MUNI

UNIVERSITY
Transforming Lives

FOUNDATIONS OF INFORMATION SYSTEMS

The Internet & WWW
 Objectives
At the end of the Chapter, the student should be able to:
• Define Internet.
• Explain the key technology concepts behind the Internet.
• Describe the current structure of the Internet.
• Examine the services provided by the Internet.
• Elucidate the concept of E-Business.
• Define E-Commerce.
• State the unique features of E-Commerce technology.

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• Describe the evolution of E-Commerce from its early years
to today.
• Examine the factors that define the future of E-Commerce.
• Explain the major themes underlying the study of E-
Commerce.
• Write short notes on the different types of E-Commerce.
• Outline the benefits and challenges of E-Commerce.
• Differentiate between Intranet and Extranet.
• Describe the concept of E-Government.
• Explain what is meant by World Wide Web (WWW).
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 Internet
• Internet refers to a vast Network of Networked Computers
that connects millions of people all over the world.
• It is generally known as the Network of Networks.
• Internet is an interconnected Network of thousands of
Networks and millions of computers (sometimes called Host
Computers or just Hosts) linking Businesses, Educational
Institutions, Government Agencies, and Individuals.

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• The Internet provides approximately 2.56 billion people
around the world (including about 243 million people in the
United States) with services such as E-mail, Apps,
Newsgroups, Shopping, Research, Instant Messaging, Music,
Videos, and News (eMarketer, Inc., 2013a, 2013b).
• No single organization controls the Internet or how it
functions, nor is it owned by anybody, yet it has provided the
infrastructure for a transformation in Commerce, Scientific
Research, and Culture.
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• The word Internet is derived from the word internetwork, or
the connecting together of two or more Computer Networks.

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• The Web is one of the Internet’s most popular services,
providing access to billions, perhaps trillions, of Web pages,
which are documents created in a programming language
called HTML that can contain Text, Graphics, Audio, Video,
and other Objects, as well as “hyperlinks” that permit users
to jump easily from one page to another.
• Web Pages are navigated using Browser Software.

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Key Technology concepts behind the Internet

• The Internet’s three key technology components are:

 Packet Switching, which slices digital messages into packets,
routes the packets along different communication paths as
they become available, and then reassembles the packets
once they arrive at their destination.

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 TCP/IP, which is the core communications protocol for the
Internet.
• TCP establishes the connections among sending and
receiving Web computers and makes sure that packets sent
by one computer are received in the correct sequence by the
other, without any packets missing.
• IP provides the addressing scheme and is responsible for the
actual delivery of the packets.

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 Client/Server Technology, which makes it possible for large
amounts of information to be stored on Web Servers and
shared with individual users on their Client Computers
(which may be desktop PCs, Laptops, Netbooks, Tablets, or
Smartphones).

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 Current structure of the Internet
• The main structural elements of the Internet are:
 The backbone: This composed primarily of high-bandwidth
fiber-optic cable operated by a variety of providers.
 Internet Exchange Points (IXPs): These are hubs that use
high-speed switching computers to connect the backbone
with regional and local Networks.
 Campus Area Networks (CANs): These are Local Area
Networks operating within a single organization that connect
directly to regional Networks.
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 Internet Service Providers (ISPs): These deal with the “last
mile” of service to homes and offices.
• ISPs offer a variety of types of service, ranging from dial-up
service to broadband DSL, cable modem, T1 and T3 lines,
and satellite link service.
 Governing bodies, such as IAB, ICANN, IESG, IETF, ISOC, and
W3C.
• Although they do not control the Internet, they have
influence over it and monitor its operations.
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 Internet Services
• Internet Services include:
1. E-Commerce
2. E-Banking
3. E-Government
4. E-Learning
5. Telecommuting
6. Communication
 E-mail
 IM (Instant Messaging)
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 VoIP (Voice over Internet Protocol)
 Blog (Web Log)
7. Virtual Communities
 Social Networks
 Forum
 MMO (Massive Multiplayer Online)
 Chat Room

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 E-Business
• Systems and technologies are transforming firms’
relationships with Customers, Employees, Suppliers, and
Logistic Partners into digital relationships using Networks
and the Internet.
• Electronic Business or E-Business, refers to the use of digital
technology and the Internet to execute the major business
processes in the enterprise.

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• For the most part, in our view, E-Business does not include
commercial transactions involving an exchange of value
across organizational boundaries.
• For example, a company’s Online Inventory Control
Mechanisms are a component of E-Business, but such
internal processes do not directly generate revenue for the
firm from outside businesses or consumers, as E-Commerce.
• E-business includes activities for the internal management of
the firm and for coordination with suppliers and other
business partners.
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 E-Commerce
• E-Commerce is the process used to distribute, buy, sell or
market goods and services, and the transfer of funds online,
through electronic communications or Networks.
• Ecommerce a subset of e-business is the purchasing, selling,
and exchanging of goods and services over computer
Networks (such as the Internet) through which transactions
or terms of sale are performed electronically.
• E-Commerce is the use of the Internet, the Web, and apps to
transact business.
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• Electronic Commerce has led to the development of
electronic marketplaces where suppliers and potential
customers are brought together to conduct mutually
beneficial trade.
• E-Commerce or Electronics Commerce is a methodology of
modern business which addresses the need of business
organizations, vendors and customers to reduce cost and
improve the quality of goods and services while increasing
the speed of delivery.
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Unique Features of E-Commerce Technology

• There are Eight (8) features of E-Commerce technology that

are unique to this medium:

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 Ubiquity: Available just about everywhere, at all times,
making it possible to shop from your desktop, at home, at
work or even from your car.
 Global Reach: Permits commercial transactions to cross
cultural and national boundaries far more conveniently and
cost-effectively than is true in traditional commerce.

