want to
start with it. So if you own a food chain by name Indian Curry, you will surely like to
register indiancwry.com as a domain name.
30
Unit 2 The Web
Occasionally, a business will choose a com1try code hecause the letters have some supposed
promotional value. For example a company focusing on Indian brand and targeting only
Indian customers will go in for a .co.in domain suffix. So iflndian Curry ha<> a food chain
only in India you can go allead and register indiancuny.co.in a<; well. Intact you can register
as many domain names as you want for your site. Multiple names help you reach more
potential customers. Often some people register multiple suffixes for the same domain
name in order to avoid the name being used by competitors. So you may go ahead and
register indiancurry.net, indiancunyin etc. It's also a good idea to register common
misspellings of the company name. You don't need several web pages for each. Several
domain names can point to the same website. So go allead and block indiacuny.com and
indiancury.com for your food chain.
Thus deciding a suffix is dependent on the type of business that you are in and availability
of the domain name.
Domain Registrars
Tilll998-99, Network Solutions (www.nctworksolutions.com) was the only company

that provided domain registration services. It charged $ 70 for two years and $ 35 for
renewal per year. However, to ensure that Network Solutions did not become a monopoly,
the U.S. government decided that other companies should also be allowed to sell domain
names. While these other companies, which are known as Domain Registrars, provide
domain names and maintain DNS servers, Network Solutions still maintains the central
database to ensure that there are no duplicates. But you still pay Network Solutions an
annual fcc to maintain your domain name in the central name server.
After this privatization the domain registration cost came down clra<;tically to just$ 10 per
year. This created a healthy competition which benefited the end customers. A few of the
domain registrars who offer this registration services are www.register.com,
voww.domainpeople.com, www.godaddy.com etc. You can get a complete list ofiCANN
Accredited Registrars at http://www.icann.org/registrars/accredited-list.html
These registrars also offer you the option to check availability of a name. If your preferred
domain name is available you can register online using your credit card or you can ask any
ISP or Hosting service provider within your region to register the domain for you. You
must ensure that you give your name or your organisation's name as THE REGISTRANT
so that you are the legal owner of the domain. Other contacts can be of the person who is
managing the domain for you.
31
e-Busincss
Unfortunately. if the domain name that you are looking for is taken then you can learn who
owns it by checking at www.whois.net. You will also get to know when the registered
domain is getting expired, so you can keep a watch and register the domain name as soon
as it expires if the earlier owner does not renew it.
RS Activity A:
Make a list of at least 15 domain name extensions and explain what they stand for.
£S Activity B:
Make a list of 10 Domain Registrars and find out the charges offered by each registrar for
registering .com, .net, .org and other domain extensions.
2.4 THE WEBSITE

- - - -- --- - - - -- - - - - - - -- - - - -- - - -
Now that you have taken care of the domain name and it's in your control for next two
years, you can get down to the most important task of making a website suitable to your
business activity. Developing the best website is a challenging and important part of taking
your business online. Your site must have a pleasing, functional design, and it must accurately
reflect your business's persona. If it doesn't, you'lllose customers and goodwill.
Making an impressive website is not as difficult as it may look, but neither is it a child's
play. If you know graphics design and the liTML language, you may pull it off without any
ones help. We will sec a few simple steps to make your own web pages later.
32
Cnit 2 The Web
But most of the companies prefer professional website developers to put a site together.
Visualization
Whether you decide to do the website on your own or hire a professional company to do
the website, it-; extremely important that you must have a visualization of what your website
should look like and how it should function.
As a st:'lrter, you should have ready answers for the following questions:
i. If you already have an offline business, will your online website portray the offline
image consistently
Will the site provide detailed information for your products and services with easy
navigdtion
3. Will the site provide details for the visitors of where to go to see ()f buy the product<;
4. Will the site provide detailed contact information for communicating with you either
by phone or email
5. Will the visitor be able to book orders online
6. Will you have a provision to accept payments online
Ifyou already have some catalogs or brochures for your existing business then it will help
: ·ou to adapt these style preferences as well as any logos or other company graphics. This
'·'ill help you to provide continuity and uniformity in you brand building.
But if you don't have any of this material ready or you are starting fresh, then you can be
.1S creative as you want and create your own brand image online.
The Homcpagc
The first impression that you make is always the everlasting impression. Making a good
first impression is important for building relationships with your online visitors. In business,
a good first impression is crucial for forging profitable, sustainable, long-term partnerships
to help build the business and keep it thriving.
Your homepage is the only tool that you have which can capture a users attention and
make him stay online till you pass on your message to him. It's a mistake to believe that the
best sites are the ones with the most razzle-dazzle. Make sure your home page loads
33
e-Busincss
quickly. You have just 7 seconds with you to load the page completely or else the visitor
loses patience and will move on to another website which is faster and more attractive.
The effective homcpage criteria
Ensure that you don't clutter the homepage. Many a times it happens that you try to put up
too many things on the home page and you deviate from the actual message that you want
to give from your website.
Home page resolution compatibility is another issue. The home page is to be seen on many
computer screens like 15" or 17" monitors. The home page design has to be compatible
so that it look..-; equally impressive on all monitors.
Don't use very fancy stuff with animations and music which will slow down the site and
may not even open on most of the browsers. Ensure that your homepage is browser
compatible. We will learn about different browsers in the consequent sections.
Usc multiple links on your home page to provide relevant information. Don't try to put
everything on the home page, use relevant links like contact us, product<.;, about us etc.
Provide an interactive feature on your website where visitors can fill in a simple forrn to get
in touch with you with their choice of product<; or services.
PS Activity C:
Study the following websites and check the loading speed and resolutions compatibility
for the homepage of each website:
1. \vww.hotmail.com
2. www.disneyworld.com
3. www.d.imakhconsultant-;.com
4. www.microsoft.com
5. www.linux.org
34
Cnit2 The Web
., -
-~ HTMLAND THE WEB
The entire website works on Hyper Text Markup I .,anguage. An HTML file is a text file
rontaining small markup tags. The markup tags tell the web browser how to display the
page. The H1ML file MUST HAVE an htm or html file extension. You can create HTML
~ue by using any simple text editor.
Designing your first web page
Here arc a few simple steps to create your own web page.
If: ·ou are using windows as a operating system, click on start, programs, acccssmies and
select notepad. You should have the notepad window open in front of you. On the notepad
r: pc in the following text:
<innl>
<head>
<tide>lltleofpagc<ltitle>
~.~
<bodv>
· is the Beginning This text is bold<lb>
y>
~
~- ::r rhis follow the following steps :
~ -on File-> Click on Save As->
the File name type:- index.htm
e as type:- Select All Files
Encoding :- ANSI
-'..nd click on save.
35
e-Business
.;:; !
~q~. i
!
~~ ... :
~c.r..u
'
~ fko-
~t-<tt~ .sa-:16.tabve: -"* }
···-·-·-·--- -- .,,_ -·-·-······-·------ ·--·-·-
!.~~~~ ... .......... -. -- -----·-···------ --· .. .'.'!:'
-chUtl:>
' <hud>
uf page<ltitlfl:>
!<t Jtlf'>Ti't.l e:
,</ head>
'<body>
' rhis i:i t.hE 8<'ginnir.g Th i~ t.ext is. bold< / b.>
l<tbo<ly.>
i<J htm •>
Fig 2.2 : Saving your first web page
Now start your Internet Browser. Select "Open'' (or "Open Page") in the File menu of
your browser. A dialog box will appear. Select "Browse" (or "Choose File") and locate
the HTMJ ftle you just created - "index.htm" - select it and click "Open". Now you
J
should see an address in the dialog box, for example "C:\rnyfolder\index.htm". Click OK,
and the browser will display the page.
CONGRATUI.,ATIONS!! You have just successfully created your first weh page.
Explanation :
Now lets try to understand what exactly does this mean and what these tags really stand
for.
The first tag in your HTML document is <htrnl>. This tag tells your browser that this is the
strut of an HTML document. The last tag in your document is <lhtml>. This tag tells your
browser that this is the end of the IITML document.
36
Gnit 2 The Web
The text between the <head> tag and the <!head> tag is header information. Header
infonnation is not displayed in the browser window.
The text between the <title> tags is the title of your document The title is displayed in your
browser's caption, which appears at the top bar above the menu bar.
The text between the <body> tags is the text that will be displayed in your browser.
The text between the and <lb> tags will be displayed in a bold font.
EXTENSION and EDITOR
The most common question that you will have is, do I use HTM or HTMI, as the file
extension?
When you save an HTML file, you can use either the .htrn or the .html extension. We have
used .htrn in our example. When HTML was first designed way back in 1990's, the file
extensions supported only 3 alphabets but now all the newer softwares perfectly support
.html extensions.
To be a skillful web developer, I strongly recommend that you usc a plain text editor to
master HTML. Once you arc familiar with the tags and the formatting, you can easily edit
HTML files using a WYSIWYG (what you see is what you get) editor like FrontPage,
Dreamwcaver or even your Microsoft Word.
A few common TAGS that you can use in your existing code are:
 for line break, for Italics, for underline etc. To get the color effect, try the
following syntax.
 This is text in Red <!font>

II
 This is text in Blue <!font>

II
 This is Arial Pont in Blue <!font>
1ou can also get to know some more tags by doing a self study on the web.
37
c- 13 usiness
~Activity D:
By using HTML TAGS make a web page which will look a.:; follows on a browser:
LEARNL"lG HTMI, TAGS
·I am learning IITML language.
This is a good learning exercise for me.
The tag starts the BOLD effect and the tag <IB> ends the BOI .D effect.
- - - - - -- - - -- - - - - - -- - - - - - - - - - - - - - --
- - - - - - - --- - - - -- - -- - - - - - - - - - - - - - -
2.6 MARKUP LANGUAGES

----------------------
A web page can comprise of many elements like gmphics, photographs, sound clips, small
codes that run within a web browser. Each of these elements can be stored on the web
server as individual files. The biggest task is to get aU these things together and display the
content in a very user friendly m<mner. A simple text file with a set of tags can do this task
with the help of text markup language. These markup tags also called as tags, provide
fonnatting instructions that the web browser can understand.
The HTML is a subset of a markup language of a older and far more complex text markup
language called Standard Generalized Markup Language (SGML). SGML wa.::; used
for many years by the publishing industry to create documents that needed to be printed in
various formats and that were revised frequently.
Another markup l<mguage that was deri vcd from SGML for usc on the web is Extensible
Markup Language (XML). This language is being increasingly used to mark up
information that companies share with each other over the Internet. XML is a meta language
where users can create their own markup clements that extend the usefulness of XMI .,
that's why the name "extensible".
38
Unit 2 The Web
The World Wide Web Consortium (W3C), a non profit group, that maintains standards
for the web, presented its first draft form ofXML in 1996: the W3C issued its fiiSt formal
version recommendation in 1998. Thus it is a much newer markup language that HTML
which was formed in 1991. In 2000, the W3C released the first version of a recommendation
for a new markup language called Extensible Hypertext Markup Language
(XHTML).
2.7 WEB BROWSERS

\Veb browsers are software programs that help you navigate the Web and access text,
gmphics, hyperlinks, audio. video, and other multimedia. Browsers work by 'translating'
~ 'interpreting' hypertext markup language (HTML)-the code embedded in Web pages
that tells them how to look. Browsers read this code and display the Web page accordingly.
Browsers can be roughly divided into two types:
• Text Browsers and
• Graphical Browsers
Initially only text browsers were used during 1990's when ''www" was comparatively
new. The Graphic User Interface (GUI) had not yet been introduced. The limitation of the
~~browser was that, you could not view the graphics present on a web page. An example
:the text browser is Lynx, which is a very popular text browser for operating systems
fu Unix and Linux.
:o.S compared to this, the graphical browsers are the Internet browsers that allow you to
~ eYerything on the pages of the Internet which includes text (writing) and graphics
;raphs, charts, pictures, diagrams, maps etc).
"Fhere arc many graphical browsers, including Intemet Explorer, firefox, and Netscape.
'Elk!:· usually can only he used if the computer has the program 'Windows' on it.
emet Explorer provided by Microsoft, seems to be the most popular graphical browser.
~ber, the site on the Intemet is exactly the same one, regardless of which browser it
~·ed through. TI1e difference is how it look-; on your screen. But the HTML coding of
ebsite changes slightly to make it browser compatible.
39
c-Busincss
Sometimes you sec following messages on different websites :
"this page is best viewed with Intemet explorer Browser''
This means that the websites has been optimized by the designer for the best effect in
Internet explorer.
What are URVs'!
The web browser follows a very interesting technology cal1cd URL.
The letters URL stand for Universal Resource Locator.
The URI"" can be seen as the address of the web page or the website.
The URL is made of several parts. Lets take the example of
http://www.hotmail.com/user/dimakhlmail.htm
• The IllTPrepresents the Hyper Text Transfer Protocol
• 'www.hotmail.com' refers to the hotmail server where information is stored
• user refers to the user accounts on this server
• dimakh refers to the user directory within the user accounts
• mail.htm is the file that the browser reads to produce this page
In this tmit we have discussed in detail about the different domain nanlC.<; and their registration
process. The exponential growth of the domain names ha<; helped in the growing usc of the
Internet and has helped fuel e-commcrce success. You also understood the concept of
website designing and how to make an cffective website with an attractive homcpagc and
other features. The different markup languages allow us to make more attractive web
pages.
With the introduction to HTML programming, you should now be in a position to design
simple web pages for yourself or your company.
40
e-Business
3.1 INTRODL"CTION
"Electronic commerce" is one of the most talked about topics since the late 1990s. This
was the concept that revolutionized the lntemet technology and totally changed the way in
which business was done. It helped a lot of companies to strutup and make multi billion
dollars and at the same time, many a companies went down the drain. "I ~-commerce" as
it is called, announced its arrival with a boom and through there wa'> a bust, it ensured that
it was here to stay as long as the Internet existed. In this unit we will discuss a lot about
carrying out transactions on the web and also try to understand what e-commerce is really
a1l about.
3.2 E-COMMERCE
Before going on to the concept of e-commerce, first let's try to understand what we mean
by "commerce". Commerce, in its simplest definition is, ''The tnmsaction of buying and
selling of goods and services". Commerce need not necessarily be always related to money.
It can also be defined as the exchange of something of value between two entities. That
"something" may be goods, services, infonnation, money, or anything else the two entities
consider to have value.
Now, when the same procc-&'i is done with an electronic medium then, it's called e-commerce.
Thus, "!J'Jectronic commerce means the transaction of buying and selling ofgoods and
services through a digital medium·~
The Internet, which has been one of the most technological advancements in recent years,
has helped to fuel the out of proportion growth of e-commerce. Benefits of e-commerce
were initially exploited by industlies which were depending more and more on computers,
telecommunications and the Internet to produce, sell and distribute goods and services.
But the concept soon caught up with other business verticals and these businesses also
jumped on thee-commerce wagon to reap in benefits with high profit margins.
The initial wave of e-commerce subsided because of the lin1itcd market reach and online
consumers in the late 1990s upto 2000.
According to the US Commerce Department, 26 million people worldwide used the Internet
in 1995. In 2005. the estimated number of users will be nearly 350 million. 1lris has given
a boost to thee-commerce market a'> the numbers of probable customers are multiplying
day by day and it has opened doors for newer business avenues and more revenue options.
44
Unit3 E-Commercc
RS Activity A;.
Write down your own detlnition of e-commerce and what it means to you.
3.3 TRAJ)ITIONAI.~ COMMERCE & ELECTRONIC COMMERCE
E-commerce transactions are considered to be far different from conventional commerce

transactions. It is also said that unless the existing busine..c;scs switch over to this e-commerce
business, they are sure to face closure in due course. This is not the truth, but the truth is.
e-commerce will defmitely change the way the traditional business is done. The traditional
businesses will not face extinction if they decide to ignore thee-commerce world. but
eventually they will benefit little, or not at all, by ignoring the power of e-commerce.
Any traditional business essentially consists of different players at different mediums which
fall into three categmies of buyers, sellers <md brokers.
A buyer is a customer who purchases certain goods or services. Once the buyer decides
his specific need, the buyer finds the product that will match his needs. After selecting the
product, the buyer finds a seller and after he is satisfied with the specific features and
capabilities of the product, he agrees to buy the product. Both buyer and the seller agree
on the terms and conditions and the buyer will then pay for the purchase. In the history of
commerce the seller used to be a producer. But the separation between sellers and
producers has been an important stage of commerce development.
A broker is an intermediary who helps buyers and sellers to complete a transaction. But
the broker need not exist in every transaction and may exist for only certain transactions
like a real estate agent.
E-commerce started taking shape during the early 1970s and 1980s, but it was at a very
nascent stage and the only application was for electronic funds transfer (EFT). The first
known example of e-commerce is the introduction of EFT between banks over secure
private networks, which changed the way the financial markets did business.
45
c-Busincss
Eventually the advent of the World Wide Web in the 1990s, tumed out to be a tuming
point inc-commerce by providing an easy to usc and a cheaper way of doing business.
The traditional methods of doing business started using the Internet medium to do business
transactions. It also gave way to new ways and methods of doing business and helped
people to think outside the box. New business models were started to capitalize on this
new power of Intemet media.
Essentially, electronic commerce is the use of technology to improve the efficiency of

business processes by handling them automatically and electronically.
_RS Activity B:
What signi.fic;mt attributes make a vittual organization different from a physical organi?.ation?
£S Activity C:
Write down the names of 3 companies who have a successful traditional business as well
as online business.
3.4 UNDERSTANDING I)ORTALS
List down a few names of websites that come to your mind when you think of c-commerce.
'lbese domains should essentially offcrc-commcrce transactions and a shopping experience
from their websites. I Iere are a few:
46
Unit3 E-Commerce
www.rediff.com
www.incliatimes.com
www.yahoo.com
www.l23greetings.com
www.bamesandnoble.com
www.ebay.com
Upgrad• your Em•ll Nowl Find out how?

~
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---:..!!.~-~-~!:.~~·~·•Y·')It·:-~--A_ _..,. •. ~___j!._!_4_-_ _ •
- !)one
Fig 3.1 : www.rediff.com, an example of a portal
All these wcbsites arc "e-commercc enabled" which means these sites offer an electronic
medium by which users coming to the website can buy products or services. A typical
name is given to such websites. They are popularly known as PORTALS.
A portal is a website which offers multiple services like search engine, chat, email, shopping
etc under a single domain.
47
c-Business
If you closely observe the example of the domains listed above, you will see that the first
three websites offer all generic services where you can get multiple services and multiple
products. But the next three domains offer similar services with the difference that they
focus on a niche market. www.l23greetings.com focuses only on greetings, while
www.barnesandnoble.com specializes in online selling of books, whereas the USP of
www.ebay.com is to offer a website where users can buy as well as sell goods online.
Such websites are called VORTALS. Thus Vertical Pmtals or Vort:Ils are websitcs which
focus only on a vertical segment of the Industry. Another example is a website like
www.sharekhan.com which focuses on giving services related to stock trading.
!hlrnil~:~'lll.4~ lmttcl;!J;c. ctub--

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CLASSIC ACCOUNT .
· I!IDICES AT A GlAtk-1:
Tho m"''"!l"""'"' •• e>:pec"J19 • CAGR ;:J %\. r. tt:s 'lear l'Y.m the r.de~ couk1 su a pul~ <;~JJ ·y v.-·- ~--,.:~~n~·
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r,.. .,.,,..er:t- """looolong """""""'

~~""':.•l;"",._'."'::''.ol :'"'"'~'"'$""-"" - ' " ' - - - -
'Fig 3.2 : www.sharekhan.com an example of a VORTAL
~ Activity D:
Name at least 5 different vertical segments of business and list down appropriate websites
in each segment.
48
Cnit 3 E-Commcrcc
3.5 L~T))ERSTANDI~G E-BUSINESS
Many a times, people tend to get confused between e-commerce and e-business. People
use both the terms interchangeably. Let us see the difference.
E-commerce is related to the actual transaction process, whereas E-business has a broader
sense in which it is not just restricted to buying and selling hut also servicing customers and
collaborating with business partners. Every time you usc the electronic medium to conduct
business, you arc contributing to c-husincss. Even when you are sending a mail to order
products or services you are doing e-business.
Another misconception about e-husiness is that only those companies can do e-busincss
who are in the business of computers or Internet. People felt that e-commerce only meant
for those people who knew about the Internet and have business related to computers and
Internet.
Rather, e-business is for those companie..o;; who have not yet implemented computerization
in their entire husine..o;;s cycle. E-business is not about starting a new business or re-inventing
your existing business.
E-business is about streamlining your cunent business processes to improve operating

efficiencies that in turn will strengthen the value you provide to your customers - value that
cannot be generated by any other means. and value that will give you a serious advantage
over your competition.
R-business uses the strong foundation of the core processes, which have been always
used in traditional business, and merges that with the technological strengths and simplicity
of the Internet medium. These new applications, called the c-business applications, let
people do business in a more meaningful and profitable manner.
E-business needs investment and precise planning to implement and make it a success.
But the budgets for a company to be "E" enabled may vary from a few hundred dollars to
billions of dollars depending upon the need, industry and the final goal.
49
e-Business
Banks have always been pioneers in taking e-business initiatives and giving the best services
through the electronic medium to its customers. The figures in table 3.1 will indicate the
world wide spending of banks in IT to make and maintain their online e-busincss processes.
Table 3.1: Global IT Spending At Banks, 2000-2004 Source: Meridien Research
USDBillion
r-R_c_~gi_o_n______~___200
__o I 2001 I 200;~~_2_oo__3__r -__2_0~
_____ 1
Europe 75 80 85 90 98
---------r ---
NorthAmerica __ 75 80 1 80 80 82____ _
5~
1
Asia/Pacific 50 50 65
~~th-_-e-r~====-----l---9-.3--+---1-0--.4-=r9.~j_~l---+---l-2--.J~___j---!.
E-busincss history and revolution
The first known efforts in e-business were taken by www.amazon.com. The company
started its online operations in July 1995 with a mission to use the Internet to transform
book buying into the fastest, easiest, and most enjoyable shopping experience possible. In
no time did they earn immense popularity and started getting huge business over the Internet
in multiple countries. Amazon and many other such websitcs that mushroomed during the
same time changed the concept of shopping. People started coming up with wild ideas of
selling different product-; online. This was a new experience even for the buyer who could
now buy anything from books, shoes, cassettes and even cars, and that too all from the
quiet privacy and convenience of their home.
Entrepreneurs could come up with a unique idea and gave it a name, design a logo with a
slogan, join the "dot com" community and soon become a proud owner of a brand new
e-business. It did not require heavy investments to put up a website and neither did it need
an existing brand name.
With the success of such small companies, the bigger and ca-;h rich companies also decided
to try their hands at c-business. Such companies which were called "Brick and Mortar"
companies soon launched their own "Click and Portal" business models.
"Brick and Mortar" companies arc those companies who have a physical presence in a
shop or an office, while "Click and Portal" companies arc those companies that operate
virtually and do most of their business transactions online.
50
Unit 3 F.rCommerce
16 Activity E:
Is e-business essential for a "brick and mortar'' company? Note down your views.
3.6 TYPES OJi"'E-BUSINESS WEBSITESAND CLASSIFICATIO~
The "dot com" boom had set a buzzword that generated a lot of terminologies for the
websites doing business over the Internet.
We can classify websites under e-business depending upon the seller who is selling his
products and services and the buyer who is buying from the website. Business organi?.ations
as well as a consumer can do both the buying and the selling. Based on this we can classify
e-business websites into 4 major categories. Refer to table 3.2.
Table 3.2 : E-business classification
B2B B2C
BUSINESS TO BUSINESS BUSINESS TO CONSUMER
Seller:- BUSINESS Seller:- BUSINESS

Buyer:- BUSINESS Buyer:- CONSUMER
C2B C2C
CONSUMER TO BUSINESS CONSUMER TO CONSUMER
Seller:- CONSUMER Seller:- CONSUMER

Buyer:- BUSINESS Buyer:- CONSUMER
Let us now look at these types in a little more detail.
51
e-Busincss
1) B2B -BUSINESS TO BUSINESS
A business organization is involved here in commercial transactions with another

business organization. In short, the seller is a business organization and the buyer is
also a business organization.
Today global competition is incrca.;;ing day by day and every corporate company is
looking at different ways and means to cut costs and increase profits. Business relations
and inter-business processes arc changing drastically and many organizations have
adapted to B2B trading technologies and methods. A few of the pioneering companies
in B2B wcbsites have been Cisco, Dell, General Electric etc. Different verticals arc
making use of B2B and forming their own network. We have many directories of
online B2B categories focusing on different industries. A fe\:v of the industries that
have benefited are automobile, clothing and textiles, food processing, supply chain
management etc.
An example of a B2B website is www.steelrx.com. This website caters to a varied

audience of people worldwide comprising of steel professionals, technocrats,
government officers, steel manufacturers, steel processors, steel end users,
academicians, planners a<; well as various steel and allied associations. (See Fig 3.3)
STEEL RX
~ ...
W«ht Prle•
Dehy ~ <lt.es
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: :~ ; ..Jt:x ~ .. -:""- ! 4: ~. .,. •• :t. tp • : ........... ~!f·:
,;.( ·t;-, ;,~.... : aJ t!"."" ~ ! ) ~ ;,; ; .0 · , ;,..,, "':: Y• :_.., ,
Fig 3.3 : www.steelrx.com an example of a B2B website
52
Cnit3 I ~-Commerce
2) B2C - BUSINF:SS TO CONSUMER
A business organization is involved here in commercial transactions directly with a

consumer. In short, the seller is a business organization that is selling its products and
services to a consumer over the Internet.
With the B2C network well established, the end consumer has benefited a lot as he
gets a good price advantage. The company is directly dealing with the end customer,
so the middle agents and commissions arc reduced and the price advantage can be
directly passed on to the customer. The pioneering company in B2C has been
www.arnazon.com. The markets soon picked up on its success and now we have
many companies offering B2C services such as online banking. travel services, online
auctions. health information, real estate sites etc.
Dell has been one of the most successful company which encouraged B2C selling
over the web www.dcll.com . Dell directly sells its products over the Internet to the
end customers without a rescUer in between. (See Fig 3.4)
•k f.:it ~ N'~.;f~ T~15 ~
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~~~-,.._.~Mb: ~--.·~ct,..n\.k'.b.i~J.-4'-i "* Ct:J;e«CotW:.ar4J

S;;tittH~:1•~~ ~1fi::C*'r-""s-*<~ ~- :.:.t~-i'Def!:: 4 :w,;tc;X..-ct:ft ":_,U..;
Fig 3.4 : www.deU.com an example of a B2C website
53
e-Business
3) C2B - CONSUMER TO BUSL""'ESS
A consumer is involved here in commercial transactions with a business organization.

In short, the seller is an individual consumer who is offering his products or services
to a business organization over the Internet.
The C2B market is not a well-established market as yet, as the consumers do not
have enough resources to cater to the online business organizations. But the Internet
medium helps the consumer to expand the reach by making an online web presence
and does not need to inve.()t heavily in marketing or establishing contacts. The areas
where C2B market is flourishing are those areas where individual consulting is needed
such as tax consultants, electrical contractors, medical practitioners, actors etc.
www.jtmewalkeronline.com is a website of an individual tax consultant offering her

services to business organi:t.ations. (Sec Fig 3.5)
rft f d:1: '<'1!1'A fai•;~ 'iool$ r1fi>

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fraulan~,
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Fig 3.5 : www.junewalkeronline.com an example of a C2B website
54
Unit3 E-Comrncrcc
~) C2C - CONSUMER TO CONSUMER
A consumer is involved here in commercial tnmsactiom; directly with another consumer.

In short. the seller is an individual consumer who is offering his product<; or services
to another consumer over the Internet.
The C2C portals are becoming very popular as the consumers get a first hand
expetience to do business right from the comfort of their own house. The C2C website
is n01mally just an interface between the consumers to initiate and help in closing their
transactions. Online bidding for different products is a good example of a C2C website
where consumers put their product<; online and any otl1er consumer can bid for the
product to buy it. C2C website.<; also offer services which are in the form of infmmation,
like an online forum community website where consumers share experiences about
travel, hobbies, profession etc.
Ebay, www.ebay.com has been one of the most successful websites in the C2C
category and they have developed a business model which they are implementing in
every country to target local consumers. (Sec Fig 3.6)
..
t; Find
What are you looking for?
~Buy
Place a &id or Buy It How
·3''::1 Pay
PoyiOr_;.,,. ~·
Httl'rica'"
Diou~et~litf
- -- y;.-.j Simp~:-- enle~ ~our "l"8ximJO" \1ost ultra a:cept ?c.yP..;1, I!!!!I!U.IIo!lt
pnce t"'.d aE:iy w;i b 'd as thP he;: and !i"Pe WJ~ to pay.
s~ • Ht• ta starst neP~ed b y-...u O~"i't V.'3"'1 Wrth ;ayPa' you'.lalto be
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Rogi.>ltetlon Benefllt: O.BNJO n. w &to(r•~.L p--ot 1GB H;ZlOOPEJ.J.)~::n& s~ ~oatc.ht!s ~!i 70 l)C<:;.>MI; A WITCH' Fr•~ r>"ll m ~ 'o.;co C<M.t.!Qll
• Most.y,nru.&d ftfl'IYI OC::*C3ll-OO'
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• P~al UU\'N ~~ot"lltt.('fl
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Fig 3.6 : www.cbay.com an example of a C2C website
55
c-Busincss
Other types of E-business websites
The government is also taking a lot of initiative to encourage e-business transactions. The
fudian Govemment has launched websites which will offer e-business solutions to business
organizations as well as consumers. Such websites can be categorized under G2B and
G2Cwebsitcs.
5) G2B- GOVERNMENT TO BUSINESS
The government offers varied business solutions and services that can be of benefit
for business organizations. This IT initiative taken by the government encourages
business organizations to practice paper less transactions for smoother and faster
business experience. The most popularly accepted effort by the government has been
their online tendering facility.
If you visit www.m~tharashtra.gov.in, you will be able to read all the important
information about the current tenders, you can download tender forms and can get in
touch with other departments of the Maharashtra government. This creates a crystal
clear relationship between the business organizations and the government.
(See Fig 3.7)
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• ~~~l_,w t-'· f~~;
0 f C'lrS
me.,._~ ; :.:o-~'l.K'ttt><\$&.!«tVI·~cl ... o:-m-.JS fr.!r:-:~ s..

