E-COMMERCE AND INTERNET MARKETING (PRELIMS)
all contribute toward the internal structure of the Internet. 
Introduction:
            The Internet is rapidly becoming a key resource for
locating information relevant to a particular field, engaging
in professional discourse, accessing published material, and
checking on tomorrow’s weather.  It has become the
foundation for tomorrow’s electronic community, providing
access to government, media, scientists, and friends and
relatives.  Access to the internet is now becoming a
requirement of doing business for many enterprises.  members of the W3C, advising, defining standards, and
Commercial use of the Internet is one of its fastest growing
uses. Several factors have led to the dramatic increase in
the size of Internet including increased bandwidth,
relaxation of government restrictions, and less expensive
connection options.  One major factor which has led to the
popularization of the Internet is the World Wide Web
(WWW), which provides a hypermedia layer over
information and resources available on the Internet.
LESSON 1: BASICS OF THE INTERNET
The Internet links are computer networks all over
the world so that users can share resources and
communicate with each other.  Some computers have
direct access to all the facilities on the Internet such as the
universities.  And other computers, example, privately-
owned ones, have indirect links through a commercial
service provider, who offers some or all of the Internet
facilities.  In order to be connected to Internet, we must go
through service suppliers.  Many options are offered with
monthly rates.  Depending on the option chosen, access
time may vary.
The Internet is what we call a met network, that is,
a network of networks that spans the globe. It’s impossible
to give an exact count of the number of networks or users
that comprise the Internet, but it is easily in the thousands
and millions respectively.  The Internet employs a set of
standardized protocols which allow for the sharing of
resources among different kinds of computers that
communicate with each other on the network.  These
standards, sometimes referred to as the Internet Protocol
Suite, are the rules that developers adhere to when
creating new functions for the Internet.
The Internet is also what we call a distributed
system; there are no central archives.  Technically, no one
runs the Internet.  Rather, the Internet is made up of
thousands of smaller networks.  The Internet thrives and
develops as its many users find new ways to create, display
and retrieve the information that constitutes the Internet.
Until 1995, NSFnet handled the bulk of the
communication activity, or traffic, on the Internet.  In 1995,
NSFnet terminated its network on the Internet and
resumed its status as a research network.  Today, the
Internet consists of many local, regional, national, and
international networks.  Numerous corporations,
commercial firms, and other companies such as IBM
provide networks to handle Internet traffic.  Both public
and private organizations own networks on the Internet. 
These networks along with telephone companies such as
PLDT, cable and satellite companies, and the government,
Each organization on the Internet is responsible only for
maintaining its own network.  No single person, company,
institution, or government agency controls or owns the
Internet.  The World Wide Web Consortium (W3C),
however, oversees research and sets standards and
guidelines for many areas of the Internet.  The mission of
the W3C is to contribute to the growth of the Web.  More
than 350 organizations from around the world are
addressing issues.
World Wide Web – It is a system of interlinked
hypertext documents accessed via the Internet
 
Internet – It is a global system of interconnected
computer networks that use the standard Internet
protocol suite (TCP/IP) to serve several billion
users worldwide
 EVOLUTION OF THE INTERNET
The Internet has its roots in a networking projects started
by the Pentagon’s Advanced Research Projects Agency
(ARPA), an agency of the US Department of Defense.
ARPA’s goal was to build a network that (1) allowed
scientists at different physical locations to share
information and work together on military and scientific
projects and (2) could function even if part of the network
were disabled or destroyed by a disaster such as a nuclear
attack.  That network is called ARPANET, became
functional in September 1969, linking scientific and
academic researchers across United States.
The original ARPANET consisted of four main computers,
one each located at the University of California at Los
Angeles, the University of California at Santa Barbara, the
Stanford Research Institute, and the University of Utah.
Each of these computers served as a host on the network. 
A host, most commonly known today as a server, is any
computer that provides services and connections to other
computers on a network.  Hosts often use high-speed
communications to transfer data and messages over a
network.  As researchers and others realized the great
benefit of using ARPANET to share data and information,
ARPANET underwent phenomenal growth.
By 1984, ARPANET had more than 1,000 individual
computers linked as hosts.
Today, more than 550 million hosts connect to the
Internet.  Some organizations connected entire
networks to ARPANET to take advantage of its
high-speed communications.
In 1986, the National Science Foundation (NSF) connected
its huge network of five super computer centers,
called NSFnet, to ARPANET.  This configuration of complex
networks and hosts became known as the Internet.
CONNECTING TO THE INTERNET
Many home and small business users connect to the
Internet via high-speed broadband Internet service.  With
broadband Internet service, computer or mobile device
usually is connected to the Internet the entire time it is
powered on.  Example of broadband Internet service
include cable, DSL, fiber, radio signals, and satellite.
 Cable Internet service - provides high-speed Internet
access through the cable television network via a cable
modem.
 DSL (Digital Subscriber Line) - provides high-speed
Internet connections using regular copper telephone
lines.
 Fiber to the Premises (FTTP) - uses fiber-optic cable to
provide high-speed Internet access to home and
business users.
 Fixed wireless - provides high-speed Internet
connections using a dish-shaped antenna on house or
business to communicate with a tower location via
radio signals.
 A cellular radio network - offers high-speed Internet
connections to devices with built-in compatible
technology or computers with wireless modems.
 A Wi-Fi (wireless fidelity) network uses radio signals to
provide high-speed Internet connections to compatible
or properly equipped wireless computers and devices.
 Satellite Internet service provides high-speed Internet
connections via satellite to a satellite dish that
communicates with a satellite modem.
ACCESS PROVIDERS
An access provider is a business that provides individuals
and organizations access to the Internet free or for a fee.
For example, some Wi-Fi networks provide free access
while others charge a per use fee.  Other access providers
often charge a fixed amount for an Internet connection,
offering faster speeds or more services for higher rates.
Access providers are categorized as regional or national
ISPs, online service providers, and wireless Internet service
providers.
ISP (Internet Service Provider)
It is a regional or national access provider.  collectively as the Internet backbone.
 A regional ISP usually provides Internet access to a
specific geographical area.
 A national ISP is a business that provides Internet
access in cities and towns nationwide.
 For dial-up access, some national ISPs provide both
local and toll-free telephone numbers. Due to their
larger size, national ISPs usually offer more services
and have a larger technical support staff than regional
ISPs.  Examples of national ISPs are Globe and Smart. 
In addition to providing Internet access, an online
service provider.
(OSP) also has many members-only features such as instant
messaging or their own customized versions of a Web
browser.  The two more popular OSPs are:
1. AOL (America Online)
2. MSN (Microsoft Network)
AOL differs from many OSPs in that it provides gateway
functionality to the Internet, meaning it regulates the
Internet services to which members have access.
AOL also provides free access to its services to any user
with a broadband Internet connection.
When selecting an ISP or OSP for dial-up access, ensure it
provides at least one local telephone number.  Otherwise,
long-distance telephone charges will apply for the time we
connect to the Internet.
 
Wireless Internet Service Provider
Sometimes called a wireless data provider, it is a
company that provides wireless Internet access to desktop
and notebook computers and mobile devices, such as
smart phones and portable media players, with built-in
wireless capability (such as Wi-Fi) or to computers using
wireless modems or wireless access devices.
Wireless modems, usually are in the form of a USB
flash drive or a card that inserts in a slot in a computer or
mobile device, generally dial a telephone number to
establish connection with the wireless Internet service
provider.  An antenna on or built into the computer or
device, wireless modem, or wireless access device typically
sends signals through the airwaves to communicate with a
wireless Internet service provider.
 How Data and Information Travel the Internet
Computers connected to the Internet work
together to transfer data and information around the
world using servers and clients and various wired and
wireless transmission media.  On the Internet, computer is
a client that can access data, information, and services on a
variety of servers.  The inner structure of the Internet
works much like a transportation system.  Just as interstate
highways connect major cities and carry the bulk of the
automotive traffic across the country, several main
transmission media carry the heaviest amount of traffic on
Internet.  These major carriers of network traffic are known
The transmission media that make up the Internet
backbone exchange data and information at several
different major cities across the country.  That is, they
transfer data and information from one network to another
until reaching the final destination.
 
Internet Addresses
            The Internet relies on an addressing system much
like the postal service to send data and information to a
computer at a specific destination.
            An IP address, short for Internet Protocol address, is
a number that uniquely identifies each computer or device
connected to the Internet.
            The IP address usually consists of four groups of
numbers, each separated by a period.  The number in each
group is between 0 and 255.
            For example, the numbers 72.14.207.99 are an IP
address.  In general, the first portion of each IP address
identifies the network and the last portion identifies the
specific computer.  These all-numeric IP addresses are
difficult to remember and use.  Thus, the Internet supports
the use of a text name that represents one or more IP
addresses.  commerce, with its vast reach over a variety of products
A domain name is the text version of an IP
address.  As with an IP address, the components of a
domain name are separated by periods.  The text in the
domain name up to the first period identifies the type of
Internet server.
 
