UNIT-I

INTERNET AND WORLD WIDE WEB

Introduction
The Internet is a global system of interconnected computer networks that interchange data by
packet switching using the standardized Internet protocol suite (TCP/IP). It is a “network of
networks” that consists of millions of private and public, academic, business, and government
networks of local to global scope that are linked by copper wires, fiber-optic cables, wireless
connection and other technologies. The Internet carries various information resources and services,
sc as electronic mail, online chat, file transfer and file sharing, online gaming, and the inter-linked
hypertext documents and other resources of the World Wide Web (WWW).
The terms Internet and World Wide Web are often used in every day speech without much
distinction. However, the Internet and the World Wide Web are not one and the same. The Internet is
a global data communication system. It is a hardware and software infrastructure that provides
connectivity between computers. In contrast, the Web is one of the services communicated via the
internet. It is a collection of interconnected documents and other resources, linked by hyperlinks and
URLs.
Internet is the world's largest computer network, the network of networks, scattered all over
the world. It was created nearly 25 years ago as a project for the U.S. Department of Defense. Its goal
was to create a method for widely separated computers to transfer data efficiently even in the event of
a nuclear attack. From a handful of computer and users in the 1960s, today the Internet has grown to
thousands of regional networks that can connect millions of users. The number of internet users has
grown by 566.4% during the period 2000-2012. As of June 30, 2012, 2405 million people (34.3% of
the world population) use the internet according to internet world states.
Any single individual, company or country does not own this global network. A network of
networks or “Internet” is a group of two or more networks that are
1) Interconnected physically
2) Capable of communicating and sharing data with each other
3) Able to act together as a single network.
Machines on one network can communicate with machines on other networks, and send data,
files, and other information back and forth. For this to work, the networks and machines that are part
of the Internet have to agree either to speak the same "language" when they are communicating or to
use an “interpreter”. This "language" is software that enables the different types of machines on
separate networks to communicate and exchange information. To be used by different types of
machine and yet be understood by all of them, the software must follow a set of rules or protocol.

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 Internet users in the world
WORLD INTERNET USAGE AND POPULATION STATISTICS
DEC 31, 2014 - Mid-Year Update

World Regions Population Internet Internet Penetration Growth Users

( 2015 Est.) Users Users (% 2000- %
Dec. 31, 2000 Latest Data Population) 2015 of
Table
Africa 1,158,353,014 4,514,400 318,633,889 27.5 % 6,958.2 % 10.3 %

Asia 4,032,654,624 114,304,000 1,405,121,036 34.8 % 1,129.3 % 45.6 %

Europe 827,566,464 105,096,093 582,441,059 70.4 % 454.2 % 18.9 %

Middle East 236,137,235 3,284,800 113,609,510 48.1 % 3,358.6 % 3.7 %

North America 357,172,209 108,096,800 310,322,257 86.9 % 187.1 % 10.1 %

Latin America / 615,583,127 18,068,919 322,422,164 52.4 % 1,684.4 % 10.5 %

Caribbean
Oceania / Australia 37,157,120 7,620,480 26,789,942 72.1 % 251.6 % 0.9 %

WORLD TOTAL 7,264,623,793 360,985,492 3,079,339,857 42.4 % 753.0 % 100.0 %

The Internet, with a capital “I” is the network of networks, which either uses the TCP/IP
protocol or interacts with TCP/IP networks via gateway (the interpreters). The Internet presents these
networks as on seamless network for its users. The Internet covers the globe and includes large,
international networks as well as many smaller, local area networks (LANs).The Internet offers
access to data, graphics, sound software, text and people through a variety of services and tools for
communication and data exchange.
 Remote Login (Telnet)
 File Transfer Protocol (FTP)
 Electronic Mail(E-Mail)
 News (Usenet Or Network News)
 Hypertext(WWW)
The Internet Technology
The Internet connects various countries. The network belongs to several domains, governments,
educational institutions, public organizations, private companies and some entrepreneurs. The
components of computer in Internet are:
 Stand alone computers
 LANs(Local Area Network)
 MANs(Metropolitan Area Network)
 WANs( Wide Area Network)
Special about the internet
There are several reasons for the use of Internet. The fastest means to get provide and compile
information.
 Get information
 Provide information
 Compile information
Getting Information on the Internet
The amount of information available through the Internet is staggering. To make more easily
available to users, programs such as the gopher were developed present material in some logical
fashion. The most recent and very successful at presenting information over the Internet is the World

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Wide Web (WWW). You could get information about people, products, organizations, research data,
versions of the printed media, etc. from the Internet.
Providing Information on the Internet
Most of what you want to provide could be considered advertising. While sound somewhat
commercial, it is the best and most inexpensive way to let know who you are, what you are doing /
have done, and how. For an organization or institution, setting up a home page is a good way to let
the world know what its products and services.
 Publishing includes full text articles , reports , illustrated articles, abstracts, computer
programs and demonstrations.
 Blogging, which is a form of self publishing. A blog is a website, usually maintained by an
individual with regular entries of commentary, descriptions of events or other material such as
graphics or video.
 Extension, in which some of the delays associated with the printed media, it may be reduced.
 Teaching, the possibilities where include both distance and learning and assistance for students.
Compiling Information about the Internet
This is a special case of getting information. The distinction is that it is possible to get
specialized information from the web. For instances, if you wanted to poll the readership for a
magazine or conduct a survey to detect the pulse of a selected community, the web provides you with
the ideal platform and opportunity. Using forms, e-mail etc you can conduct surveys and get opinion
of people from across the world. There are hundreds of discussion groups and LISTSERVs, where
one can post a question and get it answered by hundreds of people who participate in these
discussions.
Internet Access
Internet connection is one of two basic ways, dialing into an Internet Service Provider’s
(ISP) computer, or with a direct connection to an Internet to an Internet service provider. The
difference is mainly in the speed and cost. In most cases you connect to your ISP using a telephone
line and modem. This type of connection is called Dial up connection. Sometimes you go in for a
direct connection.
Dial-up Connection
With a dial-up account, you use your modem to convert computer bits and bytes in to
modulated signals that the phone lines can transmit. These signals are received by a modem at your
ISP and demodulated into bits and bytes for their computer. “Modem” is short for modulator and
demodulator. You usually connect to a local ISP and can surf or browse the Internet. Dial-up access
is either by way of SLIP (Serial Line Internet Protocol) or PPP ( Point to Point Protocol).
To establish a conventional dial-up connection to the Internet, you will need the following.
1. An account with an Internet access provider ( in India, BSNL, Sathyam online etc are some of
the Internet Access Providers). The account can either TCP/IP or shell.
2. A telephone connection.
3. A computer with serial port ( for external modems) or an expansion slot ( for internal modems).
4. A communication holder will require a browser software and an e-mail software .

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Direct Connection
You can also get a direct connection to your ISP, where you have a fixed cable or a dedicated
phone line to the ISP. Often the dedicated line is an ISDN line which is a higher speed version of the
standard phone line, but actually requires two phone lines. ISDN can handle more than 56,600 bps,
ISDN line scale upward, meaning you can transparently add more lines to get faster speeds with
single ISDN connection, up to about 1.28 billion bps.
You can also get a dedicated line call a T-1,T-2,T-3. A T-1 line can handle 1280 kilo bytes
per seconds. A t-3 line can handle ten times that speed. If you have a dedicated line, you do not use a
modem to connect your computer to the Internet, but instead a router. If you have a network in the
office and several people need to access the Internet simultaneously, consider ISDN or T-1
connection. Then, when a user does something on the Internet, the router automatically handles the
connection, even multiple tasks at the same time and you need not have a modem or telephone line
for each computer and user.
Internet Basics
For most people who are new to the Internet, the first experience is quite overwhelming.
Faced with the wide rand of features and options and the scope, magnitude and amount of
information and other resources, newbie spend a lot of time simply finding their bearings. However
as one gets the feel of the Internet, it becomes clear that Internet is similar to any other medium of
information and / or communication.
Once you know the information that you want to find, how to find it, where to finds it and
how to access it, the Internet becomes an extremely powerful resource- irrespective of whether you
are using it for work, education , entertainment, or just for the fun of exploring. Once you know how
to send and receive electronic mail, subscribe to main lists, join and participate in discussion groups
and Internet chars, your power to communicate with people anywhere in the world increases
dramatically. The beauty of Internet is that all these power and resources are available at the very
minimum cost. So Internet literacy is a must for every individual who wants to succeed in this
information age.
Steps for use of Internet
Before you can decide how you want to use the internet, you should get an idea about what
you can do and what is there in the cyberspace. For beginners, the best way to get inducted into the
cyber world is to start browsing the internet using one of the powerful web browsers like Internet
Explorer or Firefox , Opera , Chrome, Safari etc.
Web browsers are mainly used to access page of the World Wide Web. By clicking on the
hypertext linking on a page it is possible to jump from one internet site to another, regardless of its
location. Hypertext links are usually highlighted or different colored text, images or icons. You can

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check for hypertext links by moving the mouse over the area. The mouse pointer changes shape to
that of a hand. This jump from one site to another using the hypertext is called net surfing or web
browsing.
But today’s web browsers can do much more than browsing. You can download files, play
games, send and receive mails and even chat with others. In other words, the modern day web
browsers are very versatile and hey allow you to do almost all the activities that are possible on the
internet. The list of activities that you could do with web browser:
 Visit websites
 Send and receive electronic mails
 Read and post articles in newsgroups
 Download files to your personal computer
 Chat with other users on-line
 Play games with others on-line
 Access on-line multimedia including radio and video broadcasts
 Search the internet for information
 Subscribe to electronic new sletters , e-zines,RSS feeds etc
 Join contests
 Contribute articles and other materials
 Do on-line shopping
 Post your resumes on the internet
 Create your own websites
 Create an e-mail ID and account for you.
 Use the e-mail reminder service
 Find a person’s details
 Send flowers or gifts to others
Uses of Internet in Business
Almost every business uses computers to complete daily tasks. From making contact with
clients to inputting data for reports, computers allow businesses a more efficient way to manage
affairs when compared to traditional paper and manila folders. Businesses use a variety of different
types of computers such as desktops, laptops, servers, smart phones and tablets, depending on their
needs. With computers, employees are able to work anytime, anywhere.
Communication
Communication is key when gaining and maintaining clients and other important contacts.
Computers give businesses access to email, instant messaging and custom customer contact systems.
Computerized phone systems allow for automated support during off hours and a virtual operator can
quickly direct callers to the correct department for faster support.
Marketing
Computers allow businesses to create websites, stunning ads and complete marketing
campaigns. Marketing videos can be edited and custom ads created in-house with the use of
specialized software. Businesses can completely develop and manage websites with their own servers

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or connect remotely to a third-party business to upload their latest content such as articles, product
images and blog posts.
Accounting
Accounting without computers presents a high risk for human error. Accounting software
allows businesses to simply input their financial data and instantly see gains and losses. All necessary
tax reports are available the moment the data is entered. Using computers for invoicing, managing
expenses and calculating payroll is vital for ensuring financial data is as accurate as possible.
Storage
Instead of filing cabinets, businesses are able to store millions of files using computers and
servers. Data can be stored centrally for easy access from multiple computers or stored locally for
individual use. Computerized storage saves space and provides a far more efficient organization
strategy. With encryption, passwords and replace keys, data remains secure.
Documents and Reports
Most businesses have some sort of productivity software which typically includes a word
processor and spreadsheet application. These two programs allow businesses to create reports,
memos, tutorials and even colorful ads for company events. Spreadsheet applications give businesses
the chance to organize, manage and calculate both numeric and alphabetic data. With charts and
graphs, reporting becomes visual instead of text-based.
Education
Businesses use computers to help educate employees on software, company policy, standard
procedures and safety. Instead of hiring teachers, computers can be used to educate employees at
their own pace or through an online webinar with live questions and answers. This form of education
fits the busy schedules of businesses without sacrificing the quality of the education.
Research
From learning more about the competition to discovering what customers really want,
research isn't as difficult as it once was, thanks to computers. Search engines, forums, social networks
and industry specific websites provide businesses with a wealth of information and research data.
Transmission Control Protocol/ Internet Protocol
A means of connecting a computer to any other computer anywhere in the world via dedicated
routers and servers. When two computers are connected over the Internet, they can send and receive
all kinds of information such as text, graphics, voice, video, and computer programs.
No one owns Internet, although several organizations the world over collaborate in its
functioning and development. The high-speed, fiber-optic cables (called backbones) through which
the bulk of the Internet data travels are owned by telephone companies in their respective countries.
The Internet grew out of the Advanced Research Projects Agency's Wide Area Network (then
called ARPANET) established by the US Department Of Defense in 1960s for collaboration in
military research among business and government laboratories. Later universities and other US
institutions connected to it. This resulted in ARPANET growing beyond everyone's expectations and
acquiring the name 'Internet.'