' t b:.od :x:: :>~-~she':~ 1 .. Car2h~, & nt.t,butor..,- oi Ba-!Y~·'d:edt ~JO!(..t'S..
~~~~~~!Jii~l
~ ~
· r'~"".:.Jbrl"' ~s 8.1~1~:r-.,.
cf Chuiband
~.;:-~~.t=~~~<"I"N (~wv.~Al}
K.vit
~~
.. s.:.nen • r4cc:~t(,)l'l~ .';.vUe "
.,.p.;..t • Ernvtov- Sd l.try th,.ougfl: 81mk
.-..Ita-.~ r.to~. l!.l -ry~ f'vr:-:;:s 50Nipatola 1;
• ~'t'J>Oi'lii<.'J'-::eov~~ : • ~he~·~ -ur•ua< Oo1t.t':· -. ~.,... & '!"oto~~ S .. lokrafya
.. Gocd i.,e'oenvJof\";~ 't<n.\' T. Type ~ l('r>J"',:!:o~ .r Yr-~ meTQ.'\ + ~lcnc:t&v-... o;:O'J".
~§. ~~ .. ~r~ ~ Gc\"twlm~M. ::f.cs.."l.\.•~<T.
+ o\dr.li'IL1l«JJo'l RS<J"ns
f:C!'r.r". ~~
Fig 3.7 : www.maharashtra.gov.in an example of a G2B website
56
Unit 3 E-Commcrcc
6) G2C- GOVER~TMENT TO CONSUMER
The consumers needed a way by which they could communicate with the government
in a faster way. The common man of India needed an alternative to reduce the day-
to-day hassles of communicating with various government bodies. The most successful
effort that has been highly appreciated by a lot of people hac;; been that of the Indian
Railways.
1be Indian Railways website www.indianrail.gov.in gives the details of the train timings,
booking status, online ticket booking options, etc for all the trains across India. It
gives you the option to do your bookings online and get the tickets delivered at your
doorstep. It saves a lot of time for the Railways department as wcl1 as for the
consumers. (Sec Fig 3.8)
Fig 3.8 : www.indianrail.gov.in an example of a G2C website
These arc the different ways by which most of the c-busincss websitcs are categorized
popularly. Thus c-business gave multiple dimensions and options for doing business, not
just for the traditional business houses, but also for a lot of new ideas and entrepreneurial
efforts in the Internet world. E-business is supposed to he saving multimillion dollars for all
those companies worldwide who have accepted thee-business way.
57
e-Busincss
£$Activity F:
Write down at least 2 website names in each of the categories that we have discussed
above.
3.7 SUMMARY
With the introduction toe-commerce we clarified it's simple definition. E-commerce is
based on the foundation of the Internet and the web. We discussed about traditional
commerce and electronic commerce and how both are equally important for businesses to
grow and gain more profits. The interesting concept of portals and vortals introduced us to
e-business. E-business websites have been differentiated into popular types like B2B.
B2C, C2B and C2C. The government has also taken a lot of initiative to make e-commerce
a success.
3.8 SELF-ASSESSMENT QUESTIONS

- ------
Q 1. Study the different websitcs offering e-commerce solutions in the travel industry.
Q2. Perform an e-commerce transaction by buying a book or a music CD online.
Q3. List the different ways by which you can make a payment online
58
e-Busincss
4.1 INTRODUCTION
Building a 'web presence' for a company or a business is not as straightforward as it

would seem. In today 's crowded and competitive Internet environment, having a simple
static website no longer qualifies as 'web presence'.
To establish your presence over the web, you have to look beyond the static web site.
Companies have tried different themes and models; some have clicked and turned into big
successes, while many others have simply fizzled out.
It needs precise planning to make your venture a success.
In this chapter we will sec the steps needed to build a successful web presence and learn
strategies that will allow you to transfer your business from just being a store on the block
to an c-business on the web.
4.2 THE SYSTEM ARCHITECTURE

ANSl/IEEE Std 1471-2000 standards define system architecture as the fundamenltzl
organization ofa system, embodied in its components. their relationships to each other
and the environment, and the principles goveming its design and evolution. Simply put, it is
a description of the design, differcnt clements and the interaction between them, ba-;ed on
the business requirement. Web Architecture is the set of principles that all agents in the
system follow to create the large-scale effect of a shared information space. Identification.
data formats and protocols arc the main technical components of Web Architecture.
It is important to know the working of websites in order to understand the architecture

behind the World Wide Web and the web presence. You have already understood the
concept of IP address and the working of Internet and ISP. I.cts take a practical example
in which we will look at how a website page actually opens in the browser on your computer
from a remote server over the Internet.
Before connecting to your ISP, if you type www.hotmail.com on your browser, you will
see an enor page with a message similar to the one givcn below:-
- - - - - - - - --------,
I
The page cannot be displayed
The page you arc looking for is currently unavailable. The Web site might be expericncil1g
Itechnical difficulties, or you may need to adjust your browser settings.
Cannot rmd server or DNS Error
Internet Explorer
- - - --
62
Unit4 The Web Presence
Let's assume you are connected to your ISP using a dial-up network connection with the
help of a modem and a telephone line. Now if you type www.hotmail.com on your browser,
the hotmail home page opens instantly. From pre-connection to post-connection, what
exactly is the ch,mgc in your computer that helps you to access any website on the Internet?
As soon as you are connected, your machine has been assigned a Dynamic IP address.
This address becomes your identity on the Intemet. Every machine needs a unique identity
in the form of an IP address which enables your computer to be a part of the Internet.
Now, if you observe carefully, when you arc typing www.hotmail.com, on the bottom left
comer of your browser you will sec a message which may read :- "connecting to
201.158.219.56". This means, your computer detected the IP address of the hotmail
website and is taking you to visit the hotmail website on that IP address.
So far so good. Now, the next question you have is, "How docs my computer know the
conect IP address of the hotmail website?"
The answer is simple; your computer get<; this infommtion from the Domain Name Server
OJNS) that is listed in your TCP!IP properties. If you are not sure about the DNS server
that your system is configured to use, from commandprompt type IPCONFIG/AI~l, and
you will get the ll) address of your DNS server. This is typically an IP address of a server
from your ISP. So, your computer actually sends a request to this server placed in your
ISP, which is called the DNS server. This DNS maintains a record of all the domains in the
world and their conesponding IP addresses. The server instantly returns the correct IP
address of the website and your computer is diverted to that particular IP address. Just
like the DNS server from your ISP, which caches all the domain data, there are other
parent root servers which constantly update the data with the new domains, changed
domains and the corresponding IP addresses. Your ISP's DNS server refers to these root
servers if it is not able to find the required information of the domain in its list.
A website consists of a group of HTML pages interlinked with each other. These pages
are hosted or placed on an Internet server that is working 24 x 7 x 365 days. When the
request from a particular browser reaches thi<; server, the first page gets loaded. Typically,
this page is the page that the hosting server administrator has marked as index.html or
default.htm or some other name that the hosting server administrator can decide. So,
every time you type www.hotmail.com the index page is sent from the hotmail server and
is loaded on your computer.
This is fundamentally how any website works on the Internet.
63
e-Business
Now that you have understood the web architecture, lets do a couple of activities and then
proceed to make a web presence strategy for a business.
.f6 ActivityA:
Find the DNS server IP address which is being used by your computer for accessing the
Internet.
i6 Activity B:
Write down the IP addresses of the following website..<> www.yahoo.com, www.hotmail.com,
www.monster.com and www.google.co.in
4.3 WEB PRESENCE STRATEGY
1990's wa<> the decade of the .com revolution. Entrepreneurs and the venture capitalists
flooded to the internet. Their perception was that simply adding a " .com" to a company
name, gave it an added brand value and a stronger stock price.
Some businesses made the most of the spectacular .com bubble. by innovative thinking
and strong visionary planning. Amazon and ebay, for example, stand out as undisputed
leaders of thee-commerce world.
The basic model of competitive strategy for these businesses was not very different from
that of any other business: they retained the fundrnnental principles oflow cost, high volume
and comprehensive service. TI1e key to their success however was the way in which they
64
combined these traditional principles with innovative business models to provide products
and services in a range unapproachable through traditional channels.
Part of the reason that this strategy worked well for these businesses was the fact that they
were upcoming start-ups.
What happens however, if you arc not a start-up and you already have a business? Will
this business strategy still work for you? How can an existing business grow by making the
best usc of the all-powerful internet? The trick for an existing business, is to find just the
right niche that will offer a competitive advantage.
Clearly, a web presence strategy will differ based upon the type of business and the current
positioning of the business. So we should segregate business organizations in two major
sectors as follows:-
• A stmt-up organization which was BORN on the Internet as a part of the e-commercc
market space
• A well established traditionally positioned organization which now wants to take

advantage of the e-commcrcc market space
The start-ups arc running a race against time. Those who are the early entrants and hit the
market with a unique idea have a great chance of survival. So the first-comers have clicked,
and made it big in brand and money. If you arc not the first, then it is better to re-think your
strategy and be different and build a new sector brand. As a start-up it is extremely important
to ao:;sess the target market and determine whether it is still realistically open for new
entrants. The start-up on the net needs to anticipate the possible moves from established
organizations and utilize its own agility to counter these rivals.
PS Activity C:
Make a list of 5 start-up companies that were born on the Internet and did not have a
traditional business format.
65
e-Business
4.4 BRICK TO CLICK APPROACH
''The only constant in the world is change" and as we have seen, the big change in the
last decade was the Internet. The rise of the Internet has been unprecedented, even in
comparison to previous leaps in technology and information provision. It had taken 38
years for radio and 13 years for television to reach a coverage that the Internet had reached
in less than 5 years across the globe.This change has impacted many organizations and
industries dramatically and rapidly. often leaving organizations that are unprepared without
a second chance to stay in the game. As a result, virtually every business today has realized
that they must become a part of the Information Technology world in order to survive and
grow. The traditional organizations need to cope up with the Internet technology very fa~t
as their customers have realized its power and convenience.
A traditional a<;sessment of an organization's competitive position is based on determination

of power held by buyers and suppliers in the industry, factoring the threat posed by new
entrants. as well as the potential of substitute products. Company strategists have used
these models for many decades to define business strategy and project future business
potentials. This strategy is incomplete unless one considers the threat analysis from web
competitors.
Let's look at an example :
A very popular bookstore in your city has a collection of books that you always felt was
never ending and sufficient. The store owner also feels the same and believes he ha~ a
collection large and varied enough to guarantee happy customers and to keep himself in
business for a long, long time. Any book that a customer asks for is made available in 2
weeks, if not already in stock. The shop owner earns a premium from sales of his
international book section.
Then one fine day, you open the news paper and read about a website which offers the
same books as your neighborhood store at a 40% discount, with a convenience of home
delivery in less than 3 days for any book from any publishing house across the globe.
All of a sudden you now have a virtual bookstore with 4 million more titles than your
traditional bookshop. You will think twice before you go to the shop now and would
prefer buying online and save money and time. Even worse (for the store keeper), you can
go to the shop, browse through the book and then order it from this website at a discounted
price.
You can sec why the shop owner now needs to seriously rethink his business plan and
strategy. He suddenly ha<; tremendous competition from previously unknown competitors.
66
He is now, willing or unwilling, thrown in the deep waters of e-business which is completely
going to change the way he is doing business.
The only option for him is now to pick up a book one-commerce from his own shop and
make a proper business transition plan from "brick-to-click".
1) Brick-and-Mortar
This term is used to describe a traditional business organization. The term is used
more in the context of e-business to deS'cribe an organization that docs not engage in
earning its revenue primarily from online means. But most of the companies arc now
moving away from just being a brick-and-mortar company. They try to combine their
largely traditional retail operations with some online shopping. They harness technology
to achieve greater productivity and are attempting to transfonn their operations to
support the digital business model.
2) Click-and-Portal
This term is applicable for business organization that is engaged in earning it<; revenue
primarily from online means. Such an organization needs to have a very prominent
web presence and online revenue generation capabilities. The click-and-portal
organization does not have an offline presence in terms of a show room or a store.
These companies arc becoming successful as they adapt to change very quickly in
consumer lifestyle, attitudes and buying trends. These organizations offer a very
competitive cost advantage for their online buyers.
Both the "brick-and-mortar" (B&M) and "click-and-portal" (C&P) have their own
advantages and disadvantages.
The B&Morganizations provide an advantage of in-store shopping experience and

the touch and feel factor that is missing in C&P
B&M offers a smooth service in terms of returns, repairs or exchanges, which is not
that convenient in C&P
C&Pwebsitcs offer the any-time-shopping experience and the convenience shopping

advantage, which is missing in B&M
C&Pwebsite offer a global shopping experience with no geographical boundaries of

products or services. This cannot be matched by B&M.
67
e-Business
This has lead to a new breed of businesses, which are now more commonly known
as CLICK & BRICK model of business. This upcoming trend is a hybrid offline-
online business modeL which incorporates both physical and online business practices.
3) Click-and-Brick
The click-and-brick business model encourages an existing offline business to profit

from partnering with an emerging online presence. Established business houses are
taking the path towards becoming e-enabled and saving on cost and passing the
advantage to the consumers. The banks have largely benefited by this particular
approach. Most ofthe banks keep the existing "Brick-and-mortar" traditional business
and also open new branches because that's where the customers feel more comfortable
to sign up for new accounts. Once the relationship is established, the customers are
encouraged to use the online interface for monitoring and managing their accounts,
money transfers, enquiries etc. and ATM's are used for money withdrawals. This
helps in providing more professional and customized service and also saves a lot on
the cost and overheads. Many companies arc following the same logic and taking
advantage of both the traditional business as well as the online business.
It has become apparent that everyone will soon order everything over the web light
from the daily groceries to books and furniture. People realized that the key to success
is to seamlessly weave together the benefits of both the worlds and to provide
maximum benefit to the consumer.
,@:S Activity D:
Write down an example of companies under the following categories: "Brick & Mortar'',
"Click & Portal" and ''Click & Brick".
0~ l.INE PRESENCE
1
4.5 OFFLINE PRESENCE &
In a haste to make a presence online, people put up a website which sends an incorrect
message to the visitor. Building an offline presence is totally different than making an online
68
presence. In your shop you have a lot of things to put on display and to attract customers
and lure them to stay in your shop to buy things. In the online world you have less than
seven second.;; to get a customer to be hooked on to your website. He has multiple options
to try and look at alternative websites and products. So the approach should be well
defined and thought out for an online presence.
Just being online with a brochure based website does not put you on the business arena,
but that establishes as your first step towards creating your own area on the web. With
further time investments, planning and targeted promotions your site can reach the final
goal of a proper online business website.
Also, don't expect your website to be profitable from day one. Its not going to generate
business for you immediately but will help in building your online profile, generate sales
leads, and help to strengthen your existing business relationships.
The offline and online business should have a synergy between them. 1bc web should be
an extended arm for your current business procedures and relationships.
Physical stores always offer convenience and personal service which lacks in any online
website. But with a proper combination of offline and online presence, you can offer a
more convenient method of business interaction.
~Activity E:
What arc the advantages of an offline business presence against an online business presence?
~ Activity F:
What arc the advantages an organization is likely gain if it has an online business presence?
69
c-Business
4.6 CONTENT AND INFORMATION

The successful websitcs is one, which offers the right content and the correct information
to the person visiting your website. A quality web site should contain at leac;t some original
content. Sites offering quality content will attract much more traffic than those that are just
selling something. Give your visitors a reason to keep coming back. Continually add new
content.
You can plan the correct content and information bac;ed upon the competition, audience
and the industry. The content will vary based upon the products or the services that you
are offering.
Selecting content for your website
There is no rule stating a website should equally represent all aspects of your business.
You should promote those aspects of your business that best applies to your website
visitors. This approach usually emphasizes products or services with no geographic
limitations (mail order better than store visits), sell for a lower cost or require the least
explanation or negotiation.
These days. anyone with web design software and time to kill can put together a good
website promoting or selling a product or service even if he/she has no experience in that
area. So how do you stand out from such websites and portray a legitimate business?
You should showcase the work you have done over a long period of time or put forth your
unique specialty. On the web, it's always better to demonstrate rather than tell. One way
is with a showcase or spotlight page, and another is with sidebars that tell stories or show
testimonials.
Highlight your points
Most people don't read the copy of websites. Online. however, it's especially important
to make your point in short sentences, paragraphs and bulleted lists. Create multiple points
of entry for the reader's eye by boldfacing words or by varying the layout with shaded
boxes and sidebars. Put appropriate images wherever possible, one image is worth a
thousand words!
70
Add Updates, tips and news
M£my companies want website features that arc regularly updated with cmnpan) or industry
news or tips. If you already have a printed newsletter, there are a few great options to
display the same information on your website.
But ensure that you regularly keep the data updated. Stalling on posting updates on a
dated feature can make you look lazy or even out of business!
Encourage users
You can encourage the visitors to give feedbacks, offer free downloads and give free
samples. Give them a money back guarantee if they are not satisfied with the product or
service. Put up testimonials of happy customers who have tried your website.
Provide Information
Don't just target on selling your product. Provide relevant information to the customer
about your product. Give a true picture of what you offer and don't give any false
commitments. Provide a comparison of other products in the market and highlight the
positive and negative aspects of your products.
4.7 THE REVENUE MODEL

A "revenue model" refers to the specific modes in which a business model enables revenue
generation.
Not all thee-commerce initiatives have the goal of money generation.lt is said that "A
dollar saved is a dollar earned'', so revenue generation can be in terms of reduced cost<;,
improved service or efficient support But as an online website which focuses on e-commercc
as the sole money generation, needs to have a proper revenue model to sustain in the
online world.
E-commerce firms generate revenues through subscription fees, advertisement fees and
transactional income.
The revenue models used by different websites can be broadly classified a<; web catalog,
advertising-suppotted, advertising subscription mixed, fcc-based models and digital content
revenue model.
71
e-Business
a) Web Catalog Revenue model
The origin of this revenue model dates back to l8 1h Century. In 1872 Aaron
Montgomery-Ward started selling dry goods to farmers using a one-page list. Richard
Sears and Alvah Roebuck in 1895 began mailing catalogs to farmers and small
residents. They setup a tradition of retail stores and became major players in the
retail industry.
In the Web catalog model the prospective buyer picks items from an online catalog
for purchase.
These purchases may be made online, by telephone or by mail (since some people
might be afraid to disclose credit card information online).
The type of items sold by this method include :
Computers and consumer electronics (Dell.com)
Books, music and videos (Amazon.com)
Clothing (Myviltualmodel.com)
b) Advertising Supported Revenue Models
This model is used by network television in the U.S. where the audience is provided
with free viewing with advertising messages.
The money made from advertising supporL<> the operation of the business.
Before the year 2000 this was an extremely popular model (between 1994 and 1998
it grew from US $0- $2 billion.
During 2000-2002 there was no growth in Web advertising. Since 2002, however
Web advertising started to grow again but at a slower rate. Only a few high-traffic
sites could generate significant revenue this way - because of the large number of
visitors.
c) Advertising-subscription Mixed Model

'
Used for many years by newspapers and magazines (subscribers pay a fcc and accept
some level of advertising). Subscribers are subjected to less advertising than an
Advertising supported Web site. The New York Times and The Wall Street Journal
72
Unit 4 The Web Presence
use this model. Both of these newspapers use a separate revenue model for the print
and online editions.
The New York Times is supported mainly by advertising, but charges a small
subscription fee for visitors who want to access crossword puzzles. A searchable
archive (dated hack to 1996) is also provided.
A small fcc is charged for articles dated back more than one week.
d) Fee-for-Transaction Revenue Models
In this model businesses offer services for which a fcc is charged. The fee is based on
the number or size of transactions they process.
Transactions can be personalised and executed much cheaper than traditional

transaction service providers.
A good example would be a travel agent.
Traditionally, they were paid a commission for every ticket sold. With more low cost
flights being offered, commissions in many cases have disappec:'U'Cd. As a result, many
travel agents now charge a flat fee for processing a ticket on an airline that has reduced
or eliminated the fees it pays to travel agents.
e) Fee-for-Service Revenue Models
An increasing number of organisations are charging fees for services provided. These
fees arc not based on the size or number of transactions processed, but rather on the
value of the service provided (online games and entertainment).
Sony's EverQuest adventure game has more than 400.000 players. Each player
purchased a US$40 software pack and pays US$1 0 monthly.
f) Digital Content Revenue Model
Digital products received through purchasing or subscription.<> and they are received
instantly (legal research lcxis.com).
Digital copies of published documents (ProQuest acquired reproduction rights to

digital versions ofjournals and books).
Also ACM (Associated for Computer Machinery).

c-Busincss
RS Activity G:
Study the revenue model being used for the following websites:
www.wonderfulbuys.com, www.yahoo.com, www.redifi.com
4.8 UNDERSTANDING CONSUMER BEHAVIOR ONlJNE
To increase the effectiveness of your online business and to generate more business it's
extremely important to study how users actually use the web. The online consumer behavior
helps to categorise a consumer and give a personalized service.
According to Booz-Allen & Hamilton, the elite management and technology consulting
finn. and NetRatings, Inc. Web usage patterns fall into seven categories of online behavior
and while in some categories consumers arc more likely to buy, in others they are nearly
immune to traditional online marketing pleas.
These studies are of much help and examine fact<; about online behavior to improve the
ways that business interacts with it<; customers via the Internet and other new technologies.
According to the study, focusing on how people actually use the Internet - exploiting
Internet technology's ability to track behavior- is superior to marketers' current reliance
on ''best-guess" demographic and other user-based segmentations;
Focusing on the wide behavioral variations exhibited by online consumers and the
opportunities that these variations can provide for marketers, the study introduces
"occasionalization," a new form of Internet market segmentation that identifies consumer
segments based on online usage occasions rather than on user-based characteristics, such
as demographics or attitudinal data.
Segmentation
By exploring users' session characteristics - how long a user stayed online, how much time
the user spent on each page, site familiarity and the category concentration of sites visited
74
- the study uncovered seven types of sessions, and found that three - Information Please,
Loitering and Surfing- are more likely to involve shopping than others. These sessions arc
the lengthiest, ranging from 33 to 70 minutes, and page views arc one to two minutes, so
users are likely to linger on a page and be exposed to different messages.
Quickies
Typically short (l minute) sessions that center around visits to two or fewer familiar sites.
Users spend about 15 seconds per page extracting specific bits of information or sending
emaiL Users in Quickie sessions may not notice any type of message as they scoop up the
needed infonnation and log off.
Just the Facts
Users here seek specific pieces of information from known sites. At nine minutes, the.o;;e
sessions are longer than Quickies but share the ao;;pect ofrapid page views. These occasions
are less likely to involve sites best enjoyed at leisure, such a.li entertainment. Users in 'Just
the Facts' sessions have a low propensity to buy.
Single Mission
Users want to complete a certain task or gather specific information and then leave the
lntemet. During these visits, generally lasting 10 minutes, users venture into unfamiliar sites
to find what they need. while concentrating on sites within a single category. Users in
'Single Mission' sessions are only open to messages related to the purpose of the session.
but a well-targeted banner ad may provide a good return.
Dolt Again
These sessions are 14 minutes in length and are notable for lingering page views: 2 minutes,
tied with Loitering for the longest of the seven types of sessions. Ninety-five percent of the
time is spent at sites the user has visited at least four times in the past. Users in 'Do It
Again' sessions may be willing to click through banner ads that arc strategically placed on
their favorite sites or react to site sponsorships that bring real content directly to the
consumer.
Loitering
At 33 minutes in length, with two-minute page views. 'Loitering' sessions are similar to
'Do It Agains': leisurely visits to fami liar "sticky" sites, such as news, games,
telecommunications I ISP, and entertainment sites. A company undertaking a hrand
75
e-Business
positioning campaign would focus on I nitcring sessions, where the consumer spends more
time on each page and is more likely to absorb the marketer's message and develop the
necessary brand associations.
Information, Please
These sessions average 37 minutes in length and are used to build in-depth knowledge of
a topic. perhaps for a research report. They differ from 'Single Missions' because users
gather broad information from a range of sites. Users in 'Information, Plea.;;e' sessions arc
mostly going to familiar sites, but are willing to cross categorise and linger on a page that
piques their interest, giving marketers an opportunity to expose them to different messages.
Surfing
Surfing sessions arc the longest, averaging 70 minutes, with few stops at familiar sites, as
users hit nearly 45 sites in a typical session. Time per page is a minute or more, suggesting
wide, but not deep explorations. Surfers usually spend time on sites with lots of content,
giving marketers opportunities to build branding awareness. since during these occasions
users will be exposed to messages for a relatively long time. Sponsorships of content are
another good approach, encouraging users to associate their favorite content with a specific
brand name.
16 Activity H:
Analyze your online behavior over a period of the last 1 month and find the sites that fit in
with the above pattcms related to your online behavior.
4.9 SUMMARY
In this unit we discussed about setting up a web presence for a company and understood
the web system architecture. The web presence strategy is extremely important for a
startup company as well a.;; for any other company that is re-branding itself in the online
world. You also learned the concepts of brick and mortar, and click and portal. The
76
combination of offline and online presence will finally decide the success of any venture.
The content of the website..<> and the information available helps decide the revenue models
and revenue generation for the website companies.
4.10 SELF-ASSESSME~T'f QUESTIONS

----------------------------------------
Q 1. Study the web presence for the Indian Railways site and understand the offline and
online working combination.
Q2. Read the ''Times of India" newspaper and compare the online version of the same.
Note down the difference in the online and offline content and related data
77
e-Busincss
5.1 INTRODUCTION
Internet marketing refers to the usc of the Internet to advertise and sell products and
services. 1bis involves the usc of website.<; and e-mail to inform customers about a product,
solicit their questions and accept their orders directly through this electronic medium. In
the physical world, marketing efforts are more focused and targeted. It is usually based on
personal contact selling and market segmentation. In case of online, Internet marketing,
you put all your efforts into targeting a faceless, potential customer with whom you have
no relation. The image that you arc able to project through your website and media is the
final image that the potential customer will believe. The challenge for online businesses is to
convince customers to trust them and buy their goods or services online.
5.2 DESIGNL~GSTRATEGY
Developing a successful Internet marketing strategy is an essential part of your online

success. Traditional marketing is about selling your product<; or promoting your company.
Internet marketing needs a proper strategic plan that involves selecting which marketing
technique.<; will most effectively promote the growth of your company through the Internet.
In order to succeed, you must develop and implement a strategic plan that includes a short
term ~md long term perspective.
Short term marketing strategies are those that bring you a temporary boost in sales traffic.
Although these techniques arc very important to your over-all plan, they are only a temporary
traffic source and must not be solely relied upon.
Short term marketing strategies usually include:

• Purchasing advertising
• Bulletin Boards
• Search Engines
Long term marketing strategie.<; are those that bring you a steady stream of targeted traffic
over time. These strategies will continue to produce results even years down the road.
Long term marketing strategies include :

• Opt-in Lists
• Freebies
• Content
80
Unit 5 Internet Marketing
By creating and implementing a balanced marketing strategy, using both short-term and
long-term strategies, you will drive a steady stream of targeted customer traffic to your
website.
You also need to focus on the type of industry that you represent and accordingly put up
your entire strategic plan.
For a small or medium-sized business you need to implement the right Internet marketing
strategy keeping in mind your goals of m<maging better customer relations, furthering your
business initiative or maximizing your marketing efforts. You need to begin by analyzing
and evaluating your current application of the Internet. rrom your existing business you
should be able to generate a strategic plan which will give the details of the following:
Your Business Model

Operational Processes and Procedures
Internet Marketability
Website Structure and Content
Site Performance and Reports
Efficacy Opportunities
£S Activity A:
Plan an Internet marketing strategy for a famous boutique in your city.
5.3 ONLINE BRANDING

Successful marketers arc looking beyond logos and color schemes to build their brands
online. Online branding is becoming more sophisticated as more attention is paid to c:reativity
and technological applications. That, in turn, is now fuelling cross-media ad campaigns.
81
c-Busincss
There is evidence that branding is being taken more seriously online. MSN's Online Pulse,
a six-monthly barometer of marketing trends, has identified arise in advertising creativity
and attention to brand-building on the web. Technological advances have been driving this
trend. Rich media advertising formats such as Overlays (which allow ads to fill the screen
before shrinking down) have enabled clients to bring more elaborate and engaging executions
onto the web.
Online brand building is a major task for most of the corporates who have established a
big brand in the click and mortar world.
Advertisers agree that it's difficult to pull off a branding strategy on the Web. Many of the
techniques that are most successful in offline ads arc complete bombs when duplicated
online. The Net may be an interactive medium. but it often defies all brand logic.
"Strong offline brands do not always translate directly to the Web," says Rich Radka,
director of creative delivery at Sapient (SAPE), a Cambridge, Massachusetts based!-
Builder. "Treating the Web as just another distribution channel, instead of seeing it as a
different medium with different needs, usually backfires."
In fact, many sites that arc run by top brands register a minimal online traffic, according to
a recent report by .Forrester Research (FORR). Forrester studies brand awareness
and web-surfing behavior an1ong 16- to 22-year-olds, who advertisers consider strongly
brand-conscious.
Nikehas built one of the world's biggest brands. The combination of the swoosh ( the
fan1ous thick tick-mark like logo), the "Just Do It" slogan and their high-priced TV ads,
featming the likes of Michael Jordan and Tiger Woods, have inspired mi~lions of people to
buy their products. Today Nikc is a global household name.
But pay a visit to Nike's website and you can see how hard it is to take an offline brand
and replicate it online. The swoosh is omnipresent, but the superstars' images take forever
to load. Hardly an environment conveying speed, strength and athleticism. Would you like
to sutf to this site on a slow connection?
Just don't do it, is quite likely to be your response
"Although its swoosh is almost omnipresent on young consumers' sneakers and baseball
caps, Nike' s site is anything but a hot destination," Forrester contends. "Other favorite
brands like Coke, Pizza Ilut and Levi's don't even register enough traffic to show up on
the Media Mctrix audience ratings. Only six of the young consumers' top 15 brands show
up among the most-visited sites."
82
Consequently, Web brand-building is not cheap. If you're trying to build an US based

online national consumer brand, you'd better budget $30 million to $70 million just for the
advertising and communications work. For a business-to-business brand. it takes SlO
million to $30 million to launch.
The costs are high because building a brand requires a persistent online presence. For
some brands. this entails a mass-appeal site; for others, brand-building requires a
combination of initiatives from banner ads to sponsorships.
One strategy is to combine online and offline marketing. Messages across multiple media
should be consistent. But not many companies have succeeded in duplicating an offline ad
directly on the ~et, or vice versa.
Of course, some products' selling points, those of fast food, for instance, are impossible to
convey online. Conversely, popular web site brands like Yahoo or Amazon are difficult to
portray offline. One solution is to sponsor an event, or place an ad in a venue that ha<;
similar value a<;sociations as your product, like monster.com ad<; during technology seminars
and exhibitions.
Similarly, an offline bmnd- a car company, for example - might want to sponsor a website
rather than launch one to promote a new model. If you do place an ad online, beware of
advertising techniques that won't work there. There are plenty of TV and radio ads that
usc suspense as a strategy, spinning a story without revealing the product until the end.
Not a good idea online.
Banners that flash several messages before saying who they arc aren't effective online.
People are actively surfing for content that answers an interest or need for them. They're
not sitting back watching a TV screen. So if your ad takes too long to communicate that
you have something of value, people tune out.
Effective brand-building requires stratet,Tic plcmning before any ads are bought, signs painted
or brochures printed; even before the company nan1e is selected. Indeed, many !-Builders
have step-by-step processes for brand-building.
Even with such a road map, online bnmd-builcling is a fuzzy, touchy-fccly process. Advertising
executives on the other hand have had decades to figure out how to convey brands via
TV, radio and print. But the Web is a much younger medium. There's a lot to learn about
what works - and what doesn' t.
83
e-Busincss
~Activity B:
Find the rates for placing a banner advertisement on www.rediff.com and

www.indiatimes.com on 3 different sections and the homepage.
5.4 ADVERTISING CAMPAIGN
If you have to plan a campaign for online advertisements, you have multiple options to
choose from, submitting your site to search engines, bulk mail campaigns, etc. Of these,
banner advertising has been very popular and effective in terms of making a campaign
successful.
2004 marked the 10-year anniversary of web advertising. The first 10 years of online ad
spending have been a roller coaster ride, with a boom, a bust and a new resurgent boom.
For the fust time, the advertising industry is now expe1iencing a significant transformation
of pricing dynan1ics. given the changes in the supply and demand of ad inventory. At least
for premium inventory categories such as automobiles, technology and business, what
once seemed destined always to be a buyer's market is in fact turning into a seller's
market.
By most accounts, the first web advertisements were introduced on HotWired (today's
Wired News, a part of Lycos) in October, 1994, for brands including Zirna, Club Med
and AT&T. The ads were narrow strips that ran across the top of the pages, 60 pixels tall
and 468 pixels wide-the proverbial "banner ad"-precise dimensions that remain
surprisingly popular to this day. The text of the AT&T ad, the first "crossmedia" online-
plus-TV campaign (titled ''You Will" by the agency N.W. Ayer), read, "Have you ever
clicked your mouse right HERE? You will."
Fig 5.1: One of the first banner advertisements on HotWired by AT&T
84
Unit5 Internet ~arketing
A decade later, advertisers in the U.S. market spent $9.6 billion on Internet adverti. ements.
By now everyone is aware about what exactly online advertisement campaigns mean. An
online advertisement campaign is like any ad campaign ... only it's online ... on the web.
If you have products or services to sell and arc advertising them via T.V., newspapers.
brochures, etc. it is time you took your promotions online. The number of net surfers is
increasing at a rapid rate and studies have shown that people arc spending more and more
time on the web. Buying products online is convenient, ha<;sle-free and easy. Online market
places allow buyers to see the best deals available without moving from their desks and
choose the products they want, which they may not find at the local supermarket.
There arc a few ways you can promote your products and services online. Display banners
on a website (ideally a website which caters to your target audience), have banners
displayed one-zincs (online newsletters and magazines) etc. When visitors click on the
banners, they would be taken to your website. Thus, your site should be impressive and
functional enough to give a good buying experience for any online consumer. Though a
fully functional website with shopping carts is very much desired if you plan to sell product-;
or services and project your company as a professional supplier, you can still promote
your product<; or services if you have a very basic website as long as it provides details of
your offerings as well as contact details.
Web banners are images or animations which advertise products or services. Pig 5.2
shows an example of a banner advertisement put up on www.rediff.com
I
!rediff.com
:1~>4.~~~~~~~::..:.~---. .------~ ~r·.~
' - ~ ~
Fly
Mumbai - Bangalore
for Rs. 2223
Fig 5.2 : A banner advertisement placed on rediff website
85
c-Business
The intemet has already become the third most-used media channel. Growth of the online
audience. with 5.000 more users joining daily, proves attractive. Research shows that
daytime is now primetimc, as audiences that could never be reached before arc now
available and attentive. 'The Internet is a medium of a thousand niches, combining exceptional
lifestyle targeting with a mass reach. Lord I ,cverhulme's famous quote- "Half of my
advertising budget is wasted and ifl could discover which half, I would save it"- has now
been addressed. The era of media wastage is almost over because online marketers only
pay for ads called by the viewer's PC.
~Activity C:
What kind of an advertising campaign would be successful for a Honda Car showroom in
your city? Design a campaign for them.
5.5 WEB PROMOTIONS

The planned web promotion of your website offers more hits and traffic to your website.
The web promotion is linked to your domain name and your website data.
Promoting Domain Name
Much is said about the importance of registering some simple, catchy domain name such
as flowers.corn or company-name.com. And sure, anyone would rather want abc.com
than abcxyz.com. With top selling domain names capturing seven figures, let's take a
moment to examine the benefits of a catchy domain name.
Offiine Marketing
Without a doubt, the biggest advantage of a catchy domain name is that it's memorable
when a customer or prospect sees it on your business card, brochure, delivery truck or
hears it on a radio or TV ad or through word-of-mouth. If that is your priority, you should
favor names that don't require tricky spcmng, hyphens or abbreviations. Better to be
tatamotors.com than tatamtrs.com.
86
Unit 5 Internet ~arketing
Online 1\tlarketing
Surprisingly, this is where your domain name matters least. Web suders who sec your
batmer ads, page sponsorships, recruited links or sear·ch engine listings will simply click on
the banner or link to visit your site. They may never see your domain name until they visit
your site.
To see if the domain name you want is available, click on the Whois button at http://
www.networksolutions.com. If the domain you want is already taken, you may still be
able to use it. Here's how:
First, look to sec if there is a website at www.thc-namc-you-want.com. If so, browse