INTERNET TODAY
The Internet is an unprecedented gateway to a vast wealth
of knowledge and information, and its uses are virtually
unlimited.  The World Wide Web is deeply ingrained in our
culture and everyday lives.  It is a source of news, facts and
figures; a communication tool that allows millions of us to
connect with each other every second of every day; a way
to bank, invest, and shop; and an educational and
entertainment medium that allows people from all walks of
life to learn about the world and have fun doing it.
Especially promising are the marvelous advantages that the
Internet offers children, including access to educational
materials, publications, online friendships, pen pals,
subject-matter experts, and information on hobbies, games,
and sports.  There is no question that many of today’s kids
benefit enormously from online access often in ways
different from their parents’ use of it.
Advantages of the Internet
1. Faster Communication – the Internet has been
mankind’s greatest means of communication yet.
Newer innovations are only making it faster and more
reliable. (video conferencing, chat and messenger
services)
2. Abundant Information Resources – the Internet is a
treasure trove of information; which offers knowledge
on any given topic under the sun.
3. Inexhaustible Education – The Internet has become an
essential propagator of knowledge, both through free
as well as paid services. The credibility of this form of
education and whether it is safe, secure, and
trustworthy, is usually proven through the quality and
authenticity of content presented by each website.  and spread itself
The World Wide Web has become a remarkable
avenue for the academically unprivileged, to amass
greater and know-how on subjects.
1.      Entertainment for Everyone – Entertainment is
one of the foremost reasons why people prefer surfing the
Web. (online gaming, exploring lifestyle websites)
2.     Social Networking and Staying Connected –
Facebook, Twitter. These portals have become our means
to stay connected with friends and family and stay in
touch with the latest happening in the world.
3.      Online Services and E-commerce – We can
perform all our financial transactions online through the
numerous monetary services. E-commerce is used for all
type of business dealing that involves the transfer of
money through the Internet. Online transaction of money
has become the norm with almost all kinds of business.  E-
and services, makes it possible to have the client’s orders
delivered at their doorsteps. (eBay, Lazada, Shoppee)
  
Disadvantages of the Internet
1. Theft of Personal Information – The use of Internet for
banking, social networking, or other services, often
makes our personal information vulnerable to theft.
There are no fail-proof ways to securing names,
account numbers, addresses, photos, and credit card
numbers from being stolen or misused by thieving
websites and individuals.  Unscrupulous hackers can
access our sensitive information through unsecured
connections by planting phishing software
2. Spamming – refers to sending unwanted ds, which
serve no purpose and needlessly obstruct the
computer system. Such illegal activities can be very
frustrating as it makes it slower to access our email
accounts and makes the entire service unreliable for
consumers.
3. Malware Threats – One of the most annoying
problems with the Internet is the ease with which any
malware can infect our computers. Internet users are
often plagued by virus attacks that harm their
computers and important files.  Virus programs are
inconspicuous and may get activated simply by clicking
a seemingly harmless link.  Computers connected to
the Internet are extremely prone to IP targeted virus
attacks that may end up crashing the system
completely.
 Internet virus can be of three types:
1. The first type of virus affects files and goes directly
for a particular file or file type.
2. The second type harms system and executable
boot files.
3. Lastly, there’s the macro virus, which is the most
common as well as the most harmless of them all.
The macro virus simply keeps changing things like
symbols on word files.
Worms – the type of virus that can replicate
Trojan – when a virus is disguised as
something else 
4. Age-inappropriate Content – Ex. Pornography – It
is the lack of control over the distribution and unrestricted
access of pornographic material that is detrimental to
children.
5. Social Isolation, Obesity, and Depression – The
biggest problem with having the Internet is, its ability to
create rifts between the real and virtual world. There is an
addiction for everything that pertains to the web and that
includes excessive surfing, online gambling, social
networking, and gaming addiction. The link between
obesity and the Internet is rather easy to understand.  The
more one sits in front of the computer, the lesser one
exercises.  It causes also depression.  It results also to
compulsive Internet use and excessive Internet use.
Introduction:
The phrase digital world is most commonly used in
when defining citizenship, digital fluency, and digital
literacy. The digital world is the availability and use of
digital tools to communicate on the Internet, digital
devices, smart devices and other technologies.
Humanities and education discussions of the
'digital era' tend to create variations when categorizing and
defining the mass of mediated technologies and human
interactions that are suggested as part of the digital
world. The phrase 'digital world' is used loosely as a mass
noun with many possible meanings and variations.
Examples: An informal example is devices given to
toddlers entering the digital era. Formal usage includes
educational policies referring to the digital world, especially
in standardizing digital access.  Children suffering a lack of
access to the digital world are part of the digital divide.
The One Laptop per Child program is an example of (digital
world) inclusion for children living in poverty and suffering
as part of the digital divide.
The phrase digital world was being used in
electrical engineering studies before the creation of
the World Wide Web. Originally it was used to describe the
prevalence of digital electronic devices as opposed to
analogue electronic devices. Articles relating to education
in the digital world became more common in the 1990s.
            The World-Wide Web is a hypertext-based
information system.  Any word in a hypertext document
can be specified as a pointer to a different hypertext
document where more information pertaining to that word
can be found.  The reader can open the second document
by selecting the word (using different methods depending
on the interface; in a mouse-based system, a user would
probably place the mouse over the word and click the
mouse button); only the part of the linked document which
contains relevant information will be displayed.
            The second document may itself contain links to
further documents.  The reader need not know where the
referenced documents are, because they will be obtained
and presented as they are needed.
            World-Wide Web uses hypertext over the Internet: 
The linked documents may be located at different Internet
sites.  WWW can handle different text formats and
different methods of organizing information.
            World-Wide Web (W3) is the universe of network-
accessible information, an embodiment of human
knowledge.  It is an initiative started at “CERN”, now with
many participants.  It has a body of software, and a set of
protocols and conventions.  W3 uses “hypertext” and
multimedia techniques to make the web easy for anyone
to roam browse, and contribute to.
Lesson Proper:
LESSON 2: Hypertext
            The terminology of the World-Wide Web was
closely based on text.  So the basic element that a user
created or read was called a ‘page’ and a page contained
text that the user saw and information that told the web
server how to make the page look.  These instructions are
like the ‘markup’ used by printers and newspaper editors. 
So Berners-Lee named the language Hypertext Mark-up
Language or html.  Berners-Lee wrote a language that
would instruct a computer which was continuously
connected to the Web, a ‘web-server’, to store the text file
written by the user, and to give it an address of universal
(now more commonly ‘uniform’) resource locator or URL. 
Unlike the linear medium of a book, each page could be
connected to any other by embedding URL addresses
within the page.  These connections were conceived as
being a kind of link over the text and were name hypertext
links.
Email and Webmail
An early development of the World Wide Web was the
facility for sending text messages to a specified recipient. 
These electronic mails or emails needed special programs
that allowed text to be input, encoded using a standard
protocol such as Unicode, and sent via the Internet to the
host computer specified in the email address.  The program
has to reverse this process so that received emails could be
read.  The email has become the dominant method of
exchanging mail in many industry sectors, particularly in
the academic world.  Email is gradually replacing post for
many professionals, but its advantages are also its major
drawbacks: it is instantaneous and it is as easy to send an
email to many people as it is to one.  Sending an email
creates the expectation that there will be an immediate
response.  Not only is immediate response expected, but it
is expected from many people.  This new phenomenon of
interactivity has become a major problem for professionals,
who spend more and more time dealing with emails and
expurgating rubbish emails or ‘spam’.
HISTORY OF THE WEB
            Tim Berners-Lee inted the World-Wide Web in
1989, about 20years after the first connection was
established over what is today known as the Internet.  At
the time, Tim was a software engineer at CERN, the large
particle physics laboratory near Geneva, Switzerland.  Many
scientists participated in experiments at CERN for extended
periods of time, and then returned to their laboratories
around the world.
            Tim’s proposal which specified a set of technologies
that would make the Internet truly accessible and useful to
people in late 1989 was not accepted, however, Tim
persevered by October of 1990, he had specified the three
fundamental technologies that remain the foundation of
today’s Web.
1. HTML (Hyper Text Markup Language): The publishing
format for the Web, including the ability to format
documents and link to other documents and
resources.
2. URI (Uniform Resource Identifier): A kind of “address”
that is unique to each resource on the Web.
3. HTTP (Hypertext Transfer Protocol): Allows for the
retrieval of linked resources from across the Web.
Tim also wrote the first Web page editor/browser
(‘World Wide Web”) and the first Web server by the end
of 1990, the first Web page was served.  By 1991, people
outside of CERN joined the new Web community.  Very
important to the growth of the Web, CERN announced in
April 1993 that the World Wide Web technology would be
available for anyone to use on a royalty-free basis.
Tim Berners-Lee and other realized that for the
Web to reach its full potential, the underlying technologies
must become global standards, implemented in the same
way around the world.  Therefore, in 1994, Tim founded
the World Wide Web Consortium (W3C) as a place for
stakeholders to reach consensus around the specification
and guidelines to ensure that the Web works for everyone
and that it evolves in a responsible manner.  W3C standards
have enabled a single World Wide Web information and
people, and an increasingly-rich set of capabilities: Web 2.0
(personal and dynamic), Web 3.0 (a semantic Web of linked
data), Web services, voice access, mobile access,
accessibility for people with disabilities and for people
speaking many languages, richer graphics and video, etc.  The advanced technologies of the Internet
The Web Foundation supports the work of W3C to ensure
that the Web and the technologies that underpin it remain
free and open to all.
 