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 The development of hypertext based technology (called World Wide web, WWW, or just the
Web) provided means of displaying text, graphics, and animations, and easy search and navigation
tools that triggered Internet's explosive worldwide growth.
Internet is a communication network which bridges all the small computer networks
worldwide as a whole. Internet is based upon Internet technology, in particular World Wide Web
(WWW), to build Information System within organization or enterprise to accomplish
standardization and automation. Fundamentally, it means network computing environments which let
the users share the information through the Internet and Web browsers. Ultimately, it allows a certain
organization to build a Groupware within Web environment at low cost on top of existing network
infrastructure. By doing this, closed organization network would be interconnected with existing
worldwide Internet, which results in diverse information that strengthens competitive advantages of
the organization. Basic ally, it runs on top TCP/IP and HTTP and filters out any illegal access
through firewall. Where the Internet connects people and organizations and information sources by
using common protocols to link computers on a public and open – to – all basis, an Internet uses the
same common protocols for internal company or group purposes. Instead of adopting a common
proprietary standard for its communications, information storage and presentation, etc., the company
(or any group of people or companies) decides to use Internet standards and methods.
An Internet can be defined as a network connecting an affiliated set of clients using standard
Internet protocols, esp. TCP / IP and HTTP or as an IP – based network of nodes behind a firewall, or
behind several firewalls connected by secure, possibly virtual, networks. In general, a web is an
unstructured client / server network that uses HTTP as its transaction protocol. The World Wide Web
comprises all HTTP nodes on the public Internet .An internal web comprises all HTTP nodes on a
private network, such as an organization’s LAN or WAN. If the organization is a corporation, the
internal web is also a corporate web. If a corporate web connects two or more trading partners, it is
often referred to as a business – to – business web, or an extranet. Note that internal webs – also
known as intranets – are only logically “internal “ to an organization. Physically they can span the
globe, as long as access is limited to a defined community of interest
The Internet protocol suite is the computer networking model and set of communications
protocols used on the Internet and similar computer networks. It is commonly known as TCP/IP,
because it is most important protocols, the Transmission Control Protocol (TCP) and the Internet
Protocol (IP), were the first networking protocols defined in this standard. Often also called the
Internet model, it was originally also known as the DoD model, because the development of the
networking model was funded by DARPA, an agency of the United States Department of Defense.
TCP/IP provides end-to-end connectivity specifying how data should be packetized,
addressed, transmitted, routed and received at the destination. Indeed, this functionality is organized
into four abstraction layers which are used to sort all related protocols according to the scope of
networking involved. From lowest to highest, the layers are the link layer, containing communication
technologies for a single network segment (link); the Internet layer, connecting hosts across
independent networks, thus establishing Internetworking; the transport layer handling host-to-host
communication; and the application layer, which provides process-to-process application data
exchange.

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 The TCP/IP model and related protocol models are maintained by the Internet Engineering
Task Force (IETF).
The Internet protocol suite resulted from research and development conducted by the Defense
Advanced Research Projects Agency (DARPA) in the late 1960s. After initiating the pioneering
ARPANET in 1969, DARPA started work on a number of other data transmission technologies. In
1972, Robert E. Kahn joined the DARPA Information Processing Technology Office, where he
worked on both satellite packet networks and ground-based radio packet networks, and recognized
the value of being able to communicate across both. In the spring of 1973, Vinton Cerf, the developer
of the existing ARPANET Network Control Program (NCP) protocol, joined Kahn to work on
open-architecture interconnection models with the goal of designing the next protocol generation for
the ARPANET.
By the summer of 1973, Kahn and Cerf had worked out a fundamental reformulation, in
which the differences between network protocols were hidden by using a common Internet work
protocol, and, instead of the network being responsible for reliability, as in the ARPANET, the hosts
became responsible. Cerf credits Hubert Zimmermann and Louis Pouzin, designer of the
CYCLADES network, with important influences on this design.
The design of the network included the recognition that it should provide only the functions of
efficiently transmitting and routing traffic between end nodes and that all other intelligence should be
located at the edge of the network, in the end nodes. Using a simple design, it became possible to
connect almost any network to the ARPANET, irrespective of the local characteristics, thereby
solving Kahn's initial problem. One popular expression is that TCP/IP, the eventual product of Cerf
and Kahn's work, will run over "two tin cans and a string." (Years later, as a joke, the IP over Avian
Carriers formal protocol specification was created and successfully tested.)
A computer called a router is provided with an interface to each network. It forwards packets
back and forth between them. Originally a router was called gateway, but the term was changed to
avoid confusion with other types of gateways.
Year Details
1960 Networking at RAND corporation
1960 Communication Nets: Stochastic Message Flow and Delay by Leonard
Kleinrock
1965 First networking between TX-2 computers at M.LT's Lincoln labo with Q-23
computer in Santa Monica, California
1968 Proposal to start ARPANET
1965 ARPANET installed at UCLA
1969 APRA funded more universities
1971 World's first E-mail message by Ray Tomlinson of BBN
1972 TCP/IP protocol was developed
1973 TCP/IP used by American Government
1980 TCP/IP was made part of operating system

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 1982 NSF funded supercomputing centre’s are recommended
1983 Conversion of ARPANET and network communication protocol toTCP
1986 NSF launched NSFNET network backbone program
1987 CSNET merged with BITNET
1988 Internet virus was created to focus the attention on security
1990 The first relay between a commercial e-mail carrier and Internet took place
1991 Commercial Internet Exchange (CIX) was formed
1991 NSFNET turned into National Research and Education Network
1993 Multimedia browser for WWW - MOSAIC was written
1995 NSF was decommissioned and network access points was installed(NAP)
Interconnected network is the most important component of the I-way. It is fine information
distribution system prevailing in various countries. The main targets are
 Video on demand
 Home shopping
 Compute based services
 e-mail
 electronic data interchange
 information publishing
 information retrieval
 video conferencing
 Computer related services.
In order for a computer to communicate on the Internet, a set of rules or protocols computers
must follow to exchange messages was developed. The two most important protocols allowing
computers to transmit data on the Internet are Transmission Control Protocol (TCP) and Internet
Protocol (IP). With these protocols, virtually all computers can communicate with each other. For
instance, if a user is running Windows on a PC, he or she can communicate with iPhones.
Domain Name System
An Internet address has four fields with numbers that are separated by periods or dots. This
type of address is known as an IP address. Rather than have the user remember long strings of
numbers, the Domain Name System (DNS) was developed to translate the numerical addresses into
words. For example, the address fcit.usf.edu is really 131.247.120.10.
Uniform Resource Locator (URL)
Each web page has a unique address called a uniform resource locator that identifies its location
on the Internet. Web browsers utilize the URL to retrieve a file from the computer on which it
resides. Usually, the format of an URL consists of four parts, such as
 Protocol
 Server
 Path
 File name.
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 The first part of the address, the part before the coln, is access method. Most of the time when
you see http (hyper text transfer protocol) , you are accessing a web page. Apart from http, you could
use also find other protocols such as FTP (File Transfer Protocol), new (new serve), mail to (mail
server used for accessing a e-mail server) and telnet (for accessing remote computers). The protocol
is separated by colons and slashes. After the slashes, the host computer’s name is displayed, that is,
an indicator such as www, which stands for World Wide Web. Next comes the name of the computer
where the information is located.
Addresses for web sites are called URLs (Uniform Resource Locators). Most of them begin
with http (Hyper Text Transfer Protocol), followed by a colon and two slashes. Some of the URL
addresses include a directory path and a file name. Consequently, the addresses can become quite
long.
Top Level Domain
Each part of a domain name contains certain information. The first field is the host name,
identifying a single computer or organization. The last field is the top-level domain, describing the
type of organization and occasionally country of origin associated with the address.
Top Level Domain Names
.com Commercial
.edu Educational
.gov US Government
.int Organization
.mil US Military
.net Networking Providers
.org Non-profit Organization
Domain name country codes include, but are not limited to:
.au Australia
.de Germany
.fr France
.nl Netherlands
.uk United Kingdom
.us United States
Paying attention to the top level domain may give you a clue as to the accuracy of the
information you find. For example, information on a "com" site can prove useful, but one should
always be aware that the intent of the site may be to sell a particular product or service. Likewise, the
quality of information you find on the "edu" domain may vary. Although many pages in that domain
were created by the educational institutions themselves, some "edu" pages may be the private
opinions of faculty and students. A common convention at many institutions is to indicate a faculty or
student page with a ~ (tilde) in the address.
Need of browser
Once you have an account with an Internet service provider, you can access the Web through
a browser, such as Safari or Microsoft Internet Explorer. The browser is the application responsible
for allowing a user's computer to read and display web documents.

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 Hypertext Markup Language (HTML) is the language used to write web pages. A browser
takes the HTML and translates it into the content you see on the screen. You will note your cursor
turns into a pointing finger over some images or text on the page. This indicates a link to additional
information and it can be either a link to additional web pages, email, newsgroups, audio, video, or
any number of other exciting files.
Internet Protocol
The most commonly used protocols are as follows:
 Transmission Control Protocol/ Internet Protocol(TCP/IP)
 File Transfer Protocol(FTP)
 Hyper Text Transfer Protocol(HTTP)
 Telnet
 Gopher
 Wide area information service
Transmission Control Protocol/ Internet protocol
TCP/IP stands for Transmission control protocol / Internet protocol. TCP/IP is actually a
collection of protocols or rules, that govern the way data travels from on machine to another across
networks. The Internet is based on TCP/IP. TCP/IP has two major components: TCP and IP.
The IP component does the following.
 Envelopes and addresses the data
 Enables the network to read the envelope and forward the data to its destination
 Defines how much data can fit in a single envelope( a packet)
The Components of TCP as follows
 Breaks data up into packets that the network can handle efficiently.
 Verifies whether all the packets have arrived at their destination
 Reassembles the data.
TCP/IP can be compared to moving across the country. You pack your belongings in boxes
and put your address on them. The moving company packs them up, makes a list of the boxes, and
ships them across the country along the most efficient route- this may mean putting your dishes and
your bedroom furniture on different trucks. Your belongings arrive at your new address. You consult
your list to make sure that everything you shipped has arrived , then you unpack your boxes and
reassemble your house.
The Internet Protocol (IP) is the principal communications protocol in the Internet protocol
suite for relaying data grams across network boundaries. Its routing function enables Internetworking,
and essentially establishes the Internet.
Packets IP has the task of delivering packets from the source host to the destination host
solely based on the IP addresses in the packet headers. For this purpose, IP defines packet structures
that encapsulate the data to be delivered. It also defines addressing methods that are used to label the
datagram with source and destination information.

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 Historically, IP was the connectionless datagram service in the original Transmission Control
Program introduced by Vint Cerf and Bob Kahn in 1974; the other being the connection-oriented
Transmission Control Protocol (TCP). The Internet protocol suite is therefore often referred to as
TCP/IP.
The first major version of IP, Internet Protocol Version 4 (IPv4), is the dominant protocol of
the Internet. Its successor is Internet Protocol Version 6 (IPv6).
Function
The Internet Protocol is responsible for addressing hosts and for routing datagram (packets)
from a source host to a destination host across one or more IP networks. For this purpose, the Internet
Protocol defines the format of packets and provides an addressing system that has two functions:
identifying hosts; and providing a logical location service.
Datagram Construction
Sample encapsulation of application data from UDP to a Link protocol frame
Each datagram has two components: a header and a payload. The IP header is tagged with the source
IP address, the destination IP address, and other meta-data needed to route and deliver the datagram.
The payload is the data that is transported. This method of nesting the data payload in a packet with a
header is called encapsulation.
IP Addressing and Routing
IP addressing entails the assignment of IP addresses and associated parameters to host
interfaces. The address space is divided into networks and subnet works, involving the designation of
network or routing prefixes. IP routing is performed by all hosts, but most importantly by routers,
which transport packets across network boundaries. Routers communicate with one another via
specially designed routing protocols, either interior gateway protocols or exterior gateway protocols,
as needed for the topology of the network.
IP routing is also common in local networks. For example, many Ethernet switches support IP
multicast operations.[1] These switches use IP addresses and Internet Group Management Protocol to
control multicast routing but use MAC addresses for the actual routing.
Reliability
The design of the Internet protocols is based on the end-to-end principle. The network
infrastructure is considered inherently unreliable at any single network element or transmission
medium and assumes that it is dynamic in terms of availability of links and nodes. No central
monitoring or performance measurement facility exists that tracks or maintains the state of the
network. For the benefit of reducing network complexity, the intelligence in the network is purposely
mostly located in the end nodes of data transmission. Routers in the transmission path forward
packets to the next known, directly reachable gateway matching the routing prefix for the destination
address.
As a consequence of this design, the Internet Protocol only provides best effort delivery and
its service is characterized as unreliable. In network architectural language, it is a connectionless
protocol, in contrast to connection-oriented modes of transmission. Various error conditions may
occur, such as data corruption, packet loss, duplication and out-of-order delivery. Because routing is
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dynamic, meaning every packet is treated independently, and because the network maintains no state
based on the path of prior packets, different packets may be routed to the same destination via
different paths, resulting in out-of-order sequencing at the receiver.
Internet Protocol Version 4 (IPv4) provides safeguards to ensure that the IP packet header is
error-free. A routing node calculates a checksum for a packet. If the checksum is bad, the routing
node discards the packet. The routing node does not have to notify either end node, although the
Internet Control Message Protocol (ICMP) allows such notification. By contrast, in order to increase
performance, and since current link layer technology is assumed to provide sufficient error
detection,[2] the IPv6 header has no checksum to protect it.[3]
All error conditions in the network must be detected and compensated by the end nodes of a
transmission. The upper layer protocols of the Internet protocol suite are responsible for resolving
reliability issues. For example, a host may cache network data to ensure correct ordering before the
data is delivered to an application.
Link Capacity and capability
The dynamic nature of the Internet and the diversity of its components provide no guarantee
that any particular path is actually capable of, or suitable for, performing the data transmission
requested, even if the path is available and reliable. One of the technical constraints is the size of data
packets allowed on a given link. An application must assure that it uses proper transmission
characteristics. Some of this responsibility lies also in the upper layer protocols. Facilities exist to
examine the maximum transmission unit (MTU) size of the local link and Path MTU Discovery can
be used for the entire projected path to the destination. The IPv4 Internetworking layer has the
capability to automatically fragment the original datagram into smaller units for transmission. In this
case, IP provides re-ordering of fragments delivered out of order.
The Transmission Control Protocol (TCP) is an example of a protocol that adjusts its segment
size to be smaller than the MTU. The User Datagram Protocol (UDP) and the Internet Control
Message Protocol (ICMP) disregard MTU size, thereby forcing IP to fragment oversized datagrams.
Version History
In May 1974, the Institute of Electrical and Electronic Engineers (IEEE) published a paper
entitled "A Protocol for Packet Network Intercommunication".[6] The paper's authors, Vint Cerf and
Bob Kahn, described an Internetworking protocol for sharing resources using packet switching
among network nodes. A central control component of this model was the "Transmission Control
Program" that incorporated both connection-oriented links and datagram services between hosts. The
monolithic Transmission Control Program was later divided into a modular architecture consisting of
the Transmission Control Protocol at the transport layer and the Internet Protocol at the network
layer. The model became known as the Department of Defense (DoD) Internet Model and Internet
Protocol Suite, and informally as TCP/IP.
The Internet Protocol is one of the elements that define the Internet. The dominant
Internetworking protocol in the Internet Layer in use today is IPv4; the number 4 is the protocol
version number carried in every IP datagram. IPv4 is described in RFC 791 (1981).
The successor to IPv4 is IPv6. Its most prominent modification from version 4 is the
addressing system. IPv4 uses 32-bit addresses (c. 4 billion, or 4.3×109, addresses) while IPv6 uses
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128-bit addresses ( 3.4×1038 addresses). Although adoption of IPv6 has been slow, as of June 2008,
all United States government systems have demonstrated basic infrastructure support for IPv6 (if only
at the backbone level).[7] IPv6 was a result of several years of experimentation and dialog during
which various protocol models were proposed, such as TP/IX (RFC 1475), PIP (RFC 1621) and
TUBA (TCP and UDP with Bigger Addresses, RFC 1347).
IP versions 0 to 3 were experimental versions, used between 1977 and 1979. The following
Internet Experiment Note (IEN) documents describe versions of the Internet Protocol prior to the
modern version of IPv4:
Security
During the design phase of the ARPANET and the early Internet, the security aspects and needs
of a public, international network could not be adequately anticipated. Consequently, many Internet
protocols exhibited vulnerabilities highlighted by network attacks and later security assessments. In
2008, a thorough security assessment and proposed mitigation of problems was published. The
Internet Engineering Task Force (IETF) has been pursuing further studies.
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The members have spoken, advising that a high-level peek at the underlying principles of
Internet Protocol would be a good jumping-off point. After which we can forge ahead, starting the
IPv6 discussion.
Internet Protocol (IP) is one of many communications protocols that compose the Internet
Protocol Suite (IPS) and is arguably the most important protocol. Experts usually describe IPS as a
stack of protocols that convert application information (like e-mail or Web traffic) into digital packets
capable of traversing networks, including the Internet.
Specifically, IP is responsible for transmitting the digital packets from a source host to a
destination host over a network connection.
"The Internet protocol is specifically limited in scope to provide the functions necessary to
deliver a package of bits (an Internet datagram) from a source to a destination over an interconnected
system of networks. There are no mechanisms to augment end-to-end data reliability, flow control,
sequencing, or other services commonly found in host-to-host protocols. The Internet protocol can
capitalize on the services of its supporting networks to provide various types and qualities of service."
Difference between Packet and Datagram
When discussing IP, many people (including me) interchange the terms packet and datagram as both
terms have similar (identical, some argue) definitions. RFC 1594 defines a datagram/packet as:
"A self-contained, independent entity of data carrying sufficient information to be routed from
the source to the destination computer without reliance on earlier exchanges between the source and
destination computer and the transporting network."