around to get a good idea of how much effort has been spent on website construction.
If little effort is apparent or if there is no site at all, you might be able to make the domain
owner an offer he can· t refuse. Usc the Whois feature above to f md the ph(?nc number or
e-mail address of the domain owner. There is no established pricing structure for purchasing
domains, but always go into atly negotiation with two or three alternative domains in mind.
Professionals who can take care of your domain name in a much better and professional
manner can be appointed to handle the web promotions.
Internet marketing and web promotion specialists can work to develop atl individualized
marketing plan for your website that will include:
• Demographic research.
• Internet search word research.
• Monitoring website performance.
• Affiliate and partnership marketing.
These planned web promotion activities will benefit you in a lot of ways and result in
traceable and auilitahle results including :
• Generating qualified traffic and visitors to your website.

• Increased conversion ratio from traffic to lead to paying client.
• Significant reduction in advettising cost.
• Leads and clients from across the world and different countries.
• Increased sales at1d improved ROI.
• Effective visitor interaction and customer relationship.
• Increased efficiency in your sales staff and lead follow up.
87
c-Business
Permi~sion based E-mail Marketing
Bulk email marketing also helps in your web promotion activity. You can send potential
clients the latest news from your industry, special promotions or offerings. and information
on your products that will uniquely set you apart from your competition. Be sure to use
opt-in/opt-out automated software to handle your communications or you will soon discover
that you are in violation of the recent Ck"\1"-SPAM Act of 2004.
Technically SPAM includes unsolicited. unwanted, iiTelevant or inappropriate messages,

sent indiscriminately to potential customers a<; a form of commercial advertising in mass
quantities.lt is popularly known as ·junk mail".
If you do not follow the rules of anti-spamrning, then your website or W address may get
blacklisted and visitors would not be able to access your website. So it is extremely
important to use permission based e-mail marketing to avoid this problem.
SPAM is a big problem on the internet today, and everyone must do their part to limit it a-;
much a-; possible. (Please refer to Unit 8 for more details).
By sending mails to pennission based mailing list<;, you can give partial details about a new
scheme or promotional offer and then encomage people to visit your website for more
details and explore other promotional activities. A sample of a mailer is given in Pig. 5.3
ff8
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88
UnitS Internet Marketing
~Activity D:
Design a web promotion plan for the Honda Car showroom that you chose in Activity C.
5.6 SEARCH ENGThTE POSITIONING
Just getting listed in a search engine doesn't do you much good if you are number 472 of
800765 results, and it doesn't help much even if you rank at number 27. Most search
engines display 10 results per page. So the positioning becomes important if you want
your site to appear in the first 2 pages.
Search engine positioning is the process of obtaining high page ranking on search engine
re..<.;ults pages. These results pages arc a list of links pertaining to a specific user submitted
search term. Positioning is only relevant for search engines with "crawler" technology.
Crawler is a component of a search engine that roams the Web, storing the URL-; (Universal
Resources Locator) and indexing the keywords and text of each page encountered. It is
also refetred to as a robot or spider. Another program, called an indexer, then reads these
pages and creates an index based on the words contained in each document. Each search
engine uses a proprietary algorithm to create its indices such that, ideally, only meaningful
results are returned for each query.
So to achieve a top level of search engine positioning. you need to optimize your wcbpages
and websites. Search bnginc Optimization focuses on designing pages within your website
to attract search engine spiders. Website design skills arc required to optimize a site's
page properly.
Content, Content, Content!
The content of the site is one of tl1e most important factors for successful search engine
positioning. The pages you create should provide valuable information that references
very specific terms and concept<; that arc unique to your website.
89
e-Business
Titles and Meta Tags
We leamt about the TAGS when we designed a sample webpage in our earlier chapters.
The crawlers read the same tags to decide the keywords of your pages. In the early days
of search engine optimization, marketers focused on meta-tags as the primary way to
attract search engine traffic. Meta-tags arc HTML tags that help describe the document
they are located within. Today the search engines not only look at meta-tags, but also at a
site's content, internal link structure and link popularity.
l-ink Structure
To differentiate a website from others, websites have tumed to new technologies like
dynamic HTML and Flash or well designed graphics to improve the user experience.
Good navigation through your website isn't just important to your users. Search engines
use the links within your website to crawl and index the pages those links point to.
Link Popularity
The number of websites that link to your website is one of the factors that help search
engines determine your relevance for a search term. Link popularity and gaining new links
from outside wcbsitcs to your website have proven to be a popular concept for people
seeking to improve their search engine rankings.
Free Submissions to Search Engines
The search en~rines and directories provide a free submissions page where you can submit
your website and a few pages of your website to be included in their results. But before
you submit to unknown sites, it is recommended that you read the search engine's submission
guidelines and not submit your website unnecessarily or excessively.
GOOGLED!!
It is important today to have your website listed on Googlc as statistics show that 90% of
the search engine market has been captured by google. On the Google website,
www.google.com, Google provides simple and easy-to-follow steps on how to include
your website free of cost in their search engine and also gives more information about the
different paid services offered by them to help promote your site. Sec Fig. 5.4
90
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·-
These days it is necessary to pay an inclusion fcc to a majority of top search engines if you
want specific web pages indexed. A high ranking is not guaranteed through paid inclusions,
but it's a start.
The most significant change in the search engine field is the shift to a "pay-for-placement"
model. A few years ago, getting a top ranking was based solely on search engine
optimization. Submitting a website to a search engine is still free but now search engines
allow marketers to buy specific keyword positions in addition to, or instead of, optimizing
their way to the top.
16 Activitv E:
Make a list of all the keywords that you would like to include in the meta tags of your
Honda car showroom website.
-- - - - - - - -- - -- - -
91
e-Business
5.7 KEYWORDAUCTIONING
Google has a very successful program for paid advertisement campaigns. It gives a cost
effective way to do online advertising and run online campaigns based on your business
line, budget and keywords. So for web advertisers, Google says ...
"Reach people when they are actively looking for information about your products and
services online, and send targeted visitors directly to what you are offering. WithAdWords
cost-per-click pricing, it's easy to control costs- - and you only pay when people click on
your ad."
GoogleAdWords connect you with new customers at the precise moment when they're
looking for your products or services. 'Ibis means you can select when your advertisement
should appear on google. For example, if someone is searching for ''buy air tickcts"then
you can pay by bidding for this keyword so that your advertisement wm appear either in a
simple text box on the right hand side or on the top as "Sponsored I -inks".
But the best part of this is you don't have to pay for displaying this advertisement. You only
pay if someone clicks on your advertisement. 'This ensures that you only pay when someone
actually visits your website after they click on your advertisement.
You also get the benefit to plan your advertisement campaign for a specific country or
region. It also gives you a flexibility to decide your own budget on a daily basis. An
example of a search result and display of relevant ads when anyone types 'buy air tickets'
is given in Fig. 5.5
92
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l licket/W~iiqns- AtriiuesSallWi! Pi'"-"2li!rt t.irnru· Tfdwts

~Xtrs Vak;e •. F'ae Shopptng Vouche:n. • !..oya:ty Pmnts. · - Kefar l fnwlc & Shop ;or fr·m • ~nsnheatm- and Special Wat:F ara:~
Buy Airtickets in 3 )ns!alirrer.ts ••• dnmes:t-e & intematioonl air tr.wel
tUr-..:Gt-.a~2 ·r :l~2h{~l-e:S>.:..:cm-h;a.;.f~)-H¢t.WS !':n·~ . ~l}1}. "~ c~~ 2005. [ ..K!t:.t~. Sf!-!.;z; .LJ.;'.~ ' 1,",'\"fi~S.k"pb:..'f'i.•;Qf;l
Air Tickebng India.Buy Air Tickets !r.clia Air Ticketlng A[r -·· ChPlH! r;-li'Jhts Worlrj:..;--:de
Ail TK:k~irg: indta. Ruy Air Tklrots hdla, Air r l~k&ting_ Air Tick&1in.g jmta Air Tl-;;icOO·:g k' asr.Ml DJ3CC.Ltnts on AH ftm! ts
A(jar,tslttdia, t.dis Cn••P
& :l!scat.ot Alnores. ... A ~ilrlo Ra"'J" af Arnao:ir>g Cea:•
\r\-\-'S ~Pck;..;c:;{i-s;-r. c~rq/ h-ac~~~ot:fV.::::tr'1\.'>'~'-'r:a~r"':d·:~rmJ~.:'~{i,: 1 r;tt"(·.~ .} !Y. 'c\)".:t-f~t~lt-5:> r: ~
J L!:.:~-~':.~ · ;;:.f:?:f;::·..;::.t:,?:..:
~--·--·-------·---·---·-·-----·---- .. ·- -- .,.....,...,.,.,..,..,,........-~.~~- .. ___ ~- , _.._m _ _ _ , .......,_... ,_..,._........................... ---~-·- .. .,{"¥,.o?.J'-(n,~·;:•.::- ~~; ~,... _,.. ,_
Fig 5.5 : Display of ads based on a keyword search
The daily budget controls your costs. When the daily limit is reached on an average, your
ad will stop showing for that day. (The budget controls the frequency of your ad, not its
position.) You can raise or lower your budget as often as you like depending upon your
marketing goals_
You influence your ad's position by setting its maximum cost per click (CPC). The max
CPC is the highest price you're willing to pay each time a user clicks on your ad.
With Google AdWords you create your own ads, choose keywords to match yom ads to
your audience and pay only when someone clicks on them.
Fig 5_6 shows the Traffic Estimator for the keyword 'buy air tickcLc; '-It shows that the
average cost per click will be approximate!y Rs.7 _50_
Just like you, other sites are also willing to pay google for displaying their advettisements_
For this you have to decide the maximum you are willing to pay each time someone clicks
on your advertisement!!
93
c-Business
..--···-------.--.. - .. T"' ... ,.._ . . . . - - - · - -~ ... - - - · · - -
,rruu&mMi\CPC; ~- _........ _;~~!.~~J

t:,=:~~:l=t~1~i~~~-~~~~~~~~- '
jt<,;y;..,,d•. · ·
Avg. Poiiti,;n · · ·· -- cit<bl~:y·
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c.,..,o..,Y · ·-- i.vu:cr>e ···-·s.ailis~
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:blt}l mr tt~·ke!P 20 ... 0 1 :) 1~ f .!6 :. ·.~. --1:
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rru.. things to rt)tn&mbe-r:
Ynut 3(k wml: f!IM tc~ ~'t""..l a.::.._-a:e ye.~ acc(;.lt_1t by l'MponCu;gto ar. e<n:;1.-n"} ...1 1<1 Y'£"" 'tc'tt C£.'1 afJrti)IS
c~ )'f.'J4Jr CPC ~r6 hvJgm cr r-tu~ yc..ur 9'"'..CCU'U ~l.-~
y.,.,. hlyt ctv11Jo1o '!""' "!-'900r,g if)'OO!Oaily!:udgot is i50C lnll'"'c•ro Jt U/> '1 moniii.J'lc1,.,.,.
be ""31{1'<! I"W' rn;,n SlfO on t~tll rr.<>r.t~
If tJ ~ ~·'"~nO'\ •fd pe£& SM~r. hfljl S"CtJ rna; heM!: d'l:c~ro <ey..o..""d~ tbt .s!'!l too btoad Of c~t1J·• lt:\Wf
)'OU cwtt. t:y ;hJOut""l) n.re spttelfc keywD"'CS. fif.:e -ec! ftJWl m~3;d cltc,.-..'f!. Spar. f".: b•yt.-t:roo are rrcxe
bkfly t' tum • c.kck mto a cultz;r'l".or (a-j 'r9t!' ~:f:\.Y.=Crd li~!
·F ig 5.6 : The CPC calculation for a keyword selected
£S Activity :F :
Find the CPC rate for the keywords that you have selected to advertise your Honda
showroom using Google.
5.8 E-CRM
Customer relationship management (CRM) relates to the relationship between an online
9-+
customer and the company providing services. Strong CRM helps develop friendships
and relationships with customers, benefits business, generates loyalty. satisfaction and
increases value.
Retail Loyalty
Once upon a time, retailers knew all their customers personally. They knew their
preferences and what was happening in their lives. Armed with this knowledge, retailers
were able to react quickly and market products to each customer individually. They were
able to build friendships interacting with their customers. Over the years business has
drastically changed. Today customers arc getting used to shopping malls, websites,
telemarketing and self-service format stores. :Yfany retailers have lost touch with their
customers. Recognizing the long-term value of customer loyalty, retailers are now seeking
to reclaim personal relationships with their customers by encouraging e-CRM.
The Broadbase Software company commissioned an e-CRM survey ac:; part ofitc:; continuing
effort to understand the challenges and opportunities that e-businesses face. Data was
gathered from 100 companies that conduct business online, including bricks and clicks,
pure-play online companies and department stores. Survey participants were asked to
return purchases made online and use any of the customer interaction capabilities available
on each site.
The survey showed that while e-businesses are becoming more effective at providing a
variety of options for returning goods, as well as providing both e-mail and call center
service for customer queries, the timeliness of e-mail response continues to lag behind call
center options. Companies are missing critical cross-sell and up-sell opportunities by failing
to turn customer queries into marketing opportunities.
They were also asked to track any targeted marketing campaigns they received after
making the initial purchase.
E-mail response times continued to be a problem for many e-businesses, as nearly one-
third took more than two business days to respond to inquiries, forcing customers needing
faster response times to use more expensive options, such as dialing into a call center.
While more than half of thee-businesses surveyed did make an outbound offer to the
customers after the initial purchase, 85 percent of those offers were not personalized to
the customer, creating the impression that the offers were untargetcd spam e-maib, instead
of a carefully thought-out offer based on the previous buying habits of the consumer.
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e-Business
Many of the key statistical findings from the survey showed the following areas where e-
businesses are improving, a<; well as the continuing problem areas:
Positive Findings: Demonstrating progress for the online customer experience :
• HX)% websites provided the option to call-in queries regarding the status of a return.
• 89% allowed customers to return their purchases by any method of their choice.
• 83% of the sites provided the option to check the status on a return via e-mail.
• 60% of companies gave offers to participants after an initial purchase.
Negative Findings: Indicating areas for improvement:
• 85% of the campaigns were not personalized.
• 64% of returns took over two weeks to be credited.
• Of all the sites providing e-mail, 29% took more than two business days to respond
to inquiries.
• Just 11% of campaigns contained ~rraphic content instead of plain text.
42% of online shoppers said they would buy more on the Internet if the return process
were easier. Customers are frustrated with the overall lack of customer recognition and
prolonged tumaround times for tracking returns. The findings of this survey have
demonstrated that while companies are making some progress in different phases of the
total online customer experience, there is still a need for increased intelligence and
personalization - across all touch points- to increase customer satisfaction.
E-businesses need to remember that customer service is measured from the minute the
customer logs onto the site through the entire purchasing/returning process. A customer's
loyalty to any given business is only as good as the overall customer experience from
beginning to end.
96
£5 Activity G:
Design a plan for offering E-CRM over the Honda car website so as to give the best
possible service to the customers visiting online.
5.9 SUMMARY
In this unit we discussed the Internet marketing strategies. The concept of online branding
was also discussed. The origin of online advertising was presented and you also studied a
few examples of online advertising on different websites. Online marketing is increasingly
becoming important and successful companies are being innovative in their strategies online.
A big challenge faced by companies is to get their site in the top rankings. You also learned
the business of key word auctioning and looked at different ways of generating traffic to
your website.
5.10 SEI~F-ASSESSMENT QUESTIONS
Q 1. Study the current advertisements being run on Indian portals like www.rediff.com
and www.indiatimes.com
Q2. Study the cun·ent advertisements being run on International pottals like www.m<:>n.com
and www.yahoo.com
Q3. Identify the companies offering E-CRM for online companies and study their plans.
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e-Busincss
6.1 INTRODUCTION
The success of the website doing an e-commerce transaction depends on the "uptime''
and the performance of the server where the website is hosted. The selection of the server
where the site has to be hosted depends upon the size of the wcbsites. traffic estimated,
technology used and the databa<>e connectivity. As a website owner you have two options
to select from. One is a shared server where along with many other websites, your website
will also be hosted, or a dedicated/co-located server in a data center where your website
exclusively will be mnning on the server. Based on your initial study and the probable
growth plans, you need to determine the best possible hardware and software combination
which will suit the needs of your website visitors.
6.2 WEB SERVER HARDWARE

When you are designing an e-commerce ba<>ed website, you will need a server which is
capable of handling multiple transactions at any given time, round the clock, 24 hours a
day, seven days a week. Along with a sturdy hardware, the server also needs to mn
powerful web and commerce software that is efficient and scalable depending upon the
increase in the website traffic. For a high transaction e-cornmerce ba<>ed website, it is
always recommended to host the website on a server placed in a data center which provides
round the clock, high speed Internet connectivity along with uptime guarantees of99.9%.
A server is essentially a computer having high processing power and can setve files or data
to other computers connected to it over the network. The software that makes this system
work is called the server software, which is normally the operating system that is installed
on the server. The operating system runs software called the Web server software that
makes files on the server available to other computers accessing it over the Internet. The
same server can also have database management system software which is then referred
to as the database server.
Thus, the word "server" is used to describe several types of computer hardware and
software, all of which might be found in a typical electronic commerce operation.
An e-commerce based website consists of web pages, images and content which may be
maintained in a database format.
Thus selecting a web server is something that needs the utmost care and attention, simply
because an Internet based business needs a server that's reliable and is able to run 2417
for months without requiring any servicing. This reliability is something which needs to be
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C nit6 Technologies for E-Commcrcc
factored into the design from the start, and is of the utmost importance. Picking reliable
components is just as important here as making sure you pick components that fit the
purpose your web server is set to fulfill.
The hardware
The hardware consists of an Intel or AMD based processor with high speed dual CPU
support mother board, a 10/100/1000 Mbps speed network card, a 512MB or 1GB
RAM, a RAID based hard disk with multiple 80GB capacity, all this with an enclosure to
fit in a 2U rack case which can be mounted on a physical rack in the data center. The rack
case may also support CD/DVD drives, floppy drives, USB ports etc. A2U rack comes
in a very small and compact size ofjust 3 .5". See the images in Fig 6.2 and 6.3
Fig 6.1 : ·F ront view of a 2U rack mountable server
Fig 6.2 : Back view of a 2U rack mountable server
Fig 6.3 : Open view of a 2U rack mountable server with components and chassis
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ff5 Activity A:
Find out the configuration of different hardware options offered by IBM, Compaq and
DELL for a web server.
6.3 WEB SERVER SOFTWARE AND OPERATING SYSTEM

- - - -- --
The Software
The selection of the operating system, web server software and the database software
depends upon the platform on which your website application has been designed. The
development cost of the application is also governed by the price associated with the
software licenses and the cost for maintaining the application that has been designed.
Regardless of which operating system you choose, you should be able to manage the
server comfortably.
Normally the web servers run on 2 different platforms, either a Microsoft based platform
or a Linux based platform.
Windows Operating systems :
Fig 6.4 : Windows Operating Systems
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Cnit 6 Technologies for R~Commcrcc
If the web application is designed using ASP, .net and SQL languages. then the natural
selection of the operating system is Microsoft windows 2003 server edition. \\ith Internet
Information Server (liS) web server and SQL database. This comes as a package from
Microsoft along with a few more applications under a box pack called ·small Business
Server'. A windows server needs to have a higher and sturdier hardware configuration for
better pelformance and uptime.
Linux Operating systems :
red hat ~
Fig 6.5 : Linu..x Operating Systems
The other option is to use Linux based operating systems. If the weh application is designed
using PHP (a scripting language and interpreter called the Hypertext preprocessor) or
Mysql, then the preferred operating system is any I jnux flavor. The most common is the
RcdHat version ofLinux. RedHat is one of the largest I ,inux distributions, has a very large
established user base :md offers very good and frequent updates, fixes and workarounds
which can be automated also. Redhat Linux has been proven to provide stable, flexible
and ea~y to maintain web applications. It also has components pre-installed that make
setting up the web server simple and effective. So you can easily install RedHat or Apache
as the weh server with a PHP version and MySQL as a sturdy database.
Operating system comparison
PHP has become popular as a scripting language for the Web, with a LAMP (Linux-
Apache-MySQL-PIIP) architecture for building dynamic, data-driven websites. But
Microsoft's ASP (Active Server Pages) is still widely used, and it<; easy integration with
SQL Server and MySQL, as well as growing support for ASP.Nct applications, makes it
a popular choice too.
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e-Busincss
IIS is more easily managed via the Graphical User Interface (GUT), both remotely and
locally. Web tools arc also available to handle configuration and maintenance of this prolific
Web server. liS is controlled mostly through Windows management tools, but Microsoft
also offers command-line tools.
Apache is sturdy and stable but you will have to manually configure it via text files and it
will not have an easy-to-use GUI.
Another factor to consider is the ability to add functionality and features to the core Web
server. Apache uses modules, whereas liS uses plug-ins. Most Apache modules arc free,
and if you have a specific need such as MP3 streaming, you ·n probably find a module that
meets this need. TIS also accommodates third-party software and other suppliers, but you
will have to pay for the additional functionality.
Finally, remember that you must administer not only the Web server but the operating
system too. So choose an OS-Web server combination that best fits your organization's
skill set and comfort level.
2S Activity B:
Find out the operating systems on which the following websitcs are running :
www.hotmail.com, www.wondcrfulbuys.com and www.rediff.com
6.4 STATIC AND DYNAMIC CONTENT MANAGEMENT
A content management system (CMS) is a computer software system for organizing and
facilitating the collaborative creation of docwnents and other content. A content management
system is frequently a web application used for managing websites and web content,
though in many cases, content management systems require special client software for
editing and constructing articles. The market for content management systems remains
fragmented, with many open-source and proprietary solutions available.
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Unit 6 Technologies for E-Commcrce
STATIC WEB PAGE
A static web page is one where the content is hard coded directly in simple HTML file. .
lbis means that someone must edit each page whenever a change is required And because
the content is intenningled with the display code, this person will ncce:;;sarily be an expen ive
technical resource. Furtl1ermore, if the content that needs changing appears on multiple
pages, each of them will have to be edited individually. As a result, websites that u:c static
content arc expensive to maintain and usually inflexible in nature.
DYNAMIC WEB PAGE
A dynamic web page is one where the display logic is maintained separately from the
content and the content is stored in a database instead of an Hl ML file. Each page consist<;
of a template that provides the look and feel, plus the code that rettieves the appropriate
content. The template and the content are maintained separately, which means that content
changes can be made as needed by the content experts without involving technical
resources. This results in lower maintenance costs and much more t1cxibility.
A user will be a regular user only if he finds that a site is being updated frequently and also
if it is easy to use the features on the website for getting the right information. An easy
method to keep your site active and updated is to use content management systems. ln a
dynamic content 1mmagcment system, all the content resides in a central repository and
can be processed or displayed on your website using database capabilities. As the content
is already stored in a database, the same content can be reused for any other target media.
'The content management system makes creating and maintaining dynamic web sites easy
and straight-forward, without limiting your web server environment.
We have different software for providing online content management systems. By using
such software a wide range of content can be published on the Internet.
These may be characterised as follows :
• Simple pages.
• Complex pages, with specific layout <md presentation.
• Dynamic information sourced from databases, etc.
• Training materials.
• Online manuals (policy & procedures, HR. etc).
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e-Busincss
• General business documents.
• Thousands of pages in total.
• Extensive linking between pages.
It is extremely important to first decide the exact need for the content management system
and then you can choose the software accordingly. But it is very important to remember
that the most important part of a Content ManagementS ystem is the content itself. Most
of the content management systems arc easy to use and very user-friendly. You do not
need any technical expertise to use the content and publish it on the Internet. The content
management system provides a WYSIWYG (pronounced "wiz-cc-wig") editor. This editor
or program is one that allows a content creator to see what the end result will look like
while the interface or document is being created. WYSIWYG is an acronym for "what
you see is what you gef'.
6.5 CLIEI'I,. SIDE & SERVER SIDE PROGRAM:MING
The websites work on the HTTP protocol called the HyperText Transfer Protocol. It is
the communications protocol used to connect to servers on the Wcb.lts primary function
is to establish a connection with a web server and transmit HTML pages to the client
browser or any other files required by an HITP application. Addresses of wehsites begin
with an http:// prefix: however, web browsers typically default to the HTTP protocol. For
exan1plc, typing www.yahoo.com is the same as typing http://www.yahoo.com
W!:B S[RI/FR
jHTTP s et'wtl
CLENT
IJJ&wser, HTTP
1clleuhlPV rtoq~«111t
TCP <Annectlon
II' a~km
}'ig 6.6 : Web - Client-Server application
HTTP is a ''stateless'· request/ response system. The connection is maintained between

client and server only for the immediate request and then the connection is closed. After
106
Unit 6 Technologies for E-Commcrcc
the HTTP client establishes a TCP connection with the server and sends it a request
command, the server sends back its response and closes the connection.
HTMI, pages are essentially used to distribute "pre-prepared" web pages on request. A
client uses a web browser to contact a web server and uses HTrP to ask the web server
for a specific HTMJ ~document. The web server then senclc;; the requested document back
to the web browser which in tum, would displays the document as defined by the HTML
to the client.
l HTTP Connection
Fig 6.7 : II'rl'P connection
The server can only provide HTML documents which have been specially encoded by a
webmaster, and which have been placed in certain publicly-accessible directories. The
interaction between the web browser ;md web server is pretty simple and very static.
For example, to put the current date on every page using only IITML, it would require a
programmer to manually edit every file. every clay. Programmers need a way to have
HI'ML pages created and modified "on-the-fly," with information that can change weekly,
daily, by the second, or for each and every request. And they need these pages to be
modified automatically, without their constant supervision.
Thus in the case of website accessibility, the browser act<; as a client and the server, which
has the website, acts as the server. The programmer can make use of both, the browser's
capability as well as the server's capability to generate the required output by doing client-
side progmnm1ing or server-side programming.
Client-side programming is bac;;ed on the idea that the computer which the client is using to
browse the web has quite a bit of CPU power which can be utilized to perform certain
tasks.
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c-Busincss
Server- side programming is based on the idea that the hm·dware which web server software
nms on typically has quite a few resources which can he used to handle other request-; at
the same time.
1\ot on! y do servers have processing power to spm·e. they also have a battery of applications
such as e-mail, database manipulation or calendaring which is already installed and ready
for utilization.
Thus, it makes sense to share some of the load between the client and server hy taking
some of the processing load off the server and giving it to the client and vice-versa.
The most common programming l<mguage that is used for this client-server application is
known as CGI (Common Gateway Interface).
The two most popular languages for client-side scripting are JavaScript (Ketscape
Navigator) <md VBScript (Microsoft's Internet Explorer). Both technologies allow web
programmers to encode short program "snippet-;" into their HTMI, document<; which can
be executed hy a weh browser. But the problem with the client-side scripting is that the
programs arc browser dependent and the browser programs are not able to interpret the
scripting l<mguage.
JavaScript programs show e1rors when viewed using Internet Explorer :.md VBScripts do
the same when viewed with Netscapc.
This problem was overcome by using CGI.
I ,cts try to define CGI and sec exactly how it works :
Common - CGI programs can be written in many languages. CGI can he programmed in
C. C++, Java. Perl. Visual Basic or any other language which can accept user input,
process that input, and respond with an output.
Purther, ('GI works with many different types of systems. CGI works on Mac, NT,
Windows. OS2. CNTX. etc . This solves the problem of client-side programming where
the programming is now no more dependent on the client side browser to work properly.
Gateway- CGT works as a middleman or a gateway between the front-end browser and
the back end database or other applications. Its job is to help more powerful resources
like databases, graphics generation programs or network applications to talk to each
other and work towards a common solution.
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Unit6 Tcclmologics forE-Commerce
CGJ translates between the language the browser (client) understands and the multitude of
languages spoken by the servers the browser wants to communicate with.
Interface - CGI is not a language. Neither is it a program. CGJ is a standard of

communication, a process, an intetface which provides well-defined rules for creating
partnerships. The benefit is that if everyone follows the rules of the interface, then everyone
can talk to each other. Thus typically, we say that we write ''CGI programs·· or ..CGI
scriptc.;" which perform the functions of the common gateway interface.
Let us now see an example of a client-server application with CGJ :
The most common task that you perform on the web is filling up a feedback form. When
you enter the data in the fields on a form from your browser, 'md get a confirmation back
from the website. the CGI script is actually doing its job. I 'ig 6.8 describes the process.
Client lJsing
\Veb Browser
5. W6 Server ~flware senlt
cont!\Cts se:ve-r- br~wser the ~. pr~pa<ed
ustngRTIP by t.'le CGI script
conncJ~;ctior;
O"ier the Internet
}.'ig 6.8 : Working of CGI
109
e-Business
~Activity C :
Monitor the news website of www.cnn.com for a couple of days and sec whether and
how the content changes. Subscribe to the news alert by submitting the form online.
6.6 WEB SERVER PERFORMANCE AND EVALUATION

With the phenomenal growth and JX)pularity of the Internet, the performance of web servers
has become critical to the success of many cof{X)rations and organizations.
A number of research studies on web server performance have been carried out. Most of
these studies characterize server performance using workloads that either consists of mainly
static web page accesses or many static web page accesses blended with a small percentage
of CGI (Common Gateway Intclfacc) scripts that perform very simple computation
functions.
These studies can he considered as benchmarks, as long as your website is also a simple
static website. The lntemet sites of this so1t, including some ISP (Intemet Service Providers)
are usually content-oriented, meaning that they provide information to the public in the
form of HTMl, files. Users can obtain information from these sites through static web
pages including text. images, audio, as well as video information.
But the same concept cannot be applied to e-commcrce based websites. The workload
characteristics of web servers inc-commerce are dramatically different from static websites
and content-oriented static wcbsitcs. Static weh pages that arc stored as files are no
longer the dominant web accesses in this type of application environment.
A typical example of such a website is an online shopping center. When a user comes to
this kind of site. the first page to be seen contains a keyword search field and product
category selections. Entering a keyword or clicking on a category link by the user results
in a form being posted to a program that queries databases. The database application
programs at the web server machine, through web interfaces. perform all subsequent
110
Vnit6 Technologies forE-Commerce
interactions between the user and the web server such as shopping cart and purchase
transactions. Other types of commercial websites such as search engjncs. sales. and technical
support and services exhibit quite a similar behavior.
In order to design high petformance and reliable web servers fore-commerce applications.
it is critical to understand how web servers work under this application environment You
must gain insight into the server behavior and the interaction between web servers and
database servers. In particular, we need to quantitatively measure and evaluate the
petformance and resource utilization of such web servers.
The performance of the web server can be evaluated based on the following points:
a) Response Time
This is the time required for the site to load completely at different ISP connectivity
speeds. You can also use ''ping" command from your DOS prompt to test the
connectivity and the response time from your machine to the server which you are
accessmg.
For example, Ping www.google.co.in
Ifyou give this command from your DOS prompt, you will get a result as is shown in
Fig6.9
Fig 6.9 :PING command results
This shows that the server is reachable in just an average of 644ms from your machine
and that the response time is good with no data loss.
111
c-Busincss
b) Security and Certification:
If you arc allowing any secure transactions such as a credit card transaction and
verification, then it is important to know if the server is properly secured and if a SSL
certification has been taken for the transaction web server. Implementation of a firewall
at the server level is necessary to ensure high level security for the server.
c) Concurrent connections :
The number of users the server can handle at the same time is also very important.
This can be difficult to measure because the results are affected by the server's ISP
speed, the client's ISPspeed and the size of web pages delivered. The term used to
check these connections is called the 'throughput'.
d) Uptime:
Uptime refers to the length of time that a web server can remain connected to the
internet without requiring a restart. Reliable web servers can go for weeks or months
before needing a reboot.
When referred to by a web host, uptime will be given as a percentage of a web

server's total uptime in a given period. 99.5% uptime is average for a low -end web
host; this means that in one year, the server would be offline for 44 hours. Looked at
another way, on an average day. the web server would be down for 7 minutes. For
most websites this is not a problem, but for those demanding high levels of accessibility,
a guaranteed uptime of99.9% or greater is desirable. This would allow for maybe
100 seconds of downtime on any given day.
c) Monitoring tools:
To monitor your server round the clock you can subscribe to third party websitcs
that will monitor your websites at regular intervals starting from 5 minutes. These
wcbsites provide services which will monitor your HTTP requests, hardware failure,
FrP etc. Pig 6.10 is <.m example of a website www.intemetseer.com which provides
these services and generates alerts every time a problem is detected on the server
hosting the website.
112
l)nit 6 Technologies for E-Commcrcc
• 8G:fOr~>l !nte~netsear, Sr:"~IJ

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providing reliable and afforcbble monitoring services to more than 1.4
millic>n businesses.
:ntemetSeec r<rr.ot~ty mon.tors your Web sit& to ;nsure t11at ~ur Web r,ile is ~m~ilable 2¥7
!ffnteme!See! 1s :mabll.' to reach yo·Jr site. W£ v.ill sen-j you an immP.diat<> e!l'ail alert that
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r U•Jnjtor,;d ltPms •nyl-tTTP

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J<'ig 6.10 :A website monitoring service provider
~ Activitv D:
Verify the uptime, security and speed for the website www.amazon.com. Also write the
Ping results forwww.amazon.com
---- ----------------------------------------------------------------------------
113
c-Busincss
6.7 LOAD BALANCING Al'ID REDU~-:I>ANCY
Sometimes the business application hosted on a particular server is extremely critical and
a single server cannot be sufficient for hosting the application. An organization's web
applications typically perform such mission-critical tasks as e.-commerce, financial
transactions and intranet applications. Busines~ can lose millions of dollars when mission-
critical applications aren't available, so it's important that these applications arc available
at all time..'>. In a nutshell, these applications must be highly available and reliable.
An easy and effective way to aclrievc availability and reliability is to use rcdund~mt servers.
If you have more than one server implementing your site, and one of the servers crashes,
the processing request.:; can be redirected to another server. This provides a highly available
website. The increase in the number of servers helps your site to handle larger loads in an
elegant manner. Your website can service a larger more number of concurrent users and it
can service a greater number or pages per second. This helps to give the users a happy
browsing experience from your website. This also ensures that proper load balancing of
your website will never have a down time by managing requests over multiple servers.
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Fig 6.11 : Online scalability and load balancing
Different hardware and software combinations can implement load balancing. Once multiple
servers are in place, then a load balancing hardware device handles the requests coming
to the website. Common load balancing hardware in usc arc load-balancing switches such
as Cisco LocalDirector, F5 Networks 's BIG-IP andAlteon Websystems ACEdirector.
End-user requests are sent to a load-balancing device that determines which server is
most capable of processing the request. It then forwards the request to that server. This
addresses several impmtant requirements such as increased scalability, high performance,
high availability, redundancy and disaster recovery.
114
Unit 6 Technologies for E-Commercc
In order to give customized service, many websites have started implementing multiple
servers based on geographical locations of the end user. For example, if a user is browsing
from India and he types www.google.com then the user would be automatically taken to
www.googlc.co.in. Tllis helps in distributing the load of requests across multiple servers
located in different countries and continents.
Similarly. if someone types www.google.com fTOm Singapore then he will be automatically

diverted to www.google.com.sg which is a g<x)gle server placed in Singapore.
Thus, from a reliability and scalability standpoint, it is important to be able to have multiple
web servers handling your website. In order to make usc of multiple servers, you definitely
must opt for some load balancing.
~ Activitv E:
Make a list of websites which are providing geoe,rntphical redirection like www.g<x)gle.com
to www.google.co.in
6.8 SUMMARY
You learnt the concept of servers and the role of powerful servers in hosting a website.
The choice of the hardware and also the operating systems is extremely important for a
high uptime and faster speed of the website.~ for accessibility by users. Content management
and updating of infonnation plays a very import.mt role in getting more customers to your
website and making it more popular. 'Ibe progranuning support helps a website owner to
offer a good interactive expe1iencc to any online visitor. Finally the load balancing solution
for most of the heavy websites ensures a cost effective way to offer the best possible
services to the customers.
115
e-Busincss
7.1 INTRODUCTIO~
Electronic money (or digital money) refers to the cash and associated transactions
implemented using electronic means. Typically, this involves the usc of computer networks
(such as the Internet) and digital stored value systems. Electronic Funds Transfer (EFr) is
an example of electronic money. It is also a collective term for financial cryptography and
the technologies enabling it. Today's consumer is embracing the electronic age when it
comes to increasing his I her purchasing power. Electronic payments (credit, debit and gift
cards) arc more popular than ever before. Research indicates that companies which accept
credit card payments tend to generate higher revenues than those which only accept cash.
7.2 CNDERSTANDING E-PAYMEI\"TS

You have learnt so far to set up a website that makes it possible for consumers to buy
products online. The next import<mt step is to accept payments online before shipping the
product~. An important function of <m electronic commerce site is the handling of payment<;
over the Internet. Most electronic commerce involves the exchange of some form of money
for goods or services. The implementation of payment systems for electronic commerce is
stilL evolving.
Today. the four basic ways to pay for purchases that dominate both the traditional and
electronic businesses are cash, checks, credit cards/debit cards and bank transfers. Credit
cards arc by far the most popular form of consumer electronic payments online. Recent
surveys reveal that more than 90 percent of worldwide consumer Internet purchases are
paid for with credit cards. In United States, the proportion of payments made with credit