BENEFITS OF INTERNET USE
1. The Internet has an enormous amount of publications
added on it every day and it’s evolving as the most
powerful source of information.
2. Use of the Internet has made jobs easier and
oversimplified tasks that would take an enormous
amount of time before.
3. The Internet has become a great tool for avoiding the
hassles of the back, offering the chance to make the
transactions quickly and safely.
4. It also offers a powerful source for shopping and the
easiness of having products delivered straight to house,
should we decide do not want to go out.
5. The widespread use of Internet has opened new areas
of jobs in all countries and expanded the availabilities
of working from home.
6. The Internet in one of the most valuable tools in
education since it provides an enormous amount of
information and is the greater source of reference for
educators and students.
 
Internet Evolution
The available material, programs, websites and
other services of the internet are multiplied every day,
revolutionizing the technology being used.  Its applications
grow exponentially and it would be impossible to outline
everything in this booklet.  The most important aspect of
the Internet evolution however, is that its exponential
growth allows it to ease and transform people’s life and
increase their knowledge.
Preciousness of Time
            Some people say “time is money”.  Some others say
that time are precious and should not be wasted. 
Whatever applies to however, one thing is true: Todays
needs and demands of society have taken over our time
that feels it’s not enough for doing everything we need to
be doing every day.  The appearance of the Internet saving
matter came as a life saver for many tasks that would take
days to complete before.  The ability of the Internet to
store materials, its ability to calculate instantly almost
anything, and its worldwide application databases had
made tasks much easier and less time consuming in
almost every industry on the planet.
Internet Bank
managed to free people from the hassles of losing an
enormous amount of time waiting in the line to be served
at the bank branches.  Internet banking is the easy way of
dealing with bank transactions that can be done including
bill payments and transfers.  Internet banking is
convenient also in that it is available twenty-four hours a
day.
International Market
The Internet enables us to buy anything we need
from the comfort of own house.  Many supermarkets take
online orders and deliver the stock within the day at our
doorstep.  Many consumer stores offer online purchases
about almost anything we can imagine.  Online shopping
can save time and money since it offers a wide range of
specials in much cheaper prices than what we will find in
the actual stores.
 
Unemployment Agent
Another benefit that the internet has brought into
our lives is that ever since the internet has been
introduced, new areas of jobs and careers have opened up
to the public.  Web designing, computer technician and
programmer, are among the many that are found at their
peak demand for employers.  Alost every company
nowadays, needs to have a website that promotes its
products and patents that web designers are among the
most highly requested professionals needed. Housewives,
mothers and disabled people, can now have a chance to
work from their house and earn money that would
otherwise be difficult to obtain.
Treasure Bank
The biggest benefit of the internet can be found in
the educational sector.  Educators can obtain learning
material from it, prepare courses online and deliver
audio/visual information to students.  For Instructors, it is
a valuable source for referencing material and enhancing
the knowledge of their students.  The Internet provides a
great place for conferencing and collaborating with
students from all over the world.  Students can search for
information regarding their school courses via electronic
libraries who offer a great variety of journals and scientific
articles.  The resources available over the net cover almost
every aspect of the school curriculum and students have a
valuable machine for enhancing their knowledge and
expanding their assigned work.
 