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IP Attributes
IP has several attributes that define how data is transmitted, and they're important regardless
of whether we're discussing IPv4 or IPv6. So, let's take a look at them:
A. Host addressing: IP defines the addressing scheme for each host on the network and uses the
addresses to facilitate datagram delivery.
B. Protocol independence: IP by design is able to work with any type of underlying network
protocol using protocol stack technology.
C. Connectionless delivery: IP does not set up a relationship between the sending host and the
receiving host. The sending host just creates datagrams and sends them on their way.
D. Best-effort delivery: IP tries its best to ensure that the receiving host actually gets the datagrams
addressed to it, but there are no guarantees.
E. No provision for delivery acknowledgments: The receiving host does not acknowledge the fact
that it indeed did receive the data addressed to it.
One wonders how IP data grams get where they're supposed to, when the last three attributes
create less than a perfect environment. Why leave those features out of the protocol? The simple
reason is better performance. Using established connections, error-checking, and guaranteed delivery
require additional processing power and network bandwidth. So if the datagram being transmitted
does not require certain attributes, it's better they aren't used. Besides, the people who developed IP
are a smart bunch, designing a more efficient approach that uses protocol stacking.
Protocol or TCP/IP Stack
If you recall, I mentioned something called a protocol stack (officially TCP/IP) earlier. If the
type of transmitted data (such as e-mail) requires guaranteed delivery, receipt acknowledgment, or an
official connection handshake, the information is appended earlier in the datagram-building process,
or what is called "further up the stack." It turns out to be good solution, especially since it conserves
network resources.
TCP/IP Guide has an excellent explanation of what a TCP/IP stack is and how it works. The
process of encapsulation (ultimately why I included this information) also takes place in the TCP/IP
stack. Encapsulation is where the next protocol in the stack encapsulates the datagram, giving it
additional information that's required, so the packet can successfully reach its destination. The
following diagram (courtesy of TCP/IP Guide) depicts the encapsulation process:
File Transfer Protocol
File Transfer Protocol (FTP) FTP or File transfer Protocol is a system of rules and a
software program that enables a user to long on to another computer and transfer information
between it and his/ her computer. It was the first service developed for the Internet so that
government and educational institutions could easily exchange files. FTP allows the user to get
access to the files stored in the directory of a remote computer that is connected to the Internet.
Using FTP, one can upload and download files from the remote computer (known as FTP servers), if
he/she has access permission on the remote machine.
FTP works on the client/server principle. A client program enables the user to interact with a
server in order to access information and services on the server computer. Files that can be

15
transferred are stored on computers called FTP servers. To access these files, an FTP client program
is used. This is an interface that allows the user to locate the files to be transferred and initiate the
transfer process. The basic steps to use FTP are
 Connect to the FTP server
 Navigate the file structure to find the file you want.
 Transfer the file.
The specifics of each step will vary, depending on the client program being used and the type
of internet connection. Anonymous FTP allows a user to access a wealth of publicly available
information. No special account or password is needed. However, an anonymous FTP site will
sometimes ask users to login with the name “anonymous” and use their electronic mail address as the
password. There are a wide variety of files that are publicly available through anonymous FTP.
File Compression
Files on FTP servers are often compressed. Compression deceases file size. This enables more
files to be stored on the server and makes file transfer times shorter. In order to use a compressed file
it needs to be decompressed sing appropriate software. It is a good idea to have current virus
checking software on the computer before files are transferred to it.
Hyper Text Transmission Protocol (HTTP)
HTTP is short for Hypertext Transfer Protocol. It is the set of rules, or protocol that governs
the transfer of hypertext between two or more computers. The World Wide Web encompasses the
universe of information that is available via HTTP.
Hypertext is text that is specially coded using a standard system called Hypertext Markup
language (HTML). The HML codes are used to create links. These links can be textual or graphic,
and when clicked on, can link the user to another resource such as other HTML documents, text files,
graphics, animation and sounds.
HTTP is based on the client / server principles. HTTP allows computer A to establish a
connection with computer B and make a request. The server accepts the connection initiated by the
client and sends back a response. An HTTP request identifies the resource a client is interested in and
tells the server what action to take on the resources.
When a user selects a hyper text link, the client program on their computer uses HTTP to
contact the server, identify a resource and ask the server to respond with ad an action. Usually
hypertext links will be blue in colour and will be underlined. When you move the mouse pointer over
a hypertext link the pointer changes its shape to that of a hand. In the case of text base browsers, the
hypertext links will be highlighted and you can navigate between them using the keyboard.
HTTP also provides access to other Internet protocols like file transfer protocols, simple mail
transfer protocol, network news transfer protocol WAIS , gopher , telnet.
Telnet
The word “telnet” is derived from telecommunications and network and is a protocol that
allows a user to log on to a remote computer. Telnet is also known as remote login, which means
connecting one machine to another in such a way that a person may interact with another machine as
if it is being used locally.
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Telnet is a protocol or set of rules, that enables one computer to connect to another computer. This
process is also referred to as remote login.
The user’s computer, which initiates the connection, is referred to as the local computer, and
the machine being connected to, which accepts the connection, is referred to as the remote, or host,
computer. The remote computer can be physically located in the next room, the next town, or in
another country.
Once connected, the user’s computer emulates the remote computer. When the users types in
commands, they are executed on the remote computer. The user’s monitor displays what is taking
place on the remote computer during the telnet session.
The procedure for connecting to a remote computer will depend on how your Internet access
is set-up. Once a connection to a remote, computer is made, instructions or menus may appear. Some
remote machines may require a user to have an account on the machine, and may prompt users for a
user name and password. Many resources, such as library catalogs, are available via tenet without an
account and password.
telnet also operates on the client/server principles. The local computer uses a tenet client
program to establish the connection and display data on the local computer’s monitor. The remote, or
host , computer uses a telnet server program to accept the connection and send responses to requests
for information back to the local computer.
Internet Software
To connect to the Internet, a computer requires mainly three different kinds of software:
TCP/IP: TCP/IP, or Transmission Control Protocol / Internet Protocol, is the basic communication
protocol of the Internet. It allows programs on user’s computer to communicate properly over the
Internet. Usually, when you are set up with direct access to the Internet, your
Computer is provided with a copy of the TCP/IP program. Similarly, every other computer that you
may send messages to or get information from also has a copy of TCP/IP.
Dialer Software: This software is provided by the ISP to instruct the modem to dial the phone
number, and identify the user’s machine to the access provider’s system for access to the network.
Browser: To use the Internet, a web browser is essential. This program allows the user to view the
information available on the World Wide Web.
Internet Applications
The Internet has grown from a small project to today’s biggest network of computers. Due to
this colossal growth, the Internet has become the biggest domain of information. Nowadays, an
Internet user has access to a wide variety of services such as electronic mail, file transfer, vast
information resources, interest group membership, interactive collaboration, Multimedia displays,
real-time broadcasting, shopping opportunities, and much more. Some of the important services
provided by the Internet are briefed in the following few sections.
1. World Wide Web: (WWW)
The World Wide Web (abbreviated as the web or WWW) is one of the most popular services
available on Internet. It is a subset of the Internet and it presents text, images, Animation,
video, sound and other multimedia in a single interface. This greatly enhances the experience
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 of the Internet surfer. Although the World Wide Web is often referred to as the Internet, they
are actually two different concepts. The Internet is the decentralized global network of
computers that transfer information and the wring that makes all this possible whereas the
web is a collection of documents or websites, those users can access using the Internet and a
web browser. The web is a part of the Internet and it refers to a system of Internet servers that
supports hypertext using a specific Internet protocol called HTTP on a single interface (web
browsers). In addition, almost every protocol type available on the Internet is accessible on
the web. This includes e-mail, FTP, Telnet, and Usenet News. Since the WWW is a subset of
the Internet, it stands to reason that the web could not exist without the Internet. However,
the Internet would still be the Internet without the web.
The operation of the web relies primarily on hypertext, as it is a means of information
retrieval. Hypertext is a document containing words that connect to other documents. These
words are called links, which the user can select. A single hypertext document can contain
links to documents and resources throughout the Internet. With the ability of the web to work
with multimedia and advanced programming languages, the World Wide Web is the fastest
growing and the most interesting part of the Internet. With video conferencing and wireless
applications, the Internet is ready to take us to the new realm of communication and
information exchange.
2. Electronic Mail (e-mail) Electronic mail, or e-mail, is a fast, easy, and inexpensive way to
communicate with other
Internet users around the world. It is one of the basic and earliest services of the Internet and
the most used application on the Internet too. E-mail overcomes most of the problems and
delays of getting a physical document from one person to another. Rather, it has the dual
advantage of not only being faster but cheaper to sue as well.
3. Internet Relay Chat (IRC) IRC or Internet Relay Chat is a service on the Internet that allows
people to communicate in real time and carry on conversations via the computer with one or
more people. It provides the user with the facility to engage in simultaneous (synchronous)
online “conversation” with other user form anywhere in the world.
4. Chatting and Instant Messaging Chart programs allow users on the Internet to communicate
with each other by typing in real time. They are sometimes included as a feature of a
website, where users can log into chat rooms to exchange comments and information about
the topics addressed on the site.
5. Internet Telephony Internet telephone is the use of the Internet rather than the traditional
telephone company infrastructure, to exchange spoken or other telephonic information. It
consists of hardware and software that enable people to use the Internet as a transmission
medium for telephone calls. There are many Internet telephony applications available. Some,
such as Cool Talk and
NetMeeting, come bundled with popular web browsers.
6. Video Conferencing Video conferencing uses the same technology as IRC, but also provides
sound and video pictures. It enables direct face-to-face communication across networks. A
video conferencing system has to or more parties in different locations, which have the ability
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 to communicate using a combination of video, audio, and data. A video conference can be
person to person (referred to as “point-to-point”) or can involve more than two people
(referred to as “multipoint”) and the video conferencing terminals are often referred to as
“endpoints”.
The following five elements are common to all video conferencing endpoints:
7. Camera: The camera captures live images to send across the network.
8. Visual Display: It displays the images of the people taking part in the videoconference.
9. Audio System: It includes both microphones to capture audio from the endpoint and loudspeakers to
play back the audio received from other endpoints across the network connection.
10. Compression: Videos are very bandwidth-intensive and they take a long time to load. Therefore,
video systems include technologies, often referred to as codes, to compress and decompress video and
audio data, allowing transmission across a network connection in near-real time.
11. User Interface and Control System: The user interface allows the users to control
interactions for example, placing call s, storing and locating numbers, and adjust environment
settings such as volume. The control system handles the underlying communication that takes
place between endpoints.
12. Newsgroups (Usenet)
Newsgroups are international discussion groups that focus on a particular topic and helps in
gathering information about that topic. The topics discussed here cover all the fields such as
politics, computers, technology, and many more. The information or articles that make up the
“news” are written by people interested in a specific topic. These articles are posted to the
newsgroup so that others can read, reply, and comment on them.
13.Mailing Lists (List server) The Internet is home to a large community of individuals who carry
out active discussions, organized around topic-oriented forums that are distributed via e-mail. This
method of Internet communications is known as mailing list and it enables people with similar
interests from all over the world to communicate and share information with each other.
Conclusion
Internet of is the world’s largest computer network. Internet offers access to data, graphics,
sound, text and people through a variety of services. It is widely used in business. It has various
protocols.
Review Questions
1. What is internet?
2. List out the various services of internet.
3. What is World Wide Web?
4. What do you mean by protocol?
5. What are the basics of internet?
6. Explain the TCP/IP protocol.
7. What are the functions of TCP/IP protocol?
8. What is FTP?
9. Explain about HTTP.