cards is about 94 percent.
Electronic payments arc far cheaper than the traditional paper checks.lt is also convenient
for customers and can save companies money. Sending of paper bills and receiving money
in the form of paper checks is a costly affair. But sending the same bills and receiving
payment<; over the Internet promises to reduce the transaction cost to an average of 60 to
70 percent per bill. The total savings is huge, when the unit cost is multiplied by the number
of customers who could usc electronic payment.
Electronic payments are financial transactions made without the usc of paper documents
such as checks. Having your paycheck deposited directly to your bank account, having
your telephone bil1 paid electronically and having transactions via point-of-sale or debit
card<; are all considered electronic payments.
120
L'nit 7 Electronic Payment
Different electronic payment systems arc available. These differ from each other but have
the same purpose of facilitating the secure transfer of monetary value between parties.
The following 3 patties arc involved in these transactions:
(Please refer to fig 7 .I)
• Buyer (payer)
• Merchant(payee)
• Bank (issuer and /or acquircr)
The transfer is accomplished with the help of different electronic payment protocols.
Online l
Consumtj
Internet
~--......._;
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Ji'ig 7 .l : Online electronic payment processing
Electronic payment c<m also be cla<;sified in different ways depending upon the payment
systems. These are as follows:
121
e-Busincss
a) Pre-paid payment systems.
This includes electronic purses and wallets, electronic cash and certified checks.
b) Pay-now payment systems.
This includes debit cards.
c) Pay-after payment systems.
This includes credit cards.
Find out the different modes of payment by which you can make your monthly bill payments
to the top 5 cellular companies in India.
7.3 ESTABLISHI.NGAPAYMENTSYSTEM
Websites should offer their customers a payment option that is safe, convenient and widely
accepted. The choice of establishing the right online payment system depends upon the
company. its products or services and its customers. Many service providers sell different
packages of payment processing services to website owners that allow them to accept
different types of payments.
122
Unit7 Electronic Payment
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No twcd: - Nc:rt h Arncnca~s lea:Ung on!l..,e payment prcce'i~OJ.
Fig 7.2: Online payment solutions service provider
As a website owner, you have the option to either outsource the payment solution or
handle it in-house.
For those who want an ali-in-one solution, services like Transactive, Worldpay and PayPal
make it easy for you to accept credit cards and other forms of electronic payment from
your site. When a customer enters his or her information on your site, your payment
service authorizes the transaction and transfers funds to your account. These services
charge a processing fee per transaction.
PayPal offers a one-stop shop solution for all the online payment requirements of an e-
commerce ba()ed website. Pay Pal offers you a choice of low-cost payment solutions for
your online business.
123
e-Business
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Fig 7.3 : Online payment solutions by PayPal
PayPal gives a tailor-made solution depending on your needs and also gives flexibility with
4 powerful solutions. As a merchant you have the benefit of a low cost solution with no
setup fees and transaction rates as low as 2% depending upon your transactions. You
don't need to worry about security. fraud etc. as PayPal takes care of that. As a website
owner. PayPal also gives you a hassle free expetiencc by providing you with reporting and
shipping tools with the ability to take phone orders and accept multiple cuncncics.
PayPal also offers a convenient and easy way for an online buyer to make his purchase
and do the payment. He can also deposit money in his PayPal account and need not reveal
his credit card number on every site he shops, thus making it extremely secure.
/;'\ Pav fer yo1.:r POJ..(,h-'l!>l!"s. ..... :~h
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124
Unit 7 Electronic Payment
Alternatively, you may also prefer to handle the online payment in-house instead of going
to any service provider.
The first thing you need to do is set up a secure server. This is a computer that uses
encryption to make it difficult for intruders to intercept confidential information. Secure
Socket Layer (SSL) technology is used to encrypt the data. You can apply for an SSL
certificate online from various websites like www.verisign.com, www.geotrust.com.
www.thawte.com etc.
Once you have an SSI, certificate, you need to register your site with a digital authentication
service. A digital certificate validates that the site receiving your customers' information is
the correct one. It assures customers that your site is legitimate and that their information
is encrypted and safe.
Kow that you have a secure server, you will need to build or buy shopping software that
allows a customer to choose products from your site and add them to a virtual shopping
cart. When customers are ready to complete their orders, they click on a "checkout" link
that takes them to your secure server, where they enter their credit card information.
Finally, you need a system to process credit card payments and an Internet merchant
account with a bank. Credit card payment processing services arc available through several
online companies. They provide you with software that validates your customer's credit
card infqrmation over your secure server. Some businesses also choose to accept electronic
checks from customers.
£S Activity B:
Create an account with PayPal and study the different options made available by PayPal
for a buyer as well as for a seller.
125
e-Business
7.4 CREDIT CARD TRANSACTIONS
Fig 7.5: A sample credit card
Accepting credit card payment.;; through your website actually requires multiple components.
Between a paying customer and your bank account, there exist 3laycrs:
1) Payment Gateway- This is the code that will transmit a customer's order to and
from an Internet merchant account provider. The payment gateway provides you
with the ability to accept customer billing information (credit card number, credit card
type. expiration date and payment amount) and the necessary validation steps that
must be followed before the credit card is actually billed.
2) Internet Merchant Account- A merchant account is an account with a financial

institution or bank, which enables you to accept credit card payments from your
clienL.;;. The payment gateway actually tra.nsrniLc; the bi1ling information to the Internet
merchant account provider. Unfortunately, most local banks do not provide Internet
merchant account capability.
The main reason why most local financial institutions or hanks do not want to provide
online merchant accounts is because transactions conducted over the Internet arc
totally different from face to face transactions where a signature is required to authorize
the purchase. This makes online transactions prone to credit card fraud. Fraud
protection should therefore be one of your primary considerations when choosing an
internet merchant account provider.
3) Website - Regardless of which merchant provider and gateway service you choose,
your website will need to integrate with your service providers. Most providers include
detailed web integration instructions.
Processing Credit Card Transactions :
There are 3 major steps that arc essential during this processing phase:
126
• Authentication - Checks for the valid numbers that have been issued and ensures
that it is not a stolen card number.
• Authorization- Checks availability of funds and put.<> a reservation on the funds.
• Settlement- Once products arc shipped or delivered. the bank releao;;es the funds
reserved and the money will make its way into the business' account
l.~et us now look at how the transaction actually takes place. See Fig 7.6
>,..start!
Customer b ro~A~Ses
.............................;,
Order summary
sent to customer
Credit card
information sent to
merchant (acq uiring)
Customer bank sends
v erifies credit card credit card info to

and clears request r--'"'llllfll~ custome r (issuing)
'---------' bank through
p <l'ljm e nt gateway
Fig 7.6 : Credit card processing- a practical scenario
127
e-Business
Thee-commerce transaction process of buying good starts from the merchant's website.
Your customer selects a particular product and completes the online order form with the
order details. Once he I she submit the form along with the credit card details, the details
would be sent through a secure payment gateway to the merchant's bank. This transaction
happens over a very secure channel over the Internet. This information then travels to the
bank that has issued the credit card. The information on the customer's card will be ve1ified
for expiry date, credit limit available. card details, etc. Once it is verified and accepted
then the order will be confirmed. With this continuation, the customer's bank will transfer
the money to the merchant's bank account. The goods will then be shipped to your customer
and the transaction will be completed.
Transaction Costs :
The different costs associated with Internet merchant accounts are briefly explained for
you here:
a) Up Front Application Fees
Many Internet Merchant Account'> will require an up front application fee. This fcc,
supposedly. is to cover their costs for processing your application. But with growing
competition. most of companies now waive this off.
b) On Going Fixed Fee
This is a fixed monthly fee that you have to pay to the service providers irrespective
of any transactions that take place over your website. Many a times a flat fcc of $25
is charged on your account.
c) Fixed Transaction fee
Usually between $0.20 and $0.45, the fixed transaction fcc is the fixed fee portion of
each sale. The fixed transaction fee is the same for every transaction. Whether you
get a $1 sale or a $100 sale. the transaction fee will be the same.
d) Variable Transaction Fcc
The variable transaction fee is the amount that you pay to the merchant for every
transaction that takes place on your website.
This transaction fee may vary between 2% to 5%. The percentage is dependent on
the monthly volume of transactions that take place through your website.
l28
e) Termination Fees
A termination fcc is applicable if you discontinue the contract before the stipulated
time. The minimum contract period may vary from one year to three years.
f) Miscellaneous }'ees
J\ charge back fcc may be applicable if a customer requests for a refund and if he
wants his credit card to be credited. The merchant will charge a separate fee for this.
/6 Activity C:_
What is the data that must necessarily be asked about a credit card before accepting
payment?
7.5 DIGI'l'ALCERTll'ICATEAl\TDCERTIFICATEAUTHORITY
J\ digital certificate is an electronic "credit card" that establishes your credentials when
doing business or other transactions on the Web. It is issued by a certification authority
(CA), It contains your name, a setial number, expiration dates, a copy of the certificate
holder 's pub! ic key (used for encrypting messages and digital signatures). and the digital
signature of the certificate issuing authority so that a recipient can verify that the certificate
is real. Some digital certificates conform to a standard, X.509. Digital certificates can be
kept in registries so that authenticating users can look up other users' public keys.
Digital cettificates are based on public I private key teclmology. Each key is like a unique
encryption device. No two keys arc ever identica1, which is why a key can be used to
identify its owner. Keys always work in pairs , one called the private key and the other
called the public key. What a public key encrypts, only the corresponding private key can
decrypt, <md vice versa. Public keys arc distributed freely to anyone who wants to exchange
secure information with you. Your private key is never copied or distributed and remainl>
secure on your computer or server.
129
e-Busincss
The information includes the name of the subscriber, e-mail address, public key of the
subscriber, validity period for the certificate, name of the issuing CA and the serial number
of the certificate
Digital cettificatcs arc used for many different types of online transactions. 'The most popular
usc is for e-cornmerce ba~ed websitcs. electronic mails and electronic funds transfer. As a
website owner you can have your own digital certificate. This digital ID verifies a website
to a shopper and establishes the authenticity to any buyer online. A Lock Icon on the
bottom of the browsers indicates a secure digital certificate. You can double click on the
lock and it will display the web site's digital certificate. Sec Fig 7.7
..... - - --·-- --
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1 ~ tm.tare lnionnati<m
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LIC .{c)9HMS!g1
Valid from 7/12/2005 to 7/Z3/201YJ
Fig 7.7 : Digital certificate issued to wonderfulbuys.com
These certificates are issued by CertificatcAuthorities(CA). A certificate-authority service

manages and distributes these certificates and the electronic keys. A CA service is
responsible for the complex process of registering new users, securing web servers,
distributing and updating private keys and certificates, recovering lost or forgotten keys,
and maintaining audit trails that track any administrative changes made to the system. The
CA can issue a digital certificate to an organization or to an individual. TheCA requires
entities applying for digital certificates to supply proof ofidentification in terms oforganization
details, address, contact details, company registration, etc. Once theCA is satisfied, it
issues a certificate. The certificate can be of different types and encryption. The encryption
can he of 128 or 256 bit SSI, encryption. Different certificate authorities offer different
plans based on organizational needs and requirements.
130
Unit7 Electronic Payment
VeriSign is an extremely popular and trusted company offering SSL solutions for website
owners.
~riSign~ .............. .... ............,
Contact us
366-l\~3-6665 0<
S SL Certificates Gw-1:1»-6115 apiion 2
Subm~ an i[}QU!r£
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Fig 7.8 : VeriSign website www.verisign.com
131
c-Busincss
_e5 Activity D:
Try and find service providers similar to Veri Sign who offer SSL certification. Based on
the encryption, make a comparison of the rates offered by each.
7.6 SECCRE ELECTRONIC TRANSACTION (SET) STANDARD

- -- --
Secure electronic transactions will be an important part of electronic commerce in the
future. Without such security, the interest<; of the merchant, the consumer, and the credit or
economic institution cannot be served or protected. Privacy of transactions and
authentication of all parties is important for achieving the level of trust that will allow such
transactions to flourish. However. it is impottant that the encryption algorithms and key-
sizes used arc robust enough to prevent observation by hostile entities (either criminal or
foreign powers). The SET protocol was thus established to have a single ba<>e for globally
implementing the same security systems and measures.
Secure Electronic Transaction (SET) is an open encryption and security specification

designed to protect credit card transactions on the Internet. The cunent version, SETv 1,
emerged from a call for security standards by MasterCard and Visa in February 1996. A
wide range of companies were involved in developing the initial specification, including
IBM, Microsoft. Netscape, RSA, Tcrisa and Vcrisign. Since 1996 there have been
numerous tests of the concept; by 1998. the first wave of Sl rf-compliant products was
available.
Secure Electronic Transactions (SET) relies on the science of cryptography - the art of
encoding and decoding messages. The SET protocol relies on two different encryption
mechanisms, as well as an authentication mechanism. SET uses symmetric encryption, in
the form of the aging Data Encryption Standard (DES), as well as asymmetric. or public-
key encryption to transmit session keys for DES transactions (IBM, 1998). Rather than
offer the security and protection afforded by public-key cryptography, SET simply uses
session keys (56 bits) which are transmitted asymmetrically. The remainder of the
transaction uses symmetric encryption in the form of DES. This has disturbing connotations
132
for a "secure" electronic transaction protocol- because public key cryptography is used
only to encrypt DES keys and for authentication, and not for the main body of the
transaction. The computational cost of asymmetric encryption is cited as a reac;on for
using weak 56 bit DES (IBM. 1998): however other reasons such as export/import
restrictions, <md the perceived need by law enforcement and government agencies to
access the plain-text of encrypted SET messages may also play a role.
Symmetric and Asymmetric Cryptography
Modern cryptography uses encryption keys, which can encode (lock) and decode (unlock)
messages when an encryption algorithm is used. Symmetric encryption works by using a
single key, which must be known by all parties wishing to unlock the message. If we apply
a specific key to a message. using a good encryption algorithm, then it will be unreadable
by unauthorized parties. If we then apply the same key to the encrypted message, then the
message will be restored to its original form. However, this presents a problem, because
we must fmd a secure means of transmitting the key to all parties.
Asymmetric encryption, also known as public-key encryption, frees us from this limitation.
Asymmetric algorithms use two keys - a public and a private key. 'n1ese keys arc completely
independent- a private key cannot be easily deduced from a public one. When we sign a
message using someone 's public key, only the holder of the private key can read it. We
can place our public key out in the open, and rest assured that only the private key holder
can read messages encrypted for him or her.
Transaction Authenticity
Authentication is an impOJt,mt issue for users of electronic commerce. Consumers must

have faith in the authenticity of the merchant, and merchant<; must have faith in the authenticity
of the consumer. Without authentication, any individual could pose as a merchant, and
besmirch a merchant's good name by failing to deliver goods and billing up credit card
bills. Without authentication, any individual could pose as a consumer, ordering costly
goods to an abandoned house or apattment, and defrauding the merchant. Without
authentication, an individual could pose as a willing buyer, accept the goods and then
repudiate the transaction. Authentication is critical to achieving trust in electronic commerce.
Authentication is achieved through the use of digital signatures. Using ahac;hing algorithm,
SET can sign a transaction using the sender's private key. This produces a small message
digest, which is a series of values that ·'sign" a message. By compruing the transaction
message and the message digest, along with the sender's public key, the authenticity of the
transaction can be verified. Digital signatures are aimed at achieving the same level of trust
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as a written signature ha<; in real life. This helps achieve non-repudiation, as the consumer
cannot later establish that the message wasn't sent using his private key.
7.7 SL'MMARY
The electronic payment systems form the heart of the online e-commerce world. The
success or failure of the online business is dependent on how smooth the process is for
accepting payments online. We discussed many different online payment systems and
understood a few important ones. Security being a major concern while accepting money
over the Internet, we discussed about digital certificates and different certificate authorities
who !,rive a high credibility to online money transactions. Finally you also studied the SET
(Secure Electronic Transaction) standard and focused on cryptography.
7.8 SELF-ASSE.'iSMENTQUESTIO~S
- - - --
Q1. Explain the process of buying air tickets online with the help of your credit card.
Q2. Find the difference between websitcs starting with http and websites starting with
https.
Q3. Find out if you can usc a debit card instead of a credit card to purchase goods online
and explain the difference between a credit card and a debit card transaction.
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8.1 INTRODUCTION
As we move towards high value e-commerce transactions, with a large an1ount of personal
and critical data being transacted over the 1ntemet, the concern for security has increased.
Different ways and methods need to be implemented for seeming transactions over the
Internet. The World Wide Web is an open area accessible to everyone and the chances of
yow· critical data being misused and handled by others is extremely high. Different types of
firewalls and strict policies need to be implemented to keep data secure. Growing cases of
fraud and online spy wares have resulted in strict cyber laws and tracking and monitoring
systems.In this unit we will address these issues and understand the importance of security
in our new online world.
8.2 INTERI\TET SECURITY
In the ca<>e of e-commerce, the biggest risk today is that of ensuring data security. This risk
can be overcome through appropriate security measures and business <md legal procedures
that ensure integrity and reliability oflntemet transactions. But Intemct security is not just
about hardware or the network, but more about protecting data and information. The
e-commerce sites must be open to customers and vendors but at the same time
they should be closed to hackers and intruders. Creating such a security culture and
procedure that straddles this fine line can make the difference between success and failure.
Security as such is applicable for every business online as well as offline. In traditional
ways of doing business. merchant<> arc paid with real money across the counter. When
they accept credit cards. they require personal signatures on the credit receipt. But in case
of an e-commerce transaction, the merchant accepts orders from a faceless customer.
The online store is open 24 hours a day, 7 days a week. It is unattended except for the
technology that performs shopping and accepts online payment.
On the website we allow anyone, anywhere and anytime to perform transactions and
place orders. The doors to your online shop arc always open through the Intemet which
has no central control and is highly vulnerable because of insufficient security measures.
Because of this, and the lack of security standards, the Intemet gives thieves and hackers
the opportunity to cause all kinds of problems.
So to ensure that we protect and keep our entire data safe, we need to have proper
security systems which will help in not just precautionary measures but also help in tracing
out a fraud or any such unwanted incident. This security will be related to network security
as also transaction security. The network security will constitute the security of connection
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Unit 8 E-Sccurity
lines, computer hardware and int:msion. The transaction security is the security of the data
while it is being transmitted and shared over the Internet network. The prime target is the
credit card data and the personal information being entered while purchasing products
online.
8.3 TYPES FIREWALLS OF AA"ll J>OI.JCIES

A firewall is a device with a combination of software and hardware, which guards the
entrance to a private network and keeps out unauthorized or unwanted traffic. It also
serves the dual purpose of guarding the data and monitoring the traffic that is flowing out
from the private network. The installation of a firewall requires careful consideration and
planning. It acts as a very important part of the entire network. A firewall for an organization
may need to be customized and properly configured depending on the organization's
structure and requirements.
R&D Department Buaiooss Critical Servers
Personal
Firewalls
..Jt..
~A ..
/ ..•
~-~~-j
~~ •
tiD Host-based security
software insla!!ed
on server
Internal Securiiy c_~ ,. """::
Gateway ~
("
Firnanc~
• Department
Corporate .• ( ~ Personal
Firewall ~ ·~ ~'·"-~
...... ~ . .~ Firnwalls
.... ..__,,., ~
Internal Security
Gateway
Internet ,./
Fig 8.1 : Corporate firewall
Firewalls arc typically located at the boundary of the networks. In many cases this boundary
is the Internet through which the second network may be accessing or connecting to an
existing network of a company.
Role of Firewalls :
a) Data Integrity- Only authorized persons should be able to change or modify data.
b) Authentication- Users must genuinely be who they claim to be and not imposters.
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c) Confidentiality or Unauthorized- Private and sensitive data must be masked I

hidden from unw<mted users.
The working of a firewall is based on a set of pre-defined rules for the data to flow on the
network. In the simplest fonn, most of the firewalls do one of two things: Block traffic
(called default deny) or pcnnit traffic (called default permit). In either case, the focus is on
access control. Default deny blocks all traffic except that explicitly allowed by the rules
defined. Only the necessary traffic is specified to allow it across. Default permit allows all
traffic except the traffic that is explicitly blocked by the rules defined. Defaultpem1it requires
a continuous update of a list of explicitly blocked traffic every time there is a change in
protocol or new applications. Default deny does not have <my such requirements.
Thus a firewall works on a set of instructions that you provide to the software or the
hardware firewall. This set of instructions actually contributes to the policies that are defined
by the org<mization. Every organization has its own set of policies and these policies will
define the rules of the firewall.
Designing network security policies
A general"posture'' or ''st<mce'· is usually chosen for the security policy design. This stance
is used as a starting point and a conceptual fr<m1cwork for guiding further development of
the policy. Three of the most common postures arc discussed below: trust inside, least
privilege and selective blocking.
a) Trust inside : The most popular st<mce is known as "trust inside." In this scenario, it
is assumed that the most signific<mt threats will come from outside the local area
network and the emphasis of the policy will be keeping outc;idcrs from getting in. This
type of st<mce is frequently implemented by defining a firewall rule set that permits all
connections which arc initiated from the inside, but blocks connections initiated from
the outside. This type of policy is easy to conceptualize 'md fairly easy to implement
<mel manage.
b) Least privilege: Another common stance is known as "leac;t privilege." In this

stance. it is assumed that all network connections are blocked in both directions as a
starting }X>int. and the policy is incrementally opened to define pn...'Cisely what is allowed.
·l'his is also known ac; the "deny everything'' stance. Some ofthe individual PC software
firewalls operate in this m<mner, f()r example, "ZoneAlarm Pro" and '·Sygate Personal
Firewall.., These products force you to define firewall rules for each and every network
application that is used for <m outgoing connection. and also forces you to define
firewall rules upon receipt of new incoming connections.
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Unit 8 E-Security
c) Selective blocking: ''Selective blocking" is another common posture. This is also

known a~ an "accept everything'' starting point. The policy is fine tuned by explicitly
denying only selected connections which arc known to be potential!) dangerous.
This is clearly the most vulnerable stance to use as a starting point. Selective blocking
is often used as a first line of defense. One example is the blocking of selected incoming
ports using packet filtering on a border router.
Many companies provide customized and readymadc solutions for network security.
Checkpoint Sonicwall and Cisco arc amongst the top companies providing network security
solutions. Sec Fig 8.2
f> tt i\,h<t 7 .. · ·~ ·,, ·. .;. .!'Li f ~; JV"' "' 1"1 t~ ~- of~ 0 ' i.; J:r"_; I • ~j.l' {h{'"" .... ~ .•· ; ,;.•_ . ;~:,
:s. .
• C1:~:c~ t:'C:!'l~ ~rtt: ; .? ;';.·:i:~rtl. F~ai'M::af N:;·'td!~' f~ the 'TI: tc Ot:-H'(: vt "fl"'~
• T~.n ~ ~c; o -, :..·~ f:h ~·::.< ..,(' ~~-~ ~"' VP'( Sr;'.Jbe·i~ s:~1.s .!:3 C~trt- ., ,f\ ~ !il "\-· ": ~· ..-.;~if·t·, ;:-,-.:,·~c~JC>"'~
('l>Sf;::.<:M>
...cu. srres
<:~~ . ~rm:ny ~ .t~~H
Fig 8.2 : www.checkpoint.com offering firewall solutions
Many a times it happens that the organizations do not have the technical knowledge or the
expertise to design their own firewall systems. In that case the easy option is to find a
service provider who provides Mamlged firewall services. Your local ISP or network
system integrators tend to he the main suppliers of such services. These companies set I
up firewalls at the company's premises and they monitor customer security remotely through
their network operations center.
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e-Busincss
/6 Activity A:
Try and find information on the firewalls that have been setup in the networks of a cyber
cafe, a university, a software company an<.i. a pharmaceutical company.
8.4 TRANSACTION SECURITY

- - - - - - - - -- - - -- - - - - - -
An online transaction can vary from entering your login and password for checking mails,
making a payment using your credit card, transferring money from one bank account to
another or simply storing important files on your company server. In order to ensure data
security, companies pay extra attention to trdllsaction privacy, authentication and anonymity.
Transaction security has become a major concern because the number of users doing
online transactions is increasing day by day and so is the number of merchants providing
this facility.
It is important to first understand the different types of online transactions. The type of
transaction depends on the type of data being sent across the network.
Let us now see some of the types of data :
a) Public Data : This type of data has no security restrictions and may be read by
anyone. Such data should however be protected from unauthorized tampering or
modifications.
b) Copyright Data : This type of data is copyrighted but not secret. The owner of the
data is willing to provide it, but wishes to be paid for it. In order to maximize revenue,
secrnity must be tight.
c) Confidential Data : Thi<; type of data contains content that is secret, but the existence
of the data is not a secret. Such data includes hank account statements and personal
files.
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Unit 8 E-Security
d) Secret Data: The very existence of this type of data is a secret and must be kept
confidential at all times. It is necessary to monitor and log all access and attempts to
access this secret data.
The fact that there are many different types oflntemet transactions makes secmity difficult.
Because of the sensitivity of information being transferred, and in order to protect the
consumer from various forms of fraud and misconduct, security and verification arc
necessary for all types of data.
Banks for instance handle extremely confidential and secret data of all their consumers. It
is very important that the banks give a seamless solution for communications and
transaction.<; over the Internet for all their customers.
We shall now take the example of the Northern Bank having its registered office in Belfast,
Northern Ireland.
This is what the Bank says about its online_ transaction·securitj. ·
Our Security:
To help deliver secure Intemet banking services. Northern Bank has implemented a
solution that seeks to provide robust authentication anq privacy..
·Encryption-of information between the customer and NortbemBarik isj>rffiiidedby an

industry standard 128-bit SSLencryption teChnology. This is the current security stan~
utili7...ed by mostbanks in connection with their Internet banking custOmers.
.In addition to our sophisticated crYPtographic implementationwe empJoymuJtiple firewaJls

'and a real time Intrusion Detection System to protecttheNQ®e.mDauk's intemal.systems
:and customer's information against any attempted secUrity breaches.
·Security Certificates :
The Northern Bank·s Internet banking service uses certificates to initiate encryption of
~ all cotmnunication between you and the Northern ·Bank and to help ensure the
confidenti.a_lity of your infofi1lati()n: ,. ........... . ... . ·
-.
·
How to confirm a secure session :

After launching the Northem Bank JnternetBanking Login screen, you should do the
following:
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e-Business
• Ensure SSL encryption security is in place.
• Accept a valid security certificate. Security certificates for Northern Bank Internet
Banking are issued by VeriSign.
To check these two issues for your operating system and browser, follow the instructions
below.
•Internet Explorer :
• Position mouse pointer over padlock (,2) ) displayed in the status bar, text box will
display SSL 128bit.
• Double click on the padlock to view the security certificate
A valid certificate will be issued to ib.nbonline.co.uk and today's date should be within
the valid date range.
Netscape:
• Click on the padlock (~ ) displayed on the status bar at the bottom right of the
Login page. This will open up a Secwity info page.
• Select to View Certificate.
A valid certificate will be issued to 1b.nbon1ine.co.uk and today's date shotdd be within
the valid date range.
'Iransaction Assurance :
Security of trc:insactions over the Internet is a priority for Northern Bank. Our Internet
Banking service uses the be.\t security available in the market place. We are so confident
of the secwity of our Internet Banking service .that we provide the following assurclllce.
We will1·epay you money removed from your Northern Bank account if:
• The cause is an error on our part; or
• There arc unauthorized transactions on your Northern Bank account Occurring after
you notify us by telephone or in writing (including, without limitation, by notifying us
electronically using the Secured Messaging facility on Internet Banking) that someone
144
Unit 8 E-Securily
else knows your security details (that is, your Internet Ranking pass\\ ord and/or
your security questions).
We will not be responsible for any losses if :
• . You have acted fraudulently, without reasonable care or have not met the security
standards outlined from time to time in the Banking Code and in the Internet Banking
Te1ms and Conditions.
Never give your account details to anyone unless you know who·they are and why
they need them and never give your security details to any third party. More details
are available by accessing our Secmity page.
This example shows us how companies arc committed to offering secure services to their
customers.
Check the transaction sccmity terms and conditions for the top 5 banks in India. Check
the security certificates on the wcbsitcs of each bank. What does this tell you?
8.5 ENCRYIYriON
Encryption is the process of obscuring infmmation to make it unreadable without special

knowledge. It is also the process of encoding information in such a way that only the
person (or computer) with the key can decode it. There are many types of encryption.
Normal encryption uses a simple encryption key. The problem with this is that the encryption
key needs to be transmitted secretly so only the two people communicating can read a
message. The encryption works in pairs of keys.
Symmetrical Keys :
The same key is used to encrypt and decrypt the message. Each party involved with
1-lS
e-Business
encrypting or decrypting the message must have an identical copy of the encryption key.
The main disadvantage to this is the security concern that the keys must be kept secret.
Asymmetrical Keys :
Keys are generated in pairs a<> a Public Key and a Private Key The issues in the symmetrical
keys of transit are removed, as the public key is freely distributed. Each key is complement
of the other. The public key can decrypt the information encrypted by the private key and
messages decrypted by the public key can only be decrypted with the private key. The
secret key is only used by its owner.
Types of Encryption :
Let us now have a look at the different types of encryption:
a) ROT-13
Encryption dates back to the time of Caesar. Roman forces would assign numeric
values to each letter, and add or subtract a fixed amount to this value. This method is
still in usc today, called ROT-13. 13 is added to the value of each letter, scrambling
the message. (for example, A=M, B=N, etc). 13 is added because the alphabet is
modulo 26. For obvious reasons this is one of the weakest encryption types.
b) RSA
RSA is one of the most commonly used public-key algorithm.
This type of encryption was named after the three men who created it - Rivest,
Shamir and Adlcman. This type of encryption allows the secret transmission of data
without having to first transmit a secret key. However, it is quite heavy for your
computer to calculate, so it is usually used only to transmit a normal encryption key
that is then used for the actual transmission of data.
RSA lets you choose the size of your public key. The 512-bit keys arc considered
insecure or weak. The 768-bit keys arc secure from everything but the National
Security Administration (NSA), USA. The 1024-bit keys arc secure from vittually
anything. RSA is embedded in major product<; such a<; Windows, Netscape Navigator,
Lotus Notes etc.
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Unit 8 E-Security
c) DES
DES (Data Encryption Standards) was developed by IBM in 1974. It is the first
symmetric system to be widely adopted commercially. This was one of the strongest
encryption types. [twas judged to be so difficult to be broken that is was restricted
for exporting to other countries by the US Government. T here are
72,000,000,000,000,000 (72 quadrillion) or more possible encryption keys that
can be used. DES applies a 56-bit key to each 64-bit block of data making it extremely
difficult to break. Rivest, Shamir and Adleman, owners of the RSA encryption
approach, actually offered a $10,000 reward for breaking a DES message! A
cooperative effort on the Internet of over 14,000 computer users trying out various
keys finally deciphered the message, discovering the key after running through only
18 quadrillion of the 72 quadrillion possible keys! Few messages sent today with
DES encryption are likely to be subject to this kind of code-breaking effort.
d) 3DE.'i:
Although DES is considered to be strong, many companies prefer using "triple DES"
called 3DES. It is a stronger version of DES and it applies three 56-bit keys to each
64-bit block of data. The first key encrypts the data block, the second key encryptc;;
the data block and the third key encrypts the same data block again. The 3DES
version requires a 168-bit key that makes the process quite secure and much safer
than plain DES.
fe'S Activitv C:
Study the type of encryption being used by www.hotmail.com and www.icicidirect.com
8.6 SECURE SOCKET LAYER (SSL)
Although originally developed by Netscape as a way of ensuring the security of e-cornmercc

transactions, the Secme Sockets Layer (SSL) is a commonly-used protocol for managing
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the security of message transmission on the Internet. Browser-based SSL alternatives

require little or no software on remote PCs, and in most cases any PC with a browser can
be used to make the secure connection, as long as the user can authenticate to a central
server. The idea is that SSL's simplicity translates into an easier installation and long-term
cost savings because of simpler ongoing support.
The SSL standard is not a single protocol, hut rather a set of accepted data transfer
routines that arc designed to protect the integrity of transmitted messages.
SSL relics on certificates - digital identification cards - and keys. Certificates include the
name of the certificate authority that issued the certificate, the name of the entity to which
the certificate wac; issued, the entity's public key and time stamps that indicate the certificate's
expiration date.
Two types of keys are used as ciphers to encrypt and decrypt data. Private keys are
issued to entities and are never given out. Public keys are given out freely. Both keys are
necessary for authentication routines. Data encrypted with the public key cannot be decrypted
with the same key. The private key must be used.
How SSL works

These are the steps an SSl server goes t hrough to
authenticate a user-.
G ..... -· · ··········-··-·--· ·····--··················-· ·· · -··.
0 "" : Tho servor vandates i hn usar's digital s;gnawro
! Remote user cor1tams . f with t h~ 'l}Uhlic key. Tho SQr'.'er then r.hecks for the·
• corpor-ate or sor vice ; certificar~·s P.Xpiralion date. If cur reni t ims ~nd
: provid~!:,ssL sE~r\l~r. : ;. datEJ (;Ire off, the process
..
stop.s.
Sill senoer •
Elach SSL server maintains a lls1 o-r trt.J~ted ~ertificate authc>rlt!B>s.The s~1~ver
i compares the pubb~ key rrorn theCA to validate the dlgiw.J sign<:tture. If
: information has cl1at1ged or public and pri'I<He V.eys don't n1a1ch. the pr-oce:ss
er1ds. If ev$rythiPg matches. the uset can access resources.
SO.URCL NtTSCA PE
Fig 8.3 : Working of SSL
148
Unit 8 r:-Security
Veri Sign is the SSL Certificate provider of choice for over 93<if of the Fonune 500 and
the top 10 U.S. banks. There are businesses that are obviously concerned the mo.-t about
Internet security.
Here is what VeriSign recommends:
You need SSL if...
• You have an online store or accept online orders and credit cards.
• Your business partners log into confidential information on an extranet
• You have offices that share confidential information over an intr,mct.
• You process sensitive data such as address, hitth date, license, or ID numbers.
• You need to comply with privacy and security requirements.
• You value privacy and expect others to trust you.
8.7 WORLD \VIDE WJ<:B A..l\-n S}:CURITY
The World Wide Weh Consortium (W3C) develops interoperable technologies

(specifications. guidelines, software. and tools) to lead the Wch to its fullest potential.
W3C is a forum for information, commerce, communication, and collective understanding.
W3C regularly addresses security issues over the World Wide Web. We shall now look at
3 important areas of concern:
a) Web Server:
In the World Wide Web we have security issues at every stage. The web server is the
prime target with lot of security loop holes.
The moment you install a web server at your site, you have opened a window into
your local network that the entire lntcmet can peer through. Most visitors arc content
to window shop, hut a few will try to peek at things you don't intend for public
consumption. Others, not content with looking without touching, will attempt to force
the window open and crawl in. The results can range from the merely embarrassing.
for instance, the discovery one morning that your site's home page has been replaced
by an obscene parody. to the damaging, for example, the theft of your entire database
of customer information.
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c-Business
A web server represent<> yet another potential hole in your local network security.
The general goal of network security is to keep strangers out. Yet the point of a
website is to provide the world with controlled access to your network. Drawing the
line can be difficult. A poorly configured web server can punch a hole in the most
carefully designed firewall system. A poorly configured firewall can make a web site
impossible to usc. Things get particularly complicated in an intranet environment,
where the web server must typically be configured to recognize and authenticate
various groups of users, each with distinct access privileges.
b) Web surfer- end user :
To the end-user, web surfmg feels both safe and anonymous. It's not. Active content,
such asActiveX controls and Java applcts, introduces the possibility that web browsing
will introduce viruses or other malicious software into the user's sy~tcm. Active content
also has implications for the network administrator, insofar as web browsers provide
a pathway for malicious software to bypass the firewall system and enter the local
area network. Even without active content, the very act of browsing leaves an electronic
record of the user's surfing history, from which unscrupulous individuals can reconstruct
a very accurate profile of the user's tastes and habits.
Finally, both end-users and web administlators need to worry about the confidentiality
of the data transmitted across the Web. The TCP/IP protocol was not designed with
security in mind; hence it is vulnerable to network eavesdropping. When confidential
documents are transmitted from the web server to the browser, or when the end-user
sends private information back to the server inside a fill -out form, someone may be
listening in.
c) Security Risk:
There arc basically three overlapping types of risk:
1. Bugs or mis-configuration problems in the web server that allow unauthorized

remote users to :
a) Steal confidential documents not intended for their eyes.
b) Execute commands on the server host machine, allowing them to modify

the system.
c) Gain information about the web server's host machine that will allow them
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Unit 8 E-Sccurity
to break into the system.
d) Launch denial-of-service attacks, rendering the machine temporarily

unusable.