BROWSING THE WEB
            A Web browser, or browser, is application software
that allows users to access and view Webpages or access
Web 2.0 programs.  To browse the Web, we need a
computer or mobile device that is connected to the
Internet and has a Web browser.  The more widely used
Web browsers for personal computers are Internet
Explorer, Firefox, Opera, Safari, and Google Chrome.  With
an Internet connection established, we start a Web
browser.  The browser retrieves and displays a starting Web
page, sometimes called the browser’s home page.  The
initial home page at any time.  Another use of the term,
home page, refers to the first page that a Web site
displays.  Similar to a book cover or a table of contents for a
Web site, the home page provides information about the
Web site’s purpose and content.  Many Websites allow
personalizing the home page so that it contains areas of
interest to us.  The home page usually contains links to
other documents, Webpages, or Websites.  A link, short for
hyperlink, is a built-in connection to another related Web
page or part of a Web page.
WEB APPLICATIONS OR WEBSITE WIDGETS
Over the past decade or so, the web has been
embraced by millions of businesses as an inexpensive
channel to communicate and exchange information with
prospects and transactions with customers.
Web Applications
            From a technical view-point, the web is a highly
programmable environment that allows mass
customization through the immediate deployment of a
large and diverse range of applications, to millions of global
users.  Two important components of a modern website
are flexible web browsers and web applications; both
available to all and sundry at no expense.
            Web browsers are software applications that allow
users to retrieve data and interact with content located on
Web pages within a website.  Web pages may also run
client-side scripts that “change” the Internet browser into
an interface for such applications as web mail and
interactive mapping software. (example, Yahoo Mail and
Google Maps).
            Most importantly, modern websites allow the
capture, processing, storage and transmission of sensitive
customer data for immediate and recurrent use.  And, this
is done through web applications.  Such Web applications
as webmail, login pages, support and product request
forms, shopping carts and content management systems,
shape modern websites and provide business with the
means necessary to communicate with prospects and
customers.  These are all common examples of web
applications.
Web applications – are computer programs
allowing website visitors to submit and retrieve data
to/from a database over the Internet using their preferred
web browser.  The data is then presented to the user within
their browser as information is generated dynamically (in a
specific format, example, in HTML, using CSS) by the web
application through a web server.
For the more technically oriented, Web
applications query the content server (essentially a content
repository database) and dynamically generate web
documents to serve to the client (people surfing the
website).  The documents are generated in a standard
format to allow support by all browsers (example: HTML or
XHTML).
JavaScript – is one form of client side script that
permits dynamic elements on each page (Example: an
image changes once the user hovers over it with a mouse).
The Web browser is key, it interprets and runs all
scripts etc. while displaying the requested pages and
content.  Another significant advantage of building and
maintaining web applications is that running client side. 
Web applications are quickly deployed anywhere at no cost
and without any installation requirements (almost) at the
user’s end.  Web applications may either be purchased off-
the-shelf or created in-house.
How do Web Applications Work?
The Figure below details the three-layered web application
model.  The first layer is normally a web browser or the
user interface; the second layer is the dynamic content
generation technology tool such as Java services (JSP) OR
Active Server Pages (ASP), and the third layer is the
database containing content (example news) and
customer data.
The Figure below shows how the initial request is triggered
by the user through the browser over the Internet to the
web application server.  The web application accesses the
databases servers to perform the requested task updating
and retrieving the information lying within the database. 
The web application then presents the information to the
user through the browser.
Web Security Issues
Despite their advantage, web applications do raise a
number of security concerns stemming from improper
coding.  Serious weaknesses or vulnerabilities, allow
hackers to gain direct and public access to databases in
order to churn sensitive data.  Many of these databases
contain valuable information (example: personal and
financial details) making them a frequent target of hackers. 
Although such acts of vandalism as defacing corporate
websites are still commonplace, nowadays, hackers prefer
gaining access to the sensitive data residing on the
database server because of the immense pay-offs in selling
the data.
In the framework described, it is easy to see how a hacker
can quickly access the data residing on the database
through a dose of creativity and. With luck, negligence or
human error, leading to vulnerabilities in the web
applications.
As stated, websites depend on databases to deliver the
required information to visitors.  If web applications are not
secure, i.e., vulnerable to, at least one of the various forms
of hacking techniques, then entire database of sensitive
information is at serious risk.
Some hackers, for example, may maliciously inject code
within vulnerable web applications to trick users and
redirect them towards phishing sites.  This technique is
called Cross-Site Scripting and may be used even though
the web servers and database engine contain no
vulnerability themselves.
Recent research shows that 75% of cyber-attacks are done
at web application level.
 Websites and related web applications must be
available 24 hours a day, 7 days a week, to provide the
required service to customers, employees, suppliers
and other stakeholders.
 Firewalls and SSL provide no protection against web
application hacking, simply because access to the
website has to be made public – all modern database
systems may be accessed through specific ports and
anyone can attempt direct connections to the
databases effectively bypassing the security
mechanisms used by the operating system. These ports
remain open to allow communication with legitimate
traffic and therefore constitute a major vulnerability.
 Web applications often have direct access to backend
data such as customer databses and, hence, control
valuable data and are much more difficult to secure.
Those that do not have access will have some form of
script that allows data capture and transmission.  If a
hacker becomes aware of weaknesses in such a script,
he may easily reroute unwitting traffic to another
location and illegitimately hive off personal details.
 Most web applications are custom-made and,
therefore, involve a lesser degree of testing than off-
the-shelf software. Consequently, custom applications
are more susceptible to attack.
Web applications, therefore, are a gateway to databases
especially custom applications which are not developed
with security best practices and which do not undergo
regular security audits.  In general, “Which parts of a
website we thought are secure are open to hack attacks?”
and “what data can we throw at an application to cause it
to perform something it should not do?”
Introduction:
Computer Network is a pivotal element of electronic
commerce.  The availability of the internet fueled the
growth of e-commerce for both consumer market and
business market.  Networks can be categorized in Local
area networks (LANs) and wide area networks (WANs).  The
Internet is the world’s largest public WAN.  Today’s
networks are built using standard hardware and software
components.  The communications over the networks are
governed by various protocols.  TCP/IP protocol is the
foundation of all Internet applications, such as FTP, email
and HTTP.
Lesson Proper:
LESSON 3: NETWORKS
A network is a collection of computers, servers,
mainframes, network devices, peripherals, or other devices
connected to one another to allow the sharing of data. An
example of a network is the Internet, which connects
millions of people all over the world. Below is an example
image of a home network with multiple computers and
other network devices all connected.
Network topologies and types of networks
The term network topology describes the relationship of
connected devices in terms of a geometric graph. Devices
are represented as vertices, and their connections are
represented as edges on the graph. It describes how many
connections each device has, in what order, and it what
sort of hierarchy.
Typical network configurations include the bus
topology, mesh topology, ring topology, star topology, tree
topology and hybrid topology.
Network topology a topology is the physical configuration
of a network that determines how the network's computers
are connected. Common configurations include the bus
topology, linear bus, mesh topology, ring topology, star
topology, tree topology and hybrid topology.  network.
Bus topology is a network setup where each computer and
network device is connected to a single cable or backbone.
Depending on the type of computer network card, a coaxial
cable or an RJ-45 network cable is used to connect them
together.
Advantages of bus topology
 It works well when you have a small network.
 It's the easiest network topology for connecting
computers or peripherals in a linear fashion.
 It requires less cable length than a star topology.
Disadvantages of bus topology
 It can be difficult to identify the problems if the
whole network goes down.
 It can be hard to troubleshoot individual device
issues.
 Bus topology is not great for large networks.
 Terminators are required for both ends of the
main cable.
 Additional devices slow the network down.
 If a main cable is damaged, the network fails or
splits into two.
A mesh topology is a network setup where each computer
and network device is interconnected with one another.
This topology setup allows for most transmissions to be
distributed even if one of the connections goes down. It is a
topology commonly used for wireless networks. Below is a
visual example of a simple computer setup on a network
using a mesh topology.
Advantages of a mesh topology
 Manages high amounts of traffic, because multiple
devices can transmit data simultaneously.
 A failure of one device does not cause a break in
the network or transmission of data.
 Adding additional devices does not disrupt data
transmission between other devices.
Disadvantages of a mesh topology
 The cost to implement is higher than other
network topologies, making it a less desirable
option.
 Building and maintaining the topology is difficult
and time consuming.
 The chance of redundant connections is high,
which adds to the high costs and potential for
reduced efficiency.
A ring topology is a network configuration where device
connections create a circular data path. Each networked
device is connected to two others, like points on a circle.
Together, devices in a ring topology are referred to as a ring
Advantages of a ring topology
 All data flows in one direction, reducing the chance
of packet collisions.
 A network server is not needed to control network
connectivity between each workstation.
 Data can transfer between workstations at high
speeds.
 Additional workstations can be added without
impacting performance of the network.
Disadvantages of a ring topology
 All data being transferred over the network must
pass through each workstation on the network,
which can make it slower than a star topology.
 The entire network will be impacted if one
workstation shuts down.
 The hardware needed to connect each workstation
to the network is more expensive than Ethernet
cards and hubs/switches.
Star topology is one of the most common network setups.
In this configuration, every node connects to a central
network device, like a hub, switch, or computer. The central
network device acts as a server and the peripheral devices
act as clients. In a star topology setup, either a coaxial or RJ-
45 network cable is used, depending on the type
of network card installed in each computer. The image
shows how this network setup gets its name, as it is shaped
like a star.
Advantages of star topology
 Centralized management of the network, through
the use of the central computer, hub, or switch.
 Easy to add another computer to the network.
 If one computer on the network fails, the rest of
the network continues to function normally.
Disadvantages of star topology
 May have a higher cost to implement, especially
when using a switch or router as the central
network device.
 The central network device determines the
performance and number of nodes the network
can handle.
  If the central computer, hub, or switch fails, the
entire network goes down and all computers are
disconnected from the network.
A tree topology is a special type of structure where many
connected elements are arranged like the branches of a
tree. For example, tree topologies are frequently used to
organize the computers in a corporate network, or the
information in a database.
A hybrid topology is a type of network topology that uses
two or more differing network topologies. These topologies
can include a mix of bus topology, mesh topology, ring
topology, star topology, and tree topology.
Examples of network devices
 Desktop computers, laptops, mainframes, and
servers
 Consoles and thin clients.
 Firewalls
 Bridges
 Repeaters
 Network Interface cards
 Switches, hubs, modems, and routers.
 Smart phones and tablets.
 Webcams
Types of Networks in Use Today
1. Personal Area Network (PAN)
The smallest and most basic type of network, a PAN is
made up of a wireless modem, a computer or two, phones,
printers, tablets, etc., and revolves around one person in
one building. These types of networks are typically found in
small offices or residences, and are managed by one person
or organization from a single device.
2. Local Area Network (LAN)
We’re confident that you’ve heard of these types of
networks before – LANs are the most frequently discussed
networks, one of the most common, one of the most
original and one of the simplest types of networks. LANs
connect groups of computers and low-voltage devices
together across short distances (within a building or
between a group of two or three buildings in close
proximity to each other) to share information and
resources. Enterprises typically manage and maintain LANs.
Using routers, LANs can connect to wide area networks
(WANs, explained below) to rapidly and safely transfer
data.
3. Wireless Local Area Network (WLAN)
Functioning like a LAN, WLANs make use of wireless
network technology, such as Wi-Fi. Typically seen in the
same types of applications as LANs, these types of networks
don’t require that devices rely on physical cables to connect
to the network.
4. Campus Area Network (CAN)
Larger than LANs, but smaller than metropolitan area
networks (MANs, explained below), these types of
networks are typically seen in universities, large K-12 school
districts or small businesses. They can be spread across
several buildings that are fairly close to each other so users
can share resources.
5. Metropolitan Area Network (MAN)
These types of networks are larger than LANs but smaller
than WANs – and incorporate elements from both types of
networks. MANs span an entire geographic area (typically
a town or city, but sometimes a campus). Ownership and
maintenance is handled by either a single person or
company (a local council, a large company, etc.).
6. Wide Area Network (WAN)
Slightly more complex than a LAN, a WAN connects
computers together across longer physical distances. This
allows computers and low-voltage devices to be remotely
connected to each other over one large network to
communicate even when they’re miles apart.
The Internet is the most basic example of a WAN,
connecting all computers together around the world.
Because of a WAN’s vast reach, it is typically owned and
maintained by multiple administrators or the public.
7. Storage-Area Network (SAN)
As a dedicated high-speed network that connects shared
pools of storage devices to several servers, these types of
networks don’t rely on a LAN or WAN. Instead, they move
storage resources away from the network and place them
into their own high-performance network. SANs can be
accessed in the same fashion as a drive attached to a
server. Types of storage-area networks include converged,
virtual and unified SANs.
8. System-Area Network (also known as SAN)
This term is fairly new within the past two decades. It is
used to explain a relatively local network that is designed to
provide high-speed connection in server-to-server
applications (cluster environments), storage area networks
(called “SANs” as well) and processor-to-processor
applications. The computers connected on a SAN operate
as a single system at very high speeds.
9. Passive Optical Local Area Network (POLAN)
As an alternative to traditional switch-based Ethernet
LANs, POLAN technology can be integrated into structured
cabling to overcome concerns about supporting traditional
Ethernet protocols and network applications such as PoE
(Power over Ethernet). A point-to-multipoint LAN
architecture, POLAN uses optical splitters to split an optical
signal from one strand of single mode optical fiber into
multiple signals to serve users and devices.
10. Enterprise Private Network (EPN) These types of
networks are built and owned by businesses that wants to
securely connect its various locations to share computer
resources.
11. Virtual Private Network (VPN)
By extending a private network across the Internet, a VPN
lets its users send and receive data as if their devices were
connected to the private network – even if they’re not.
Through a virtual point-to-point connection, users can
access a private network remotely.
Network Security for E-commerce Systems
Network security – refers to the security of operating
systems and servers.  Hackers can gain portions of control
over the operating systems or servers by exploring flaws in
operating system and server software.  Software vendors
usually respond to security holes quickly in patches.
Firewall
Firewall software restricts access by network protocols and
IP addresses.  For Web applications, the typical firewall
configuration is to place public Web server outside the
firewall and rest of servers (such as database, email server,
FTP and etc.)  inside the firewall, and configure the firewall
to allow only HTTP access for incoming requests.
Virtual Private Network (VPN)
For geographically dispersed organizations who do not
want to use expensive private networks, they can use
encryption technology and software to create a Virtual
Private Network (VPN).  Network traffic is encrypted while
traveling through the Internet.
Private Network
The physical network that carries network traffic is not part
of the Internet.  This option offers additional security with
extra cost.
Internet Network Architecture
In the field of computer networking there are different
types of technologies that are used for the sake of
information which is used for the sake of the benefit of the
humanity.  One of these technologies is the internet
technology.  It is that type of technology that is required to
search any kind of information at any place.  Internet
technology operates with the help of networks such as
wired networks and wireless networks.  But if one
compares the wired technology with the wireless
technology, then wired internet technology has more
reliable and the faster networking as compared to wireless
internet technology.
The process of route parts of the computer hardware in
computer networking is called as computer architecture. 
But when those architectural techniques are used in the
field of internet networking technology, it is referred as
internet network architecture.  It is defined as the
arrangement of different types of parts of computer or the
network hardware to configure or setup the internet
technology is known as internet network architecture. 
Different types of devices or the hardware is required to
set-up the internet network architecture.  It can operate
with the both networks such as wired or either wirelessly.
There are lots of components that are involved in
maintaining the architecture of the internet technology. 
Some important parts that are used to configure the
networking of the internet technology are as follows:
Satellite
A major part of the internet network architecture is the
satellite.  Satellite plays a vital role in catching and
distributing the signals over the network and the users use
the internet network to search different types of
information at any time.
Network Adapters
There are different types of network adapters that are used
to configure or setup the internet technology on one’s
operating system.  First install the network adapters in the
system then install its software for the sake of its proper
working or compatibility.  Some common network
adapters that are used for access of the internet are LAN
cards or modems etc.
Routers
As this technology also operates wirelessly so some
components that are used to configure the internet
network technology wireless router plays an important
role and it is also the main part of the architecture.  It is
defined as the device that is used to transmit data from one
place to another in the form of packets that are called as
data packets is known as router.  These data packets are
also called data gram.
Access Points (AP)
A special type of routing device that is used to transmit
the data between wired and wireless networking device is
called as AP.  It is often connected with the help of wired
devices such as Ethernet.  It only transmits or transfers the
data between wireless internet technology and wired
internet network technology by using infra-structure mode
of network.  One access point can only support a small
group of networks and works more efficiently.  It is
operated less than hundred feet.
Clients
Any kind of device such as personal computers, note
books, or any kind of mobile devices which are inter linked
with wireless network area referred as a client of internet
network architecture.
Bridges
A special type of connectors which is used to establish
connections between wired network devices such a
wireless LAN.  It is called as bridge.  It acts as a point of
control in internet network architecture.
Two components are also some time play as important role
in internet network architecture:
1. Basic Service Set (BSS)
2. Extended Service Set (ESS)
 