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 UNIT –II
INTERNET ADDRESSING
Introduction
In general, Internet addressing is a systematic way to identify people, computers and Internet
resources. On the Internet, the term address is used loosely. Address can mean may different things
form an electronic mail address to a URL.
IP Address
If you want to connect to another computer, transfer files to or from another computer or send
an e-mail message, you first need to know where the other computer is – you need the computer’s
address.
An IP address is an identifier for a particular machine on a particular network. It is part of a
scheme to identify computers on the Internet. IP addresses are also referred to as IP numbers and
Internet addresses. An IP address consists of four sections separated by periods. Each section
contains a number ranging from 0 to 255.
The four sections represent both the machine itself , or host, and the network that the host is
on. The network portion of the IP address is allocated to Internet service providers by the interNIC,
under authority of the Internet Assigned Number Authority (IANA). ISPs then assign the host portion
of the IP address to the machines on the networks that they operate. The IP addresses have the
following characteristics in general:
Characteristics of IP Address:
 IP addresses are unique.
 No two machines can have the same IP number
 IP addresses are also global and standardized.
 All machines connected to the Internet agree to use the same scheme for establishing an address.
Domain Name:
A domain name is a way to identify and locate computers connected to the Internet. No two
organizations can have the same domain name.
Examples of major domain name:
Aero-air transport industry
Biz- business
Coop-cooperatives
Com-commercial entities
edu-educational institutions
net- organizations directly involved in Internet operations
org- miscellaneous organization that don’t fit any other category, such as non- profit organizations.
gov- united states federal government entities
mil- united states military
mibi-mobile devices
Pro-professions
tel-internet communication services
travel- travel and tourism industry related sites
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 Each domain name corresponds to numeric IP (internet protocol) addresses. An IP address
takes the form of 4 numbers, each one between 0 and 255, separated by periods.
The internet uses the numeric IP address to send data. For instance, you may be connecting to
a World Wide Web server with the domain name.
Electronic mail addresses
Electronic mail or e-mail, allows information to be sent between computers and peoples on
the Internet. It is the most widely used Internet resource. Just as a written letter can be sent to
multiple recipients, an electronic mail message can be sent to one or more mail addresses. An e-mail
address identifies a person and the computer, for purposes of exchanging electronic mail messages.
The basic structure of an e-mail address is [email protected]
level-domain.
Uniform Resource Locator (URL)
A URL identifies a particular Internet resource. For example web pages, a Gopher server, a
library catalog, an image or a text file. URL represents a standardized addressing scheme for Internet
resources and helps the users to locate these resources by indicating exactly where they are. Every
resource available via the World Wide Web has a unique URLs. URLs consist of letters, numbers and
punctuation. The basic structure of a URL is hierarchical and the hierarchy moves from left to right
as follows. http://www.xyz.com/
World Wide Web (WWW)
History
Tim Berners-Lee invented the World Wide Web in 1989, about 20 years 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. These scientists were eager to exchange data and results, but had
difficulties doing so. Tim understood this need, and understood the unrealized potential of millions of
computers connected together through the Internet.
The WWW is the brainchild of Tim Berners Lee a CERN ( European Laboratory for Particle
physics) engineer, who had the idea of creating an electronic web of research information. During the
1980s he developed a programming language called Hypertext Markup Language (HTML) on which
the web is based. Early web pages contained only text, but due to rapid advancements in technology ,
the web pages now contain pictures and other multimedia elements in addition to text.
CERN (1991)
Tim documented what was to become the World Wide Web with the submission of a proposal
to his management at CERN, in late 1989 (see the proposal.), This proposal specified a set of
technologies that would make the Internet truly accessible and useful to people. Believe it or not,
Tim’s initial proposal was not immediately accepted. However, Tim persevered. By October of 1990,
he had specified the three fundamental technologies that remain the foundation of today’s Web (and
which you may have seen appear on parts of your Web browser):

21
 Tim also wrote the first Web page editor/browser (“World Wide Web”) and the first Web
server (“http“). 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.
Since that time, the Web has changed the world. It has arguably become the most powerful
communication medium the world has ever known. Whereas only 25% of the people on the planet are
currently using the Web (and the Web Foundation aims to accelerate this growth substantially), the
Web has changed the way we teach and learn, buy and sell, inform and are informed, agree and
disagree, share and collaborate, meet and love, and tackle problems ranging from putting food on our
tables to curing cancer.
Tim Berners-Lee and others 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 of 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 Web Foundation supports the work of W3C to ensure that the Web and the
technologies that underpin it remain free and open to all. With over 1 trillion public pages (in 2008)
and 1.7 billion people on the Web (in 2009), we do not really understand how these pieces work
together and how to best improve the Web into the future. In 2005, Tim and colleagues started the
Web Science Trust (WST). WST is building an international, multidisciplinary research community
to examine the World Wide Web as “humanity connected by technology”. WST brings together
computer scientists, sociologists, mathematicians, policy experts, entrepreneurs, decision makers and
many others from around the world to better understand today’s Web and to develop solutions to
guide the use and design of tomorrow’s Web. The Web Foundation believes the discipline of Web
Science is critically important to advancing the Web, and supports WST‘s efforts to build and
coordinate this new field of study.
Most of the history of the Web is ahead of us. The Web is far from reaching its full potential
as an agent of empowerment for everyone in the world. Web access through the world’s 4+ billion
mobile phones is an incredible opportunity. New Web technologies will enable billions of people
currently excluded from the Web community to join it. We must understand the Web and improve its
capabilities. We must ensure that Web technologies are free and open for all to leverage. The work of
the Web Foundation aims to have a substantial, positive impact on all of these factors, and on the
future history of the Web.
What makes up the World Wide Web?
The Internet is often confused with the World Wide Web. The misperception is that these two
terms are synonymous. The Internet is the collection of the many different systems and protocols.

22
The World Wide Web, developed in 1989, is actually one of those different protocols. As the name
implies, it allows resources to be linked with great ease in an almost seamless fashion.
The World Wide Web contains a vast collection of linked multimedia pages that is ever-changing.
However, there are several basic components of the Web that allow users to communicate with each
other. Below you will find selected components and their descriptions.
Networking
With standardized hardware and software, the microcomputers provide user -friendly
environment. It meets the computing requirements of most users. But, the need for interaction with
other computer users and with other computer systems fo r exchange of data etc., has
increased over the years. Networks are increasingly meeting this need. From the users’ point of view
the networks may be of two types:
 Local area network
 Wide area network.
Computer networking is the process of inter connecting two or more computers so that the users
can communicate with each other, share resources and overcome other limitations of stand-alone
systems. The network can be established with a variety of combinations of computers such as a net
of only microcomputers, microcomputers and one or more minicomputers and a set of
microcomputers connected to a mainframe computer. The computers in typical network are
autonomous in the sense that they have processing capability independent of the network.
ADVANTAGES OF NETWORKING
The main advantages of networking are:
(i). Hardware resource sharing: Network enables sharing of expensive resources such as
processor, storage space and
peripherals like modern, fax, and laser printer.
(ii). Sharing of databases:
The network permits concurrent access to the same data file by many users in the network. Thus, user
in the sales department, production department, inventory department etc , share corporate databases.
(iii). Sharing of Software
Any user in a network can load and use the software installed on any of the computer of
fileserver in the network.
(iv). Communication between users
The Network users can communicate between them. E-mail facility can also be used for
communication.
(v). Decentralized data processing:
In a network, the data processing can be decentralized by enabling local offices to capture and
store data, and generate information to meet most of their requirements a local level itself.
(vi) Security of data
In a networked environment the data is backed up with duplicate storage. Adequate security
measures are also put in place to product the data.
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TYPES OF NETWORK
The networks can be classified into three; local area network (LAN), metropolitan area
network (MAN) and wide area network (WAN). They are explained in the following sections:
1. Wide Area Network (WAN) WAN is made up of number of autonomous computers d
istributed over a wide geographical area. WANs were originally developed in the late 1960s to
enable communication between computer centers and sharing of hardware, software and other
communication facilities.
WAN can be implemented using private or publ ic networks. In a private network an organization
takes on lease telephone lines to connect such sites into a network. It is also possible to connect
computers in different locations using microwave or satellite transmission. Public networks are installed
by the Government owned telecommunication agencies. WAN spans large geographic distances. It is
also called long-haul network. WAN is usually operated at lower speeds then MAN and involves delay.
Most organizations use private networks for communication. Society for Worldwide Interbank
Financial Transactions (SWIFT), a non -profit organization of banks, owns a private network. The
network exchanges financial transactions between the participating financial institutions, about 3000 in
number in over 60 countries. The terminals of these participating banks are hooked with SWIFT’s access
centers. The network offers data communication service 24 hours a day, 7 days a week. INDONET,
NICNET, SBINET and WELCOMENET are some of the private network in India. CMC’s INDONET offers
e-mail service to customers for a fee. NICNET is a network of National Informatics Center that connects the
entire district headquarters in the country. SBINET is a private network of State Bank of India and connects
its branches across the country. WELCOMNET connects the hotels of the Welcome Group.
Advantages of WAN
The integration of the local nodes into the distributed database linked by the WAN provides
the following advantages:
1. The WAN allows access to database at remote sites, enabling exchange of data.
2. If a remote node fails, remaining nodes on the network can still exchange data.
3. If the network fails, the local mode can still access its own database.
4. The data used on daily basis by the sales offices resides at the local site, making it easier to retrieve
quickly.
5. The local offices can maintain the data more effectively. The corporate office can access the data as
needed.
6. As a site's database grows larger, its system's storage capacity can be easily upgraded without affecting
the transfer of data between other nodes on network.
One of the most significant aspects of a wide area network when comparing it with freedom
of a local area network is the involvement of a public telecommunications authority. Regardless of
whether the network is made up from system, the controlling authority is almost always the public
authority. In order to protect their equipment and employees, the authority lays down rules, which
must be observed by anyone connecting to their lines. In most countries stringent requirements are
also imposed on the characteristics of the data transmissions.

24
2. Metropolitan Area Network (MAN)
Metropolitan area network covers a wider area than a local area network. Usually MAN
covers a large metropolitan city and is a scaled down version of wide area network. It operates at
high speeds over distances sufficient for a metropolitan area.
3. Local Area Network (LAN)
A LAN is a system of interconnected microcomputers, sharing common resources like disks,
printers etc., and links a number of computers workstations) together to allow many people to use the
same software and data files. Each user in such a multi -user environment accesses the resources
through his microcomputer workstation. The network operating system integrates all the network
components and makes operation smooth and transparent. LAN works in restricted geographical area
such as within a large building or offices within a few kilometers.
The LAN is an interconnection of computers that need to communicate with each other in a
limited geographical area. The network may have other sharable devices attached such as fax, laser
printers and copiers. The network includes a central facility with huge storage capacity for the
requirements of the organization. It also has a network operating system for managing the network.
Types of LAN:
Local area networks are mainly of two types:
1) Client/ Server LAN and
2) Peer-to-Peer LAN.
Client / Server LAN Client Server LAN has servers and clients. The server is a computer
that manages shared resources: hardware as well as software and data. It is usually a powerful
computer with large RAM and secondary storage capacity. The LAN has a number of
microcomputers, called clients, the request the server for services. The LAN may have many servers
each specializing in one area of service such as file server, printer server, database server etc. A file
server stores program and data files. A database server stores data and a printer server controls
printers on the local area network.
Peer-to-Peer LAN:
In a Peer-to-Peer LAN every computer is equal in status and functioning. All the computers
on the network are capable of communicating independently with any other computer on the network
without using a server. Thus, any computer on the network can access data and programs stored on
any other computer. The peer -to-peer LAN is less expensive than client/server LAN. But at the
same time this LAN may be slower than a client/server LAN.
LAN Topology The design of network requires selection of a particular topology and an
architecture for the interconnection of network component. Topology refers to the way the
computers are physically connected into the network. The network architecture includes the
specifications of the components that can be connected to the network. IBM’s Systems Network
Architecture (SNA) is an example of vendor developed network architecture. Such network
architecture specifies network components such as terminals, workstations, printers, cluster
controllers, host computer and communications controllers. There are number of network
topologies. Of them ring, star and bus are popular network topologies.