2. Browser-side risks, including:
a) Active content that crashes the browser, damages the user's system,
breaches the user's privacy or merely creates an annoyance.
b) 'lbe misuse of personal information knowingly or unknowingly provided

by the end-user.
3. Interception of network data sent from the browser to server or vice versa via
network eavesdropping. Eavesdroppers can operate from any point on the
pathway between browser and server including :
a) 'Ibe network on the browser's side of the connection.
b) The network on the server's side of the connection (including intranets).
c) The end-user's Internet service provider (ISP).
d) The server's ISP.
e) Either ISPs' regional access provider.
It's important to realize that "secure" browsers and servers are only designed to protect
confidential information against network eavesdropping. Without system security on
browser and server sides, confidential documents are vulnerable to interception.
To overcome security risks and problems, it is impmtant that the system administrator or
the "webmaster" should take proper precautions.
W3C recommends the following general security precautions:
If you are a webmaster, system administrator or are otherwise involved with the
administration of a network, the single most important step you can take to increase your
site's security is to create a written security policy. This security policy should succinctly
lay out your organization's policies with regard to:
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e-Business
• Who is allowed to use the system?
• When arc they allowed to usc it?
• What are they allowed to do (different groups may be granted different levels of
access)?
• Procedures for granting access to the system.
• Procedures for revoking access (for example, when an employee leaves).
• What constitutes an acceptable usc of the system?
• Remote and local login methods.
• System monitoring procedures.
• Protocols for responding to suspected security breaches.
This policy need not be anything fancy. It need only be a clear summary of how the
information system works, rcf1ccting your organization's technological and political realities.
There arc several benefits to having a written security policy :
1. You yourself will understand what is and what is not permitted on the system. If you
don't have a clear picture of what is permitted, you can never be sure when a violation
has occurred.
2. Others in your organization will understand what the security policy is. The written
policy raises the level of security consciousness and provides a focal point for
discu.c;;sion.
3. The security policy serves as a requirements document against which technical solutions
can be judged. This helps guard against the ''buy first, ask questions later" syndrome.
4. The policy may help bolster your legal case should you ever need to prosecute for a
security violation.
2S Activity D:
Talk to 2 system administrators and understand the security measures taken by them for
the server and the network of their organization.
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Unit 8 E-Sccurity
8.8 SPAMMING AND PIDSIIING

Spanuning is the use of any electronic communication medium to send unsolicited messages
in bulk. While its definition is usually limited to indiscriminate bulk mailing and not any
targeted marketing, the term "spam·· can refer to any commercially oriented, unsolicited
bulk mailing perceived a<; heing excessive and undesired. The most common fonn of spam
is that which is delivered in an e-mail a-, a form of commercial advertising.
I Iowever, over the short history of electronic media, people have done things comparable
to spamming for many p1¥f>oses other than the commerciaL and in many media other than
e-mail. Spammers have developed a variety of spamming techniques. which vary by media:
e-mail spam, instant messaging spam, Usenet newsgroup spam, Web search engines spam,
weblogs spam and mobile phone messaging spam.
~
Facsimile
~~
ca
. -rna·~
\Mobile Phone
·
Messenger Etc.
Fig 8.4 : Different spamming techniques
Spamming is economically viable for spammcrs because advertisers have effccti vely no
operating costs beyond the management of their mailing lists. Because the barrier to entry
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e-Busincss
is so low, the volume of unsolicited mail has produced other costs which are borne by the
public (in terms of lost productivity and fraud) and by Internet service providers, who
must add extra capacity to cope with the deluge. Spamming is widely criticised and has
been the subject of legislation in a number of countries.
SPAM STATISTICS
In 1995, SPAM represented approximately l million pieces of email annually, with 10

mmion users worldwide. This equates to a ratio for spam to users of 10: 1. Each Internet
user received an average 10 pieces of SPAM annually.
In 2000, SPAM represented approximately 30 billion pieces of email annually with 165
million users worldwide. This equates to a ratio for spam to users of 181: 1. Each Internet
user received an average 181 pieces of SPAM annually.
In 2003, SPAM represented over 100 billion pieces of email annually with 253 million
users worldwide. This equates to a ratio for spam to users of 377.39: 1. Each Internet user
received an average 249 pieces of SPA..\.1 annually.
According to MessageLabs, today the amount of spam received by users has surpassed
the amount oflegitimate email received daily.
At the current rate of continued growth, the level of SPAM in 2010 would be approximately
2.1 trillion pieces of email annually for 750 million users.
SPA..\11cvels have risen over 600% annually since 1997 and are estimated to continue to
do so Ferris Research shows that $10 billion dollars is lost annually by businesses dealing
with spam according to a ·wa<>hington Post article.
Robert Mahowald, research manager for IDC. said his firm estimates that for a company
with 14,000 employees, the annual cost to fight spam is $245,000. And he added, "There's
no end in sight.''
According to a CNN special report, spam costs businesses worldwide over $13 billion:
• $8.9 billion for US corporations.
• $2.5 biWon for I ~uropean businesses.
• $500 million for US and European service providers.
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{.;nit 8 E-Security
Symantec provides world wide spam statistics. The graph below represents the region
wise messages and spam statistics worldwide.
The country of origin of a message is determined by the location of the server from which
the message was sent to the customer. The server may not necessarily be located\\ !thin
the same country as the sender of the message.
1~ ~ ......._ _ _ __
• Ptn:ontoftotal~tone~
.s=
c
0
• -tn1Gftoti1~1<4'l'!'
E _ :
~
- . ... -- ·-························-·-··-·-····-- --- - ...---- - -----------·····---· .. - --- -. -- .. - --- --·----,
ll%
Ill ..::... : . • . . 1.~ 1.£'11>

.l&llah/
········ ·-~
-~ •
Oceania
Oalmlld Rog!OII ofOrll:ilt:
Sotrell: Srhl#tllK Pt'CJM tiMwtX'k
:Fig 8.5 : Claimed region of origin for mails and spam
Spam can take many forms, but a recent study by MessageLabs of consumer email users
discovered that emails offering products or advertising general goods and services is the
number one spam concern. Other high volume spam producers are the adult. health,
mortgage and loan industry, investment industry and the real estate industry.
Aclult iO~
WC!riGwlcle Spall! catogory DAta:

5ourt!J: Srmllllli!C Pro~Nefarurk
J:i'ig 8.6 : Spam forms and worldwide statistics
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e-Business
SPAM vs. Computer Viruses and Trojans
• SPAM is not, in the truest definition of the phrase, a computer virus, though it is an
Internet epidemic.
• SPAM is and has assumed virus-like traits such ao;; an exponential growth worldwide,
an ability to impair network performance due to overwhelming load <md a frequent
ability to have users/computers perform actions they would not have normally done
(such as view pornographic materials delivered in emails).
• Some SPAM may carry viruses in their payloads or attachments. In fact many do, as
a way of enticing you to open the attachment. JUST SAY NO TO OPENING
A'ITACIIMENTS FROM UNKNOWN SENDERS.
• A computer virus seeks to control or disrupt a network or computer system through

the nmning of scripts or programs in a manner that achieves the desired result- from
simply self-propagation to malicious destruction of data stores <md systems.
• A computer trojan disguises it<>elf as it enters a user computer, installs itself <md remains
normally unseen and unrecognized by the average user. The troj<m may perform such
actions as log all keystrokes and send these to a remote computer, delete an email
addresses out of all files on a user computer to then send to someone else, dig for <mel
retrieve all passwords <md sensitive information stored on the computer, run itself as
a "server" and piggyback on the user computer to run rogue networks or perform
remote control of the user system. :Nctbus, Backorifice, Kazaa and many others are
examples of these.
Let us now look at the concept of J>hishing :
Phishing is the act of sending an e-mail to a user falsely claiming to be an established

legitimate enterprise in an attempt to scam the user into surrendering private infonnation
that will be used for identity theft. The e-mail directs the user to visit a website where they
arc asked to update personal information such as passwords and credit cards, social
security and bank account numbers that the legitimate organization already hao;;. The website
however, is bogus and set up only to steal the user 's information. For example, 2003 saw
the proliferation of a phishing scam in which users received e-mails supposedly from eBay
claiming that the user's account was about to be suspended unless he clicked on the
provided link and updated the credit card information that the genuine eBay already had.
Because it is relatively simple to make a website look like a legitimate organization's site
by mimicking the HTML code, the scam counted on people being tricked into thinking
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Unit8 E-Security
they were actually being contacted by eBay. They would subsequently go to eBay· itc to
update their account information. By sparnrning large groups of people. the "phi ·her"
counted on the e-mail being read by a percentage of people who actually had li~ted credit
card numbers with eBay legitimately.
Phishing, also referred to ac;; 'brand spoofing' or· carding'. is a variation on "fishing". the
idea being that bait is thrown out with the hope that while most may ignore the bait. some
will definitely be tempted into biting.
Let us now read about an actual case of phishing :
The user gets a mail which looks ac;; if it has been sent by Citibank, as it has its logo and the
same look and feel. The user is ac;;ked to click on a link to go and enter his secure information
including hank details, login and password etc. Once users entered this information the
phishing website received access to all their secure data. A sample email that was being
circulated for getting Citibank customers' data is shown in Fig 8.7.
E'e ~dt ~ ~ Message ~ Iools t!eb

3~!tUt.~-~':.~rm Y"'.:!~~-~-~-!~!"."--~---·-·-·--·-------~~-£8~~-
,.,
cffi· - -- -
Dea~ :.:!til::3ank Cll::>:o~er.
Re<..ently :ttere !lave oeen a 'arge r.umher of illenttytheft attempts targellr.;; Citl la;1k
custo rr.e~c; In order to safeg uar::: your ac~ou:1t, wo require that you confirm yoL.~
banking details.
This :;~ocesc; !s manoa tory, ar.d if not completed withir. the rea·est t~e your acrour.:
may be m.t>jo ~: :o temporary suspo'lsion.
To secL.~O y co:~fl rm y(;ur O t;bari< a:count ae tai:s ;;lease go to:
t :tps://web do· uo ;:it•b.~nK. com/s ignin/script c/luq·n/qs•u setup isn
·T r.a:~k you for your orc'T1pt at!entio r to t'1i:; M,~tte r a1d t'lank you for using Cit!il3:.k!
Citi'"' ldertlty l heft Sc!U:i01S
A member of ciligroup
? .C..\J4 ( i!l::l'J~ fJ
: \ l.i\''it:l':
~
1""'-'!"...........,........-.-.......-"'t-·----...,- -~--------
http;fiH8.78.2S1.6i38{dt/lndex.ht:m
. ..,----------~
Fig 8.7 : Citibank phishing mail
Study Fig 8.7 closely. The actual website address (marked in the box) is something far
different than the actual www.citibank.com . This is what users should look at while entering
any secret information and to be saved from phishing.
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e-Business
PS Activity E:
Find out details about anti-spamming software and find the ways to detect phishing attempt<;.
8.9 SUMMARY
In this unit we discussed about the Internet security concerns and the ways to ensure a
safe transaction. You were introduced to the concept of fire walls and the importance of
setting up policies. Security policies arc very important to keep the organization's data
very safe. Along with the data, the transaction process also has to be secured and the data
kept extremely safe. We also understood the encryption fundamentals and the different
ways of encryption. The growing risk of spamming and phishing was a very important
concept to understand and a major concern for companies today.
8.10 SELl'-ASSESSMENT QUESTIONS

---------------------------------
Q 1. Make a list of the domains from where you have received maximum spam mails.
Q2. Install a personal firewall on your own computer and observe the reports of any
attacks on the computer.
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c-Busincss
9.1 INTRODUCTION
Until recently, the Internet was only about the creation of e-business and e-commerce
systems, and it was dominated by websites and store fronts. We have now entered the
next phase of the Internet evolution: the proliferation of e-serviccs. E-services are modular,
nimble, electronic services that perform work, achieve tasks or complete transactions.
Almost any asset can be turned into an e-service and offered via the Internet to drive new
revenue streams and create new efficiencies.
9.2 U~"l>ERSTANDING E-SERVICE
The world of e-services enables businesses to be more nimble and cost-effective. E-

services are available in a number of forms to help you streamline supply chains, automate
business processes and ultimately, better serve your customers. Some e-services are
available as apps-on-tap (applications available immediately) to give you a more efficient
method to deploy your applications. Other e-services are available on business portals
that enable new ways to improve efficiency.
Given the interest in e-services and the simultaneous, unorganized, developments in the
various sectors, it is understandable that many definitions and perspectives have emerged
regarding "e-services". Some private sector companies view ·'e-service" narrowly as
information services, while ff organizations such as Hewlett-Packard have been making
"e-service" their marketing theme in order to move away from a product-centered focus
to a service-centered focus. In some government agencies, "e-service'' is viewed as a
means of holding the government accountable to its citizens. Other IT companies, such as
Microstrat:egy, for example, view "e-service" a<; a purely IT driven concept. In the academic
community, e-service is seen as an overarching customer-centric concept.
Put simply, e-service means managing e-commerce from a customer's perspective.

Emphasis in e-service is on the customer rather than the technology. The focus is on issues
such as customer relationships and customer equity in networked environments,
understanding the nature of service quality in such an environment, and planning how an e-
service customer can best be. satisfied. While these issues all require knowledge of
technology, the primary interest is in consumer behavior and the maintenance of profitable
customer relationships.
A lot of sectors have benefited through e-services and electronic commerce. Now a days
the services that are being offered by firms contribute to the success of the firms more than
anything else. The impact of web based delivery and services of is being felt in all sectors
including fmance, government, healthcare. communication, tr'msportation. etc. We will
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Unit 9 E-Services
take a look at a few different sectors and the role of c-services there. Many e-services are
already cropping up behind the scenes in web-based applications.
9.3 ELECTRONIC COMMERCE AND BANKING
Banking has suddenly become an extremely interesting sector from the marketing point of
view. Banks have introduced innovative services such as the Electronic Bill Presentment
'md Payment (EBPP) service, loan services via the Internet, integrated balance statements
for people with several bankbooks, hank wire transfers via the Internet and e-Customer
Relationship Management (c-CRM) services.
Internet banking is now one of the four most used fmancial services, along with CD/ATM
withdrawals, telehanking and bank teller services.
The role of electronic commerce in banking is multifaceted and impacted by changes in

technology, rapid deregulation of many areas of finance, the emergence of new banking
institutions and basic economic restructuring. Technology is a predominant solution for
controlling costs. Many banks feel that in order to be profitable they need to reduce
operating expenses and maintain strict cost control. Banks are increasingly turning towards
technology to help reduce operating costs and still provide adequate customer service.
Innovation and technology are becoming the key differentiators in the fmancial services
business.
Banks not only provide conventional banking products over the Internet hut arc also
developing new product<; to take advantage of advances in e-commerce. In the conventional
way, the banks make use of their wcbsites to display all their product offerings and detailed
information. Thee-commerce way helps hanks offer those products which otherwise
would be very difficult to offer. These facilities include online bill payments, balance transfers,
inter-bank transactions, credit applications, foreign exchange, El<T(Elcctronic Fund
Transfer), cash management, funds management, etc.
By developing such e-commerce products, it helps the hank in strengthening relationships

with customers and attracting more customers. It opens doors for new business opporttmities
to sell more and varied products at lower costs. The role of banks in thee-commerce life
cycle is extremely crucial. Any purcha<;e on the web involves the bank of the seller, as well
as the buyer, to complete the entire transaction. The banks need to have a strong network
and understanding amongst themselves to successfully complete the e-cornrncrce transaction
and to credit and debit the payment as per the terms decided between the seller and the
buyer online. This role of hanks in e-commerce is explained in Fig 9. 1.
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c-Busincss
j•---~-S-el.-ler
'E-Commerce
Buyer ...... Over the
Internet _ __,
~
I
l
/
/ I
~
/
/
/
Bank
Buyer's
Bank • Payment
Networks
.... .·SeHer~s
. Bank
·
-
Fig 9.1 : Role of banks in e-commerce
Security concerns
There is a growing concern about the security of the overall transactions involved in online
banking. Internet users have changed their online behavior due to security concerns. The
fear of intrusion and losing privacy and the online frauds discourage shoppers from buying
products online. A recent study by Forrester Research has revealed that 14% of online
consumers have stopped using online banking due to concerns about phishing and 72% of
the Internet users who do not usc Internet banking are wonied about identity theft. (For
more details on phishing, please read Unit 8)
To overcome this concern, five major business hanks in the United Kingdom are designing
a brand scheme to establish trusted third parties for ecommerce. Lloyds TSB, Barclays,
Natwest, HSBC and the Royal Bank of Scotland want to launch an infrastructure described
as similar to the 'direct debit' scheme. Tmsted third parties arc organisations that provide
secmity services toe-commerce merchants and buyers.
A recently formed working group will set technical and public service standards, against
which the banks will launch competing services. The banking industry i...;; looking for different
ways to provide safeguards for electronic commerce.
Services using the proposed standards will target business users and could include the
issuing and authentication of digital signatures and the stamping of digital receipt.;; following
transactions.
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Unit 9 E-Services
RS ActivityA:
Study the online banking services offered by any of the top 3 Indian Banks and compare
it with the top 3 banks in the United States or United Kingdom.
9.4 ELECTRONIC COMMERCE AND RETAILING
In commerce, a retailer buys products in large quantities from manufacturers or importers,

either directly or through a wholesaler, and then sells individual items or small quantities to
the general public I end user customers. This takes place usually in a shop called the retail
store. Retailers are at the end of the supply chain. Marketers see retailing as part of their
overall distribution strategy. The retail industry is one of today' s best organized businesses.
But the impact of e-commercc on markets has forced established firms to face competition
from Internet hased entrants with focused offerings.
Online marketplaces are both an opportunity and a threat to retail merchant<;. They are an
opportunity because they offer traditional merchants an additional channel to advertise
and sell their products to consumers thus potentially increasing sales.
In addition, online markets arc more efficient than their physical-world counterpart<; thus
lowering trans;;zction costs for hoth merchants and consumers. For example, low transaction
cost<; are one reason why Amazon.com, a virtual bookstore, can offer a greater selection
and lower prices than its physical-world competitors.
The shifting role for intermediaries in retail e-commerce
Online retail markets will be facilitated by intermediaries, hut there are important questions
about the role and functionality of these intermediaries.
In bricks and mortar commerce, typically a number of intermediaties handle distribution

between the original producer of a product and the ultimate consumer. For example. a
wholesaler, a distributor, a retailer, and sometimes a finance company will help with payment
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c-Business
and an insurance company will offer service guarantees. It has been argued that as online
marketplaces lower the cost of market transactions, it will become easy to match the
original producer and the ultimate buyer directly, and as a result the role of intermediaries
may be reduced, or even eliminated, leading to "disintermediation"
While the growth of retail e-commerce may lead certain types of intermediaries to extinction,
it appears likely that online market<; will more than compensate for this by promoting the
growth of new types of intermediaries, leading to "rcintermediation." One reason is that
online markets arc changing the constraints faced by sellers in designing their product
offerings, fostering the emergence of new types of intermediaries that create value by
aggregating services and products that traditionally were offered by separate industries.
For instance, a consumer in the market for a new car might select a make and model
bac;ed on the experience from test drives, magazine research and recommendations from
friends. The buyer would then negotiate the price, order the vehicle take delivery through
a car dealer, arrange frnancing through a bank and purchase insurance fi:om an insurance
company. By dramatically lowering the transaction and distribution costs, the Internet has
allowed intermediaries such as Automart to offer all of the above products and services,
with the addition of a physical test drive. Similar intermediaries arc emerging in other
markets, such as Travelocity and Microsoft's Expedia travel services aggregators, or real
estate websites that aggregate products and services related to real estate transactions.
The current patterns of retail intermediation seem certain to be substantially reshaped. For
information goods such as newspapers, music, videos and software, distribution is likely
to be transformed, ac; delivering goods over the Internet is likely to replace many physical
distribution systems, leading to substantial disintermediation of wholesalers and distributors.
This impact is already apparent in software retailing, and soon products such as books
and music may also be delivered electronically as the physical component of mastering a
CD or printing on paper can be carried out by the consumer or is superseded as in the
case of electronic storage of music in MP3 players and text in e-books.
For some physical products, direct sellers such as Dell Computers arc likely to squeeze
out traditional wholesalers and distributors. Traditional retailers will still play a substantial
role, as a large fraction of customers value their service and convenience. However, markets
will increasingly value quick, just-in-time deliveries from the manufacturer to the final customer
to reduce costs and time-to-delivery. The supply chains of traditional retailers are likely to
be transformed so that they receive more goods directly from manufacturers, rather than
through wholesalers.
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Unit 9 F..-Services
Moreover, new intermediaries are emerging with expertise in running transportation and
payment networks that will be especially important to retail c-commerce. For instance.
FcdEx and UPS have become major Internet intermediaries because of their logistics
expertise and their economies of scale in distribution.
Some merchants will follow ''click and mortar" strategies that will allow the integration of
consumer experience across online and conventional channels. For example. a consumer
may shop in a physical store, but order in a kiosk and have the purchase delivered at
home; or a physical store can be used to return or exchange a product that wac:; purchased
online. The future may be in strategic partnerships between online and conventional retailers.
Currently, electronic intermediaries often free ride on traditional intermediaries for certain
services, such as providing the physical experience that is still important in many markets
before a buyer can select an appropriate product offering. For example, consumers may
test drive a vehicle at a traditional dealer, and then purchase it at Auto-by-TeL This free-
riding cannot be sustained if electronic intermediaries gain a significant market share. For
instance, when a consumer purchases a car at Auto-by-Tel, the auto manufacturer may
pay a fee to the provider of t11e test drive, whether a traditional showroom or an altemative
venue such ac:; a car rental agency, essentially unbundling the traditional functions of an auto
dealership. This type of arrangement might be unlikely in a traditional retail setting, as it
may not be difficult to collect the necessary information about consumer behavior.
The roles of intermediaries in online retail markets will also include providing trust
relationships, ensuring the integrity of the market. matching customers and suppliers, and
providing marketing information to suppliers. For example, intermedimies such as search
agents may acquire power because of their ability to recommend products, create consumer
trust and their perceived neutrality. Also, intermediaries arc emerging to help consumers
evaluate non-price information. For example, next generation search agent.;; wi1l include
the ability to search and compm·e product offerings based on product features; Bizmte.com
provides ratings of individual merchants; Consumer Reports and Epinions offer product
reviews; Comparenet.com offers feature-based comparisons. Intermediaries will also
collect information from consumers to keep track of merchm1treputations. Credit bureaus
and credit card companies will provide information and guarantee payment for consumers.
Insurers will sell protection from opportunistic behavior or failure of other parties to deliver
on their obligations.
In conclusion, while intermediaries that provide physical inventory buffers arc likely to be
squeezed by better demand information, manufacturing-to-order, and improvements in
logistics, intermediaries that provide information-based services will play an increasing!}
important role in retail markets.
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c-Business
£5 Activity B:
List down 5 new innovations that you are likely to see in the virtual markets in the future.
9.5 ELECTRONIC COl\tiMERCE AND PUBLISHING
Electronic publishing includes the publication of ebooks, electronic articles and the
development of digital libraries. Electronic publishing has become common in scientific
publishing where it is now being argued that peer-reviewed printer scientific journals are in
the process of being replaced by electronic publishing.
In the old days, there were basically three states of a publication's life: the manuscript, the
print publication and the post-publication applications, with a great deal of time in between.
Now, thanks to the kinetic and codified architecture oflnternet publishing, these different
states in the evolution of a publication can mean an enhanced competitive position and
new income streams for publishers and a richer information source for the reader.
The very process of publishing it<;elf invites publishers to redefine what their resources are
and where to make their investments in order to capitali:te on the developing potential of
the online marketplace of ideas. Successful publishers may soon discover that their essential
resources are defined not in terms of timber, paper and glue, or paying large sums to web
builders and outside experts, but rather in salaries and fees paid to people to think about
their publications, to refine and market the authors' ideas.
The internet worked machine makes such intellectual effort measurable, definable and
deliverable. Online, the behind-the-scenes processes assume front and center stage
importance. The acquisitions editor who can respond the quickest to trends and scientific
developments online, will be able to attract more authors to the publishing house; the
editors who do the best editing may provide inducements to authors to choose one publisher
over another because of the added value the publisher brings to the publishing process.
The production department doesn't labor anonymously for months on each book, behind
168
Unit 9 E-Serviccs
closed doors, but instead assumes responsibility for regularly reporting and meeting posting
changes occurring within the publishing house.
Revenue model :
Online publishers arc developing certain business models to charge customers directly
and convince them that such charges arc justified. As more and more firms begin to offer
online content, they will be forced to adjust to new customer attitudes regarding pricing.
Publishers currently finance their business by offering advertisers mass markets for delivering
their message in return for large advertising fees. The general public has hcen traditionally
conditioned to think that the news, information and entertainment they rccei ve should be
subsidized (or nearly free) and that advertisers should pay the bill. This approach may not
be viable in the online medium when mass markets are replaced by customers selecting
their information and delivery methods. For this reason probably, early experiments with
online subscriber-bac;ed services have not hecn very successful.
The early online publishing pioneers are trying to accomplish a difficult feat. Newspaper
and magazine publishers, some of the first to stake their claims on the Internet, arc tinkering
with new advertising models for their J1cdgling website<>. In general, main stream advertisers
have been skittish about pumping money into a medium with an audience whose size and
habits are nearly impossible to figure out.
Copyright issues :
Another key issue in online publishing relates to digital copyrighL<>. Effective technological
protection mechanisms are vital to ensuring the availability of quality content online. The
Internet makes it extremely eac;y to copy. retransmit and alter works without the permission
of the copyright holder. Moreover, the digital world has no international boundaries and
policing is almost impossible since the levels ofprotection and sanctions against infringement
vary widely in countries across the globe. This makes the risk even greater. Clearly without
effective protection, publishers arc not willing to risk their investment and hard work.
Googled!!
Google hac; found a smart way to overcome the problems in tl1e online publishing world. It
has come up with the unique concept of a "Google book search". You can search the full
text of books to find the ones that interest you and learn where to buy or bon ow tllem.
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e-Business l
Th·- is what they explain about the working of their Google Book search:
-Just do a search on Google Book Search or on Google.com. When we fmd a hook

- content contains a match for your search terms, we'lllink to it in your search
ults. Click a book title and you' ll sec the Snippet View which, like a card catalog,
\ s information about the book plus a few snippets - a few sentences of your search
lee'! in context. You may also sec the Sample Pages View if the publisher or author hac;
.: '-en us permission or the Full Book View if the book is out of copyright. In all cases,
· Il also see 'Buy this Book' links that lead directly to online bookc;tores where you can
the book."
Snippet View Sample Pages View Full Book View
I I l
L __j l_
\ 1ew a few sentences and View a limited number of View the entire book
adonnationaboutthebook pages of the book
li'ig 9.2: View of the search on Googlc book search
G __ ;Ie supports the authors as well as the publishers. Google offers a Partner Program
~-. · gncd to help publishers and authors promote their books by showing the readers a
_,...·ted number of sample pages.
~lc claims that publishers will sell a lot more books if a lot more people knew about
ern. Google can help make that happen. Publishing houses can reach out to wider and
·er markets if they started to think of Google Book Search as a free worldwide sales
m:i marketing system.
""By matching your words with user searches, Googlc Book Search connects your books
ith the users who are most interested in buying them -and then links them to places
:here they can buy them immediately."
Cnit 9 E-Services
Google also commits protection
"Your books arc hosted on our secure servers and users can only see a limited number of
pages from your books. In addition, copy, save and print functions are disabled. And you
can remove any of your books from Googlc Book Search at any time.··
~Activity C:
Study the online publishing and archiving system of 'The Times oflndia' newspaper.
9.6 ELECTRONIC COMMERCE AND SUPPLY CHAIN

MANAGEMENT (SCM)
Supply Chain Management is the management of the entire value-added chain, from the
supplier to manufacturer right through to the retailer and the final customer. SCM has three
primary goals: Reduce inventory, increase the transaction speed by exchanging data in
real-time, and increase sales hy implementing customer requirements more efficiently.
Electronic commerce and supply chain management both have seen significant
developments in recent years in business practice as well as in the academic community,
merging technology, systems, and innovative process models.
Many supply chain management operations are using software that focuses on systems
and processes to support the flow of information within and between organizations, which
occurs in the context ofproct.rrement, manufacturing, sales, distribution ofgoods, information
and services.
Web-based Supply Chain Management
Supply chain management provides supervision and direction for the various parts of the
distribution system including production scheduling and inventory controL transportation.
warehousing, wholesaling, retailing and brokerage. It encompa~scs and proves beneficial
to all industry sectors. Global competition is putting business pressures on all supply chains
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e- I3 usiness
to reduce their cost<; while being more proactive.At the same time, fi1ms, with their suppliers
<md client<;, arc facing mounting pressure to co-ordinate and increase collaboration in their
business activities and processes. As all firms and their partners try to simplify their supply
chain operations, they arc gradually adopting web-based supply chain management
technology. Key processes include sharing Product Description Catalogue. Order Status
Information, Inventory Data as well as demand projections over the Intemet.
Sharing Product Description Catalogue over the Internet
An electronic catalogue is a centralized online repository for item data. It includes all
attributes that can be used to support business processes across multiple departments and
supply chain partners such as merchandising, logistics and marketing.
One of the benefits of having product information in a standardized digital fmmat is the
capability to exchange data with trading partners. The frequent communication of product
information is possible a..:; access to electronic catalogues may be via the Intemet or through
Electronic Data Interchange (ED I).
The intemct-enabled electronic catalogue will become a ba<;ic requirement for doing business
and will have as great an impact on fim1s as the introduction oflJPCs (Universal Product
Code which is the standard bar code for retail packaging in lJSA). bar code and Enterprise
Resource Planning Systems (ERP) did. We arc at a similar juncture in time now with the
emergence of data synchronization of electronic catalogues.
More than 43% of manufacturers and 46% of wholesalers are already using the electronic
catalogue technology to share infmmation with their customers.
Only 15% of the firms involved in transportation and warehousing arc taking advantage of
this particular practice. This can probably be explained by the fact that they do not create
any products of their own, and their pmtners (manufacturers, wholesalers and retailers)
take responsibility for electronic catalogue capability.
For retailers, only 12% are using electronic catalogues with their suppliers and 27% with
their customers.
Electronic catalogues are the wave of the future and will ensure data integrity and cost
reductions in communications between partners. More importantly for SMEs (small and
medium enterptises ), low-cost entry options exist today to start enjoying the benefits of
electronic catalogues.
17:2
Unit 9 E-Scrviccs
9.7 SPECIALIZED SERVICES
Let us now have a look at specialized services offered by 2 organizations today.
Hewlett Packard :
Many companies arc banking on the growth of c-scrviccs and specialized services. Hewlett
Packard branded it<; services by the name of c-services.
E-services. a business concept developed by Hewlett Packard (HP), is based on the idea
that the World Wide Web is moving beyond e-business and c-commerce (that is, completing
sales on the Web) into a new phase where many business services can be provided for a
business or consumer using the Web. Some c-scrviccs, such as remote bulk printing. may
be done at a Website; other e-services, such as news updates to subscribers, may be sent
to your computer. Other e-services will be performed in the background without the
customer's immediate knowledge. HP defines c-scrviccs a<; '·modular, nimble, electronic
services that perform work, achieve tasks or complete transactions."
Using liP's c-scrvices concept, any application program or information resource is a

potential e-service and Internet service providers (lSPs) and other companies arc logical
distributors or access points for such services. Thee-services concept also sees services
being built into "cars, networked devices :md vittually anything that has a microchip in it.''
HP's vision is that IT departments will increasingly address their needs in a modular way
so that individual modules can potentially be addressed by some e-service.
LivePerson
LivcPerson is the leading provider of hosted solutions and services for managing online
customer interactions. "I .ivcpcrsons" on-demand software enables companies to identify
and proactively engage the right customer. using the right communication channel, at the
right time.
I jvcPerson's comprehensive software platform, Timpani, is a fully\ integrated multi-channel

commmrication solution that facilitates real-time sales, customer service and marketing.
Timpani deliver tools that support and manage all online customer interactions: chat, email
and self-service/knowledgebasc. By supplying a single agent desk'top and unified customer
history, Timpani enables companies to deliver a personalized and seamless service
l/3
c-Busincss
experience. More than 3,000 customers, including EarthLink, Microsoft, Hewlett Packard,
Qwest and Verizon have implemented LivePerson technology to increa<;e sales, satisfaction
and loyalty: reduce service cost-;; and improve agent productivity.
PS Activity D:
List the supply chain management initiative started by Tata Motors.
9.8 SUMMARY
Every day many new services come online and make profits by offering customers innovative
services. In this unit we took a look at a few different services like banking, retailing,
publishing etc. A few specialized services were also explained and we discussed about the
services being offered by different successful companies in each sector.

- - - -- - -
Q 1. Make a list of a few more services that can be offered more effectively using the
electronic medium.
Q2. Write down a list of 5 websites which you use regularly for accessing different services
like banking, shopping etc.
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e-Business
10.1 INTRODUCTION
The benefits of implementing e-business tools is not so much in the use of technology, but
in the streamlining of business processes and the ease in finding new markets.
Some of the advantages of e-business include :
• Quicker and easier communications.
• Strengthened marketing capabilities and reach.
• Increased hours of operation (a website provides 24hrs 7 day inforn1ation to existing

and potential customers).
• Access to broader information through research.
• Reduced cost of doing business by lowering transaction costs and increasing efficient
methods for payment, such as using online banking and reducing stationety and postage
costs.
• The opportunity to adopt new business models and develop tailored customer support
programmes.
10.2 E-BUSINESSAND INTEGRATION WITH TRADITIONAL CHANNELS
E-commerce, B2B, B2C, Internet, intranet, cxtranet and web-portals have all emerged as
new business opportunities and different channels to conduct business. This has lead to a
lot of discussion about the existing traditional business channels and the integration of
those channels with the new "e" trend.
Certainly, the accelerating pace of web-based transaction alternatives has given rise to
much speculation regarding the long-term evolution of our business methods. A recent
study report about a major mail-order pharmacy and a new online competitor does a
good job of illustrating fundamental differences in the new e-companies and the old school
brick-and-mortar firn1S. You'd probably be surprised to learn that in this age of competition,
the established enterprise is winning- its e-cornrnerce presence is growing tenfold while
the dotcom is spending exorbitantly trying to catch up. Why? Primarily because the traditional
business completely understands the operations required to support their online business.
Rather than getting more business, execution of the transaction process has become the
more challenging issue. So just being e-enabled docs not help. It needs to have a well
established understanding of the core-business. People are now f(x::using more on integrated
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Unit 10 E-Business- An Evaluation
efforts to help traditional business grow by taking help of the power of technology and e-
commcrcc.
Rich Hightower, President of Kent Electronics Corp, New York, has explained how he
successfully integrated both traditional and e-business together for his success ...
We olthe traditional brick-and-mortarcstablishment have met the challenge ofthe nev.·e-

busincsses not by cowering in awe or disparaging their attributes, but by embracing the
technology and incorporating it<; capabilities to expand our own offe1ings and better sen·e
our customers. Many of us in distribution are already well along with our second- or even
third-generation of c-business applications that allow visitors to our website to access
inventories, and current customers to gain secure access to their accounts, with the ability
to perform most functions involving order status and tracking. Obviously, the options
available vary somewhat from site to site, but it's a fact that customers arc virtually "wired
in" to ourinf01mution systems, alleviating the need for them to Int:Lke phone calls to customer
service. Our e-busincss initiatives arc being built around ourproven ability to execute at
the other end ofthe transaction. No doubt. the way we communicate with our customers
and the ability to quickly share pertinent information will change, but the goal will remain
the same: execution.
While some view the Internet in a "revolutionary" context, others see it as merely another
step in the evolutionary process of the technological age we live in. Hardly a day goes by
that some group within our own organization, Kent b1cctronics. isn't considering how to
incorporate new e-commerce initiati vcs into their future growth plans. And, while I'd like
to think that we're unique in this regard, the fact ofthe matter is that most ofour suppliers.