ROUTERS
A router is a computer networking device that forwards
data packets toward their destinations through a process
known as routing.  Routing occurs at layer 3 of the OSI
seven-layer model.  Routing is most commonly associated
with the Internet Protocol, although other less-popular
routed protocols remain in use.  In the original 1960-era of
routing, general-purpose computers served as routers.  addresses the routing of packets among different
Although general-purpose computers can perform routing
modern high-speed routers are highly specialized
computers, generally with extra hardware added to
accelerate both common routing functions such as packet
forwarding and specialized functions such as IPsec
encryption.  Other changes also improve reliability, such as
using battery rather than mains power, and using solid-
state rather than magnetic storage.  Modern routers have
thus come to resemble telephone switches, whose
technology they are currently converging with and may
eventually replace.  The first modern (dedicated,
standalone) routers were the Fuzzball routers.
Functionality of Router
A router must be connected to at least two networks, or it
will have nothing to rout.  A special variety of router is the
on-armed router used to route packets in a virtual LAN
environment.  In the case of a one-armed router the
multiple attachments to different networks are all over the
same physical link.  A router which connects end-users to
the internet is called Edge Router.  A router which serves to
transmit between other routers is called Core Router.  A
router creates and/or maintains a table, called a “routing
table” that stores the best routes to certain network
destinations and the “routing metrics” associated with
those routes.  In recent times many routing functions have
been added to LAN switches, creating “Layer 2/3 Switches”
which route traffic at near wire speed.  Routers are also
now being implemented as Internet gateways, primarily for
small networks like those used in homes and small offices.  •
This application is mainly where the internet connection is
an always on broadband connection like cable modern or
DSL.  These are not “routers” in the true sense, but the
terminology has been confused with network address
translation.
AUTONOMOUS SYSTEMS
In autonomous system (AS) is a network or a collection of
networks that are all managed and supervised by a single
entity or organization.  An AS is a heterogeneous network
typically governed by a large enterprise.  An AS has many
different sub networks with combined routing logic and
common routing policies. Each sub network is assigned a
globally unique 16-digit identification number (known as
the AS number or ASN) by the Internet Assigned Numbers
Authority (IANA).
Autonomous systems were introduced to regulate
organizations such as Internet service providers (ISP),
educational institutions and government bodies.  These
systems are made up of many different networks but are
operated under the umbrella of a single entity for easy
management.  Large enterprises tend to have large network
infrastructures with many smaller networks, dispersed
geographically but connected using a similar operating
environment.
Border Gateway Protocol (BGP) is the protocol that
autonomous systems to connect them.  BGP uses the ASN
to uniquely identify each system.  This is particularly
important when routing and managing routing tables for
external networks or autonomous systems around their
borders.
Autonomous System Numbers
Autonomous System Numbers (ASNs) are globally unique
numbers that are used to identify autonomous systems
(ASes) and which enable an AS to exchange exterior routing
information between neighbouring ASes.  An AS is
connected group of IP networks that adhere to a single and
clearly defined routing policy.
To identify each autonomous system, a ‘globally unique’
number is assigned to them from a centralized authority so
that there are no duplicate numbers.  Globally Unique
means exactly that.  Within the entire internet all around
the globe, the AS number should be unique.
LESSON 4: INTERNET MARKETING
Being Digital
What does it mean?
Something is digital when all of its properties and
information are stored as a string of zeros and
ones
• Each zero and each one is called a bit
– A bit is a single piece of information
– “A bit has no color, size, or weight, and it
can travel at the speed of light.” Nicholas
Negroponte - MIT Media Lab
Being Digital
Digital Benefits for Marketing
• Three factors make the translation from atoms to
bits very powerful
– Moore’s law
– The ability to create digital environments
– Convergence
 • Let’s take a closer look at each factor
To Understand How Moore’s Law Plays Out, Let’s Take A
Look At Some Recent Headlines
Moore’s Law
Each new generation of chips (released about every 18
months) packs 2x components into the same surface area
to create 2x power
HEADLINE
Name of Publication – Date
Insert excerpts from a current article out of the business
press (e.g. Wall Street Journal, Wired News, Business 2.0, or
Fast Company) that talks about increasing miniaturization. I
usually take excerpts out of the lead paragraph, and
highlight keywords. I’ve found articles in the business press
on semiconductor innovation at major US research
universities, for example, that nicely illustrate Moore’s law.
Moore’s Law Makes it Cheap to Substitute Marketing Bits
for Marketing Atoms
 Sales Calls
 Energy
 Newsprint
 Time
Digital Environments Are Participatory
• Digital environments encourage participation
• Users input requests and other information
• Software systems
– retrieve relevant information
– enable customized responses and
experiences
Digital Environments Are Spatial
• Digital technologies enable the creation of virtual
spaces
• Current connection speeds and bandwidth limit
widespread use of virtual spaces for marketing
purposes
• Spatial elements are being used to provide
familiarity and comfort to users
Digital Environments Are Encyclopedic
• Digital information can be stored cheaply
• So, it’s possible to archive huge amounts of
information and make it available
– movie databases
– online technical help & solutions
Digital Convergence

Where do the savings come from?  Interactive MultimediaExperience

Opportunities forSaving o Content
o Computing
 Software Distribution o Communications
 Corporate Intranets
 Online Customer Support Convergence
 Net Surveys Adds Flexibility
 User Manuals
 Internet capabilities augment traditional power of
mass market media
 DTV means that Net marketing will grow
dramatically

Digital Environments
Digital Technologies Fundamentally Change Everything
• Digital environments are
– procedural Marketing ProcessesThat Can Be Digitized
– participatory
– spatial  Understand Markets & Customers
– encyclopedic  Involve Customers in Design Process
• Each of these properties creates opportunities for  Market & Sell Products & Services
marketers  Deliver Value Through Distribution
 Provide Customer Care
Digital Environments Are Procedural  Manage Customer Information
• Computers are logic engines - they follow rules
• However, well-programmed computers can create PART2
wonderful illusions of intelligence, spontaneity,
and attention to detail THE GLOBAL MATRIX
• For example: digital actors can create the illusion
 The web is truly worldwide
of social interaction
 Firms and governments around the globe are
– Imagine digital actors as hosts on a Wal-
devoting huge sums of money to make the
Mart Web site
promise of the Web come true
– Digital actors can make the online site
 Malaysia, for example
feel “more like Wal-Mart
 - Celebrity endorsements, media stories,
MARKETING WITH NETWORKS and general “buzz” create an aura of
success.
 Networks are a social technology
 A network of users and resources creates a new Sharing
activities and powerful capabilities for marketers
 Low connections costs lead to sharing
 For Internet marketers, networks imply
 Shared resources enable companies to launch a
- Ubiquity
Net presence more easily and cost-effectively
- Expectations
- Sharing Specialization
- Specialization
- Virtual value activities  The Internet makes it easier to bring resources
together from a wide range of alliance partners
Ubiquity  Each alliance partner specializes in providing
Metcalfe’s Law particular content
The value of a networks starts to grow at a rate that is the  Visit any portal or search engine
square of the size of the network - Yahoo!
- Excite
 To understand How Metcalfe’s Law Plays out, lets - Alta Vista
take a look at some recent headlines. - Lycos
- AOL
HEADLINE
Name of Publication – Date Virtual Value Activities
Insert excerpts from a current article out of the business  A VVA takes Information as an input and outputs
press (e.g Wall Street Journal, Wired News, Business 2.0, or new kinds of info that helps customers
Fast Company) that talks about the increasing number of - Solve problems
people online. I usually take excerpts out of the lead - Makes better decisions
paragraph, and highlight keywords. I’ve found articles on - Entertain themselves
the surging Net population in China, for example, that
nicely illustrate Metcalfe’s law. The Five Virtual Value Activities