25
a) Star Topology: In star network the nodes are connected to a central computer called the host computer.
The nodes cannot communicate directly. Each node can communicate with the host computer.
The host computer takes the message and routes it to the other node or nodes.
The host is the main computer to which other nodes are connected by communication links.
The host computer is responsible for the overall functioning of the network. The node may be a
microcomputer, terminal or any other device like storage device, printer etc.,
In a star network centralization of control over the network resources is easy. It is also
possible to network minicomputer or mainframe with other microcomputers and dumb terminals. It
eliminates single point failure of a common wire. If one of the host computers fails,usually affect the
others in the network. But the hub becomes a central point of failure in a ring network. If the host
computer breaks down, the entire network breaks down.
Ring Topology: In a ring network the computers can communicate directly with each other
and also with the central computer. The nodes are connected to a line that is closed like a loop. The
ring network is more reliable than star network. Even if the central computer in the network fails, the
other computers can continue to communicate with each other.
Bus Topology: A bus network configures computers to a single non -looping channel. The
computers connected to the network share the same bus or communication channel. Bus wiring is
easy and needs much less wring for small segments. Old Ethernet bus wiring is prone to cable
failure. If the bus wiring connection is broken at any point, the entire network fails.
d) Hybrid Network: In most cases, instead of a single topology, a combination of topologies
may be used for greater flexibility and reliability. Hybrid network combines features of Star, Ring
and Bus network:
Features of LAN
The features of LAN include the following :
a) Limited geographical area say within a few kilometers. b) Common communication link for
sharing information, software and peripheral devices without regard to proximity of user to
such resources on the network.
c) High transmission capability.
d) Low error rate as the network contains built-in component for detecting for system errors.
e) Private ownership by the user.
f) Not subject to regulation by the telecom service.
LAN interconnects computers and computers and components within a limited geographical
area. Such LANs are normally set up within a single business complex, a hospital, an office- building
etc. The site can have one or more buildings but they should not be too for a way, say less then5
kilometers. A LAN can also include a variety of
computer systems and devices such as workstations, microcomputer, file servers, plotters, scanners,
graphic terminals and printers.
A large personal computer or minicomputer serves as the LAN’s hub. A high capacity hand
disk is attached to the hub as data files and software are stored on

26
The users can load the software on the file server and retrieve data files for processing. The output
can be directed to the printer attached to the LAN.
Any the communication network that meets most or all of the following characteristics can be
classified as LAN:
a) All the devices on the network share a common transmission medium, that is, the cable and/ or the
controller.
b) The devices connected to the network can operate independent of the network.
c) Any device connected to it can communicate with any other device on the network, and
d) The network is capable of supporting heavy data traffic over short distances compared to
telecommunication network.
e) The network covers a limited area usually a few kilometers in radius or a single site like a
university campus, an office or a factory.
LAN Components
The components of LAN are File server, workstation, network operating system, LAN cable,
Active and Passive hubs etc.
a) Workstation
It is a single-user microcomputer with high power communication facilities. It can exchange
message with other workstations or fileserver.
Workstations can be of two types:
User workstation and server workstation.
User workstation is a microcomputer on the network, which is used to access the network.
Service workstation performs service to process other workstations on the network. User workstation
normally does not process requests from other workstations.
Server workstation makes available all sharable network resources to other workstations.
More than one server workstations may be added to the network such as printer server and fileserver.
Normally the server workstation is the most powerful workstation.
Server workstation may be dedicated or non-dedicated. In case of dedicated workstation, it is
not available for other user applications. Non -dedicated server workstation doubles as an individual
workstation and at the same time performs network-related functions.
File Server File server is actually a process running on a computer that provides the clients
access to files on that computer. The term is loosely applied to mean computer that runs file server
software. In this sense, it is a powerful computer with special software to serve files to other
workstations on the network. The files, which may be program files or da ta files, are simultaneously
shared by a number of workstations. Novell Netware is a popular network operating system.
Gateway The gateway assists in communicating between LANs. A workstation may be
dedicated to serve as gateway. This is required particularly when two networks with different
technologies have to communicate with each other. Gateway may also be used to connect LAN with
a mainframe computer.
Network Interface Unit The network interface is a printed circuit board installed in the
microcomputer. It may be called network card, network adapter or network interface unit. It
connects the workstations functionally and physically with the network.
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 Active Hub Hub is an electronic device to which multiple computers are attached usually
using Twisted pair cables. Active hub is a powered distribution point with active devices that drive
distant nodes up to one kilometer away. It can connect up to eight nodes on the network. The
maximum distance carried by an active hub is about 2000 ft.
Passive Hub This hub is a distribution point that does not use power or active devices in a
network to connect up to four nodes within a short distance. The maximum distance covered by a
passive hub is nearly 300 ft.
LAN Cable LAN requires superior cable capable of transferring data at high speed. Coaxial
cables or fibre optic cables may be used for networking computer.
h) Network Operating System (NOS) The NOS integrates all the network components. The
NOS facilitates file and serving along with other functions like communications and e -mail between
workstations. In most LANs the NOS exists along with the computer’s operating system.. The
computer’s operating system processes the system requests first and processes them the workstation
resources. If it is not a local request, meaning that the network resources have to be used, the request
is transferred to NOS for carrying out. Thus, the NOS is responsible for controlling access to data,
storage space and sharing of other peripheral resources.
i) Applications Software Another component of LAN is application software. It has to be
ensured that the application software works in the multi-user environment.
j) Protocols Data transmission between devices requires protocol. Protocols are sets of rules
and procedures to control the data transmission between computer and other devices. They are
common technical guidelines for communication between devices. They specify the order in which
signals will be transferred, the signal for completion of transfer etc. Only Devices using the same
protocol can communicate directly. Both the sending and receiving devices must use the same
protocol for effecting communication. For communication between devic different protocols requires
intermediate interpretation device or software.
The Protocol performs the following functions:
a) Set up a link with the other device in the communication.
b) Identify the component to other components in the communication (sending device’s channel ID)
c) Send and interpret the data
d) Provide a continuous feedback on data transmission like data is not being received and understood.
e) Request for retransmission of garbled data.
f) Engage recovery procedure when error occurs.
g) Provide an acceptable way of terminating transmission so that all devices have completed the process.
The protocol is embedded in communication software designed to use a particular user. The
user need not bother about the protocol as the components involved in the communication perform
the protocol matching. The data communication protocols are of two main types: asynchronous and
synchronous. The synchronous protocol transmission, the devices in communication must be
synchronized with the other. The transmission is governed by a time interval and not by start-stop
bits. For example, clock, in the modern, sets the time interval.

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Extranet and E-Mail
An Extranet is a private network that uses the Internet protocol and the public
telecommunication system to securely share part of business information or operations with suppliers,
vendors, partners, customers, or other businesses.
Through e-mail, documents are prepared and sent electronically. The recipients need not be
present at the other end to send the message. The message gets stored in the electronic mailbox of the
addressee. The recipient can open the mailbox whenever he is free and can read or print the message.
Extranet
An Extranet can be viewed a-part of a company's intranet that is extended to users outside the
company. It has also been described as a "state of mind" in which the Internet is perceived as a way
to do business with other companies as well as to sell products to customers. Extranet
extends the intranet from one location to another across the Internet by securing data flow, to another
intranet to a business partner. In these way intranets of business partners, suppliers, creditors,
distributors, customers, and the like are connected to extranets by agreements. An Extranet requires
security and privacy. These require firewall server management, e-issuance and use of digital
certificate or similar means of user authentication, encryption of messages, and the use of virtual
private networks that tunnel through the public network.
Characteristics of Extranet
The following are the important characteristics of the Extranet. a) It is an extended Internet-
private business networks located outside of the corporate firewall.
b) It can be referred to an intranet that is partially accessible to authorized outsiders. c) It is a network
that uses the Internet to link businesses with oth ers that share the common goals.
Uses of Extranet
Companies can use an Extranet to:
1. Exchange large volumes of data using Electronic Data Interchange.
2. Share product catalogs exclusively with wholesalers or those in the Trade. c. Collaborate with
other companies on joint development efforts.
3. Jointly develop and use training programs with other companies. e. Provide or access services
provided by one company to a group of other companies, such as an online banking application
managed by one company on behalf of affiliated banks.
4. Share news of common interest exclusively with partner companies.
5. The manufacturing companies can coordinate the design manufacturing, scheduling and
6. Delivery across supply chain. With extranet the technology firms can support for their customers
and partners and makes it
7. Possible for remote access for employees. The financial services firms by using extranet can
reduce costs of proprietary networks. With extranet the publishing companies can increase t he
speed of design and production cycles.
8. Other benefits:
 Quicker turnaround time
 Improved communication

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  Decreased paper flow
 Traceable correspondence
 Better service
 Lower overhead and expenses
 Improved employee morale
 Increased Margins. ,
 Flexibility and scalability.
 Reduced transitional barriers.
 Versatility.
A brief list of examples of extranet could include:
Allowing suppliers access to relevant inventory levels
Allowing clients to review their account records
Allowing students to update address information in real time. As with intranet, access is granted only
where you establish that it is required. User access is controlled by the latest in security technologies,
protecting sensitive material from intrusion.
The relationship between intranets, Extranets and e–commerce
The answer has three parts. First, intranets, extranets and e-commerce have in common the
use of Internet (predominantly web) protocols to connect business users. Second, intranets are more
localized and can therefore move data faster than more distributed extranets. (Bandwidth limitations
also apply to e -commerce.) Third, the amount of control that network managers can exert over users
is different for the three technologies.
On an Internet, administrators can narrowly prescribe access and policy for a fixed group of
users. For example, a company could specify Red Hat Linux as its standard desktop operating
system, and Netscape Communicator 5 as its standard browser and mail client. The company could
then write intranet workflow applications that leverage the uniform computing environment, over
which it exercises strong control. On a business-to business Extranet, system architects at each o f
the participating companies must collaborate to ensure a common interface and consistent semantics
(data meanings). Since one company cannot reasonably enforce standards on its trading partners,
extranet application developers must taken into account a wider range of technologies than is the case
for intranets. For example, one company participating in an extranet might be using Microsoft
Internet Explorer, another Netscape Navigator 4.5 and another Navigator Gold 3.x In order to
collaborate via extranet, the applications have to perform adequately on all represented platforms.
The same is true, even more, for e -commerce, in which the trading partners may be completely
unknown to one another. This is the case when you walk into a supermarket: the common interest in
communication is based on the need to transact business, and not necessarily on a long-term trust
relationship. Thus, e -commerce applications often support a level of security and transactional
integrity (for instance, non -repudiation of orders) not present in intranet or extranet applications.
E-Mail (Electronic Mail)
E-mail is an electronic message sent form one computer to another. We can send or receive
personal and business-related messages with attachments, such as pictures or formatted documents.
We can even send songs and computer programs. The e-mail communication is incredibly simple. A
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person with a PC and a modem to connect to the network can communicate with the other(s) so
connected to the network. The message can be prepared and sent instantly. The other person finds
the e -mail when he checks his mailbox and may replay to the message in the same way. The
message sent is private and no other person can read it.
Each user of e-mail service has a user ID or password serving as e -mail address. First thing to
do is to get online using modem and communication software. The system requires user-id and
password. Now the user can prepare his message in the form of a document using a word processor.
The e-mail address of the recipient has to be typed in before the message is sent,
With e-mail each person connected to the system is allotted a mailbox and the software
required for sending and receiving e -mail. The mailbox is simply a file into which the e -mail system
stores electronic documents. The user can check his mailbox for messages over the network. The
sender specifies his identify and that of the recipient. The sender then prepares the document or
retrieves the stored document and sends it.
E-mail is a document communication facility. To ensure that the recipient also understands the
emotions as well, a set of special symbols is used to convey some non -verbal Signals.
E-mail is the transmission of information electronically from terminal to terminal. The
document is prepared in a word processor and is mailed electronically. The basic facilities in e- mail
include message creation, message transfer and post delivery service. The e -mail service may be
traditional mainframe based or minicomputer based or LAN based system with PCS to access from.
Working of E-Mail
The first thing to be done is to type the message and the e -mail address of the recipient. Once
the ‘send’ button is clicked, this e-mail is sent through the telephone line after it’s conversion into
analog signal by the modem. The e -mail message arrives at our service provider’s server. If the
server recognizes the e-mail address as valid, the mail will be sent either through the network of the
service provider or through Internet gateway to the service provider of the recipient.
To send e-mail, we need a connection to the Internet and access to a mail server that forwards
the mail. The standard protocol used for sending Internet e -mail is called SMTP, short for Simple
Mail Transfer Protocol. It works in conjunction with POP servers. POP stands for Post Office
Protocol.
When we send an e-mail message, our computer routes it to an SMTP server. The server
looks at the e-mail address (similar to the address on an envelope), then forwards it to the recipient’s
mail server. Once the message arrives at the destination mail server, It’s stored until the addressee
retrieves it. We can send e -mail anywhere in the world to anyone who has an e -mail address.
E-mail route
With the advent of MIME, which stands for multipurpose Internet Mail Extension, and other
types of encoding schemes, we can not only send messages electronically, but we can also send
formatted documents, photos, sound files, and video files.
Infrastructure Requirement for E-mail
1. Personal Computer
2. Telephone Connection
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 3. Modem
4. Mailing software viz., Outlook Express or Netscape communicator or Internet Explorer etc.
Advantages of E-mail
1. Messages can be prepared and sent any time convenient for the sender.
2. Message can be received at the convenience of the recipient.
3. The transmission takes place instantly and the message gets stored in the mailbox of the
recipient.
4. The system can confirm delivery of message.
5. Copies of message can be sent to multiple recipients.
6. It reduces paper work.
Disadvantages
1. Recipients must be having e-mail connectivity. They must have computer terminals, modem
and telephone.
2. They must be subscribing to the same e-mail service provider.
3. Poor telecommunication affects the quality of message transmitted.
4. Despite all the disadvantages e-mail is a cheap form of information transmission. INDONET,
NICNET, DARTMAIL and ICNET provide this service in India. A user can be a subscriber to
such e-mail service providing agencies and use their facility.
E-Mail Addressing Pattern
Internet e-mail addresses typically have two main parts: [email protected]. First there is the
user name (alpha) which refers to the recipient’s mailbox. Then there’s an axon sign (@). Next
comes the host name (gmail), also called the domain name. This refers to the mail server, the
computer where the recipient ha an electronic mailbox. It’s usually the name of a company or
organization. The end of the domain name consists of a dot (“.”) followed by two or three letters
(such as .com and .gov) that indicate the top-level domain. This part of the domain name indicates
the type of organization or the country where the host server is located.
E-Mail Messages
E-mail messages are similar to letters, with two main parts.
The header contains the name and address of the recipient, the name and address of
anyone who is being copied, and the subject of the message. Some e-mail programs also display your name
and address and the date of the message.
The body contains the message itself. Just like when sending letters, we need the correct address. If
we use the wrong address or mistype it, our messages will bounce back with messages like – Return to Sender,
Address Unknown routine. When we receive an e-mail, the header tells us where it came from, how it was
sent, and when. It’s like an electronic postmark. Unlike a letter, which is sealed in an envelope, e -mail is not
as private. It’s more like a post card. Messages can be intercepted and read by people who really shouldn’t be
looking at it. We should therefore avoid including any confidential information unless we have a way to
encrypt it.
Usage of Mails
Incoming mails can be checked on a daily basis at least 3 times a day. We can use the e-mail
facility judiciously and extensively for communicating with Circle Office / Head Office/ Service
Branch / Customers.
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 Communicate e-mail id to all domestic and overseas customers and use the facility for passing
on information regarding new schemes launched by Bank and other important information to them.
Encourage customers to contact branch through e -mail for information regarding their urgent
banking requirements.
Use the facility as a marketing tool to attract new customers, exchange greetings with existing
customers and also inform them about recent happenings in the locality.
Web Browser
A web browser (commonly referred to as a browser) is a software application for retrieving,
presenting and traversing information resources on the World Wide Web. An information resource is
identified by a Uniform Resource Identifier (URI/URL) and may be a web page, image, video or
other piece of content.[1] Hyperlinks present in resources enable users easily to navigate their browsers
to related resources.
Although browsers are primarily intended to use the World Wide Web, they can also be used
to access information provided by web servers in private networks or files in file systems.
Internet browsing or net surfing as it is often called , is process of visiting different web sites
on the Internet hosted by various companies, organisations , educational institutions, magazines,
individuals etc. the Internet contains a wealth of information that can help your business. The major
web browsers are Firefox, Internet Explorer, Google Chrome and Opera.
Searching on the Web
The World Wide Web has emerged as a viable and legitimate way to publish information.
Experience is starting to suggest that certain kinds of information can be found more effectively on
the web than it can be found using print sources. Until recently, surfing was a typical approach for
finding information on the web. Surfing is unstructured and serendipitous browsing. Starting with a
particular web page, the approach is to follow links form page to page, make educated guesses along
the way, hoping sooner or later to arrive at the desired piece of information. Surfing is browsing
without tools.
A number of new tools have been developed that enable information published on the web to
be searched and discovered more effectively. There are three main types of search tools such as Web
indexed and search engines and web directories.
Web Index
A web index is designed to assist users in locating information on the World Wide Web. Web
indexes are also referred to as catalogs or directories. A web index collects and organizes resources
available via the World Wide Web. There are number of web indexes are available. The method of
organization, as well as other features, may vary from one index to another. Some index may present
information alphabetically; others may take a topical approach. Topical indexed often present their
resources in a hierarchical arrangement, moving from general to more specific. Some of the popular
web indexes are
 Yahoo!
 Web crawler
 Bizweb
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Web Directory
A web directory or link directory is a directory on the World Wide Web. It specializes in
linking to other websites and categorizing those links. A web directory is not a search engine and
does not display list of web pages based on keywords. Instead, it lists websites by category and sub-
category. The categorization is usually based on the whole website rather than one page or a set of
keywords, and sites are often limited to inclusion in only a few categories. Web directories often
allow site owners to directly submit their site for inclusion and have editors review submissions for
fitness. Some of the popular web directories are
http:// www.aboutus.org/
http://www.about.com/
http://www.botw.org/
Search Engine
A web search engine is an interactive tool to help people locate information available via the
World Wide Web. Web search engines are actually databases that contain references to thousands of
resources. Users interact with the database, submitting questions that as the database if it contain
resources that match a specific criteria.
There are many search engines available on the web. A web search engine provides an
interface between the user and the underlying data base. The interface presents the user with a place
to types in a search engines use fill-out forms as an interface and support complex queries. Some of
the most popular search engines are Google and Yahoo!
Review Questions
1. What is internet address?
2. What is IP address?
3. What do you mean by domain name?
4. Write a note on URL.
5. What is web page?
6. State the uses of internet?
7. List out the advantages of e-mail.
8. What is web browser?
9. Explain the types of web browsers?
10. How does e-mail work?