competitors and customers arc working on similarplans of their own.
It's true that the dizzying growth of the Internet has given rise to entirely new business
models. using interconnectivity, databases, and search engines to locate customers'
component requirements. I would suggest, however, that the real challenge is how fast the
dotcoms can develop the required basic operational skills and order fulfillment systems
that more traditional businesses already take for granted. This is a necessary part ofthe
value proposition that the newcomers must bring to the table.
Ifan Original Equipment Management (OEM) has a spot buy situation for a small quantity
of specific part numbers. the search capability offered by some of this teclmology is a
logical option for the buyer. On the other hand, under more typical circumstances, today 's
sophisticated customers have myriadrequirements that cannot easily be met by a selection
methodology that "cherry picks'' one or two parts from several possible suppliers. based
on immediate availability or lowest pricing.
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e-Busincss
Ours is a vibrant and pmgressive industry, so one can only sunnise from past perfom1ancc
that the future potential is limitless. Time has always been the enemy: it's the one finite
commodity that once lost callllol ever be recovered. So, as the hardware becomes faster,
the clvailable bandwidth increases, and we gain a broader level of experience with the
current applications. The progressive, trclditional organizations will continue to leverage
emerging technology lo provide further efficiencies that shoiten timelines and speed execution
of the supply chain pmcess. It would, therefore, be logical to expect that the successful
brick -and-moz1ar businesses that embrace these enhancement<; will continue to flourish.
-Rich Hightower, President of Kent Electronics
Give 3 examples of successful integration of e-business and traditional channels.
10.3 E-MARKET PLACE AND E-PROCUREMENT
An e-marketplace is an internet based facility that enables trade between one or more
purchasing organisations and a vruiety of suppliers. E-marketplaccs arc usually opened
through your web browser and use the intemet instead of paper based systems to place an
order with a supplier. Thee-marketplace streamlines the process of selecting what you
need from a supplier and placing an order with them. Some e-marketplaces also allow
suppliers to send an invoice electronically.
E-procurement refers to purchasing electronically, usually via an electronic procurement

application. Companies implement e-procurcment systems to streamline and automate
their purchasing process, eliminate maverick buying, reduce the cost of products, reduce
the number of suppliers and reduce the cost per transaction. These savings improve the
bottom line.
E-marketplaccs tend to offer a range of products which suppliers display in electronic

catalogues. You can log-in and compare the prices cmd features of the different products
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on offer, before placing an order. When you place an order through an e-m.arketplace. it
can be tracked using your web browser, starting from the moment you place the order.
right up until the goods are paid for. Suppliers logging into thee-marketplace '' ill nx:eive
the orders and can then dispatch the goods and invoice the buyers.
The e-marketplacc can provide valuable management information about your purchasing.
such as what goods and services the consumers purchase and from which suppliers. This
data can be extracted on a regular basis to maintain an up-to-date spend analysis that \\'ill
provide you with a current picture of your customer 's purchases. E-Marketplaces gather
this data by recording all the purchasing activity that goes through the facility. Thee-
marketplace can usually be integrated into the finance system which means that purchases
will automatically be included in the purchase ledger. 'This will allow financial managers to
have access to the latest information on consumer purchases and have better control of
their budgets.
E-:\farketplaces often offer the ability to publish a 'Request for Quotation' or RFQ. When
users wish to purchase something that is not listed on any of the suppliers' catalogues, they
c£m publish the specification of the items or services that they require and any supplier who
is registered can view these details and respond to the request.
E-Marketplaces can also include a punch out facility which allows users to access and
purchase from catalogues on external websitcs, (e.g.www.dcll.co.uk). When users arc
using punch out, they do not have to log-out of thee-marketplace, since they access the
website from within thee-marketplace, and import data back into the system from the
supplier's website or catalogue. This means that users can usc all the usual features of the
marketplace including their shopping cart. However, establishing a punch out facility can
be complex tmd will require substantial effort between the external websites and the supplier.
e-Choupal- Connecting the Indian fanner with the world
The e-Choupal website is a unique example of c-market and c-procuremcnt.
E-choupal is the unique web-based initiative ofiTC's International Business Division. It

offers the fanners oflndia all the information, products and services they need to enhance
farm productivity, improve farm-gate plice realization and cut transaction costs. Farmers
can access the latest local tmd global information on weather, scientific farming practices
as well as market prices at the village itself through this web portal- and that too in all
regional languages. E-choupal also facilitates the supply of high quality farm inputs a.;; well
as purchases of commodities at the customer ·s doorstep.
tol
e-Business
ITC's International Business Division, one of India's largest exporters of agricultural

commodities, has conceived e-Choupal a<> a more eftlcient supply chain aimed at delivering
value to its customers around the world on a sustainable basis.
The e-Choupal model has been specifically designed to tackle the challenges posed by the
unique features of Indian agriculture, characterised by fragmented farms, weak infrastructure
and the involvement of numerous intermediaries, among others.
E-Choupal also unshackles the potential of the Indian farmer who has been trapped in a
vicious cycle oflow risk taking ability -7low investment -7low productivity -7 weak
market orientation -7low value addition -7 low margins -7 low risk taking ability and so
on. This made the Indian agribusiness sector globally uncompetitive, despite our rich and
abundant natural resources.
Such a market-led business model can enhance the competitiveness oflndian agriculture
and trigger a healthy cycle of higher productivity, higher incomes, enlarged capacity for
farmer risk management, larger investments and higher quality leading again to higher
productivity.
Further, a growth in rural incomes will also unleash the latent demand for industrial goods
so necessary for the continued growth of the Indian economy. This will create another
cycle propelling the economy into a higher growth trajectory.
'
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.'
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Unit 10 E-Business -An Evaluation
Appreciating the imperative of intermediaries in the Indian context. e-choupalleveragcs

information technology to virtually cluster all the value chain participants. delivering the
same benefits as vertical integration does in mature agricultural economics like the CSA.
E-Choupal makes use of the physical transmission capabilities of current intermediaries-

aggregation, logistics, counter-party risk and bridge financing -while disintcnncdiating them
from the chain of information flow and market signals.
With a judicious blend of click & mortar capabilities, village internet kiosks managed by
farmers- called sanchalaks - themselves, enable the agricultural community to access
ready information in their local language on the weather & market prices, disseminate
knowledge on scientific farm practices & risk management, facilitate the sale of farm inputs
(now with embedded knowledge) and purchase farm produce from the farmers ' doorstep
(decision making is now information-based).
Real-tin1e information and customised knowledge provided by e-choupal enhances the

ability of farmers to take decisions, align their farm output with market demand and secure
quality and higher productivity. The aggregation of the demand for farm input<> from individual
farmers gives them access to high quality input<> from established and reputed manufacturers
at fair prices. As a direct marketing channel, virtually linked to the 'mandi' system for price
discovery, 'e-Choupal' eliminates wasteful intermediation and multiple handling. Thus it
significantly reduces transaction costs.
'e-Choupal' ensures world-class quality in delivering all these g<x)ds & services through
severd.l product I service specific partnerships with leaders in the respective fields, in addition
to ITC's own expertise.
While the fmmers benefit through enhanced farm productivity and higher farm gate prices,
lTC benefit<> from the lower net cost of procurement (despite offering better prices to the
farmer) having eliminated costs in the supply chain that do not add value.
16 Activity B:
Do you agree that e-marketplaces will improve business standards?
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c-Business
10.4 CUSTOMERLOYALTY
Customer loyalty describes the tendency of a customer to prefer and choose one business
or product over another for a particular need. In the packaged goods industry, customers
may he described as being "brand loyal" because they tend to choose a certain brand of
soap more often than others. Note the use ofthe word "choose" though; customer loyalty
becomes evident when choices are made and actions arc taken by them. Customers may
express high satisfaction levels with a company in a survey, but satisfaction docs not equal
loyalty. Loyalty is demonstrated by the actions of the customer; customers can be very
satisfied and still not be loyal.
Customer loyalty has become a catch-all term for the end result of many marketing
approaches where customer data is used. You can say Relationship Marketing or Database
Marketing or Permission Marketing or Customer Relation Management (CRM), and what
you are really talking about is trying to increase customer loyalty- getting customers to
choose to buy or visit you more. Increased customer loyalty is the end result and the
desired goal of these programs. All of the above approach~s have two element-; in common
-they increase both customer retention and the lifetime value of customers. (Lifetime value
=the total value a consumer can bring to a company over his lifetime through purchases
and recommendations).
Customer loyalty is the result of well-managed customer retention programs; customers

who are targeted successfully hy a retention program demonstrate higher loyalty to a
business. All customer retention programs rely on communicating with customers, giving
them encouragement to remain active and choosing to do business with your company.
You want customers to do something, to take action. You want them to visit your website,
make a purchase, sign up for a newsletter. And once they do it for the first time, you want
them to continue doing business with you, especially since you probably paid big money to
get them to do business with you the first time. You don't want to pay big money the
second time. You want to create a "loyal" customer who engages in profitable behavior
repetitively over time.
Customer data and models based on this data can tell you which customers arc most likely
to respond and become loyal, no matter what kind of front -end marketing program you
are running or how you ·'wrap it up" and present it to the customer. The data will tell you
who to promote to, and how to save precious marketing dollars in the process of creating
customers who are no longer loyal to you.
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Unit 10 E-Busincss- An Evaluation
For example, let's say you look at your most loyal customers and find that on an average
they buy or visit you at least once every 30 days. So you begin tracking t:hcsc customers.
and discover 20% of them ''skip" their 30 day activity. In addition, 9()l:f- of the 20Cf who
skip never come back. You are watching the erosion of customer loyalty right before your
eyes.
And it's too late to do anything about it, because they're already gone. You will waste a
tremendous amount of money trying to get them back. Research tells us you have to
develop a way to identify high loyalty customers who are at risk, and take action before
they leave you.
This is accomplished by using the data customers create through their interactions with
you to build simple models or rules to follow. These models can be your early warning
system, and will alert you to situations like the "30 day skip" example given above, in time
for you to do something before the customer defect<;. Behavior models cause the data to
speak to you about the loyalty status of the customer before it's too late.
Online Customer loyalty and relationship management
Once upon a time, retailers knew all their customers personally. They knew their
preferences and what was happening in their lives. Armed with this knowledge, retailers
were able to react quickly and market to each customer individually. They were able to
build friendships interacting with their customers.
Along the way of growing chains, building malls, websites, ecommerce and promoting
self-service, many retailers lost touch with their customers. Recognizing the value in customer
loyalty, retailers are now seeking to reclaim personal relationships with their customers.
Recently a survey was conducted to study the online shopping experience of customers.
Overall customer care is still lacking. Slow response times and lack of personalization
hampers customer care efforts as e-businesses continue to lack a 360-Degree view of
their customer.
The survey showed that while 'e-businesses are becoming more effective at providing a
variety of options for returning goods, as well as providing both e-mail and call center
services for customer queries, the timeliness of e-mail response continues to lag behind
call center options, and companies are missing critical cross-sell and up-sell opportunities
by failing to turn customer queries into marketing opportunities.
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c-Busincss
During the survey data was gathered from 100 companies that conduct business online,
including bricks and clicks, pure-play online companies and department stores. Survey
participant.;; were asked to return purchases made online and usc any customer interaction
capabilities available on each site.
They were also asked to track any targeted marketing campaigns they received after
making the initial purchase.
E-mail response times continued to be a problem for many e-businesses, as nearly one-
third took more than two business days to respond to inquiries, forcing customers needing
faster response times to use more expensive options, such as dialing into a call center.
While more than half of the c-businesses surveyed did make an outbound offer to the
customers after the initial purchase, 85 percent of those offers were not personalized to
the customer, creating the impression that the offers were untargeted spam c-mails, instead
of a carefully thought-out offer based on the previous buying habits of the COIL'mmer.
42% of online shoppers said they would buy more on the Internet if the return process
was easier. Customers are frustrated with the overall lack of customer recognition and
prolonged turnaround times for tracking returns. The findings of this survey have
demonstrated that while companies are making some progress in different phases of the
online customer experience, there is still a need for increased intelligence and personalization
- across all touch points - to increase customer satisfaction.
E-Businesses need to remember that customer service is measured from the minute the
customer logs onto the site through the entire purchasing/returning process. A customer's
loyalty to any given business is only as good as the overall customer experience from
beginning to end.
£S Activity C:
a) Give an example of an online customer loyalty program run by a website and analyze
the results of the same.
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Unit 10 E-Business- An Evaluation
b) Give 5 suggestions that an established business can implement in order to enhance its
customer loyalty.
10.5 CUSTOMER RETENTION
Customer retention is said to be the philosophy and practice of treating customers so well
that they lack any rea11on to go anywhere else. The philosophy of building your business
on the basis of repeat sales, past customers and word-of-mouth recommendations sums
up customer retention.
The rule of thumb is that it costs five to ten times less to keep a customer than it does to
acquire a new one. This is a major impetus behind the move to customer relationship
management.
Customer retention marketing is a tactically-driven approach based on customer behavior.

In the case of online businesses trying to improve customer retention, advertisers and
retailers must study how users actually use the Web, according to Booz-Allen & Hamilton,
the elite management and technology consulting firm, and NetRatings, Inc .. Web usage
patterns fall into seven categories of online behavior, <md while in some categories consumers
are more likely to buy, in others they are nearly immune to traditional online marketing
pleas.
Customer retention is considered by both scholars and practitioners to be one of the

critical success factors for retail businesses with its implications for cost savings and
profitability. Furthermore, retained customers enhance profitability with their lower sensitivity
to price changes and their higher likelihood of referring new customers. Customer retention
is an even more challenging issue in the context of online shopping, where the switching
costs for customers are minimal. It is therefore important to identify the major determinants
of online customer retention.
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c-Busincss
AOL -a customer retention program
Retention is a key issue for AOL, as it is for virtually every online consumer service. In July
2003, AOL successfully launched ChoiceStream's MyBestBets Personalization Platfom1
in several areas oftheAOLservice.AOLchosetheMyBestBetsPlatform with the goal of
enhancing members' online experiences through personalization. TI1e Platfonn enables
members to indicate their preferences for movies, television, music, retail products and
more, and then tailors content to match their individual interests. The result is a truly
personalized online experience in which each member is surrounded by content they will
enJOy.
By deploying the platform and delivering a truly personalized online experience for each
member, AOL was able to achieve:
a) Lower churn, better retention.
Members are more likely to stay with a service that knows them and caters to them
individually.
b) Increased sales.
Personalized commerce pages that highlight products and content are likely to be of
interest to members, generate higher sales conversions and maximize the value of
every inch of screen real estate.
c) Enhanced promotional effectiveness.
ChoiccStream enables AOL to target the right product to the right consumer.
d) Service differentiation.
True personalization at the user level (versus personalization based on demographic

or geographic breakdowns) sets AOL apart from other online services.
e) Rich customer data.
Preference data can be leveraged across AOL' s marketing and sales efforts to support
corporate goals.
AOL launched the concept of"MY AOL" which gave a true personalized experience for
their users, helped a lot in individual attention to the users and also increased customer
retention.
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Unit 10 E-Business -An Evaluation
Manage My Feeds
G.ett.,e JntormatJt>n yoo want q!Jlc~·tl and easih'. Chooso the catc-Q6~ an<! sources otteC:'ds ttl'3t¢'J wane Iosee !!r.
U) AGL.
:...•.•'<.".:"?.'.>.":.~......
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ste:. i'lt'?t"• !'~A-..
l!'ig 10.2 :MY AOL initiative for customer retention
f6 Activity D:
Study the online customer loyalty programs launched by www.rediff.com and
wvvw.indiatimes.com. Which one do you feel is more likely to be effective?
10.6 E -BUSINESS LIMITATIONS
All said and done, people arc aware that e-commerce or e-husiness has its own limitations.
Of course the benefits or advantages may be far more than the limitations. But it is important
to realize that limitations do exist and that we need to take proper steps to find the right
solution to overcome these limitations and make our website successful.
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e-Busincss
The limitations may be of two types:
a) Technicallimitations
b) Non-technical limitations
a) Technical Limitations :
The technical limitations of e-business activities are likely to be :
• Costs of a technological solution are likely to be high.
• Some protocols arc not standardized around the world.
• Reliability for certain processes may not be guaranteed.
• Insufficient telecommunications bandwidth.
• Software tool" are not fixed but constantly evolving (for instance, browsers).
• Integrating digital and non-digital sales and production information.
• Access limitations of dial-up, cable, ISDN, wireless.
• Some vendors require cettain software to show features on their pages, which
is not common in the standard browser used by the majority.
• Difficulty in integrating c-Commcrcc infrastructure with current organizational

IT systems.
b) Non- Technical Limitations:
The non-technical limitations arc likely to be:
• Customer fear of personal infom1ation being used wrongly (privacy issues.)
• Customer expectations unmet
• Undefined mles and regulations.
• Security and privacy- vulnerability to fraud and other crimes.
• Lack of trust and user resistance.
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Unit 10 E-Busincss- An Evaluation
• Fear of payment information being unsecured.
• Tactile limitations.
• Many businesses face cultural and legal obstacles.
• Limitations of support services.
• Lack of critical mass in certain market areas for sellers and buyers.
• Accessibility outside of urban/suburban and area.:; effects universality.
• Higher employee training required being click and mortar.
• People's resistance to change.
• People not used to faceless I paperless I non-physical transactions .
.RS Activity E:
Discuss the technological limitations for the growth of e-commerce in India.
.RS Activity F:
Elaborate on the status of laws against cyber crime and online fraud.
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e-Business
10.7 SUM.l\1ARY
Understanding the advantages and disadvantages of e-business was an important part of
this unit. Offline business models and online business models can complement each other
to provide better corporate success. The successful e-market place and e-procurement
systems were discussed with a few interesting and successful examples. Customer loyalty
and online relationship management is a very important part of any e-commerce transaction
and we shall see a lot of innovation in this area in the future.
Q 1. Study the cyber laws as defined in India.
Q2. Check thee-procurement program being followed by TATA motors and flnd out
how it has improved its overall profits.
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c-Business
11.1 INTRODUCTION
The importance of business intelligence is increasing day by day. In traditional commercial
enterprises, business intelligence about the customers tends to be reduced to understanding
customer behavior. In the online e-commerce world, working on business intelligence is
easier by capturing the data at the right place and displaying the output in multiple useful
formats.
Business Intelligence (BI) is a broad category of application programs and technologies

for gathering, storing, analyzing and providing access to data to help enterprise users
make better business decisions. BI applications include the activities of decision support,
query and reporting, online analytical processing (OLAP), statistical analysis, forecasting
and data mining.
11.2 TURNING INFORMATION TO KNOWLEDGE
Data, Information and Knowledge are terms that are often used interchangeably, even
though they are far from identical.
Simply defined :
Information is data that has been given structure.

Knowledge is information that has been given meaning.
Data, information, and knowledge are interwoven and interrelated in complex ways. The
three entities influence each other and the value of each of them depends on the purpose of
use. Both data and information require knowledge in order to be interpreted. At the same
time, data and information are useful building blocks for constructing new knowledge.
Knowledge, information and data work together as individual, but critically interdependent
entities to provide a greater entity which is analyzable hy the human mind.
Knowledge
/
Information
Data
Fig. 11.1 : Relationship between data, information and knowledge
196
Unit 11 E-Business Intelligence
Fig 11.1 suggests that the relationship between data, information and kno\\ ledge is linear.
In today's global market, there is an increasing appreciation of the value of shared

information and knowledge- and of the technologies that make this happen. The organisation
that ignores the value of this capital does so at its own peril! Productivity and profits are
inexorably linked to the expertise of the workforce - and in particular to the learning and
sharing of this expertise.
In a recent survey conducted by Ernst & Young, an audience of executives from 431 firms
(300 US, 131 from Europe) was asked 20 questions on the usc of knowledge in their
organization.
One ofthe questions was, ''What are the most strategically important issues your organization
faces?"
• 87% said knowledge was critical to competitiveness.
Furthermore,
• 44% said they arc poor, or very poor, at transferring existing knowledge to other
partli of the organization.
• Only 12% thought they were above average at leveraging that knowledge.
Information increases in value the more it is used.
It is self regenerative, it feeds on itself.
A new piece of information creates the demand and conditions for the production of
subsequent pieces.
Information has different meaning at different point<; in time.
Knowledge has an economic value only when used.
It adds value to the balance sheet and can be measured.
Knowledge-intensive goods arc deemed more valuable if more users possess the same
knowledge.
Context gives meaning to information and thus creates knowledge. Context enables different
users to value the same piece of knowledge differently.
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e-Business
Two people may associate different values to the same piece of information because one
is "smarter" than the other- either because of their skill set or their genetic endowment.
25 Activity A:
How can you differentiate between data, information and knowledge while accessing an
online stock trading website?
11.3 TURNING KNOWLEDGE TO PROFITS

·- - - -- · - - ----
Every organization revolves around knowledge: knowledge of business processes,
knowledge of information sources, knowledge in the form of models, and knowledge
stored in databa.:;es. However, the most important knowledge is 'stored' in your co-workers:
'People are our main asset'. In practice, it appears to be difficult to determine which
knowledge is of vital importance and where it can be found. Managing and maintaining
such knowledge is even more difficult.
The Value of Knowledge Management (KM)
Knowledge Management is defined in many different ways. One way in which it can be
visualised is the progression between data retrieval, data tracking and data interpretation.
It is now incrca.:;ingly recognised how important the role played by information speciali.:;ts
is in the successful implementation ofKM.
In a recent study conducted by Reuters, 54% of managers surveyed arc worried about
making poor decisions in spite of all the information at their fingertips. When there is too
much information:
Over half of the managers ignore it.
61 % delegate it to someone else.
84% store it for the future.
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Unit 11 E-Busincss Intelligence
There is also a growing appreciation of the cost<; of inefficient information gathering and
sharing. A recent study showed the following:
• Weh Searches by Knowledge Workers= 150
• Number of Knowledge Workers =5.000
• Total Searches= 750,000
• Length of Search x .40
• Total Time =300,000
• Cost/hour x $30
• Tota1 Cost of Web Searches= $9,000,000!!
Not surprisingly, there is now a rapidly rising investment in technologies that facilitate
knowledge management. Thus any organization that makes a proper use of this knowledge
and helps in managing this knowledge system is already making a lot of profits hy just
saving on this manpower cosl People have realized that better knowledge management is
actually extra profits for the organization and the user of the knowledge hase.
DrivingKM
In driving the shift to hetter knowledge management, the knowledge management system
needs to put a thrust on three major areas :
• Indexing intemal and extemal information resources to the same standard so they can
be searched simultaneously.
• Extracting precisely the information required from internal and extema1 resources
using powcrful search technologies.
• Ensuring that the hest information is made available or ·'pushed" to the right people,
at the right times, in the tight formats for maximum advantage.
Knowledge Management is a practice that deals with all aspects of organizationa1

knowledge. The purpose is to attract and retain top talent and to meet the challenges that
the competition in our new "Knowledge Economy" hrings. It involves discovering, capturing.
organizing, relating, sharing and generating organizational knowledge that will eventually
foster an innovative working environment and increase business value.
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e-Business
There is a wealth of organizational know ledge in most companies about how to do things
better. Yet much of it fails to reach the people who need it, and at the time they need it.
Sometimes it is even covered over by a mass of less relevant information, or even outdated
infonnation.
At other times, people simply do not care to share knowledge or their best practices
among each other. Too much politicking and mistrust makes it worse. Organizations that
still haven't instilled or promoted a healthy knowledge sharing environment, risk lost market
opportunities, cost, and confusion, and even risks to safety.
Are people wasting time searching for solutions when someone else has already found an
answer? Are they failing to do things the way customers expect? Arc teams within the
same organization making the same errors, instead oflcarning from the experience of
others? Is time being wasted by employees protecting what they know instead of applying
what they know? If so, then you should reevaluate to sec how your business can benefit
from a knowledge management initiative.
Knowledge Equals Success and Profits!!
In industry after industry, success comes to the companies that have the best information
or wield it most effectively. It does not necessruily come to the companies with the best
balance sheets. The successful companies in today's Information Era are the ones that
recognize the value of its ''intellectual capital" and harness it wisely.
Microsoft, Oracle and other comprulies did not become successful simply for their numbers.
It was the collective information, the knowledge and the wisdom of these companies that
distinguished them from other very rich companies such as Sears.It was their "intellectual
capital" and the smart usc of this power.
The crucial issue is discovering and l1Ulturing yom intellectual capital. Intellectual capital is
the sum of everything everybody knows in a company that gives it a competitive edge.
Basically, intellectual capital is the compru1y's collective brainpower. It encompasses the
knowledge. training, intuition, intellectual property, experience, information, shared learning,
collaboration with its partners, customers, suppliers etc. It is hard to identify and harder
yet to deploy effectively. But once you find it cmd recognize its value YOU WIN.
However, appreciating and nourishing inte11ectual capital demru1ds more thru1 a theoretical
perspective. It requires an immediate and practical action plan focused on learning and
mastering new management approaches that will maximize yow- organization's collective
brainpower. This, in turn, means identifying your business goals. developing and harnessing
your staff's true potential and sustaining their support.
200
16 Activity B:
Study a knowledge management software and see how it can help in increasing profits for
a company in the retail industry.
11.4 WEB ANALYTICS
Web analytics is a component of online business that has been slowly gaining momentum
over the last few years. One whose time, many say has officially come, based on Googlc 's
acquisition of Urchin Software. In general terms. web analytics is the process of collecting
data about the activities of people accessing your website (visitors)-how they found you,
when they visited. what pages they l<X)ked at, what they bought or downloaded, and so
on, and mining that data for information that can he used to improve the website.
Web data is often analyzed to push and pul I the three general levers available to businesses
on the internet: marketing. merchandising and site design. Marketers will often usc this
data to determine how well (or how poorly) their hard-earned marketing dollars arc spent.
By identifying every inbound marketing campaign, marketers arc able to make apples-to-
apples comparisons regarding how well each type of acquisition vehicle performs, usually
by examining some type of conversion rate. Merchandisers and content managers will
analyze web data to better understand which products or content encourage visitors to
click more deeply into the site and stay engaged. Designers use web analytics to better
understand impediments to success on sites by examining the flow of traffic around the
site. Perhaps the most common use of web analytics data is fall-out rep01ting, which is
looking at specific valuable paths on the site (for example, the checkout process) in an
attempt to understand why visitors abandon the process prior to completion.
More ;md more, companies are re-examining their investment in web analytics and working
to determine how to get more out of the money they spend. Occasionally. companies
incorrectly use the terms "web analytics'' and "web measurement". The terms are worth
differentiating. "Web (data) measurement" is the act of collecting the da~ wherea<; ··web
analytics" is the process of actually interpreting the data. ideally to improve your business
201
e-Business
online. One of the most prevalent trends, evidenced by the increasing number of job
postings for "web analytics manager" and "web data analysts." is the idea that companies
need to staff for analytics success. Hiring smart people, or outsourcing to savvy
organizations. are critical to being successful with web analytics, and smart people need
resources.
Google has also expanded its horizons by entering the online analytics and keywords. The
service that is being offered by google is called as Google Analytics.
Google Analytics tells you everything you want to know about how your visitors found
you and how they interact with your site. You will be able to focus your marketing resmrrces
on campaigns and initiatives that deliver Return on Investment (ROI), and improve your
site to convert more visitors.
You can see how visitors interact with your website and identify the navigational bottleneck.<;
that keep them from completing your conversion goals. You can trace how profitable your
keywords arc across search engines and campaigns. You can also pinpoint where your
best customers come from and which markets arc the most profitable. Google Analytics
gives you this and more through easy-to-understand visually cnh<mced reports.
Googlc uses the Urchin software to generate all the web analytics. It analyzes traffic for
one or more wcbsitcs and provides accurate and easy-to-understand reports on your
visitors- where they come from, how they usc your site, what converts them into customers
and much more. Urchin is essential for executives, marketers, webmasters and web
designers. The reporting intcrface is intuitive and extremely powerful. Change date ranges,
or add filters and Urchin's Business Ready C:rraphics update instantly. Export reports and
graphics to any Office application while making a presentation. An example of the results
on a golf website w here analysis has been provided based on the search engine is given
below. You can find which search terms the visitors used and that too on which search
engine like Google, yahoo. MSN, AOL etc. See Fig 11.2
202
Unitll E-Busincss Intelligence
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RS Activity C:
Study a few sample reports of web analytics for websites in the automobile industry and
software development companies.
203
e-Busincss
/6 Activity D:
Make a list of a few web analytics software available in the markeL
11.5 CUSTOMER P~:RSO~ALIZATION

On a website, personalization is the process of tailoring pages to individual users'
characteristics or preferences. Commonly used to enhance customer service or e-commercc
sales, personalization is sometimes referred to as one-to-one marketing: because the
enterprise's webpage is tailored to specifically target each individual consumer.
Personalization is a means of meeting the customer's needs more effectively and efficiently,
making interactions faster and easier cmd consequently, increasing customer satisfaction
and the likelihood of repeat visits.
Personalization in some ways harkens hack to an earlier day, when consumer relationships
more were closely tailored to the individual. If you have ever bought a hook from Amazon,
for example, the next time you visit them they will, like a friendly and helpful sales clerk,
greet you by name and tell you ahout the product'i in stock that they think you might like.
Such as more books by the same author, or books purchased by other people who also
bought the book that you purcha~ed. Many portal sites. such as Yahoo allow site visitors
to customize the page with selected news categories, local weather reports and other
features.
One thing online personalization can do that humans cannot is anticipate a customer's
needs. For instance, in a real store, if a store employee notices a customer checking out
the home goods department, he will not approach the customer and say, "How would you
like a coupon with that?" or "The customer who just bought that, also bought ...''. With
online personalization. you can do just that. If a customer is spending some time on one
portion of your website, you can prompt them to see if they'd like to further customize the
section.
204
Personalization is much more than simply allowing a user to choose their fa,·oritc colors
for a website- it involves letting the customer customize the site. and let the site customize
itself depending on what you think the customer wants.
There are many ways to personalize a website, or portal. and an equal number of
technologies that support these techniques. TI1e key factor is that personalization. properly
done, creates a one-to-one dialogue between you and your site's visitors. whether those
visitors are employees wanting to get information about their company and its policies.
consumers looking to make a purchase or learn more about a particular interest, or other
companies with which you do business.
Types of personalization
Let us now look at 4 different types of personalization :
a) Rule based personalization
It is probably the easiest to understand and implement. Designers must know ahead
of time what the condition is and what to do about it. It is often similar to an if/then
type format. For instance, a computer hardware company knows that they have
p1inter paper overstocked, so they decide to get rid of it somehow. When a customer
adds a p1intcr to their "shopping cart,'' they prompt them to see if they want to buy
some printer paper. You could also incorporate sales or discounts in this approach-
if a customer buys a printer. we can sell them paper at half price.
There arc a number of personalization software product<; available, including those

from Broadvision, Response! .ogic and Autonomy.
b) Community based personalization
This method offers users customized information depending on what others like him
have done previously. This is the type of personalization you sec whenAmazon.com
tells you "P eople who bought this book also bought..." . Based on what previous
users have done, the site is tailored for users. This is a very general way to personalize
a website and may often present incorrect customizations. but more often than not it
is of some help to the user.
c) Inference personalization
This method relies on leamingthe user's behaviour by monitoring what they· redoing
at the moment. For instance, we monitor a user's clicks and see that they've clicked
c--Busincss
on computer books the last 7 out of 10 times. Therefore, we infer that this user is
interested in computer books. and we can tailor the site accordingly. You could prompt
them to sec if they would like a discount on computer books. or need more information.
or even modify the home page so that it displays featured computer books.
Another ''feature" of this model is its ability to learn a user's behavior. Seeing that
they click on computer books may mean that they arc computer book shoppers. and
can be treated as such by the application.lf. on the other hand, they don't click on
any pattern of items. we can treat them as window shoppers, and adjust accordingly.
By grouping users into categories, developers can strut to predict their needs.
d) Cookies and personalization
A message given to a web browser by a web server leads to the browser storing the
message in a text file. The message is then sent back to the server each time the
browser request<; a page from the server. This user information is provided to the
web server by ..cookies" present in the web browsers.
The main purpose of cookies is to identify users and possibly prepare customized
web pages for them. When you enter a website using cookies. you may be asked to
fill out a fonn providing such information as your nrune and interests. This information
is packaged into a cookie and sent. to your web browser which stores it for later use.
The next time you go to the same website, your browser will send the cookie to the
web server. The server can use this information to present you with customised web
pages. So. for example, instead of seeing just a generic welcome page you might sec
a welcome page with your nrune on it.
16 Activity E:
Study the personalization offered by any 3 websites of your choice.
206
Unit ll E-Business Intelligence
11.6 PRIVACYRIGHTS
Personalization depends on the gathering and use of personal user information and so
privacy issues are a major concern. The Personali;.r,ation Consortium has been formed to
address these very concerns.
lhe Personalization Consortium is an international advocacy group organized to promote

and guide the development of responsible one-to-one marketing practices. Founding
members include Pricewaterhousc Coopers, American Airlines and DoubleClick. The
consortium has established ethical information <md privacy management objectives: these
include, for example, the suggestion that enterprises should inform users about the information
being gathered, and the purposes for which it is sought. According to a Consortium survey
of web users, 73% of respondents find it helpful to have websites retain their personal
information, while only 15% refuse to supply personal information online. 63% of
respondents disliked having to reenter infornmtion that they had already supplied.
Recently Google lmmched it~ Gmail service. Grnail is a free, search-based web mail service
that includes more than 2,500 megabytes (2.5 gigabytes) of storage. The backbone of
Gmail is a powerful Googlc search engine that quickly finds any message an account
owner has ever sent or received.
Gmail is supported by advertisers who buy keywords, much like the Google search engine's
AdWords advertising program. Gmail uses "content extraction" (the term used in Google's
patents) on all incoming and outgoing e-mail in order to target the advertising to the user.
For example, if the user is having an e-mail conversation about applying for a job, Gmail
might present the user with ads about online job search sites and resume writing services.
This raised a major concern about privacy issues and risks. Gmail violates the privacy
rights of non-subscribers. Non-subscribers who e-mail a Gmail user have "content
extraction" performed on their e-mail even though they have not consented to have their
communications monitored. nor may they even be aware that their communications arc
being analyzed. Subscribers to Gmail also face risks to their privacy.
To answer these concerns, Googlc updated its privacy policy. You cm1 visit gmail 's privacy
policy and get a detailed analysis of its privacy policy.
Similarly every website owner needs to have his own privacy policy. especially if he i
dealing in e-commercc based wcbsites. So privacy online is a delicate matter as it is