 Selecting
Ubiquity  Synthesizing
Metcalfe’s Law  Enabled by AI technologies that build up profiles of
users (implicit) and allow a user to input
The more people on line, the bigger the e-commerce preferences (explicit)
opportunity.  Selects the most relevant info (to a given user) and
makes it the most obvious
- My Yahoo!
Ubiquity
- Preferred customer pages
Opt-In, Opt-Out, Spam

 Spam is a drawback to ubiquity

 Net Marketers must choose what terms the offers Why The Net Works
user
No restrictions: the company has unrestricted  It’s reliable and efficient
use of the information it gathers on visitors to  Multiple connections
its site - There are a number of ways to connect to
- Opt – out: users can choose not to receive any each node on the network
solicitation - Even if multiple links aren’t working, a
- Opt – in: users can give permission to receive message can still get through
relevant solicitations  Packet switching
- No sharing: the company cannot use or sell - Messages are broken up into pieces called
use information packets
- This allow many users to simultaneously
Expectations share network resources
 Open technology standards enable the Internet to
 Publicity and Celebrity
grow (scale)
- Hype plays a large part of any Net
marketing campaign  Open standards
 Kim Polese, Marimba - software protocols and operations are
 Jeff Bezos, Amazon readily available
- they are documented widely
- they aren’t controlled by any one firm
 The economic logic of hype
  Scalability refers to the ability to add locations, - New Products Teams
paths, capabilities, and resources to the Net - Training
without having to reengineer the whole thing - Research and Data Sources
- Employee Activities
When The Net Stumbles
Wide Range of Internet Content
 Outages on the Net are quite rare
 Congestion and delay is more common Contrasting Internal and External Network Roles
 Access lags are caused by limited transmission
capacity from the user to the Internet Difference An Intranet An Internet
- Faster connections will enable marketers
to utilize and send richer content
Managerial Propriety info Public info
 Transmission lags are caused by limited Control Decentralized Centralized
transmissions capacity from the user’s ISP to the
server’s ISP
 Server lags refer to the time that a server takes to Communication Employee Customer
recognize and fulfill a user’s request Goal

Networks Inside Companies Orientation Process Sales/ marketing

 Internet marketing uses Net technologies to reach Development Implementation
out to customers Collaboration Transactions
 Many companies divide their Net activities into
three categories Desired Creates a Customer/ sales
- The public Internet, managed by the Transformation learning cycle
marketing department organization Create customer
- The extranet, connects the company with loyalty
it’s major suppliers
- The Intranet, available only to the
company’s employees
Lesson 5: Web Business Models 
How Companies Organize Net Activities
 LEARNING CONTENT
 PUBLIC INTERNET (Marketing Department)
 Visible to the public Managed by marketing Introduction:
- Financial Data Many companies are embracing “e-commerce.” Or
- Government Records business conducted on-line over computer networks, as a
- Universities means of expanding markets, improving customer service,
- Current and Potential Customers reducing costs, and enhancing productivity.  Companies
- Competitors have traditionally used computers to manage their product
- Research Community and customer data.  Now, however, advances in networking
- Media technology have enabled firms to streamline their
transactions with suppliers, distributors, and retailers
 EXTRANET (Marketing and Logistics) through the electronic exchange of information.
 Visible to suppliers and B-to-B customers
 Supply chain management
 Managed by marketing and logistics Lesson Proper:
- User Advocates/ Groups
- Beta Users
E-commerce Business Models—Definitions
- Alliance Partners
 Business model: set of planned activities designed
- Supplies Partners
to result in a profit in a marketplace
- Distribution Partners
 Business plan: document that describes a
- Research and Data Sources
firm’s business model
- Procurement
 E-commerce business model: aims to use and
leverage the unique qualities of Internet and Web
 INTRANET (Human Resources and
Communications)
KEY INGERDIENTS OF BUSINESS MODEL
 Internal to a company
COcCOMPONENTS KEY QUESTIONS
 Available only to employees
Value Proposition Why should the customer buy
 Often managed by HR
from you?
- Executive Vision
Revenue Model How will you earn money?
- Benefits
Market What market place do you
- Travel
Opportunity intend to serve, and what is its
 size?
Competitive Who else occupies your
Environment intended marketplace?
Competitive What special advantages does
Advantage your firm bring to the
marketplace?
Marketing How do you plan to promote
Strategy your products or services to
attract your target audience?
Organizational What type of organizational
Development structures within the firm are
necessary to carry out the
business plan?
Management What kind of experiences and 2. Subscription Revenue Model
Team background are important for - Web site that offers users content or services
the company’s leaders to charges a subscription fee for access to some or all
have? of its offerings
Examples:
o Consumer Reports Online
o Yahoo! Platinum
Value Proposition 
Defines how a company’s product or service fulfils the
needs of customers

Questions to ask:
 Why will customers choose to do business with
your firm instead of another?
 What will your firm provide that others do not or
cannot?

Examples of successful value propositions:

 Personalization/customization
 Reduction of product search costs
 Reduction of price discover costs
 Facilitation of transactions by managing product
delivery
3. Transaction Fee Revenue Model
Revenue Model - Company that receives a fee (commission) for
Describes how the firm will earn revenue, generate profits, enabling or executing a transaction.
and produce a superior return on invested capital 1. In auction sites when a seller is successful in
auctioning off a product site receives transaction
Major types: fee
1. Advertising revenue model 2. Online stock broker receives fees each time it
2. Subscription revenue model executes a transaction on behalf of customers
3. Transaction fee revenue model Examples:
4. Sales revenue model o eBay.com
5. Affiliate revenue model o E-Trade.com
o Visa
1. Advertising Revenue Model o Schwab 
- Web site that offers content, services and/or
products also provides a forum for 4. Sales Revenue Model
advertisements and receives fees from - Company derives revenue by selling goods,
advertisers. information, or services to customers
- Common model used for high traffic Web sites. Examples:
- It includes selling banner ads, classified ads, o Amazon.com
sponsor ads, pop-up ads, etc. Revenue at Yahoo, o LLBeancom
Web crawler, and Geocities is generated this way. o Gap.com 

5. Affiliate Revenue Model

 - Sites that steer business to an “affiliate” receive a - Achieved when a firm can produce a superior product
referral fee or percentage of the revenue from any and/or bring product to market at a lower price than
resulting sales most, or all, of competitors
Examples: - Firms achieve competitive advantage when they are
o MyPoints.com able to obtain differential access to the factors of
production that are denied to competitors
o Google
FIVE PRIMARY REVENUE MODELS Types of competitive advantage include:
o First mover advantage—results from a firm being
REVENUE EXAMPLES REVENUE SOURCE first into a marketplace
MODEL o Unfair competitive advantage—occurs when one
firm develops an advantage based on a factor that
Advertising Yahoo.com Fees from advertisers other firms cannot purchase
in exchange for
advertisements  Market Strategy
- A plan that details how a company intends to enter a
Subscription WSI.com, Fees from new market and attract customers
Consumerreports.org, subscribers in - Best business concepts will fail if not properly
exchange for access marketed to potential customers
Sportsline.com to content or services Organizational Development
- Describes how the company will organize the work
Transaction eBay.com. E- Fess (commissions) that needs to be accomplished
Fee Trade.com for enabling or - Work is typically divided into functional
executing a departments
transaction. - Move from generalists to specialists as the
company grows
Sales Amazon.com, Sales of goods,
LLBean.com, information, or  Management Team
Gap.com, Sears.com, services. - Employees of the company responsible for making
JCpPenny.com the business model work
- Strong management team gives instant credibility
Affiliate MyPoints.com Fees for business to outside investors
referrals. - A strong management team may not be able to
salvage a weak business model, but should be able
to change the model and redefine the business as
it becomes necessary
 Market Opportunity
Categorizing E-commerce Business Models: Some
- Refers to a company’s intended market space and the
Difficulties
overall potential financial opportunities available to
- No one correct way
the firm in that market space
- We categorize business models according to e-
- Market space: the area of actual or potential
commerce sector (B2C, B2B, C2C)
commercial value in which a company intends to
- Type of e-commerce technology used can also
operate
affect classification of a business model
- Realistic market opportunity: is defined by revenue
Some companies use multiple business models
potential in each of market niches in which company
hopes to compete  B2C Business Models
Competitive Environment
- Refers to the other companies selling similar products
and operating in the same marketspace.
Influenced by:
o how many competitors are active
o how large their operations are
o what is the market share for each competitor
o how profitable these firms are
o how they price their products
 Includes both direct competitors and indirect
competitors
 Competitive Advantage  B2C Business Models: Portal
- Offers powerful search tools plus an integrated
package of content and services
 B2B BUSINESS MODELS