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 UNIT- III
ELECTRONIC COMMERCE AND E-BUSINESS

Introduction
The growth of Internet into a global market place attracts more business firms to use this
media for commerce. Business firms may use the Internet initially for communication. Websites are
set up to provide information about its products and services. Business firms offer corporate
information, product information, marketing related services etc,. The Internet has integrated the
fragment markets words over though in a modest way. But
this interaction is growing rapidly. The most important advantage of the Internet for business firms
is that it allows reaching customers at very low costs.
Electronic Commerce
Electronic commerce is the process of searching, choosing, buying and selling of product or
service on the electronic network; it uses the computer and communication networks for promoting
products, selling, delivery, collection and delivery service.
E-commerce can be defined as paperless exchange of business information using various
electronic systems such as electronic interchange, electronic mail, electronic bulletin boards,
electronic fund transfer and other network based technologies.
E-commerce is the process of delivery of information, products and services, including
payments through cables , networks and by similar access devices.
E-Commerce is the automation of manual processes and paper transactions where the
orgnisations move to a fully electronic environment, where the functioning or working in the
organization changes due to the introduction of this electronic environment.
E-Commerce is the electronic tools in the field of business, which executes the requirements
of the organizations, consumers, suppliers, employees and governments at lesser costs with improved
quality of goods and services.
IBM Corporation has defined e-commerce as “the automation of the business process between
buyers and sellers.
Historical Development of E-Commerce
Commercial transactions are as old as human civilization. The seller sells and the buyer
purchase the product, but the emphasis is given for the quality of product or service, mode of
operation, flow of information and the methodology followed in the transaction.
Year Events
1970s Introduction of electronic fund transfer between banks
1980s Electronic massaging – EDI,E-mail
Mid 1980s Social interaction, chat rooms, knowledge sharing , file transfer protocol, global village
Late 1980s Integral part of work, groupware, platform operations
1990s World wide web concept- economy in transaction- economy in scale.
The importance of e-commerce lies in its effort to improve the execution of business
transactions over network techniques. The network technology has helped small business to compete
with the big industrial houses. E- commerce activities have become an integral part of business
activities.
Developments
The government of united state has announced recently that all federal purchases would be
made paperless, due to the impact of e-commerce. Many firms and companies are at present
conducting e-commerce over the Internet.

35
 E-commerce generated the revenues that are managed by the commercial people and used by
the manufacturing organizations in creating products and services at the doorsteps of the consumers.
The object of e-commerce is to generate revenue by satisfying the consumer wants as well as the
wants of various activities
Electronic Commerce includes:
a) Buying and selling on the Internet
b) Making payments electronically
c) Business transaction in which there is no physical exchange or physical contact.
d) It is transacting a business over am electronic network without physical contact.
The problems connected with electronic commerce are:
a) Identity
b) Authentication
c) Protection of data
d) Confidentiality
These Problems can be solved by using:
a) Secure socket layer and hypertext transfer protocol
b) Digital signatures
c) Using public key cryptography
d) Using digital certificates.
In E- commerce, the parties to a transa ction interact electronically. They may be separated by
long distances physically, yet the electronic network bring them together not only to complete a
transaction but also to get after sales support, E -commerce is not just doing transaction over the
Internet, it aims at few other things as well like :
Web enabling an organization’s business so that it can facilitate better customer interaction,
handing customer enquiries receiving customer order and payments online.
1. Improving customer service capabilities by allowing customers by providing Inert access to its
databases containing customer interest information.
2. Use the web to gather customer need information and thus to reducing cycle time by responding
to customer needs quickly. It enables the firm in coming out with new available new product
information to customers.
3. Raising productivity of all activities in the organization by improving the flow of information in
the organization.
Features of E-Commerce
E-Commerce has the following general features:
b) It is a business strategy to cut down costs, while improving quality and increasing the speed of
delivery of goods/services.
c) It has ability to sell and purchase products/services/information on computer networks.
d) It is a solution for office automation and quick business transactions.
e) It is a tool to improve intra business functioning like business re-engineering.
f) It is tools to improve inter business communication through easy and accurate interaction and
information interchange.
Importance of E-Commerce
E-Commerce becomes inevitable because of the following:
a) Low setup cost:
Anybody can easily set up a website. In fact there are many organizations and training
institutes who help customers in developing and launching websites. To market a product large retail
showrooms are not required, just a web site showing the characteristics of the product including cost
details are sufficient.
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b) Global Free Market:
Nobody can dominate the global market as presence on the Internet is easy not only for global
giants, but even small organizations can participate actively at low costs and compete with stiff
competition.
c) Global Access:
Since more than 200 countries are hooked onto the Internet, anybody who can afford a TV
and a telephone can fully access the Internet and gain the information required.
d) Availability of Technology:
Since the same technology like web servers, browsers, engines, Internet, etc., is used
throughout the world therefore business can be easily conducted.
e) Multiple Opportunities:
By using E-Commerce multiple activities like selling, renting, purchasing etc. can be
performed. In fact a whole variety of transactions can be provided all under
f) Others:
E-commerce systems are being established for automating and enhancing many aspects of
communications, publishing, marketing, sales and customer service such as:
Customer Research
 Pre-Sales Enquiries;
 Information Publishing and Dissemination;
 Sales;
 Advertising;
 Promotions;
 Public Relations;
 Purchasing;
 Transactions;
 Funds Transfer;
 Production; ` Delivery;
 After-Sales Service;
 Ongoing Relationship Management; and
 Customer Support.
 The benefits of electronic commerce are not just available to large corporations and
 Government departments and many small to medium businesses are discovering new cost effective
opportunities to use Internet-related technology to help their business operations locally and
internationally.
Business Practices
The normal network enabled business activities can be classified into following headings
 e-mail for communication
 EDI- for procurement
 EFT- for payments
 Technological data interchange – engineering
 Customization – demand driven manufacturing
 Virtual enterprises
 Work flow automation
 Desktop – video conferencing
 Logistics coordination
 Electronic publish
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  Electronic banking
 Management aspects.
Business Practices and Forces
Modern business mostly depends on the technological improvements. The e-commerce
business practices can be classified in the various headings. Some of the heading is e-mail, EDI, EFT,
logistics, manufacturing, video conferencing, coordination logistics etc. there are internal forces and
external forces
Internal forces are controllable by the management and can be applied by the management as and
when required. External forces are emerging in the competitive business environment due to various
development and changes.
Factors inducing Expansion
The major factors inducing the e-commerce are as follows:
 Demographic conditions.
 Changes in consumer wants and needs..
 Local economic conditions.
 High competition / global competition.
 Rapid development in the field of computer technology.
 Increasing consumer awareness on goods and services.
 Changes in the market strategies.
 Globalization practices followed in many countries.
Impact of E-Commerce
 Reduction for distribution cost
 Globalized markets
 Lower product cycle periods
 Increased responses from the consumers and intermediaries
 Rapid use of the field of computer network
 Need for taking alternate decision in the wide markets
 High cost of clerical and paper transactions.
Technological Advancement
Many countries have achieved in modernizing the transport system by providing super highway and
sophisticated road and rail for fast movement of goods and services from one state to another. The
inter-state highways system have provided for the faster distribution of goods and services. The
reasons for technological developments are :
 e-commerce forces are
 economics factors
 globalization factors
 digital convergence
 quality
 competition
 time awareness
 customer interaction
Digital Convergence
The transactions between the seller and the buyer related environmental operators are done
through the digital media. The digital media makes it possible for processing and transmitting data in
bits. The data or information can be formulated in understandable way by digital technology and
transmitted in digital technology. The receiver has the ability to decode the information and
understands the information. Thus digital technology has assisted for the expansion of transaction in
the present day business.

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 Digital convergence means the information are stored, combined and manipulated by the
digital technology. Hence the information can flow efficiently without loss of time and reach the
directed targets with more emphasis. The convergence can be classified as content convergence and
transmission convergence. Again it can be classified as
i) Multimedia convergence
ii) Cross media convergence
iii) Storage convergence
iv) Information convergence
v) Access device convergence
Contents convergence means the convergence of data in the digital forms. These data can be
processed, stores, retrieved, enhanced, converted and compressed. This technology helps industries
such as newspapers, book publishing etc. the data are stores in data bases and the browsers help to
access data without any delay. The network infrastructure has enabled for the smooth flow of
information from the databases.
Transmission convergences is the concept of transmission of data from the information provider
to the information needed person. The activities are converged in digital technology. The data are
compressed and transmitted through telecom wires and cables.
Review questions
1. Define the term E-commerce.
2. What are the uses of e-commerce?
3. Briefly describe the historical development of e-commerce.
4. State the problems of using e-commerce.
5. Enumerate the features of e-commerce.
6. Describe importance of e-commerce.
7. Elucidate the factors inducing the expansion of e-commerce.
8. Describe the technology advancement of e-commerce.