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 Universal Standards: Shared by all nations around the world,
in contrast to most traditional commerce technologies,
which differ from one nation to the next.
 Richness: Enables an online merchant to deliver marketing
messages in a way not possible with traditional commerce
technologies.

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 Interactivity: Allows for two-way communication between
merchant and consumer and enables the merchant to
engage a consumer in ways similar to a face-to-face
experience, but on a much more massive, global scale.
 Information Density: This is the total amount and quality of
information available to all market participants.
• The Internet reduces information collection, storage,
processing, and communication costs while increasing the
currency, accuracy, and timeliness of information.
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 Personalization & Customization: The increase in information
density allows merchants to target their marketing messages
to specific individuals and results in a level of Personalization
and Customization unthinkable with previously existing
commerce technologies.
 Social Technology: Provides a many-to-many model of mass
communications.
• Millions of users are able to generate content consumed by
millions of other users, therefore, the result is the formation
of social Networks on a wide scale and the aggregation of
large audiences on social Network platforms.
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 Evolution of E-Commerce
• E-Commerce has gone through three (3) stages:
o Innovation
o Consolidation
o Reinvention
 The early years of E-Commerce were a period of explosive
growth, beginning in 1995 with the first widespread use of
the web to advertise products and ending in 2000 with the
collapse in stock market valuations for dot-com ventures.

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• The early years of E-Commerce were a technological
success, with the digital infrastructure created during the
period solid enough to sustain significant growth in E-
Commerce during the next decade, and a mixed business
success, with significant revenue growth and customer
usage, but low profit margins.

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 E-Commerce entered a period of Consolidation beginning in
2001 and extending into 2006.
 E-Commerce entered a period of Reinvention in 2007 with
the emergence of the mobile digital platform, Social
Networks, and web 2.0 applications that attracted huge
audiences in a very short time span.

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Factors that define the future of E-Commerce

• Factors that will define the feature of E-Commerce include

the following:
 E-Commerce technology (Internet, Web, & Mobile Platform)
will continue to propagate through all commercial activity,
with overall revenues from E-Commerce and the number of
products and services sold all rising.

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 Traditional well-endowed and experienced fortune 500
companies will continue to play a dominant role.
 The number of successful purely online companies will
continue to decline, and most successful E-Commerce firms
will adopt an integrated, multi-channel bricks-and-clicks
strategy.
 Regulation of the Internet and E-Commerce by government
will grow both in the United states and Worldwide.

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Major themes underlying the study of E-Commerce

• E-Commerce involves three (3) broad interrelated themes:

 Technology: To understand E-Commerce, you need a basic
understanding of the IT upon which it is built, including the
Internet, the Web, and Mobile platform, and a host of
complementary technologies – Cloud Computing, Personal
Computers, Smartphones, Tablet Computers, Local Area
Networks, Client/Server Computing, Packet-Switched
Communications, Protocols such as TCP/IP, Web Servers,
HTML, and Relational and Non-Relational Databases, etc.
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 Business: While technology provides the infrastructure, it is
the business applications – the potential for extraordinary
returns in investment – that create the interest and
excitement in E-Commerce.
 Society: Understanding the pressures that global E-
Commerce places on contemporary society is critical to
being successful in the E-Commerce market place.

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 Major Types of E-Commerce
• There are five (5) major types of E-Commerce:
 Business-to-Consumer (B2C) E-Commerce: This involves
businesses selling to consumers online and is the type of E-
Commerce that most consumers are likely to encounter. E.g.
Amazon.
 Business-to-Business (B2B) E-Commerce: This involves
businesses selling to other businesses online and is the
largest form of E-Commerce. E.g. Go2Paper.com.

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 Consumer-to-Consumer (C2C) E-Commerce: This is a means
for consumers to sell to each other online.
• In C2C E-Commerce, the consumer prepares the product for
market, places the product for auction or sale, and relies on
the market maker to provide Catalog, Search Engine, and
Transaction Clearing Capabilities so that products can be
easily displayed, discovered, and paid for. E.g. eBay.

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 Consumer-to-Business (C2B) E-Commerce : This occurs when
a consumer is selling a product or service to a business
online. E.g. the relationship between a freelancer and a
possible employer.
 Social E-Commerce: This is an E-Commerce that is enabled
by social Networks and online social relationships. E.g.
Facebook.
 Mobile Commerce (M-Commerce): This involves the use of
wireless digital devices to enable online transactions.
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 Local E-Commerce: This is a form of E-Commerce that is
focused on engaging the consumer based on his or her
current geographic location. E.g. Groupon offers subscribers
daily deals from local businesses in the form of “Groupons”
discount coupons that take effect once enough subscribers
have agreed to purchase.