beneficial as we11 as potentially troublesome to the end user.
207
e-Business
Study the privacy policy of gmail, mnazon and rediff.
11.7 SUMMARY
In this unit we discussed about business intelligence and applying it to the online world.
The relation of data, information and knowledge was explained and discussed in this unit.
We also discussed about turning knowledge to profit and making the most out of proper
and systematic knowledge management. The concept of web analytics and offering online
customer personalization experience to web shoppers and visitors is intriguing. Organisations
will have to be clear in their minds about the growing issues related to privacy.
Q1. Identify companies who specialize in Business Integration services and find a case
study where BI bas been implemented for an online website.
Q2. Subscribe to web analytics services offered by Google and study the performance of
3 websites.
208
e-Business
12.1 ~TRODUCTION
Mobile or cellular phones have fac;t moved from being a class service to a mass service for
the common man- fuelled by continuously fa11ing rates and increased coverage. The
affordability has made mobile services the key plank for economic development. India
represents one of the most exciting opportunities for mobile services in the coming years.
India already has 20 (Second generation) and 2.5G services. Early and expeditious
introduction of3G services in India will hold the key to India's mobile success and its
future dominance in mobile telephony. The exponential growth of mobile technology has
opened the doors form-commerce in India and is considered to be the next big wave after
the dot-com and e-commerce boom.
12.2 THE NEED FORM-COMMERCE

Mobile Commerce or m-commerce is about the explosion of applications and services
that are becoming accessible from Internet-enabled mobile devices. It involves new
technologies, services and business models. It is quite different from traditional e-commerce.
Mobile phones or personal digital ac;sistants (PDAs) impose very different constraints
than desktop computers. But they also open the door to a slew of new applications and
services. They follow you wherever you go, making it possible to access the Internet while
walking down the street with friends and family, or while driving around looking for a
nearby restaurant or mall.
As the Internet finds its way into our purses or shirt pocket.;;, the devices we use to access
it are becoming more personal too. Already today, mobile phones and PDAs know the
phone numbers of our friends and colleagues. They are starting to track our location.
Tomorrow, they will replace our wallets and credit cards. One day, they may very well
tum into intelligent assistants capable of anticipating many of our wishes and needc;, such
as automatically an·anging for taxis to come and pick us up after business meetings or
providing us with summaries of relevant news and messages left by colleagues. But, for all
these changes to happen, key is.sues of interopcrability, usability, security and privacy still
need to be addressed.
Mobile commerce appears to be the easiest and fastest way to do business today. It will
require mobile operators, remote service providers, commercial companies and fmancial
institutions to engage in new ways of business that never existed before. It is computing
and communicating on the move. M -commerce has opened up a new revolutionary em in
global business. In mobile business there will be no need for international custom regulations
that vary country by country, therefore it will he business literally without borders. Business
212
Unit 12 M-Commercc
collaboration and new marketing opportunities in the consumer busine · · segment ha•:e
developed, met with widespread popularity and established a finn place for themsel··es.
The gigantic growth rates for electronic business prove this. Enormous rationalization
potential has been achieved in the Business-to-Business (B2B) segment. For example.
logistics chains have been streamlined and sourcing processes optimized. The Business-
to-Consumer (B2C) segment, too, is exploring new directions.
With the demand for more value-added services increasing day by day, more and more
companies arc venturing into mobile technologies and m-commcrce. If current predictions
arc to be believed, within 2 years there will be more IT access from mobile and wireless
devices than from "conventional'' devices. Within five years it is predicted that mobile and
wireless access will totally predominate business. As all kinds of organizations compete to
be first in this new area, the technical and organizational challenges needed to make the
transition from the current ways of doing business arc beginning to make themselves felt.
l<'ig 12.1 : Services and mobile devices
M-commerce will soon be a major focus in the communication industry. Because of the
growing need for m-commcrce, telecom operators have begun to tap into e-commerce
business while focusing on value added services. This will open a lot of new business
avenues for both t.clecom value-added businesses as well as the e-comrncrce market.
Telecom services and e-commerce business have been so distinct till now that no one ever
expected the two would be bundled together. But the boom and further development of
value-added services and c-commercc business has made their combination possible.
~13
c-Business
~ ActivityA:
Explain the need of m-commerce for banks and e-commerce websites.
12.3 M-COMMERCEAPPlJCATIONS
Them-commerce market players can theoretically be broken down into three types:
a) Network operators
h) Suppliers
c) Content providers
All the three type..;; of players have resources that can diversify into the field of m-commerce.
Network operators such as Airtel already have an established customer base and control
the networks.
Suppliers include handset and network equipment manufacturers. application system

developers as well as security specialists. These makers arc suppliers as well a<> the players
because they are all eager to provide the necessary infrastructural elements for a stake in
the m-commcrcc game.
Content providers are made up of established businesses looking to add wireless access
to their options or startups looking to exploit m-commercc to deliver innovation. For
example, some dotcoms such as rediff, are already actively seeking ways to deliver their
web content over the wireless network.
Surprisingly, telecom operators today arc not the leaders in the c- commerce business, but
the followers. The entertainment content of value-added services is still much more than
that of commerce. But the world keeps on changing and no one can tell what e-commerce
wil1 1ook like in the future. \Vhether tclecom operators could become the market leaders
214
Unit 12 Yl- Commerce
still depends on their own performance. From the consumers· perspecti• e. the~ use
messaging capabilities on their handsets in India, for instance, while cw tomers of financial
institutions in Europe generate much of the revenues in them-commerce m.arl...et Hov. e\ er.
m-commerce has the potential to eventually be part of every consumer·s life. as businesses
expand their IT capabilities to include m-commerce.
According to Ovum's research, there is a lot of uncertainty about which mobile commerce
applications will be successful and make money. The research firm classified m-commerce
applications into three categories. Please refer to Fig 12.2
Goods Services Information

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Applications in M-Busincss
Entertainment :
Mobile entertainment includes any leisure activity undertaken via a personal technology.
which is, or has the IX>tential to be, networked and facilitates the transfer of data (including
voice, sound and video) over a geographic distance either on the move or at separate
locations.
:!15
e-Business
Developments in content, delivery and mobile devices are making mobile entettainment a
remarkable business opportunity. Today technology is available to design and build devices
that will truly 'wow' consumers with a high-quality entertainment experience. All this is
happening now, not a year or two down the road! Mobile entertainment is a new and
dramatically changing industry, consisting of companies from the traditional media and
telecommunications industries as well as new firms focusing solely on mobile entertainment.
While many feel that mobile entertainment is going to become the next big thing within
media and telecommunications, there are still many issues related to both its industry and
the market that must be dealt with before this will happen.
Mobile Banking ()1-Banking):
'l11e mobile phone is increasingly being recognized by banks as a cost-effective channel to

deliver banking and trading services. In Asia's technologically more advanced countries
like Korea, Singapore, Hong Kong and Japan, mobile phone market penetration is more
than 40%. Millions of mobile phone transactions are carried out every day throughout
Asia, opening huge direct marketing opportunities for banks. Moreover, it can be expected
that e-commerce, both B2B and B2C. will grow exponentialJy as mobile banking takes
over in Asian nations.
Mobile banking is a fusion of mobile technology and fmancial services, which ha<; emerged
after the advent of portable Internet and smart-chip-embedded handsets.
Mobile banking services will inevitably expand into the untapped Asian markets, including
India and China, where currently almost 30 million people own cell phones, but where
mobile banking has yet to gain broad consumer acceptance.
~Activity B:
Study the mobile application service provided by Reliance at their "R world" facilities.
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Unit 12 M- Commerce
12.4 WIRELESS MARKETING
This sub-unit deals with marketing to consumers via mobile phones. Wirele ·- marketing
works just like any other channel of advertising, as it sponsors or subsidizes content As an
example, wireless marketing has enabled large consumer companies to sponsor\\irelcss
versions of TV game shows.
Wireless marketing enables marketers to measure and track wireless response in real time
and quickly respond based on the responses received. This makes wireless similar to
email, websites, call centers_and other two-way channels that are direct to the customer.
Wireless marketing provides interactive communication wherein the consumer can provide
information to the company and the company can respond with infommtion.
An example of wireless marketing is a trivia contest implemented by Indiatimes where the

consumer was engaged in a series of questions, as one question was answered :.mother
arrived. Through this series of messaging, the consumer gained bonus point<> for providing
specific information.
lhis succc..<.;sful Indiatimc...;; initiative has lead to a lot of contests <md has literally got consumers
addicted to participating, thus popularizing wireless marketing.
Fig 12.3 : Indiatimes mobile marketing initiative
The Indiatimes 8888 service offers a lot of information right fi·om the latest NEWS to
Astro, Cricket, Poll, Jokes etc. More than 9 million subscribers have already used the
service.
2Notify Campaign Manager
2Notify Campaign Manager is a web-based campaign management system for mobile

marketing applications. Creating and launching interactive cross-carrier SMS, MMS and
WAP-Push campaigns is quick and easy with 2Notify Campaign Manager. Sec Fig 12.-1-
It includes the following applications :
Permissions Management System. Comprehensive Reporting. Analytics, Wirele ·s

messaging applications and Wizards for creating Sweepstakes, Coupons & Polling.
e-Business
2Notify Campalgn Manager
Fig 12.4 : 2Notify campaign management solutions
Wireless marketing problems
Due to a heterogeneous mobile network system, a high penetration of mobiles and emerging
third generation wireless data networks, a large number of consumers will soon have
conveniences such as high-speed multimedia, video conferencing and computing literally
at their fingertips. However, mobility while creating the magical illusion of being footloose
and fancy-free also brings its own nuisance value along with it.
Mobile marketing was hailed as a new and lucrative market created by technological
advances. At the next level, it was envisaged that at some point wireless advertisements in
the form of emails and mobile imagery delivered to cellular phones would offer consumers
time and location sensitive information. For the past several months now there has been a
sudden proliferation of three and four digit shmt codes registered by cellular companies,
media companies, savvy cellular telemarketing companies, along with the ubiquitous 10
digit numbers often used for voice and SMS-based solicitation by ghost marketers.
'Ibese marketers and cellular service operators have sensed new revenue streams. Retailing
bulk SMS to various short code marketers and media companies at premium prices for
promotions, loyalty programmes, feedback, reminders and alerts, quizzes, voting, lottery,
launches, contest<; and premium entertainment and information have led to a glut of intrusive
communications.
Subscribers, however, view this new form of marketing as more of a nuisance and intrusion.
Soon subscribers may start rejecting mobile marketing campaigns because of spam
problems, mobile viruses and the obvious long of ptivacy and interruptions.
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Unit 12 M- Commerce
£S Activity C:
List the mobile marketing campaigns carried out by Airtel and Reliance for its. ubscribers.
(You may choose any other organization too.)
12.5 MOIULE CUSTOMER RELATIONSHIPMANAGEl\1ENT (CRl'\1)
The mobile business industry is rapidly growing thanks to a set of technologies that potentially
enable a large variety of innovative services. In effect, the mobile and personal nature of
wireless devices, combined with the voice and data transmission capabilities of wireless
networks provides a set of unique features such as ubiquity. 24hours reachability, localization.
personalization, dissemination and convenience which are commonly considered the most
valuable distinctive advantages upon which mobile services can build their value proposition.
Mobile Customer Relationship Management (CIUvi) services seem to have all the
characteristics commonly associated with successful mobile services and have accordingly
been predicted among the most promising ones. Yet, the real development of this sector
has not been well explored so far, especially in relation to the actual supply of mobile
CRM services to the public.
Using analytics, profiling effectively and acting upon customers· mobile behavior can greatly
enhance your services, enabling you to deliver timely information, updates, offers and
provide better customer satisfaction.
Building a mobile database of opted-in customers is the first step. This can be done by
signing up customers by texting into a simple short code and getting them to register on a
website or through a call center.Alternatively, integrating exi-;ting CRM systems with mobile
marketing software is often the fastest way to build a detailed mobile database.
Mobile CRM campaigns can be delivered to customers by SMS, MMS, java. mobile
lntemet or tl1rough a combination of these technologies.
219
e-Busincss
Simple, well-targeted SMS campaigns have been delivering value for years by targeting
existing customers with related and value-added products and services.
New technologies and software arc now helping operators and brands alike to use more
intemctivc and graphically tich technologies like YIMS.javaand WAPto improve marketing
efforts.
Further advancements in mobile technologies indicate that these will be used as a CRM
tool for years to come.
Factors for mobile CRM success
A mobile CRM application for any company is desirable. Sales professionals will use a
mobile application only if they can reliably depend on it. every single time. To ensure that
the mobile application <md CRM data is always available when they need it, mobile
applications must support off-line functionality. Mobile CRM applications must be designed
with the ability to intelligently usc a wireless connection when it ·s available, but not be
dependent on it when its not.
Field professionals need more than just access to customer information in the field; they
also need information on promotions, products, competitors, service requests and order
status. So selecting a platform based on open standards that can integrate with a variety of
back-end systems such as ERP. intranet, legacy, database and e-mail is imperative. In
addition, support for open standards also ensures that your application can support a
wide variety of platforms and is flexible enough to keep up with the rapidly changing
device landscape.
Mobile CRM applications typically contain your field service and sales organization's
lifeblood: customer contact infonnation. Handheld applications should be able to provide
enterptise-calibcr security through authentication. encryption and central, policy-based
control.
Mobile application performance and ease of usc arc vital for field professional effectiveness
and adoption. Unlike desktop or laptop applications. field professionals use handheld
applications in small time increments of one to ten minutes. This means that users in the
field will quickly stop using a system that is slow or difficult to usc. ·to be effective, mobile
CR.;.\1 systems must be 'instant on', easy to navigate and requiring little or no training. Just
a.;; important is a user interface that is configurablc to each organization's unique workflow
and sales process. The right interface can make all the difference to your end users.
220
Unit 12 M- Commerce
Features such as server-pushed alerts and scheduled synchronization v·ill ·imulate an

always-connected experience by delivering information to the user as soon as possible,
given the wireless coverage in a particular area. Mobile applications should accelerate
communication, decision-making and customer responsiveness by keeping users connected.
How is mobile CRM different from web based CRM?
12.6 M-PAYMENTS
:vtobile security and payment are central to m-commcrcc. The shift from physical to virtual
payments has brought enormous benefits to consumers and merchants. For consumers, it
means case of use. For mobile operators, mobile payment presents a unique opportunity
to consolidate their central role in them-commerce value chain. Financial organizations
view mobile payments and mobile banking as a way of providing added convenience to
their customers along with an opportunity to reduce their operating costs.
Any m-comrnerce transaction involves an m-payment which is defmed as the process of

two pruties exchanging financial value using a mobile device in return for goods or services.
A mobile device is a wireless communication tool, including mobile phones, PDA'\. wireless
tablets and mobile computers. Due to the widespread usc of mobile phones today. a
number of payment schemes have emerged which allows for the payment of services/
goods from these mobile devices.
M-payment value chain
Many different players may be involved in a mobile payment process. For example, there
is the consumer who owns the mobile device and is willing to pay for a service or product
The consumer initializes the mobile purchase, registers with the payment provider and
authorizes the payment A content provider or merchant sells the product to the customer.
c-Busincss
In the mobile payment context, content can range from news to directory services. shopping
and ticketing services, entertainment service'> and financial services. The provider or merchant
forwards the purchase requests to a payment service provider, relays authorization requests
back to the customer and are responsible for the delivery of the content.
Another player in the payment procedure is the payment service provider who is responsible
for controlling the flow of transactions between mobile consumers, content providers and
the tmsted third party (TIP). He is also responsible for as well as for enabling and routing
the payment message initiated from the mobile device to be cleru·ed by the TIP. Payment
service providers could be a mobile operator, a hank, a credit card company or an
independent payment vendor.
Another group of stakeholders is the trusted third party, which might involve network
operators, banks and credit card companies. The main role of the TIP is to perform the
authentication and the authorization of transaction parties and the payment settlement.
Finally there arc mobile operators who arc more c;oncerned with the standardization and
interoperability issues. They may also operate mobile payment procedures themselves
and provide payment services for customers and merchants. One thing to be considered is
who receive..;; the customer data. Customers rarely wish to divulge their infommtion, whereas
the same customer infom1ation might he important for merchants or content providers for
their business. Payment procedures need to ensure that none of the players receive this
sensitive and confidential data, when customers use a prepaid payment solution to huy
goods. On the other hand, this information is absolutely necessary to authorize credit
payments.
M-payment life cycle
The payment transaction process in a mobile environment is very similar to our typical
payment card transaction. The only difference is that the transport of payment details
involves a wireless service provider. A WAP/IITML based browser protocol might be
used or payment details might be transported using technologies such as bluetooth and
infrared. The mobile payment lifccycle shown in Fig 12.5 includes several steps.
222
Unit 12 M- Commerce
Customer I I Merchant I Payment service

provider I TIP I
- Service f-* HService request ~ .._ Authentication and

request authorization f-4
request/response
I Purchase
authorization
I +j Delivery of
service I I
I
I Billing
I I
I I
~
I
I Payment I
I
....
l<'ig 12.5 : The m- payment life cycle
These steps include the following:
1) Registration : The customer opens an account with a payment service provider for
a payment service through a pmtjcular payment method.
2) Transaction : Four steps are identified in an m-payment transaction :
a) Customer indicates the desire to purchase content using a mobile phone button
or by sending an S~S (short message service).
b) Content provider forwards the request to the payment service provider.
c) Payment service provider then request\~ the trusted third party for authentication
and authorization.
d) Payment service provider informs content provider about the status of the
authentication m1d authorization. If the customer is successfully authenticated
and authorized, the content provider will deliver the purchased content.
3) Payment settlement: Payment settlement can take place through real-time. pre-
paid or post-paid mode.
e-Business
Areal-time payment method involves the exchange of some form of electronic currency,
for example, payment settlement directly through a bank account. In a pre-paid type of
settlement, customers pay in advance using smart cards or electronic wallets. In the post-
pay mode. payment service providers send billing information to a trusted third party
which sends the bill to the customer, receives the money back and then sends the revenue
to the payment service provider.
f6 Activity E:
Study the m-paymcnt option provided by Reliance to purchase tickets, cricket services
and banking transactions. Write your observations here.
12.7 SUlVIMARY
M -commerce is said to be the next step of c-commerce and has a lot of potential and a
high success probability. There arc several areas where it can he creatively applied. The
wireless media h<L') helped in actually popularizing m-commcrce husiness. Mobile technology
also has helped in providing customized customer relationship management and reaching
out to customers who were previously difficult to reach. Organisations arc now working
hard to identify ways of easing the difficultie.c; associated with m-payments.
12.8 SELF -ASSESSMENT QUESTIONS

- - - - -- - - -
Q1. Elaborate your views on safety and security of m-commerce.
Q2. How important is the mobile content for different business organi:~.ations and for
personal usc?
224
e-Busincss
13.1 L~TRODUCTION
The Internet is linked to communication technology that has evolved over many centuries
and has shown an exponential growth in the last century. The invention of the computer
and the massive web of the Internet have literally shrunk the world. The journey from the
old traditional ways of communication to the latest technological gizmos has been as exciting
ac:; roller coaster ride. 'Ibe coming years will sec a substantial development in thee-commerce
world and it will definitely reshape the structure of our business world. But efforts need to
be taken to ensure a balanced approach in planning the growth process, as well as the
successful implementation of any e-business.
13.2 AGLANCEATTHEillSTORYOFCOMiVIUNICATION
The history of communication dates way back to 1500 BC and beyond when the only
medium of communication was through bird messengers or human messengers on foot or
horse back. In 900BC, the very first postal service for government use in China was
started. 776 BC saw the first recorded usc of homing pigeons used to send messages of
the winner of the Olympic Games to the Athenians. Tsai Lun of China invented paper as
we know it in 105 BC and the first wooden printing press wac; invented in China in 305
AD.
Let us now have a quick glance at the major milestones :
:Fourteenth Century
Newspapers appear in Europe.
Gutenberg of Germany invents the first metal, mobile printing press.
Year 1500-1800
• Ships on Perdinand Magellan's voyage signal to each other by firing cannons and
raising their flags.
• First long-distance semaphore telegraph line established.
• Joseph Henry built an electric telegraph.
Year 1800-1900
• Samuel Morse developed the Morse code - 1835.
228
Cnit 13 The Road Ahead
• Samuel Morse built the first long dist<mce electric telegraph line-1843.
• Alexander Graham Bell and Thomas Watson exhibit an electric telephone in

Boston-1876.
• Thomas Edison patented the phonograph with a wax cylinder ac;; a recording medium
1877.
• Eadweard Muybridge invented high-speed photography creating the first moving

pictures that captured motion-1877.
• Emile Berliner invented the gramophone-1887.
• George Eastman patented Kodak roll film canlera-1888.
• First telephone answering machines -1898.
• Valdemar Poulsen invented the first magnetic recordings using magnetized steel tape
as a recording medium; the foundation for both mass data storage on disk and tape
and the music recording industry -1899.
Year 1900-1950
• Marconi transmitted radio signals from Cornwall to Ncwfow1dland -· 1901.
• Lee Deforest invented the electronic amplifying tube or triode. This a1lowed all
electronic signals to be amplified improving all electronic communicatiom i.e. telephones
and radios - 1906.
• Thomas Edison demonstrated the first talking motion picturc-1910.
• I1irst radios with tuners and different stations - 1916.
• The television or iconoscope (cathode-ray tube) invented by VladirnirZworykin and

the first television can1cra - 1923.
• John Logic Baird tnmsmitted the first experimental television signal - 1925.
• Warner Brothers Studios invented a way to record sound separately from film on
large disks and synchronized the sound and motion picture tracks upon playback (an
improvement on Thomas !:'Alison's work)- 1926.
c-Business
• NBC started two radio networks.
• CBS founded.
• First television broadcast in England.
• Warner Brothers released 'TheJaJ.z Singer", the first successful talking motion picture
- 1927.
• Radio popularity spread with the "Golden Age'' of radio.
• First television broadcac;ts in the United States of America.
• Movietone system ofrecording film sound on an audio track right on the film invented
1930.
• Joseph Begun invented the first tape recorder for broadcasting and the first for magnetic
recording- 1934.
• Television broadcastc; taped and edited, rather than only shown live- 1938.
• Scheduled television broadcasts began -1939.
• Howard Aiken and Grace Hopper designed the MARK series of computers at
Harvard University.
• Harvard's Mark I put into government owned public service. 'Ibe age of Infom1ation
Science began - 1944
• I .ong playing record vinyl invented and played at 33 rpm.
• Transistors invented, enabling the miniaturization of electronic devices -1948.
• Network television started in the United States of America- 1949.
Year1950-
• Computers first sold commercially -1951.
• Chester Carlson invented the photocopying machine -1958.
• Integrated Circuits invented enabling the further miniaturization of electronic devices

and computers- 1958.
230
Unit 13 The Road Ahead
• Xerox invented the Tele copier, the first successful fax machi~ - i <XKJ.
• ARPANE1~ the first Internet started - 1969.
• The computer floppy disc invented.
The microprocessor invented- 1971.
• HBO invented pay-TV service for cable- 1972.
• Apple I home computer invented.
• First nationwide programming via satellite and implemented by Ted Turner - 1976.
• First cellular phone communication network started in Japan -1979.
• Sony Walkman invented - 1980.
• IBM PC first sold- 1981.
• Computer mouse became a regular part of the computer - 1981.
• Time magazine named the ·computer' as their "Man of the Year".
• First cellular phone network started in the United States of America -1983.
• Apple Macintosh released.
• IBM PC AT released- 1984.
• Cellular telephones in cars became popular- 1985.
• CD-ROMs in computers -· 1985.
• After 25 years, the American government released control of the internet and the
now famous WWW was born, enabling communication at the speed oflight
£S ActivityA:
List 5 major inventions in communication technology within the last century. which according
to you are the most important.
e-Busincss
13.3 THE PRESENT
"This has been a great year moving towards the digital lifestyle. I'd say it's going
even faster than we would have expected.''
-Bill Gates, :2.005 International Consumer Electronics Show
Bill Gates redefined the role of personal computers, and is obviously the right person to
talk about the past, present as well as the future. He is busy achieving his dream of a
computer in every home and on every desk. India is also fast catching up with this trend
with computer prices falling rapidly and the demand soaring. What exactly does Bill Gates
have to say about the present? An extract from him is given below:
"Thirty years ago, there were no personal computers. Microsoft is celebrating its 30th
anniversary. and in some ways the vision that we've had is the same as it was 30 years
ago, the idea that software would be a key element and that software would run in many
different types ofdevices that would be very low cost and very high volume•.
It's probably hard to remember that at that time computers were thought ofas something
that were really balancing the power in favor oflarge businesses and central governments
and not really as favoring individual creativity, individual expression and really allowing
for innovative work.
Well. the price reductions that have taken place and the change in the nature of the
computers have shifted that ve~y dramatically. Of course, the computer is sttll a fantastic
tool for government, it's a great tool for large organizations, but, as much as anything,
it's a tool for the individual; whether for doing your work or your activities at home, the
personal computer with software is really the best tool ever invented to help you
communicate, pursue new infom1ation and be creative in much better ways.
Only 15 Percent of the way toward a computer in every home in tbe world!
Every several years, the power of the personal computer is doubled, and that's why we
can say that the machine that we have today is more than a million times as powerful as
232
Unitl3 The Road Ahead
the personal computer that got Paul Allen and I to start Microsoft 30 years ago. The
software has started to fulfill the dreams we had of the computer being in every home,
and on every desk. From a numeric point of view, however, it"s only in the very rich
countries like the United States that we're more than halfway towards achieving that
goal. If we take the world at large, we've only achieved about 15 percent of that goal of
pervasiveness, and so there is still a lot more to be done.
Fortunately, there's very good progress, and l would say over the next decade things
will accelerate.
Historical1y, you probably thought of personal computers as having the best price
performance because of the competitive framework where many companies make
personal computers and they're completely compatible with each other, but you didn't
· think of the personal computer as where you would get the very highest perfonnance.
But in the Ia<>t few years, that too has changed. ln fact, just a few weeks ago 1keynoted
a convention called Supercomputing and talked about how computers based on
Microsoft software and the chips that Windows run on were actuaJly providing the
highest performance capability in the world for business problems, for scientific problems
and for every type of problem there is.
You might ask. if that's the ca<>e, why haven't we seen a rapid shift to these low cost
computers, and the answeds that because of the software that's been written on traditional
machines it will be more than a decade before that transition is largely complete. But
year by year. the move of applications from the mainframe. from the non-mainstream
UN IX-type~ystems onto the PC server hardware and increasingly onto the soft\l.'are
that we build, wiH increase.
l11e wonderful thing is that as you move to new hardware, the cost ofthe hardware is
often less than the maintenance cost of the hardware it replaces, and sp the only thing
that's di fficuJt is making sure that you've got the new software system and you can
make that transition. The software ib also far better, far more flexible, easier to get the
information, much better developed tools, but that ha<> to be planned in an orderly way.
And so the move towards a very uniform, very high-performance type of computer
hardware is a huge benefit that will allow more ambitious applications to be built.
· Historically, if you had talked about a database, say, that would have pictures of all the
citizeJL-. and keep track of all their activities, that would have been a very. very expensive
machine~ today. for only a few hlilldred thousand do1lars the hardware that's capable of
doing that is available.·•
233
e-Busincss
fe5 Activity B:
Write 5 important aspect<; of the Internet which have changed the way you live life today.
13.4 THE }i'UTURE
What docs the future hold for us?

The extract continues :
11
So what's the next frontier? Well, c.:ertainly we have to t.:'\Ckle the cost of application
development the cost of maintaining these systems, and here too, the magic of software
can come in and make things sjmpler and more automatic.
And so if we think about IT budgets, the idea is to take the portions that go to maintaining
existing systems and shift those so tbey can be invested in new applications.
· The form of the computer is changing at the same time. Of course, we've all seen the
incredible explosion in mobile phones. These mobile phones are changing from merely
being voice-oriented devices to being very, vety software driven. The ability to browse
information of all types, to get your e-maiL to organize your schedule. to check any .
information about the customer you•re going to see, all of that is becoming substantially
better. And this software centricity actually plays into the strengths that Microsoft has •
becatr.~e we can bring these functions to life.
If we think of a cell phone even four years from now, it \viii have many new capab:ilitie...:;.
It will be able to show you a map ofyour current location, not just a map in the traditional
sense. but even a picture of the buildings, show you the routes that you want to go on.
virtual reality indicating the current traffic conditions, indicating if there are any colleagues
in the area that you might want to get in touch with and even given a sense ofhow long
it's going to take you to travel there. You will be able to complete transactions over your
phone. as it will use a new type of wireless approach called NFC that is capable of
being built into these phones.
234
You will be able to use your camera in some ways that you might not expectlf you have
a receipt from a business lunch, you'd take a picture of that, it would be recognized by
software and filed in the right expense software.lf somebody hands you his or her
business card, just take a photo of it, it wi11 recognize the text and add that to your
contact list. If you're in a foreign country anu see a !>ign you'd like to read, just take the
picture, the sign would be sent down to software on the Internet, translated and sent
back so you can see what the sign is.lf you are considering buying a product and want
to see the reviews or what the best price is, simply take a photo of the bar code, or the ·
productit<;elf, and software will guide you through that purcha<:>ing process. empowering
you with extra information.
And so the cell phone will be a key communication tool. When people want to call you,
instead of thinking about a phone nwnber and which phone number you have at work at
home, they'll simply call you, use your e-mail name to say they want to call you -and
sofn¥are, working on your behalf, will understand what device you have with you,
where you are, whether the call from this person is important enough at that time to
intermpt you. how much information should be passed to that person about your activity
and your schedule, depending on how close your relationship with them is. and all of
this would be done in a seamless way.
The PC, ofcourse, is a full-screen device, which will be getting smaller. One of t11e great
dreams we have is that every student should have a Tablet PC. In fact, we have some ·
great pilots where that's been going very well. We have \Vork to do~ we have to bring
the prices down. get more curriculum software done. but we· re hard at work on that
together with our partners. And eventually the cost of the hardware should hl! low
enough that this is something that even for the cost that you would normally spend on
textbooks you'll be able to provide this Tablet PC. And, of course, the course material
would be far betrer than it is on paper, it will be interactive, it will have videos, you can
quiz yourse1f, see the latest thing, the teacher can customize the information, so that it's
vastly superior to the way that that works today. So this tablet initiative is something
we've been investing in for over a decade and that's very important.
Another big breakthrough is that the way that you receive video. which today is through
broadcast, either over the air or over some cable infrastructure, will actually move
entirely to the Intcmet. Why? Because it's able to reuse the same infrastructure that we
have for Internet browsing and voice calls as well. When you get video onto the Internet,
the flexibility is quite phenomenal. For example, if you want to watch a local sp01ts team.
that would never make it in today's broadeast channel lineup, as long as somebody had
a digital camera, t11at local sports team is there. You can watch it whenever you want in
:235
c-Busincss
fact, ifit's a game that's fairly slow, you can say to the software. summarize this in. say,
lO minutes, and you' II simply see the highlights, you won't have to sit through the less
interesting parts. It's all based on your interests and your time. Likewise, when you
w~tch the news, the sports you care about will be there in depth. while tbe.ne\VS that
you are not interested in will simply be eliniinated. · · · · ·· ····· ···· ·
There's a lot of excitement about advertising being done in new and better ways. Today,
advertising is incredibly inefficient If you see a product you're interested in, you can't
get more information and fmd out where it's available. Most ad<; are presented to people
who aren•t the target audience, and so magazi11es. newspapers and TV shows ate
moving onto the Internet. Advertising will be targeted, and the person who wants to sen .
an expensive sports car will go after the people who might be interested in that~ the
people who want to sell products to men or women will understand exactly who that .
viewer is. If that person wants to know more about the product. they can do that right ·
away.
Now, having talked about the ~~eat opportunities. you aJJ know there are challenges as
well A-; we're using the Internet. the reliability now becomes a critical issue, the security
to make sure that criminals who move into this digital realm can't take advantage of ,
people, whether it's spam or fake bank accounts. th.ese are going to require a lot of new
investments and Microsoft h..'lS that as its top priority, and yet also working with you in :
temlS of what the laws should be and the sophistication of law enforcement to make :
sure this doesn't hold back the potential of this digital revolution."
PS Activity C:
What factors will affect the growth of the lntemet in the near future?
13.5 THE YEAR 2020 - COMPLETING THE CIRCLE
15 years ago nobody would have predicted the Internet era as we see it today. Its much
more difficult to even think of the year 2020 in terms of technological growth and
developments.
236
Cnit 13 The Road Ahead
The year 2020 is predicted to be a turning point in our history with lot<> of things being
achieved. The lntcrnet has become very familiar, but experts are predicting further ·webs·
in our lives to enable integrated communication between people: humans and machines:
and machines and machines. The prediction is five webs: ncar-web. pocket-web, voice
web, computer to computer web. and a web that allows embedded systems and sensors
to work together to do things. Por example, a washable chip in a garment would tell the
washing machine the correct programme to use. E-business will provide new ways of
doing business. E-markets will open up new perspectives in trading for the construction
sector. For example. procurement for services would be more competitive using the
Internet. Marketing, payment, selling and cost reduction arc all benefits c-business will
reap.
The global economy has created a world that is interdependent and interconnected. A
stock market crac;h in one part of the world sends shockwaves across the globe.
Multinational companies move their operations around the world to be cost effective. The
'virtual workplace· allows projects to operate 24-hours a day. Pollution. global warming
and other global environmental problems know no national boundaries.
It is often said that we are moving at a fast speed towards completing a vicious circle.
Today we are in the 21st ccntmy, but if you closely observe, all the major in ventions,
discoveries and research work has been carried out only in the last century. The vicious
circle is the one where we tend to perform certain actions or movements that leads to a
self-destruction by completing the full circle and gets us back to the beginning. Ironically,
books on mythology, the Bible, modem day scientists and even the famous prophet
Nostradamus. have referred to the san1e concept of''completing the full circle" in different
ways.
A broad-ranging survey of technology leaders, scholars, industry officials, and the public
finds that most experts expect attacks on om network infra<;tructure in the coming decade.
Some argue that serious assaultc; on the Internet infrastructure will become a regular part
oflife.
THE PEW INTERNET PROJECT
In September 2004, the Pew Internet Project sent an email invitation to a list of respected
technology experts and social analysts. asking them to complete a 24-question survey
about the futme of the Internet.
This survey reveals that there is a strong across-the-board consensus that the Internet\ ill
become so important to users in the coming decade that the network. it.;;clf will becvf'le an
e-Business
inviting target for attack. By a nearly 3-1 margin, the experts in this survey expressed
worry about the vulnerability of the internet and the likelihood of an attack on the underlying
infrastmcture within the next ten to fifteen years.
Some 66% agreed with the following prediction: At least one devastating attack will occur
in the next 10 years on the networked infonnation infrastructure or a country's power gtid.
As one expett wrote, "A simple scan of the growing number and growing sophistication of
the viral critters already populating our networks is ample evidence of the capacity and
motivation to dismpt.'' Eleven percent disagreed with the prediction and 7% challenged it,
including some who argued that they did not expect any attack to be serious enough to
involve loss oflife or a very long outage.
Some of the highlights of the survey are written below for your reference :
• 59% of these experts agreed with a prediction that more govemment and business
surveillance will occur as computing devices proliferate and become embedded in
appliances. cars, phones and even clothes.
• 57% of them agreed that virtual classrooms will become more widespread in fmmal
education and that students might, at leac;;t occasionally. be grouped with others who
share their interests and skills, rather than by age.
• 56% of them agreed that ac;; telecommuting and home schooling expand. the boundary
between work and leisure will diminish and as a result ,family dynamics will change.
• 50% of them believe that anonymous, free, music file-shating on peer-to-peer networks
will still be easy to perform a decade from now.
• "Connections across media, entertainment, advertising and commerce will become

stronger with future margins going to a new breed of 'digital media titans'. Well
branded innovators such as Google and Starbucks have a chance to build all-new