BUSINESS EXAMPLES DESCRIPTION REVENUE

MODEL MODEL - Typically utilizes a combines
subscription/advertising revenues/transaction fee
(1) NET MARKET PLACES model
- May be general or specialized (vortal)

E- Grainger.com Single-firm Sales of goods  B2C Business Models: E-tailer

distributor online versions - Online version of traditional retailer
FindMRO.com of retail and Types include:
Staples.com wholesale o Virtual merchants
stores; supply o Bricks-and-cricks
maintenance, o Catalog merchants
repair, o Manufacturer-direct
operation
goods; indirect
inputs.  B2C Business Models: Content Provider
Information and entertainment companies that provide
E- Ariba.com Single firms Fees for market digital content over the Web
procureme creating digital making Typically utilizes a subscription, pay for download, or
nt CommerceOn markets where services, supply advertising revenue model
e.com thousands of chain Syndication a variation of standard content provider model
Siernens sellers and management,
buyers transact and fulfillment B2C Business Models: Transaction Broker
for indirect services. - Processes online transactions for consumers
inputs. - Primary value proposition—saving of time and
money
- Typical revenue model—transaction fee
Exchanges Exchange.eSte Independently Fees and Industries using this model include:
el.com owned digital commissions on o Financial services
marketplaces for transaction. o Travel services
IMX.com direct inputs. o Job placement services
GEPolymerlan Vertical industry
d.com orientation.  B2C Business Models: Market Creator
- Uses Internet technology to create markets that
bring buyers and sellers together
Industry Covisint.com Industry-owned Fees and
Examples:
Consortia vertical digital commissions on
Sciquest.com o Priceline.com
markets open to transaction
o Ebay.com
Pasticsnet.co select suppliers.
- Typically uses a transaction fee revenue model
m
 B2C Business Models: Service Provider
- Offers services online
- Value proposition: valuable, convenient, time-
(2) PRIVATE INDUSTRIAL NETWORKS saving, low-cost alternatives to traditional service
providers
- Revenue models: subscription fees or one-time
Single- Wal-Mart Company- Cost absorbed
payment
firm owned networks by network
networks Proctor & to coordinate owner and  B2C Business Models: Community Provider
Gamble supply chains recovered - Sites that create a digital online environment
DaimlerChrysl with a limited through where people with similar interests can transact,
er set of partners. production and communicate, and receive interest-related
distribution information.
Ford Motor efficiencies. - Typically rely on a hybrid revenue model
Co. Examples:
o IVillage.com
Industry- Nistevo Inc. Industry- owned Contributions o Friendster.com
wide networks to set from industry o About.com
networks Globalnetexch standards, member firms
ange.com coordinate and recovered
DCCnet.org supply and through
logistics for the production and  B2B Business Models: E-distributor
Worldwiderret industry. distribution - Company that supplies products and services
ailexchange.or efficiencies; directly to individual businesses
g fees for
transactions
and services.
 - Owned by one company seeking to serve many
customers
Example:
o Grainger.com

B2B Business Models: E-procurement Companies

- Create and sell access to digital electronic markets
- B2B service provider is one type: offer purchasing
firms sophisticated set of sourcing and supply
chain management tools
- Application service providers: a subset of B2B
service providers
Example:
o Ariba

 B2B Business Models: Exchanges

- An electronic digital marketplace where suppliers
and commercial purchasers can conduct
transactions
- Usually owned by independent firms whose
business is making a market
- Generate revenue by charging transaction fees
- Usually serve a single vertical industry
- Number of exchanges has fallen to around 200 in
2005 
END of LESSON 5 
ASSIGNMENT
 Read about Pricing in an Online World

NOTE: PRELIM EXAM LESSON 1-5

 
 B2C BUSINESS MODELS

BUSINESS VARIATIONS EXAMPLES DESCRIPTION REVENUE MODEL

MODEL
Portal Horizontal Yahoo.com Offers an integrated package of Advertising, subscription
General AOL.com content services and content- fees, transaction fees
MNS.com search, news, e-mail, chat, music
downloads, video streaming,
calendars, etc. Seeks- to be a
user’s home base.
Vertical/ Salinet.com Offers services and products to Same
Specialized specialized market space
(Vortal)
E-tailer Virtual Amazon.com Online version of retail store, Sales of goods
Merchant where customrs can shop at any
hour of the day or night without
leaving their home or office.
Clicks and Bricks Wal-Mart.com Online distribution channel for a Same
Sears .com company that also has physical
stores
Catalog LandsEnd.com Online version for a direct mail Same
Merchant LLBean.com catalog

Manufacturer Dell.com Sales of goods

direct Compaq,com
Content WSJ.com Information and entertainment Advertising, subscription
Provider Sportsline.com providers like newspapers, sport fees, affiliate referral
CNN.com sites, and other inline sources fees.
Rhapsody.com that offer customers up-to- date
ESPN.com news and special interest how-to
guidance and tips and/or
information sales.
Transaction E-trade.com Processors of online sales Transaction fees
Broker Expedia.com transactions, such as stock
Monsters.com brokers and travel agents, that
Travelocity.com increase customer’s productivity
Hotels.com by helping them get things done
Orbitz.com faster and more cheaply.
Market Auctions Ebay.com Well-based businesses that use Transaction fees
Creator Priceline.com internet technology to create
Amazon.com markets that bring buyers and
sellers together.
Service Mybconsulting.co Companies that make money by Sales of services
Provider m selling users a service, rather than
Lainfo.com a product
xDrive
myCFO.com
Community About.com Sites where individuals with Advertising, subscription,
Provider IVillage.com particular interests, hobbies, and affiliate referral fees
NetNoir.com common experiences can come
Oxygen.com together and compare notes.
Epinions.com
Lesson 6
LEARNING CONTENT
Introduction:
As a businessman, the most exciting and complex
exercises that you will take is pricing your products
and services online. You have to utilize an effective
online pricing strategy so that consumers will
The Unique Value Effect
purchase your brand and products.  This requires both
a test-and-learn mentality paired with an intuitive feel
for how you would like your brand and products to be
perceived.  In an online marketplace, the price of a
product can captivate the interest of a customer or
make them exit to another website.  Whether you are
a B2B e-commerce site or a B2C online store, a pricing
strategy is an effective driver of growing profits and
influencing inventory turnover (Parekh, 2020).
Lesson Proper:
The Substitute Awareness Effect
THE POWER OF PRICING
Drucker’s Pricing Sins
1. The Worship of Premium Pricing – companies
try too hard to hold onto high profit margins
with small sales
2. Skim Pricing of New Products – companies
serve the most desirable segment first and
forget to adapt to the main stream
3. Cost-Driven Pricing – Cost is internal to the
firm, but value is the only thing the customer
cares about
 Common perception is that the Net will
always raise consumer price sensitivity
o This will be true for many companies
 But, some companies will be able to get
higher prices
 So, we need to understand why the Internet
brings about changes in price sensitivity
 The most important determinant of price
sensitivity
 Unique features and benefits lower price
sensitivity and raise willingness to pay
 To prove uniqueness
o Provide hard facts, solid testimonials,
and hands-on trial use
 The Internet is effective at doing this
 Connects price sensitivity with the presence
and awareness of alternatives
o Price elasticity depends on whether
there are alternatives available in the
marketplace
 The Net enables instantaneous side-by-side
price comparisons of available alternatives
o Increasing information may lead to
less willingness to pay
 This may be the Net’s biggest impact

Total Expenditure Effect

The High Leverage of Proper Pricing
 Proper pricing must reflect
brought about by the Internet
 Consumers are more price sensitive when
changes
shopping for items that comprise a larger
percentage of their budget
 They naturally pay more attention to shopping
for the best price
o Examples include cars & healthcare

Shared Cost Effect

 Price sensitivity decreases if the person

Figure 1 Pricing is Tightly Linked to Profitability
PRICE SENSITIVITY & THE NET
Price Sensitivity and Online Information
choosing the product isn’t the person
paying for the product
o Example: Business travelers are less
price sensitive because their
employers are footing the bill
 Companies have to decide whether they’re
targeting their sites at the decider or the
payer
 If the target is the payer, emphasize cost
effectiveness
Price-Quality Effect Real-Time Pricing Alternatives