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 Advantages of E-Commerce
 Lower Cost  Business Hours 24/7
 Economy  Global Location
 Higher Profit Margins  Lower Transaction Costs
 Better Customer Service  Easy Shelves Arrangement
 Quick Comparison Shopping  Convenient Shopping
 Teamwork  Transactions Recording
 Knowledge Markets  Etc.
 Information Sharing, and Control

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 Challenges of E-Commerce
o Security o Products People won't buy
o System and Data Integrity online
o E–Commerce is not free o Inability to Feel the product
o Shipping Takes Time o Shopping is Social Experience
o Shipping Costs More o Etc.
o Doubts and Fears
o Harmful Malicious Codes
o Too Many Competitors

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 Intranets and Extranets
• An Intranet is a private Network (such as a company LAN)
that is designed to be used by an organization’s employees
and is set up like the Internet (with data posted on Web
pages that are accessed with a Web browser).
• An Intranet is a TCP/IP Network located within a single
organization for purposes of communications & information
processing.
• In fact, all the applications available on the Public Internet
can be used in Private Intranets.
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• A Company Network that is accessible to authorized
outsiders is called an Extranet.
• Extranet is an Intranet that is at least partially accessible to
authorized outsiders.
• Extranets are usually accessed via the Internet, and they can
be used to provide customers and business partners with
access to the data they need.
• Access to Intranets and Extranets is typically restricted to
employees and other authorized users, similar to other
company Networks.
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 E-Government
• E-Government refers to the application of the Internet and
Networking technologies to digitally enable government and
public sector agencies’ relationships with citizens,
businesses, and other arms of government.
• E-Government is the use of Information and Communication
Technology to simplify the sharing of information, speed
formerly paper-based processes, and improve the
relationship between citizens and government.

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• In addition to improving delivery of government services, E-
Government makes government operations more efficient
and also empowers citizens by giving them easier access to
information and the ability to Network electronically with
other citizens.
• Forms of E-Government include:
o Government-to-Citizens (G2C)
o Government-to-Business (G2B)
o Government-to-Government (G2G)
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 Government - to - Citizen (G2C) E-Government
• Government uses G2C model Website to approach citizen in
general.
• Such Website also provides services like registration for
birth, marriage or death certificates, auctions of vehicles,
machinery or any other material. .
• Main objectives of G2C Website are to reduce average time
for fulfilling people requests for various government
services.
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• Citizens can use G2C applications to submit their state and
federal tax returns online, renew auto licenses, apply for
student loans, and make campaign contributions.

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 Government - to - Business (G2B) E-Government
• Government uses B2G model Website to approach business
organizations.
• G2B applications support the purchase of materials and
services from private industry by government procurement
offices, enable firms to bid on government contracts, and
help businesses receive current government regulations
related to their operations.

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• G2B E-Government allows businesses to access information
about laws and regulations and relevant forms needed to
comply with federal requirements for their business.
• Such Websites support auctions, tenders, and application
submission functionalities.

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 Government-to-Government (G2G) E-Government
• G2G applications are designed to improve communications
among the various levels of government.
• For example, the E-Vital initiative establishes common
electronic processes for federal and state agencies to collect,
process, analyze, verify, and share death record information.
• Geospatial One-Stop’s Web Portal, GeoData.gov, makes it
easier, faster, and less expensive to find, share, and access
geospatial information for all levels of government.
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 World Wide Web (WWW)
• The World Wide Web (WWW) is a service provided by the
Internet that uses universally accepted standards for storing,
retrieving, formatting, and displaying information in a page
format on the Internet.
• World Wide Web (WWW) is the collection of Web pages
available through the Internet.
• The World Wide Web (the Web) is one of the most popular
services that runs on the Internet infrastructure.

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• Web Pages contain text, graphics, animations, sound, and
video and are linked to other Web pages.
• By clicking on highlighted words or buttons on a Web page,
you can link to related pages to find additional information
and links to other locations on the Web.
• The Web can serve as the foundation for new kinds of
Information Systems.

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 References
1. Stair, R. M., & Reynolds, G. W. (2012). Fundamentals of
Information Systems (Sixth Edition ed.). Boston, USA: Course
Technology, Cengage Learning.
2. Kenneth C. Laudon & Jane P. Laudon. Essentials of Management
Information Systems. 9th ed., Prentice Hall, 2011.
3. Stephen Haag and Maeve Cummings. Management Information
Systems for the Information Age. 8th ed., McGraw-Hill/Irwin, 2009.
4. Stephen Haag and Maeve Cummings. Information Systems
Essentials. 3rd ed., McGraw- Hill/Irwin, 2008.
5. James A. O’Brien & George M. Marakas. Introduction to
Information Systems. 14th ed., McGraw-Hill Irwin, 2008.
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