distribution models tied to ad revenues and retail sales."
• Govemments will be forced to become increasingly transparent and accessible over

the Net.
So what we can guess and hope for is that the next few years till2020 would be as exciting
as the preceding ten years.
238
,R!S Activitv D:
List your predictions about the lnternet and e-conunerce for the year 2Q_Q_
13.6 SUMMARY
ln this unit the future of e-cornrnerce, Internet and over all technology was discussed. A
glance at the history gave us an overall look of what has happened in the last few centuries
and how things have flomished only during the last few decades. The views of Bill Gates
were explained with his views of the past, present and future. The year 2020 was discussed
and we tried to predict a few things about what may happen till that time.
Q1. I ~laborate the future of ISP and e-cornmerce market and its impact on mankind.
Q2. Write your own views of the future technology development by year 2020.
c-Business
14.1 INTRODUCTION
The year 2000 witnessed the ''dot com" boom and eventually the "dot com" bust too.
Few of the companies survived the sudden downfall of the Information Technology business.
But those who survived it had a strong technology base and a sustainable business model.
They did not just depend on website visits (eye balls) but were more focused on a more
substantial customer centric approach. Successful comp£mies like amazon.com, yahoo.com,
ebay.com etc have established a strong brand name with their business success and
achievements. Few of the companies who failed after riding on the "dot com" wave are
boo.com, kozmo.com, pets.com, etc. Many wcbsitcs also tried their luck on the stock
exchange where they initially received a strong listing. Unfortunately they lost it all of a
sudden with the crash. known today popularly as the "dot com burst".
Let us now have a detailed look at a few cases.
14.2 WWW.AMAZON.COM
Amazon.com, Inc. (NASD:AMZN)
Sector: Services
Jndustry: Retail (Specialty)
Website: http://www.arnazon.con~
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242
Unit 14 Case Studies
Amazon.com, Seattle, WA, www.amazon.com
This is the largest online shopping site and one of the most widely known e-commerce
sites on the Web. Founded by JeffBezos in 1995, it had 11 employees by the year's end.
Within four years, it had more than 1,600 employees and four million customers.
Ama.r,on started out as an online bookstore, constantly making news with the number of
titles it offered for sale. In the late 1990s, Amazon had more than four million titles after
adding CDs, videos, DVDs and games. It continued to add new lines of business including
toys, consumer electronics, software, power tools, home improvement products and online
auctions.
Amazon.com, Inc. (Amazon) is a customer-centric company that sells a range of products

that it purchases from manufacturers and distributors through its seven retail websites:
www.amazon.com, www.amazon.co.uk www.amazon.de. www.amazon.co.jp.
www.amazon.fr, www.amazon.ca and www.joyo.com. Amazon and third-party sellers
offer new. used, refurbished and collectible items in categories such as apparel. shoes and
accessories; home, garden and outdoor living products: baby care products; jewellery
and watches; books; kitchenware and houseware; beauty product~): magazine subscriptions;
camera and photography; music and musical instruments: cell phones and service: office
productc;;; computers and computer add-ons; software: consumer electronics: sports and
outdoors; digital versatile discs (DVDs), including rentals and videos; tools and hardware;
gourmet food; toys and video games, and health and personal care.
For the nine months ended 30 September 2005. Amazon.com Inc.'s revenues increal)ed
26% to $5.51B. Net income before accounting change decreased 45% to $13-+M.
Revenues reflect an increal)e in sale volumes from ~orth American and international
operations. Net income was offset by higher fulfillment expenses, increased marketing
expenses, higher technology & content expenses and increased general & administrative
expenses.
Founded as Cadabra.com by JeffBezos in 1994, in the early days of the mainstream

Internet, the company began as an online bookstore. Bezos saw the potential of the Internet;
while the largest brick-and-mortar bookstore might sell upwards of200.000 titles, an
online bookstore could sell many times more. Bezos renamed his company "Amazon"
inspired by the world's most voluminous river, the Amazon. Amazon.com began service in
July 1995. The company was originally incorporated in 1994 in the state of Washington
and was reincorporated in 1996 in Delaware. Amazon.com had its initial public o(lering
on May 15, 1997, trading on the NASDAQ stock exchange under the symbol AMZN at
an IPO price of$18.00 per share (equivalent to $1.50 today due to stock splits).
2-IJ
e-Busincss
Amazon's initial business plan was unique in that the company did not expect to turn a
profit for a good four to five years after it was founded. 111is strategy proved to be a sound
one in the wake of the dotcom collapse of2000. Amazon grew at a steady pace in the late
1990s while other Internet companies appeared out of nowhere and grew at a hlindingly
fast pace. Amazon's "slow'' growth caused a number of its stockholders to complain,
saying that the company was not reaching profitability fast enough. When the Internet
"bubble" burst and many e-companies began going out of business, Amazon persevered
and finally turned its first-ever profit in the fourth quarter of2002. It totaled a meagre $5
million Gust 1 cent per share, on revenues of over $1 billion) but it was extreme!y important
symbolically for a company that kept promising profitability but wa()n't delivering. It ha()
since remained profitable and maintained revenues of over $1 billion per fiscal quarter. In
January 2004, Amazon posted its first full-year net profit (for calendar year 2003). Its
profits were $35.3 million on revenues of $5.65 billion. Much of the growth of the company
was due toiL() intemational division.
Recognizing the website's success in popularizing online shopping, Time Magazine named
Bezos it's 1999 Man ofthe Year.
Locations and partnerships
Amazon.com operates retail websites not only for the United States, hut also for Canada,
the United Kingdom, Germany, Austria, France and Japan. In addition, the websites of
Borders.com, Waldenbooks.com, Vrrginmega.com, Vrrgirunega.co.jp, Waterstones.co.uk,
CDNOW.com, and liMY.com now redirect to Amazon's site for the country in question.
for which these companies are paid referral fees. Typing ToysRUs.com into one's browser
will similarly bring up Amazon. com's Toys & Games tab. Amazon.com also operates
Target's retail website and the online NBA store.
Expansion of product lines and site features
Amazon's bookstore quickly began expanding, branching off into retail sales of music
CDs, videos and DVDs, software, consumer electronics, kitchen items, tools, lawn and
garden items, toys, appareL sporting goods, gourmet food, jewellery, watches, health and
personal-care items, beauty products, musical instruments, and much more.
According to information in the Amazon.com discussion forums, Amazon derive about

40% of its sales from affiliates, whom they call ''Associates." By the end of2003, Amazon
had signed up almost one million Associates.
Amazon bought the Intemet Movie Database (IMDh) in April1998, a move that upset a
244
number of its longtime users; the transformation ofiMDb from a public domain, nonprofit
site to a commercial venture was seen as a slap in the face to rmmy Internet users. However.
the IMDb has continued to grow and prosper.
Amazon bought Cambridge, Massachusetts-based PlanetAll in August 1998 for 800,000

shares ofAmazon stock, then valued at approximately $88 million. PlanetAll operated a
web-based address book, calendar and reminder service. Amazon absorbed most of the
staff at PlanetAll in early 1999. Many went on to build community-focused features for the
Amazon website, including Friends & Favorites and Purcha<;e Circles. TI1e original PlanetAll
website was discontinued on July 2, 2000.
In March 1999,Amazon launchedAmazon.comAuctions, its foray into the Internet auctions

space, at the time dominated by eBay. Although Amazon's stock received a short-term
boost from the announcement, Amazon's auction business fail eel to chip away at eBay 's
juggernaut growth. Much of the failure is owed to Amazon's inability to quickly integrate
the fledgling auction business into their existing successful retail space where Amazon's
customer traffic was focused. Amazon Auctions was followed by the launch of a fixed-
price marketplace business called zShops in September 1999, and a failed Sotheby 's I
Amazon partnership called sothebys.amazon.com in November. Although zShops failed
to live up to its expectations, it laid the groundwork for the hugely successful Amazon
Marketplace service launched in 2001 that let customers sell used books. CDs, DVDs
and other used products alongside new items.
Amazon bought Alexa Internet, Accept. com, and Exchange. com in a set of deals worth
approximately $645 million in June 1999.
In 2002, Amazon became the exclusive retailer for the much-hyped Segway Human
Transporter. (Bezos was an early supporter of Segway, much before it<; details were made
public).
"Search Inside the Book" is a feature that makes it possible for customers to search for
keywords in the full text of many books in the catalog. The feature started out with 120 ,000
titles (or 33 million pages of text) on October23, 2003. There are currently about 250 .000
books in the progrmn. Amazon has cooperated with around 130 publishers to allow users
to perform these searches. To avoid copyright violations, Amazon.com does not return
the computer-readable text of the book but rather a picture of the page containing the
found excetpt.lt also disables the printing of the pages, and put<; limits on the number of
pages in a book a single user can access. Amazon is planning to launch Search Inside the
Book internationally.
245
e-Busincss
In 2004, Amazon launched a new search engine called a9.com (http:// www.a9.com/).
A9 .com incorporates Search Inside the Book, allowing users to search \Vithin the text of
hooks a<; well as searching for text on the Web. It also purchased Joyo.com, a Chinese e-
commerce Website.
Also in 2004, Amazon launched its Presidential Candidates feature, whereby customers
could donate from $5 to $200 to the campaigns of U.S. presidential hopefuls, resurrecting
the Amazon Honor System for the purpose. The Honor System was originally launched in
2001 as a way for Amazon customers to "tip" their "favorite wcbsitcs and to buy digital
content on the web.,. Amazon collected 2.9% of the payment plus a flat fcc of 30 cents. It
ha~ never been shut down, hut ha<; fallen into relative disuse.
14.3 WWW.HOTMAIL.COM
Ilotmail.com
Website: http://www.hotmail.com
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Fig 14.2: www.botmail.com
246
A free, advertiser-supported e-mail service from Microsoft Network (MSN) provides

you with a pem1anent e-mail address that can be accessed fi·om any web browser. Originally
developed by Hotmail Corporation and acquired by Microsoft in 1998. Hotmail became
the fa'itest growing e-mail service on the Web. Por information, visit www.hotmail.com.
Hotmail is one of the most popular free '·web mail'" e-mail services, which arc accessible
from anywhere on the planet via a standard web browser. It was founded by Jack Smith
<md Sabc-er Bhatia in 1995, and wa-; commercially launched on July 4, L996, Independence
Day in the U.S., symbolically representing freedom from lSPs.
Jack Smith first had the idea of accessing e-mail via the web from a computer anywhere in
the world, originally as an impetus from getting by corporate firewalls blocking regular
mail service,-;. When Sabeer Bhatia came up with the business plan for the mail service, he
tried all kinds of names ending in '"-mail" and finally settled on hotmail because it included
the letters ''I ITML'" - the markup language used to write web pages. It was initially referred
to as IloTMaiL with selective upper casing.
Hotmail was backed by the venture capital firm Draper Fisher Jurvetson and was later
sold to Microsoft Corporation, whichrebranded it under its MSN umbrella. By December
1997, Hotmail reportedly had more than 8.5 million subscribers. By February 1999 it had
reported more than 30 million active members. Hotmail serves e-mail accounts in many
countries and is cmTently the largest web mail provider.
llotmail offers 250MB of free e-mail storage to their American members, and 2MB of
free e-mail storage to their other users, although they have given the 250MB limit to
members from other countries also. For a fee, customers can get 2GB of storage. In
contrast, Yal1oo! Mail offers 1GB for free currently. to all of its members with 2GB offered
at a price. Gmail from Google however offers over 2GB for free.
While I-Iotmail does not have POP3 email access, it is possible to check your email using
Microsoft Outlook and Outlook Express on PC and Microsoft Entourage on Mac. using
the WchDAV protocol. While this service was free for a number of years, Microsoft
announced on September 27 2004 that they were making it a subscription-only service
for new users immediately and existing users fromApril2005. However. users can get
around this restriction using I:reePOPs 1, a flexible free software application that allows
email client access to web mail services through POP3.
On ~ovcmber 18.2004. Hotmail began offering email addresses from several country-
specific domains. Now users can register a @hotmail.co.uk address or @msn.co.in.
247
e-Business
In December 2004, Microsoft started its new blogging service (beta) called MS~ Spaces
and integrated it with MSK Messenger and Hotmail.
MSN now offers a service named ~crosoft Office Outlook Live. This will offer the latest
version of Outlook and updates for a charge. MSN Hotmail users will then be able to usc
their email account~ (including Hotmail) on it
A Hotmail account is temporarily deactivated (all messages cleared. although not the address
hook) if the user abandons it for a month or more. It may even be permanently deleted
eventually. Hotmail Plus customers (customers who pay for extra storage) are exempt
fi·01n deactivation.
Until May 10 2005 , the special feature of including dots in the email address wasn't
available, but with growing competition from other free email providers like Gmail and
Yahoo! Mail, this feature too was made available to users.
14.4 WWW.REI>D'RCOM
Red iff.com India Ltd.,

(NASDAQ: REDF)
This is a popular news, information. entertainment and shopping portal. It was founded in
1996 and is headquartered in Mumbai, India with offices in New Delhi and New York,
USA. It has more than 200 employees. Rediff.com also offers the Indian American
community one of the oldest and largest Indian weekly newspapers ''IndiaAbroad" which
it acquired in 2001.
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248
It is today one of the most popular pmtals among the Indian and global Indian communities.
IL<; latest additions have been the Rediff mobile, Rediff calendar, Redifibol instant messenger
and Broadband. Today Recliffhas eamings of over $64 million with monthly hits exceeding
90 million. The popularity ofRediffbegan with its free web-based e-mail service offering
and it<; speed a<; compared to other email services. There is comprehensive information on
business, politics, sports and InfoTech in three regional languages besides English. The
portal has also launched the Rediff US Edition for the Indian community in the United
States and Canada. A useful feature for cricket lovers is a downloadable 'scoreboard'.
Rediff increased the storage capacity of its free public Rcdiffmail service to a full gigabyte
in order to compete with Gmail and Yahoo! Paid users get 2GB of storage space. One
problem with Rediffmail though is that it stores emails in units of 4k, instead of the
conventional 1k.
Redifi is known for iL<; aggressive promotion and clean content. Rediff also provides blogs,
shopping, news and a host of other features for the Indian diaspora. Rediff started in 1996
as a way for Indians living abroad to follow the news from home. But by 2000, Indians
started going online in larger numbers, and Rediff- which now has 27 million registered
users- found its readership split almost 50/50 between Indians in India and Indians
abroad.
Rediff.com India Limited (Rediff or rcdiff.com) is a provider of websites in India and the
United States, consisting of communication services, such as e-mail and instant messaging.
news and information channels, chat, community features, search engines, and mobile and
online marketplace services. The company also publishes two weekly newspapers in the
United States and Canada: India Abroad and India in New York. On AprilS, 2004, the
Company sold its phone card business to Worldquest Networks, Inc. Rediff's product
and service offering consist<; oflndia Online business <mel the U.S. Publishing business. It<;
Rediff.com India website consists of information, communication and content services.
free <mel paid commtmity features and products, including c-commerce and mobile services.
For the six months ended 30 September 2005, total revenues rose by 48% to $8.6M.
Results reflect higher revenues from the India Online business and improved gross margins.
Rediff.com India Limited is an Internet portal focusing on India and the global Indian
community, offering 17 interest-specific channels. community features, local language
editions, search capabilities and online shopping.
249
c-Business
14.5 WWW.WO:\TIERFL'LBUYS.COM
www.wonderfulbuys.com
website: www.wonderfulbuys.com
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It is a very popular online shopping pmtal, especially for the USA and Canada regions. It
has expanded its services pmtly in certain European areas as well.
It was started way back in August 19-99 and had just 2 employees and only 10 products.
Today the company has grown to include hundreds of products, additional website.<>. and
more than 100 employees throughout the C".S., Canada and India. As the company has
grown, so too, has the customer base. Wonderfulbuys has now served more than one
million customers throughout Canada, the U.S. and the U.K. and offers customers the
opportunity to purchase product-; in each of these currencies and have the prooucts shipped
directly to their door.
250
Unit 14 Case Studic~
At Wonderfulbuys, the company continually strives to anticipate the product needs of their
customers and to provide them with the most popular, reliable and innovative product<;
available. They have teamed up with some of the most well-known and trusted names in
the business, including TiJia.llarnilton Beach, Deni, RONCO and Stamina Products. They
have also introduced a unique 'Shop by Brand' feature, which makes it easy for customers
to choose products from their favorite brands.
As you explore the website, you will discover hundreds of unique and popular products-
many of which are available for next day delivery. From electronics and fitness equipment
to kitchen gadgets and health and beauty products, they have got something for everyone!
Not sure what to get? Wonder[ulbuys.com e-gift cettificates arc the perfect solution and
make the perfect gift for any occasion!
In order to provide their clients with the best possible service, everything (from product
sourcing and order processing to fulfillment and customer service) is handled in-house and
they manage the entire process with their customer in m ind. All orders are processed
online and shipped as requested by the client. They confirm orders by e-maiL and provide
customers with tracking information so that, at any point in time the customer knows the
exact status of his delivery.
At Wonderfulbuys, tl1e first priority is always to their customers.
It has now emerged as the world's largest, single-source distributor and e-retailer of As-
Seen-On-TV product<>. Wonderfulbuys.com has warehouses and facilities in the US.
Canada and the VK specifically designed to stock and ship As-Seen-On-TV products
across the globe. The wonderfulbuys.com website makes these products available to
consumers online. anytime, anywhere in the world. With a target of 1,000 plus stock-
keeping units (sku's) available online today (and many more available to go online each
day), wondcrfulbuys.com is a powerhouse in the online. Ac;-Seen-On-TV category.
When you surf the wonderfulbuys.com website you will only sec the pages they present to
their visitors. Off-line, wonderfulbuys.com is part of a thriving group of companies w ith
several decades of experience in the As-Seen-On-TV market. Their strategic partners
include manufacturing, distribution and order fulfillment specialist<> as well as traditional,
bricks and mortar retailers.
So far we have seen a few success[ ul exan1plcs of ilie "dot com" world. A few of the failed
"dotcoms" include www.pct'i.com, www.boo.corn, www.kozmo.com
251
e-Business
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Fig 14.5: www.pets.com
Recently the most successful''dot com'' venture has been www.googlc.com
14.6 W\VW.GOOGLE.COM
Google Inc. (NASD:GOOG)

Sector: Technology
Industry: Computer Services
Website: http://w'A-w.google.com/
Google has been the most successful and popular search engine website so far.
Google began as a research project in early 1996 by Lany Page and Sergey Brin, two
Ph.D. candidates at St<mford who developed the hypothesis that a search engine based
on analysis of the relationships between wcbsitcs would produce better results than the
bac;ic techniques then in usc. It wac; originally nicknamed BackRub because the system
252
Unit l4 Case Studies
checked backlinks to estimate a site's importance. (A small search engine called RankDex
was already exploring a similar strategy.)
Larry and Sergey continued working to perfect their technology through the first half of
1998. Following a path that would become a key tenet of the Google way, they bought a
terabyte of disk-; at bargain prices and built their own computer housings in Larry's dorm
room, which became Google's first data center. Meanwhile Sergey set up a business
office, and the two began calling on potential partners who might want to license a search
technology better than any other available at that time. Despite the dotcom fever of the
day. surprisingly, they had little interest in building a company of their own around the
technology they had developed.
Unable to interest the major portal players of the day, Larry and Sergey decided to make
a go of it on their own. All they needed was a little cash to move out of the dorm - - and to
pay off the credit cards they had maxecl out buying a terabyte of memory. So they wrote
up a business plan. put their Ph.D. plans on hold, and went looking for an angel investor.
Their first visit was with a friend of a faculty member.
Andy Bcchtolsheim, a founder of Sun Microsystems. was used to taking a long view of
things. One look at their demo and he knew Google had potential - -a lot of potential. But
though his interest had been piqued, he was pressed for time. As Sergey tells it. "We met
him very early one morning on the porch of a Stanford faculty member's horne in Palo
Alto. We gave him a quick demo. He had to run off somewhere. so he said. ·Instead of
discussing all the details, why don't I just write you a check?' It was made out to Google
Inc. and was for $100,000."
The investment created a small dilemma. Since there was no legal entity knmvn as "Google
Inc.," there was no way to deposit the check. It sat in Larry's desk drawer for a couple of
weeks while he and Sergey scrambled to set up a corporation and locate other financiers
among family, friends and acquaintances. Ultimately they brought in a total initial investment
of almost $1 million.
And as the saying goes .... the rest is history.
Today Google, Inc. (NASDAQ: GOOG) is a U.S.-based corporation, established in

1998, that manages the Google search engine. Google is headquartered at the "Googleplex"
in Mountain View, California and employs over 3,000 workers. Dr. Eric Schmidt, former
CEO of :NovelL took over as Google ·s CI ~0 when co-founder I .arry Page stepped down.
For the nine months ended 30 September 2005, Google Inc.'s revenues have increased
253
e-Business
96% to $4.22B. Net income totaled $1.09B, up from $195.YI. Revenues reflect the
continued expansion ofthe company's global advertiser base, partner network and the
benefits of product improvemenL~. Net income also retlects a growth in higher margins,
Google site revenues and the absence of a $20 I million charge related to the non-recurring
portion of their settlement of disputes with Yahoo.
Google Inc. offers targeted advertising solutions and global Internet search solutions through
its Internet site ,and intranet solutions via an enterprise search appliance. Its principal
products and services include Google.com, Google AdWords, Google AdSensc and
Google Search Appliance. Google.com comprises products and services that benefit users
and enable them to find relevant infonnation quickly and easily. GoogleAdWords enables
advertisers to present advertisements to people at the precise moment those people arc
looking for information related to what the adve1tiser ha~ to offer. Google AdSense enables
the websites in the Google network to serve targeted advertisements from AdWords'
advertisers. Googlc Search Appliance is a software and hardware solution that companies
can implement to extend Google's search performance to their internal or external
infonnation.
14.7 SUMMARY
In this unit we took a look at different successful case studies of the online websites and
companies. An insight was provided of how the companies started and flourished and
how only a few strong contenders sustained through the ''clot com" boom and the burst.
Along with the mention of a few failures, a few interesting and inspiring cases have been
explained in depth.
14.8 SELF-ASSESSME~T QUESTION

Q 1. Make a list of 5 popular online websites and make a case study repo1t of the success
of these websitcs.
254
e-Busincss
Acquiring Bank I Merchant Bank : The bank that does business with merchants who
accept credit cards.
ADSl,: Asymmetric Digital Subscriber I jne. A high-speed digital telephone connection

that operates over an existing copper telephone line, allowing the same line to be used for
voice calls.
Ad ware: Software that may have been installed on your computer by a remote site to
display advertisemenlll.
Affiliate Program : A popular website promotion tool where a website contracts with
other websites for driving visitors to its site. The revenue is calculated according to the
traffic brought by a particular website.
Anonymous FfP: A convention for public FfP (rile Transfer Protocol) servers, whereby
you can log in with the usemame anonymous and supply your email address as a password,
and once logged in, you have access to publicly available files.
Apache: The most popular Web server on the WWW, which mainly runs on Unix or
Linux systems.
Application : A computer program or a suite of computer programs that performs a

particular function for the user, such as a word-processor, e.g. Microsoft Word, or a
range of functions, such as Microsoft Windows or Microsoft Office. See Computer
Program, Operating System.
Authorization : The act of insuring that the cardholder has adequate funds available
against their line of credit. A positive authorization result~ in an authorization code being
generated, and those funds being set a~idc. The cardholder's available credit limit is reduced
by the authmized amount.
Bandwidth : The amount of data that can be sent from one computer to another through
a particular connection in a certain amount of time, e.g. via a computer to the Internet and
vice versa. It is usually measured in kilobits per second (Kbps) or megabits per second
(Mbps).
258
Appendix
bps :Abbreviation of bits per second. the smallest measurement of data transmission
speed, e.g. via a Modem. Computer people normally measure data tnmsmission speeds
in Kbps, meaning kilobits per second, or Mbps, mc<ming megabits per second. If you
have a 28.8Kbps modem, it means that your modem can transmit at speeds up to 28.800
bits of information per second. Sec BiL Kilobit, Megabit.
Broadband: A general tem1 used to describe high-speed Internet connectivity. Connection

speed is usually measured in Kbps (kilobits per second) and Mbps (megabit~) per second).
Browser : Software that enables users to access and to navigate the World Wide Web -
to ''smf the Web" in colloquial tcrms. Intemet Explore and Nctscapc arc two browsers
that arc in widespread usc. Sec World Wide Web.
Business to Business: A business model for business on the Internet. Popularly called
as B2B, it includes c-commerce transactions between two business organizations.
Business to Consumer: A business model for business on the Internet. Popularly called
as B2C. it includes e-commcrce transactions between a business organization and an
individual.
c
Cache : A L'achc contains information stored by a Web Browser on your hard disk. so
that you don't have to download the same material repeatedly from a remote computer.
Browsers keep copies of all the Web pages that you view, up to a certain time. so that the
pages can be redisplaycd quickly when you go back to them.
Cardholder :Any person who opens a credit card account and makes purcha<;e: u. ing a
credit card.
CGI Script :A program residing on a Web Server (usually in a directory called cgi-bin ).
which processes data from an JITML form. CGI stands for Co mmon Gateway Interface.
CMS : Content Mcmagement System A software package that makes it possible for non-
technical users to publish content (text, images, etc) on a website.
Cookie :A piece of infmmation stored on a user's computer by a Web Browsen \ hen rhe
user visits a website for the first time. Websitcs use cookies to recognise users who haYe
previously visited them.
:59
e-Business
Cyber squatter: A term normally used to describe someone who registers the name of a
popular Web address- usually a company name- with the intent of selling it to its rightful
owner at a high price.
Database : A body of data stored in a set format allowing the data to be retrieved,
queried. and cross-referenced using software.
DBMS : Database Management System. An application enabling the storage. modification,

retrieval, and querying of data in a database.
Domain Name :A unique name that identifies a Website. Domain names always have
two or more part'>, separated by dots. The part on the left side is specific and the one on
the right is more general.
Download : To transfer a copy of data, a computer program, a graphic file, a sound file or
video tile from one computer. which is usually large and remote. to another computer. This
is the main means of obtaining data and programs from the World Wide Web.
E-commerce : short for electronic commerce, meaning any sale I purchase that takes
place over the Internet.
Email : Electronic Mail. A system for transfening ~md receiving messages via the Internet.
End-user: The final user of a piece of software or hardware. That is, the person for
whom the product was created, as distinct from a user, who might be a person creating
products for end-users- such as a programmer.
FAQ : FAQ stands for Frequently Asked Question, and also refers to documents
periodically posted to discussion lists and newsgroups containing common questions and
their answers. The ICT4LT project's list off-<'AQs is located here. See Discussion List,
Newsgroup.
Firewall: A firewall is a software package that sits between your computer and your
[nternct connection, keeping an eye on the traffic going to and fro.
260
Appendix
Freeware: Softv.·are that can be copied and used without payment to the author(s),
although there may be some restrictions on distribution. Sec Shareware.
FfP: File Transfer Protocol. A way of transmitting files between Internet sites. Piles arc
stored on an FrP server to which a user on a remote host can log in and download and/or
upload files using FTP client software. See Anonymous FfP. Client. Server.
Gateway: A hardware or software that acts as a mediator between two distinct protocols
and help in the transfer of information between diverse systems.
GIF: Graphic Interchange Format. A file format used for storing simple graphics.
Gigabyte (GB): Usually abbreviated to GB, or Gig in common computer parlance. A

unit of measurement of computer memory or disk capacity= 1,073. 741,824 bytes. See
entry on Measurement Units. Sec Bit, Byte, Kilobyte, Megabyte.
Graphical User Interface (GUI): An operating system interface consisting of graphical

clements such as windows and icons, which the user can manipulate using pointing devices
such as a mouse.
Hacker :A person who spends their time trying to gain access to infonnation stored on
other people's computers all around the world.
llomcpage: This is the main Web page of a business, organisation or school, or of a

personal website. From this page, links are made to other pages on the same site and to
external sites.
Host : The name given to a computer on the Internet.
Hosting : A term used for storing and maintaining ftles, email or domains on a server that
is connected to the Internet.
Hostname: The network address of a computer on the Internet (host) written as letters,
for example www.dimakhconsultant".com. Ahostname is the human-friendly form of
the host's IP address. which is the real Internet address of the computer
HTML: Hypertext Markup Language. This is the language used for designing webpages.
26l
e-Business
HTfP: Hypertext Transfer Protocol. The transfer method (protocol) used by the World
Wide Web to transfer Web pages between computers on the Internet.
Internet : The worldwide network of computers. The Internet is the collection of

interconnected networks that evolved from the ARPANET of the late 60's and early 70's.
Internet Service Provider (ISP) :A company that provides a subscription service and
related software to enable users to access the Internet.
Intranet: A private network inside a company or educational organisation and used over
its LAN (Local Area Network). A sort of local internet.
IPAddress : The address of a computer (Host) on the Int.crnct, expressed as four nwnbcrs
(maximum 3 digits each) separated by dots (e.g., 150.237.176.8). Hosts are nearly always
referred to by their hostnamcs (e.g. www.dimakhconsultants.com) which arc mapped
on to IP addresses by special Internet hosts called name servers.
ISDN : Integrated Services Digital Network.
Kb : Abbreviation for Kilobit.
KB: Abbreviation for Kilobyte. K is also used.
Kilobit: Usually abbreviated to Kb.l.024 Bits. A unit of measurement, usually -relating to

data transmission speed.
Kbps : Abbreviation for kilobits per second. A unit of measurement of data transmission
speed.
Kilobyte : Usually abbreviated to K or KB. A unit of measurement of computer memory

or disk capacity= 1,024 bytes.
L~~: Local Area Network. A network of computers at one site. ALAK is limited to an
immediate area, usually the floor of a building or the s<m1e building.
262
Appendix
Leased Line: A I. known as a .Pri\-atc Cir...-ui:. -~ · dcdi..:ared communications link

between two sites.
MAN: Metropolitan Area Network. A network of computers :oc...ted at different sites

within a large fixed area. such a-; a city.
Mb: Abbreviation for Megabit.
MB : Abbreviation for Megabyte.
Mbps : Abbreviation for megabits per second. A unit of measurement of data transmission
speed, e.g. via a Modem. A typical Broadband connection to the Internet would transmit
data at lMbps or 2Mbps. See Bit, Kilobit..
Megabit : Usually abbreviated to Mb. 1,024 Kilobits or 1,048,576 Bits, a unit of

meao;urement, usually relating to data transmission speed. See Hit. Kilobit.
Megabyte: Usually abbreviated toMB. 1,024 Kilobytes or 1,048,576 Bytes. A unit of

measurement of computer memory or disk capacity.. Roughly 180,000 words of text- an
average-sized noveL See entry on Measurement Units. Sec Bit, Byte, Kilobyte, Gigabyte.
Modem: Short for modulator/demodulator. A device which converts computer data to a

signal that can be transmitted over a telephone line. It can also reconvert a signal coming
into a computer via a telephone line so that it can be understood by the computer. Modems
arc used to connect computers with the Internet.
Name server : A special type of Internet host which converts a text hostname into a
numerical IP address which identifies a computer (Host) on the Internet. When you try to
connect to a host such as www.microsoft.com, a request is first made to the name server
to resolve the name into an IP address, which is then used to locate the host.
~avigate : This describes the process of finding your way around a series of menus
within a computer program or finding your way around the Web.
Nctiquette : Etiquette on the Intcmcl. A code of conduct for people communicating by

email via the Internet.
263
c-Business
Network : A system for linking several computers together, so that they can share a
common disk drive :md also communicate with one another. Most popular local networks
allow the computers within it to call down programs from the common disk drive and also
to store them, but do not allow communication between individual computers.
Payment Gateway : A computer system that acts as a mediator between a merchant

account and online storefront. Payment gateway is used in authentication of credit card
information and real-time charging from a credit card.
PDA: Personal Digital Assistant A handheld device that combines computing, telephone/
fax, and networking features and serves as an organiser for personal information.
Protocol: A method for encoding data for transfer within and between computers. The
principal protocol 'used to transfer data on the Internet is TCPIIP.
QuickTime : Software used for viewing movies and listening to audio clips on the Web:
http://www.apple.com/quicktime.
Root Directory : The topmost directory in the directory hierarchy, from which all other
directories are descended. On a PC's hard disk, this has the pathname C:\. Sec Directory.
Router: A special dedicated Internet host which acts as a gateway between two networks,
passing data between them. Software on each router decides the optimum path for data to
the next router, until the data eventually reaches the recipient computer.
s
Screen Resolution: The number of dots (pixels) displayed on screen, expressed as two
numbers representing horizontal and vertical resolution, e.g. 640 x 480, 1024 x 768. See
Colour Depth, Pixel.
Search Engine: A search facility provided at a number of sites on the World %de Web.
Search engines enable the user to search the whole of the Web for key words and phrases
and to locate related websites. This is a useful facility for locating information.
Server :A computer or program which provides a service to other computers or programs
264
Appendix
(known as clients . For example. \'.hen ) ou click on a link in a Web page your browser
sends a request to a " 7orld Wide ""eb server which then ·serves· the requested page to
the browser.
SSL :The SSL (Secure Sockets Layer) Protocol is a protocol developed by Netscape
Communications which provides secure communications between the server and client,
preventing others from capturing or viewing the data being exchanged. Netscape has
extensive information on the SSL Protocol.
Source Code : The human-readable form of a computer program, which is converted

into binary computer instructions (machine code) by a compiler or interpreter.
Spam: Unsolicited email advertisements, the Internet equivalent ofjunk mail.A Spammer
is someone who sends out spam. A spammer can email an advertisement to millions of
email addresses, newsgroups, and discussion lists at very little cost in terms of money or
time.
Sysadmin : Systems Administrator. The person running a computer system.
Tag : In HTML, a Tag is a markup which controls how the text it defmes is rendered by
the browser. I 'or example, <a hrcf="http://www.scdl.nct">SCDL</a> in H1ML appear
on screen as the hyperlink SCDL.
TCPIIP: Transfer Control Protocol I Internet Protocol. The main data transfer protocol
used on the Internet. See Internet. Protocol.
Telnet: A program which allows you to log in to a remote host and carry out the same
commands a~ if you were using a terminal at the host site.
Trojan : Trojans arc programs - usually malicious - which install themselves or run
surreptitiously on a victim's machine.
u
Unix :An operating system widely used on large computer systems in corporations and
universities, on which many Web servers are hosted. An open source version of Unix.
called I ,inux, is becoming increasingly popular at the expense ofWmdows.
URL : Uniform Resource Locator. A URL contains the location of a resource on the
265
c-Business
Internet. Also known as a Web Address. A UR1, specifics the address of the computer
where the resource is located, which may be the homepage of a website.
User-friendly : Mainly used to describe Software. Software that is easy to use and offers
guidance (if the user does silly things!) is described as user-friendly.
w
W3C : World Wide Web Consortium. An international non-profit organisation which acts
as a ·resource centre' for the World Wide Web, and is active in setting open technical
standards. The current Director of W3C is Tim Berners-Lee, the inventor of the Web.
WAN : Wide Area Network. A network of computers located at geographical1y separate
sites.
Web Server: Software which allows the computer (Host) on which it's installed to serve
website files to browsers. One or more websites can he hosted on a computer running a
Web server.
Website :An area on the World Wide Web where an organisation or individual stores a
collection of pages of material. The pages are usually interlinked with one another and with
other websites.
\Vebsite Traffic : The number of times a website is viewed by a unique visitor within a
stipulated time.
Will : Wireless r1delity, also known as Wifeless Networking. a way of transmitting
information without cables that is reasonably fast and is often used for notebook computers
within local area networks, e.g. a university or school campus.
World Wide Web: This is the most powerful and fa<;test growing Internet service, invented
in 1989 by Time Berners-Lee and became a public resource in 1993.
WYSIWYG: "What You See Is What You GeC. An acronym dating back to the pre-
Windows and pre-Mac period, when what you saw on the screen was not necessarily
what appeared on your printer - something we now take for granted.
Acknowledgements and references
Most of the technical entries were supplied by Fred Riley, University of Hull, and by
Graham Davies, Thames Valley University.
\Ve acknowledge the authorship and copyright(© 1994-2005) of Matisse Enzer 's glossary.
266

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1.2 TID~ NTER~ET

Who owns the Internet?

1.3 THE BEGINNI:l\G OF TID: INTERNET

The Ji'irst Node on the Internet

Fig 1.2 : The .First Interface Message Processor (IMP)

''Did you get the L T' he asked.

''Do you see the 0?" he asked.

''Yes, we see the 0 ," replied the Stanford team.

Klein typed in the G, and the system crac;hed ! !!

In 1974, TCP/IP (Transmission Control Protocol/Internet Protocol). the protocol used on

The Early Internet

The Early Applications of The Internet

Where Internet- networking was once thought of as a computer-to-computer connection,

The Commercial Internet

The Network Access Points

NSI-<NET to private industry. The privatization oflntcrnet was substantially completed in

Computer Networks Classification

:MA..~s- Metropolitan Area Network, in essence a computer network that is meant to

1.5 TECHNOLOGY OVERVIEW

A new term called internetwork was soon coined.

An internetwork is a collection of individual networks, connected by intermediate networking

1.6 PACKET SWITCHED NETWORKS

A packet is a unit of data that is transmitted across a packet-switched network. A packet-

Private IP addresses also provide a basic form of security as in a typical network

1.8 NTERNET SERVICE PROVIDERS

Connecting to the Internet

Optional equipment includes: a printer, a soundcard, speakers, a video camera and a

Accessing the Internet

The ISP assigns two types of IP addresses

Dynamic IP's : A dynamic IP address is a number that is assigned to a computer by an

Static IP's :A static IP address is a number that is assigned to a computer by an Internet

Internet connectivity options and speeds

ISDN I DSL I Cable

Improvements in electronic hardware have allowed conventional phone lines to accept

I .cased Lines or Leased circuit'i

Fig 1.4 : Connectivity using a dish antenna and RF tower.

Wi-}'i, Wi-Max connectivity

Deciding the ISP & the connection speed

Now you may ask- 'How am I going to decide how to connect?'

Fig 1.5 : Comparative connection speeds

1.9 GLOBAL INTERNET CONNECTIVITY

F'ig 1.6 : Backbone Internet connectivity

1.11 SELF -ASSESSMENT QUESTIONS

2.2 DO.MAI~ NAMES

A domain name is a company's unique identity on the worldwide Internet. To do business

A domain name usually appears in the form yourcompany.com. It can be used as a

The Beginning- Domain Name

The World Wide Web, Inter~'IC, and the public domain

ICA~N and the spirit of the Internet

The exponential growth

.F ig 2.1: The Hierarchical Domain ~arne System inverted tree structure

.;edu 1100 200) 4194 7012 7284 7480 I

-.3 DOMAIN NAMES REGISTRATION

Choosing your Domain Name

.com , for commercial enterprises

.mil for US department for Defence

Tilll998-99, Network Solutions (www.nctworksolutions.com) was the only company

2.4 THE WEBSITE

5. Will the visitor be able to book orders online

6. Will you have a provision to accept payments online

The effective homcpage criteria

Designing your first web page

Get~ st, ·!!1naA ~,~~,!\Q'!I:•kftff! G<1*. AheMt ~GelAil"lld<•ts@tlt~ab>;I.""I PIIeUI