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 UNIT –IV
TYPES OF ELECTRONIC COMMERCE
Introduction
A business model is the method of doing business by which a company can sustain itself, that
is, generate revenue. The business model spells out how a company makes money by specifying
where it is positioned in the value chain.
Some model is quite simple. A company produces goods or services and sells it to customers.
If all goes well, the revenue from sales exceeds the cost of operation and the company realizes profit.
Other models can be more intricately woven. Radio and television broadcasting is a good example.
The broadcaster is part of a complex network of distributors, content creators, advertisers and
listeners or viewers. Who makes money and how much, it is not always clear at the outset. The
bottom line depends on many competing factors.
For understanding, e-commerce can be defined as any form of business transaction in which
the parties interact electronically. A transaction in an electronic market represents a number of
interactions between parties. For instance, it could involve several trading steps, such as marketing,
ordering, payment and support for delivery. An electronic market allows the participating sellers and
buyers to exchange goods and services with the aid of information technology. Electronic markets
have three main functions such as
1. Matching buyers and sellers
2. Facilitating commercial transactions
3. Providing legal infrastructure.
Based on the parties involved in electronic transactions, the e-commerce can be classified into the
following types.
E-Commerce Transaction Models
Model Description Examples
B2C Sells products or services directly to consumers Amazon.com
B2B Sells products or services to other businesses or brings multiple Metalsite.com
buyers and sellers together in a central market place
B2G Businesses selling to local , state and federal agencies Igove.com
C2C Consumers sells directly to other consumers Ebay.com
C2B Consumers fix price on their own, which businesses accept or decline Priceline.com
E-Business transaction model
1) Business –to- Business (B2B)
2) Business –to- Consumer (B2C)
3) Consumer –to- Consumer (C2C)
4) Customer to customer (C2C)
a) Business –to-Business E-Commerce
This is done between business firms. For example, electronic transactions between a
manufacturing firm and its supplier firms are B2B transactions. This segment is the largest and
growing one in electronic, commerce. Here firm use the electronic network for purchasing products,
consulting services and paying for them. Business to business system is used for e-commerce in a
pure business environment. It covers many ways where e-commerce can be used to support one
business trading with other. Much of the attention given to B2B system relates to developments such
as e-marketplaces and e-exchanges, but most of the actual use of e-commerce is at a lower level in e-
commerce implementation cycle.
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 B2B is that model of e-commerce whereby a company conducts its trading and other
commercial activity through Internet and the customer is another business itself. This essentially
means commercial activity between companies through the Internet as a medium.
Major advantages of B2B
 Direct interaction with customers
 Focused sales promotion
 Building customer loyalty
 Scalability
 Savings in distribution costs
How B2B works: Tools and techniques
 Use of pricing as a tool
 Use of application service provider Model
 Use of generic Model which are known for efficiency as well as personalized attention to
various business customers
 Use of Comparison shopping
B2B Transaction Model
 B2B Storefronts: Provide business with purchase, order fulfillment and other value added
services. Eg Staples.com
 B2B vertical Markets: Provide a trading community for specifying industry. Eg
HotelResource.com
 B2B aggregators: Provide a single marketplace for business purchasing for multiple suppliers
eg Chemdex.com
 B2B trading hubs: Provide a market place for multiple vertical markets. Eg VerticalNet.com
 B2B Post and browse Markets: Provide Marketplace where participants post buy and sell
opportunities eg CATEX.com
 B2B auction markets: Provide a market place for buyers and sellers to enter competitive bids
and contracts eg FreeMarkets.com
 B2B fully automated exchanges: Provide a market place for the automatic matching of
standardized buy and sell contracts. Eg PaperExcange.com
Tools and techniques at the disposal of B2B enterprises
 Use of pricing as a tool
 Use of application service provider model
 Use of generic models which are known for efficiency as well as personalized attention to various
business customer
 Use of comparison shopping.
b) Business –to- Consumer E-Commerce
Consumers check electronic catalogues to learn about products and compare prices of
products sold. They purchase products at the firm’s website and may pay electronic cash or other
means like credit card.
Business to consumer is a concept of online marketing and distribution of products and
services over the Internet. It is a natural sequence of steps for many retailers who sell goods directly
to the consumer. The general idea for achieving success in B2C e-commerce lies in reaching more
customers, providing better services, and increases sales while spending less. For the consumer, if is
relatively easier to appreciate the importance of e-commerce as it saves their precious time, which
they spend moving around in crowded supermarkets, by enabling them to do the same from their
home, by shopping on-line at any time in virtual Internet shopping malls and have the goods and
delivered at their doorsteps.
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 The supplier may be an existing retail outlet such as a grocery store. These businesses may
have been slow in gearing –up for e-commerce compared to the innovative Internet companies, but
they usually have a sound commercial structure as well as in-depth experience of running a business.
This system can also be used to receive information such as share prices, insurance quotes, online
newspapers or weather forecasts.
Some of the reasons for using B2C:
Inexpensive costs, big opportunities. Once on the Internet, opportunities are immense as companies
can market their products to the whole world without much additional cost.
Globalization . Even being in a small company, the web can make you appear to be a big player
which simply means that the playing field has been leveled by e-business.
Redeced operational costs. Selling through the web means cutting down on paper costs, customer
support costs, advertising costs,and order processing costs.
Consumer convenience. Searchable content, shopping carts, promotions and interactive and user
friendly interfaces facilitate customer convenience, thus generating more business. Customers can
also see order status ,and get their receipts online.
Knowledge Management. Through database systems and information management , you can find
out who visited your site ,and how to create , better value for customers.
B2C Processes are as follows
 Visiting the virtual mail
 Customer registers
 Customer buys products
 Merchant processes the order
 Credit card is processed
 Operations management
 Shipment and delivery
 Customer receives
 After sale service
How B2C works
 Visiting the virtual mall
 Customer registration
 Customer buys the product
 Merchant process the order
 Credit card is processed
 Operations management :eg quality management
 Shipment or delivery
 Customer receives
 After sales service
Benefits of B2C
 Inexpensive cost
 Big Opportunities
 Globalization
 Reduced operational coast
 Customer convenience
 Knowledge management
Barriers of B2C
 You can see but you cannot touch, feel and smell
 Digital Photographs are not color accurate
 Consumer expects high service standards
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  Trusting the company/brand
 Financial security
 Personal Data
c) Consumer –to- Consumer E-Commerce
Some sites offer consumers to deal directly with each other. Auction sites are examples. At these
auction sites consumers can buy and sell products.
Electronic commerce is useful to both producers and consumers as it helps them overcome the
traditional barriers of distance from markets and lack of information about market opportunities.
Producers and traders no longer need to maintain physical establishments requiring large capital
outlays. Virtual shops and contact points on the Internet may enable
Storage close to the production sit e and distribution can be made directly to the consumer. Increased
advertising possibilities worldwide may help small and medium industries and businesses that
traditionally find it difficult to reach the consumer abroad. E- Commerce may also enable such firms
to eliminate middlemen while trying to sell their products abroad.
d. Customer to customer
Customer to customer system refers to e-commerce activities, which uses an auction style model.
This model consists of person to person transaction that completely excludes businesses from the
equation. C2C system enables customer to directly deal with each other. Examples of this type of
system are
www.ebay.com
www.amozan.com
www.snapdeal.com
www.flipkart.com
Under the C2C e-business model, consumers sell directly to other consumers via online classified ads
and auctions, or by selling personal services or expertise online. Examples of consumers selling
directly to consumers are ebay.com( auction) and trader online.com ( classified ads)
There are also a number of new consumer to consumer expert information exchanges that are
expected to generate $6 billion in revenue by 2005.
E-Business Model Based On The Relationship Of Transaction Types ,Although there are many
different ways to categorize e- business models, they can be broadly categorized as
(1) E- business Model based on the relationship of transaction parties
(2) E- business Model based on the relationship of transaction types
E- Business Model based on the relationship of transaction parties

Business Business

Government

Customer Customer

E-Business Transaction parties

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 B2C : Sells products or services directly to customers, eg amazon.com
 B2B : Sells products or services to other business, or brings multiple buyers and sellers together
in a central market place, eg. Chemdex.com
 B2G: Business selling to local, state and federal agencies, eg. iGov.com
 C2C : Consumers sell directly to other consumers, eg ebay.com
 C2B : Consumers fix price on their own, which business accept or decline. Eg Priceline.com
This business model is essentially ruled by the following parameters.
On the basis of value addition
Value addition is the addition of value to a product or service because of the opportunities that
is offers on the web.
On the basis of control
At the high end of control there is hierarchical control and at the low end there is no control, so
that it is self-organizing. Normally, the control is done through the policies of the websites.Based on
this, there are nine types of transaction can be identified as listed below.
 Brokerage
 Aggregator
 Info-mediary
 Community
 Value chain
 Subscription
 Manufacturer
 Advertising
 Affiliate
Revenue Model
In business, revenue typically consists of the total amount of money received by the company
for goods sold or services provided during a certain time period. Therefore, revenue models are a part
of the business model.2) Many online companies generate revenues from multiple income streams
such as advertising, subscription, affiliate marketing etc. Online models not only sell goods or
services but also contacts (e.g. banner) and information (e.g. user-data).
Five primary revenue models are described below. Since there are possibilities of multiple
variations, many companies do not use one single revenue model. They combine for example
subscription fees with advertising and/or sales.
Advertising Revenue Model
Typically, fees are generated from advertisers in exchange for advertisements, which is
ultimately the classic principal among the revenue models besides sales. Even if representatives of
major media companies complain about earning less money with online advertising than with
advertising in print or TV, the figures indicate steadily rising revenues.
The advertising revenue model is based on contacts making it one of the indirect sources of
revenue. The conventional version is display-marketing - for example wallpaper, super banner,
rectangle, skyscraper - which is paid according to traffic (invoice per CPC/cost-per-click or
CPX/cost-per-action). The main online advertising variations are besides display-marketing, affiliate-

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marketing (advertising on many websites, CPX) and search-engine-marketing (CPC). Special models
are e-mail-marketing and social-media-marketing. For advertisers with a lower budget for example
the New York Times created a self-booking-tool for display-ads on a CPM(Cost-per-mille)-basis.
And there are still rising new opportunities.
Examples
 Google (e.g. AdWords and AdSense)
 Facebook
 New York Times (Marketing)
Subscription Revenue Model
Users are charged a periodic (daily, monthly or annual) fee to subscribe to a service. Many sites
combine free content with premium membership, i.e. subscriber- or member-only content.
Subscription fees do not depend on transactions. Subscribers use the content as long and often as they
want. For example Publishers and content services, e.g. newspapers, magazines, TV channels - they
provide text, audio or video content to users who subscribe for a fee to get access to the service or to
download the new issue:
Transaction Fee Revenue Model
A company receives commissions based on volume for enabling or executing transactions.
The revenue is generated through transaction fees by the customer paying a fee for a transaction to
the operator of a platform. The company is a market place operator providing the customer with a
platform to place his transactions. During this process the customer may be presented as a buyer as
well as a seller. To actively participate in this e-market, customers must register, so both parties of a
transaction taking place are identified. From a business perspective, the offer is determined by others
as customers offer their goods online and are acting as sellers. The amount of the transaction fee can
be both – fixed and percentage calculated. Example of ebay.
Sales Revenue Model
Wholesalers and retailers of goods and services sell their products online. The main benefits
for the customer are the convenience, time savings, fast information etc. The prices are often more
competitive. In terms of online sales there are different models such as market places as common
entry points for various products from multiple vendors.
Example the shops of single companies, sometimes based on web-catalogs (combines mail, online
and telephone-ordering.
The Affiliate Revenue Model
The affiliate program is an online distribution solution which is based on the principle of
commission. Merchants advertise and sell their products and services through links to partner-
websites. It is a pay-for-performance model: Commissions are only paid for actual revenue or
measurable success. An affiliate-link includes a code, which identifies the affiliate. That’s how clicks,
leads or sales are tracked. The affiliate therefore acts as the interface between merchants and
customers. This model leads to a win-win situation: the merchants sell their products or services and
the affiliates get their commissions. Variations include banner exchange, pay-per-click and revenue
sharing programs. The affiliate model is well-suited for the web and therefore very popular.

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E-Commerce Activities
Business firms use the Internet platform for communication and commerce. The e- commerce
activities can be discussed as follows:
a) Direct Marketing and Selling
Business firms set up websites for direct marketing and selling. Direct selling was one of the earliest
forms of e-commerce. For example, Amazon.com, Barnes and noble and Dell computers engaged in
direct selling. Gradually firm moved on to one or more complex operations on the web.
b) Value Chain Integration
E- Commerce does not tolerate any kind of delay. Delay in inventory tracking and management can
cripple the business. E - Commerce firm use EDI for exchanging transaction data among them so
that transactions are automatically processed. Thus suppliers, customers and service providers will
use open EDI for integrating their processing systems leading to more efficient operations.
c) Corporate Purchasing:
Internet provides opportunities for business firms to reduce cost of purchasing. Suppliers
keep their electronic catalogs updated. Comparative price information is also available.
Ordering can be electronically done to reduce the laborious paper work in purchasing.
Officers can approve purchase orders electronically. The firm can enforce policies; provide greater
services to customers and suppliers.
d) Financial and information services
A wide range of financial services are offered on the Internet. They include:
a) Online banking
b) Online billing
c) Online securities transactions
d) Secure information distribution
e) Mobile commerce
Mobile commerce is a part of e-commerce and differs from the latter on the use of mobile
telecommunication communication network in place of telecommunication network. M -commerce
includes only transactions with a monetary value and it excludes short message services. One
condition essential for the success of mobile commerce is large user base of mobile phones.
Adequate security for mobile transactions is another condition for its adoption in a big way.
Conclusion
The internet and e-commerce plays vital role in business. It eliminates the various hurdles. At present
circumstances the people widely used various techniques of internet such as electronic commerce, electronic
banking, and electronic mail. Electronic advertisement and electronic marketing.
Review questions
1. What are the e-commerce transaction models?
2. What is business to business model?
3. State the advantages of B2B.
4. What is business to consumer ecommerce?
5. List out the reasons for using B2C.
6. State the process of B2C.
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 UNIT –V
E-MARKETING