 Well-known brands with high quality  Auctions

reputation can charge higher prices because  Rental Markets
price sensitivity is lessened  Yield Management
o Example – Charles Schwab vs.
Auctions as Real-Time Pricing
Ameritrade
 Unknown online low-price outlets need to  Auctions work well on the Internet
build confidence and trust if they want o In-depth information is available to
customers to respond to low price bidders
o One solution is to partner with trusted o Confused bidders can call or e-mail for
and well-known firms more info
 While well-known firms may eventually have o Participants can join in from
to lower their prices to match the anywhere on the planet
competition, the price-quality effect delays  Online auction sites improve the power and
the need for this response efficiency of auctions
Inventory Effect o The Internet makes it easier to gather
buyers and sellers together in the
 Price elasticity is much higher on items that same place at the same time
are nonperishable and can be stored easily o The Internet enables sellers to
o Example: A discount on books may provide in-depth information, so
prompt purchase even though the buyers can evaluate the item being
consumer may not read the book for sold
several months o The Internet expands the number of
 It’s harder to stimulate demand by lowering bidders, which raises the price paid
the prices of perishable items and the profitability of the auction
o There has to be a closer match
Online Auction Types
between time of purchase and
consumption  English Auction
o An auctioneer calls out bids until no
REAL-TIME PRICING
one is willing to top the last bid
 Why Simple Pricing Approaches Fail o The high bidder gets the item
o Examples: FirstAuction.com,
 Setting prices is difficult if
Onsale.com and E-bay.com
o Companies don’t know their demand
 Dutch Auction
curves
o The price starts high and falls at
o Different customers pay different
regular time intervals
prices for the product or service
o The first customer willing to bid gets
o Customers buy multiple products that
as many of the items as he/she wants
are linked to each other
at that price
 Under rapidly changing conditions
o Remaining items continue to have
o It’s impossible for companies to
their prices cut
calculate demand curves accurately,
so they can’t figure out price elasticity
 Instead of setting prices themselves, many
companies are using real-time pricing
o The power of the Internet to provide
real-time information to the
marketplace makes real-time pricing
possible
Online Rental Markets  Bundling Works Well When the Bundle is Viewed
More Similarly than Individual Items
 The rental market serves customers’
immediate needs
 More efficient because the buyer pays a fee
for each use rather than paying a large lump
sum for unlimited use
o Example – software rentals
 Barriers to further online adoption include
credibility and the lack of willingness of sellers
to use micro-transactions 

 Yield Management

 Yield management is the matching of price

and available capacity

Requirements for successful yield management:

 Fixed and perishable capacity – the good must

lose 100% of its value at a specific point in
time. In addition, the industry should face
high fixed costs so the cost of an additional
customer is relatively low
 Customer base with identifiable segments –
give price sensitive customers a break without
causing a loss of customers willing to pay full
price
 Demand uncertainty + information technology
– tracking is necessary to ensure proper yield
management (made easier by using company
web sites)

Bundling

 Bundling works particularly well online

 Bundling is the combination of products into
larger packages
o A single fee gives users access to
entire product offering
 Example: AOL

Bundling Guidelines

 Margin Spread Bundling

o Bundle items that have a high
contribution margin ratio
o Creates incentive for increasing
volume
 Aggregation Bundling
o Target the bundle toward the average
customer
o Increases customer demand for the
bundled good
QUIZZES
QUIZ 1
1. What type of virus that can replicate and spread itself –
Worms
2. The national science foundation (nsf) connected its
huge network of the five super computer centers,
called NSFnet, to ARPANET. This configuration of
complex networks and hosts became known as the
internet.-True
3. Which of the following is correct about wireless
moderns?-All of the above
4. Ana is mobile user. She connects easily to the internet
with her notebook computer, smart phones and other
mobile devices while away from a telephone, cable, or
other wired connection. What type of connection is she
using- Wi-Fi
5. The original ARPANET consisted of four main
computers. Which is not a location of one each of the
four main computers? New York University
6. Which is true about a domain name?-It is the text
version of an IP address
7. What is the correct evaluation of the following
statements?
a. A regional ISP usually provides internet access to a
specific geographic area.
b. A natioal ISP usually is a business that provides
internet access in cities and towns nationwide.
Both statements are true
8. Which of the following provides high-speed internet
connection using a dish- shaped antenna on house or
business to communicate with a tower location via
radio signals? Fixed wireless
9. NSFnet became functional in September 1969, linking
scientific and academic researchers across United
States. False
10. ARPANET oversees research and sets standards and
guidelines for many areas of the internet. False
11. Which is the following is correct about wireless
modern? usually are in the form of a USB flash drive or
a card that inserts in a slot in a computer or mobile
device
12. Which is the following is a correct description of an IP
address? An IP address, short for internet Protocols
address, is a number that uniquely identifies each
computer or device connected to the Internet.
13. Which of the following is a family of the technologies
that provide internet access by transmitting digital data
over the wires of a local telephone network? DSL
14. AOL, differs from many OSP’s in that it provides
gateway functionally to the internet, meaning it
regulates the internet services to which members have
access. True
15. Andrea keeps on sending unwanted e-mails to Johnny
which makes it slower to access his e-mails accounts.
What is this scenario refers to? Spamming
QUIZ 2
1. _____ is a special type of browser used in smart phones.
Mobile browser
2. _____ is the universe of network accessible information.
World Wide Web
3. _____ interprets and runs all scripts. Web browsers.
4. Websites depend on computer programs to deliver the
required information to visitors. False
5. Most web application are custom- made and involve
custom applications which are not developed with security
practices and which do not undergo regular security audits.
True
6. The terminology of the W3 was closely related to Text
7. Firewalls and SSL provide no protection against web
application web application backing. True
8. Web pages may also run client-side scrips that change the
internet browser into an interface for such application as
web mail and interactive mapping software like Yahoo,
Mail, and Google Maps. True
9. The World Wide Web (W3) is the universe of network
accessible information, an embodiment of human
intelligence. World Wide Web
10. ______ are computer programs allowing website visitors to
submit receive data to/from a database over the internet
using their preferred web browser. Web applications
11. Safari is an example of a Web browser. True
12. _____ is application software that allows users to access
and view Web pages or access Web 2.0 programs. Web
browsers
13. _____ user a Unicode
14. The basic element that a user created or read was called a
page. True
15. _____ is process of a computer or device receiving
information such as Web page, from a server on the
internet. Downloading
16. Special index documents have been created in the WWW
information space and these can be searched for given
keyword(s). The result is a new document which contains
links to documents selected from the index. True
17. ____ is a build in connection to another related Web page
or part of Web page. A link short for hyperlink/ Electronic
mails/ emails
18. The page contained test that the user saw and information
that told the website how to make the page look. False
19. _____ uses hypertext and multimedia techniques to make
the web easy for anyone to roam browse, and contribute
to. W3
20. Hom page is many Websites can be personalized so that it
contains areas of interest to us. True
QUIZ 3
1. E-commerce is the trade of products and services by
means of the Internet or other computer networks is a
definition given by what perspective?Online Services and E- 10. E-commerceis an emerging concept that describes the
Commerce process of buying and selling or exchanging of products,
services, and information via computer networks including
2. Telecommunicationis a communication at a distance by the internet.
technological means, particularly through electrical signals
or electromagnetic waves.
3. E-commerce is the delivery of information, QUIZ
products/service, or payments over the telephone lines,
computer networks or any other electronic means is a 1. Just-in-time inventory procedures enable
definition given by what perspective? Communication companies to carry optimal levels of inventory that
save space and energy ___
4. MATCHING TYPE
2. Westinghouse developed an energy-efficient
Geometric graph network topology
refrigerator in 1994 that was more efficient than the
route packets On-armed router
Assembling parts of Computer architecture U.S. Department of Energy Standards ___
computer networks
Energy Star
Regulate organizations Autonomous systems
Smaller than WANs Metropolitan Area 3. _____ Energy Star labels for electronics and
Network appliances that are environmentally friendly are an
Collection of computers Network
example of what kind of labelling? Eco-labelling
First modem Fuzzball routers
Clients Internet Network 4. Green marketing can have an influence on climate
Architecture change in several substantial ways
Common network modems
adaptors Environmental benefits
Data pocket router
5. The ability to trace components throughout the
5. Data Interchangeis a document standard which when distribution process is not limited to food as the
implemented acts as common interface between two or automotive and computing industries have also
more computer applications in terms of understanding the adopted forms of traceability __ Green Marketing
document transmitted.
6. Companies that incorporate consciousness inter
6. Electronic Data Interchange provides a development tool their mission statements and strategy enhance their
for defining format of data interchange in a wide variety of images among consumers and the general public ___
business communities. Strategic Benefits
7. MATCHING TYPE 7. Terrapass enables consumers to purchase carbon
Geometric graph mesh
offset for their auto, air, or home emissions ___
Route packets The same physical link Environmental Benefits
Assembling parts of bridges
8. Issues involved in high dependence on the
computer networks
Regulate organizations Educational institutions agricultural sector __ Developing Economies
Smaller than WANs Spans an entire geographic 9. Pertains to the interaction with customers,
area
suppliers, consumers, and other interest groups __
Collection of computers Internet
First modem Dedicated Social Performance
Clients Note books
10. Fetzer has a companywide waste reduction
Common network Access of the internet
program that involves recycling of bottles, cardboards,
adapters
Data packet Data gram plastics, aluminum paper waste, oil, and glass. Fetzer
took an aggressive approach when it set a goal of zero
8. Video Conferencing facilitiesoffered t hrough the internet Manufacturer
helps organization to hold meetings, conferences with
participants from multiple remote locations.

9. It is a new methodology of doing business in three focal

areas _____, _______ & _______