Introduction
Traditional marketing
Marketing is to promote the sale of your products and services. It should include:
Market research from competitive information gathering to industry awareness to soliciting
customer opinions and preferences.
Publicity from press releases to the positioning of your company and its offering in the marketplace.
Advertising that is text-based and graphic based (display)
Sales, is includes distribution and merchandising.
Customer service and customer support.
Problems of traditional marketing
There are some problems in traditional marketing such as
 Traditional marketing is expensive
It can cost a lot of money to produce and print brochures, product sheets and catalogues. It is
also expensive to keep support personnel on hand to answer inquiries from customers, and it
costs a lot of money in postage and shipping fees to send information to prospective
customers.
 Traditional marketing can be a very time consuming process. Mistakes have to be
corrected. You have to wait for months for an ad that you have placed to appear in a
publication.
 Traditional meeting has a “ hit and miss” quality. Marketers often send out bulk of mails to
customers and yet receive a tiny response. Moreover they feel that they do not cater to the
taste of the consumers or rather that they do not come across the right consumer.
Businesses have always made their presence felt by establishing shops, factories, warehouses
and office buildings. An organization’s presence is the public image it presents to its stakeholders.
The stakeholders of a firm include its customers, suppliers, employees, stockholders, neighbours and
the general public. Companies tend not to worry about the image they project until they make their
mark. Initially, they focus only on their survival. On the web, making one’s presence felt is much
more important. The only contact the customers and other stakeholders have with a firm on the web
might be its websites or its web pages. Therefore, creating an effective and appealing web page is
essential even for the smallest and the newest firm operating on the web.
Identifying Web Presence Goals
When a business creates a physical space in which to conduct its activities, its m on very
specific objectives. Few of these objectives are image-driven. An ambitious businessman must find a
location that will be convenient for customers to access, with sufficient floor space features to allow
the selling activity to occur, and they must take into consideration the room space to store inventory
and provide working space for employees. An added feature is the interior decoration which could
enhance the business ambience, and at the same time attracts customers. The success of a business
relies on fulfilling these objectives in a tangible, physical location.
On the Web, businesses and other organizations have the advantage of creating a space of
their own choice, design and other embellishments, good enough to make a distinctive presence. A
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website can have images, and can activate them by animation, thus making the customers feel and
enjoy its presence. It can serve as a sales brochure, a product show rooms, a financial report, an
employment ad, or a customer contact point. Each entity that establishes a Web presence should
decide which tasks the website must accomplish, and which tasks are most important and need to be
included for promoting their business.
Achieving Web Presence Goals
An effective site is the one that creates an attractive presence that meets the objectives of the
business or the organization. These objectives include:
Attracting visitors to the website
 Making the site interesting enough so that visitors stay and explore.
 Convincing visitors to follow the site’s links to obtain information.
 Creating an impression consistent with the organization’s desired image.
 Building a trusting relationship with visitors.
 Reinforcing positive images that the visitors might already have about the organization.
 Encouraging visitors to return to the site.
Meeting the need for web visitors
The web designer, who makes a site useful for everyone, needs to keep in mind some of the
possible reasons listed as follows.
 Learning about products or services that the company offers.
 Buying the products or services that the company offers.
 Obtaining information about warranties or service and repair policies for products they have
purchased.
 Obtaining general information about the company or organization.
 Obtaining financial information for making an investment or credit granting decision.
 Identifying the people who mange the company or organizations.
 Obtaining contact information of a person or a department in the organization.
E-marketing value chain
E- Marketing thrives with the maintenance of strong relationship between the company and
customer. It is like a chain – the company acquires customers, fulfills their needs and offers support
and gains their confidence so that they return to it again.
Site Adhesion : Content, Format and Access
Content
A customer accesses a website for the content of that site. Initially a customer will want to
navigate quickly to gain a clear understanding of the site’s progression to more detailed information.
The key to this is to match a user’s psychological and technological sophistication profile with that of
the site’s initial and subsequent impact.
Format
The format of an organization’s site is important with respect to the customers’ technical
sophistication.
Access
Online data accesses depend on the bandwidth requirement. The clear rule in the initial
interaction phase is to use as minimal a band with as is feasible to facilitate as wide an audience as
possible.
Maintaining a website
Creating a website that meets the needs of visitors with such a wide range of motivations can be
challenging. Not only do website visitors arrive with different nees, but aslos they arrive with
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different experience and expectation levels. In addition to the problems passed by the diversity of
visitor’s characteristics, technology issues can also arise. These websites visitors will be connected to
the Internet through a variety of communication channels that provide different bandwidths and data
transmission speeds. They also will be using several configurations. The wide array of browser add-
in and plug-in software’s adds yet another dimension to visitor’s variability. Considering and
addressing the implication these many visitor characteristics when building a website can help
convert those visitors into customers.
When construction the websites, the business should try to meet the following goals.
 Convey an integrated image of the organization.
 Offer easily accessible facts about the organization.
 Allow visitors to experience the site in different ways and at different levels.
 Provide visitors with a meaningful, two way communication link with the organization.
 Sustain visitor attention and encourage return visits.
 Offer easily accessible information about product and services and how to use them.
Internet has emerged as the biggest market place in the last few years. Prospective buyers
generally browse through the Internet when it need of something or when they want to know more
details of something. The volume of Internet transactions is increasing every day. The shopping
patterns of the people have changed due to Internet invasion. Internet is a new dynamic vehicle to
influence buyers. It enables extensive cover, as it has the potentials to reach global market at a rapid
rate. The tremendous success of microsoft, google, yahoo and amazon has providing confidence to
business organization and marketers to adopt e marketing along with their conventional method of to
attract and retain customers,
The continuing progress of technology, emergence of e-consultants, generation of creative
ideas have made significant contributions in making e-marketing exciting, interesting, interactive and
affordable to business organizations. E-marketing should be unique, creative and appealing to
customers. Demographic aspects such as age, sex, income religion, education should be considered
while formulating online advertisements.
E-marketing is the process of conducting marketing activities and achieving marketing
objectives through electronic medium. It may be defined as an economic process that involves the use
of computer, Internet and other electronic systems and network, whereby the goods or services are
exchanged and their values in terms of price are determined.
CISCO specialists define e-marketing as the sum of all activities a business conducts through
the Internet with the purpose of finding, attracting, winning and retaining customers.
E-Marketing involves the use of online networks, computer communication and digital
interactive media to the marketing objectives of the organization. It enhances the functions of
traditional form of marketing. Business organizations adopt marketing tactics like e-mail, banner ads,
referrals, and video ads to attract tan retain customers.
Advantages of E-Marketing
1. Saves money and time
Using electronic media to carry out marketing activities and automation of business processes
result in reduction of cost. The costs involved in printing catalogues brochures are saved by adopting
online marketing. It is easy to make changes in electronic catalogues, e-mail and brochures and can
be sent to several people at a lower cost. E-mail allows business organizations to exchange

49
information with prospective customers. Time and money spent on sales representatives are
eliminated in online marketing.
2. Intimate customer relationship
Customers generally require a lot of information. Their quest for information arises before,
during and after purchase. Business organizations can send upto date information to customers. It
enables them to establish and improve customer service at a lower cost. Business organizations are
able to respond to their customer queries quickly through e-mail and thus improve their business
overall.
3. Attract analytical buyers
There are buyers who purchase the product only after comparison. They are called as
analytical buyers. It usually takes long time for analytical buyers to make comparisons. Hence, the
purchase decision is postponed. When the purchase decision postponed , the sale of the product also
get marketing enables buyers to compare the products offered by various organizations at a
remarkable speed by visiting their websites. This enables the customers to reach a decision quickly
and result in purchase of a product and service without delay.
3. Removes distance barriers
Online marketing enables buyers to compare the products offered by various organizations at
a remarkable speed by visiting their websites. This enables the customers to reach a decision quickly
and result in purchase of a product or a service without delay. This helps to improve the sale of the
organization. This greatly benefits the business that deals with high valued products such as cars,
electronic goods, etc.
4. Removes distance barrier
Online marketing enables business organizations to each customers globally and instantly
through Internet. Thus, it aids in reaching global audience by removing the geographical barriers
caused by distance.
5. Offers choice
E-marketing enables the customers to see the electronic images of the product and choose the
size , color of the product of their choice. There is no role for sales representatives in compelling the
customers to buy the product. So, the purchasing process will be totally due to the intiative of the
buyer.
6. Easy collection of data
e- Marketing helps business organization to collect data and measure about customer’s buying
pattern.
Market segmentation
Market consists of buyers. Buyers differ in their wants, attitude, purchasing power, age,
income status, buying pattern and geographical locations. The complex and varied behavior of the
buyers is the prime reason for segmenting a market. A market segment consists of buyer groups with
similar wants. Market segmentation is essential for locating, comparing and utilizing marketing
opportunities. Based on marketing segmentation, marketing programmes and plans can be framed
effectively. Market segmentation enables the marketers to choose the target market and offer the right
e-marketing mix. Market segmentation helps a marketer to know beforehand the kind of products or
services that can be sold on Internet and to whom the products can be sold.

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A market can be segmented into three categories
 Geographic segmentation
 Demographic segmentation
 Psychographic segmentation
Geographic segmentation:
Geographic segmentation divides the market into different geographic units such as nation,
state and cities etc.
Marketing strategy varies from continent to continent, nation to nation and region to region.
Different marketing strategies have to be developed for urban and rural customers. For example, an e-
card greeting company has to develop different marketing strategies for its customers in India and in
United States. The festivals differ from nation to nation.
Demographic Segmentation
The study of population is called demography. Sex, age, marital status, education, income are
all demographic characteristics. Gold Jewelers can focus on women. Likewise, if trendy watches are
introduced in the market by Titan Watches, then it can focus on the youth. Likewise, PC literates
possess online shopping practices possess online shopping practices. Online retailers can focus on p
literates. Web retailers can provide separate virtual spaces for differ C market segments.
Psychographic Segmentation
In psychographic segmentation, buyers are divided into various groups based on social class,
life style and personality characteristics. For example airlines can focus on upper middle class and
high class society as their purchasing power enables them to pay for air travel. Astrological website
can directly send opt-in-emails to persons who are interested in astrology.
E-MARKETING MIX
The number of customers purchasing goods through Internet has increased. Lot of business
organizations are marketing their products by placing their products on the websites. A successful
mix focuses on the target market for which the e-marketing mix is prepared. Marketing mix decisions
play an important role in implementing effective marketing management.
The four elements that constitute a successful e-marketing mix are
1. E-Product or service
2. E-Price
3. E-Place
4. E-Promotion.
Objectives of e-marketing mix
The marketing elements should be well blended or combined to achieve marketing objectives.
E-marketing elements so that the organization can realize the following objectives.
1. Increase in profit
2. Good return on investment
3. Increase in sales volume
4. Increase in market share
5. Reduction in promotion cost.
6. Easy global reach.
E-Marketing mix basically involves decisions on product, price, place and promotion.

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E-Product
Product possesses some utility. It is beginning point of marketing. An organization can
achieve good profit only if the product is satisfactory. In traditional maket, consumers can visit
physical stores and touch and feel the product before they purchase.
On the other hand, in the electronic market, consumers have to buy products based on
electronic images.
Hence, business organization or marketers should provide complete information about the
product or service to enable people to commit purchase. For example, an electrical store provides
complete information about their products to the buyers. Some marketers allow customers to
download samples to know the utility of the product. A customer who visits the website of Sears can
get complete information about the products that the customer is looking for. For example, if he/she
is looking for electronic accessories, he shall be able to access the information quickly and easily by
visiting the website of Sears. Website of Toyota provides detailed information about each vehicle
model. The webpage of Toyota also provides a help link and information about how to contact the
company for further details and purchases.
Online marketing enables business organizations to reach global audience. The needs and the
taste of the people differ from country to country and individual to individual. E-Marketing enables
business to customize products according to the needs of the customers. There are certain goods like
music, software, videos which can be customized according to the needs of the customer. For
example, clothing retailers display photographs of casual and business clothing along with price,
colour size, etc. This enables a purchaser to get complete information about the product and choose
the desired product that suits his requirements. Some ancillary products along with main purchases
can also be given to attract customers. For example, when a person buys a printer through online, an
extra printer cartridge can be offered to boost the sale of printers. Business organizations can also
provide after sale service through online for certain goods and retain customers in the long run.
E-Price
Price is considered as an important factor to both the seller and the buyer. Determining the price of
the product in the Internet world is very difficult. In traditional market, it is easy for business to
forecast sales based on past experience and market research. In electronic market, price of the product
offered by business organization is very transparent. Internet allows people to visit the websites of
various business organizations and choose the best seller who offers a best deal in the market. So, the
price set by the marketers should attract customers and at the same time should cover the cost and
generate more revenues to the organization.

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 Marketing goods on the web is very cost effective. The savings that are generated should be
considered while setting the price of the product. Today, customers are able to dictate prices through
web auction. It can be witnessed from the growth of eBay where thousands of buyers and sellers are
bidding daily to arrive at best price or deal.
Payment for purchase of product has also been made easy with the use of credit cards.
Business organization should ensure secured payment system to attract and retain customers.
Through websites, business organization are able to attract customers anywhere in the world and
deliver goods to them. Delivery of goods at customer’s doorsteps enhances the shopping charges in
electronic market. Any such shopping charges may result in increase in the overall price of the
product. Hence, marketers should bear the above factor in mind while fixing the price of the product.

E-Place
In electronic commerce, there is a direct link between the business and the consumer. The
middlemen are eliminated and the business delivers the goods directly to the customers. There are
certain goods like music software which are directly delivered to the customers through online. In
case of durable goods, business organization should ensure that goods are delivered to the customers
within a reasonable time. If a business organization delays in delivery, then the site may not attract
customers for any further transactions. The goodwill of the business organization will be lost because
of such delays. Business organizations before placing online links and advertisements should know
the customers and its capacity to serve customers. A website allows marketers to attract customers
anywhere in the globe. A seller of perishable goods should accept offers that needs shorter route and
a seller of durable goods can accept longer route for delivery. For example, a florist should accept
offers that have shorter routes and a seller of television sets can have a longer route for delivery.
Promotion
Promotion is the method adopted by the marketer to inform and persuade buyers to accept or
recommend the product. Every organization should have good online promotion strategies to pull the
customers towards the organization. In traditional market, organization to have face-to-face contact
electronic market, business organizations have screen-to-face contact. Developing healthy
relationship through chat and e-mail is necessary to retain customers. Placing banner advertisements
on other WebPages is another form of e-promotion. Banner advertisements must be placed on
websites where web browsers frequently browse. Marketers can send e-leaflets to respondents and
hope at least a small percentage will reply. Newsworthy stories on company's product or services can
be placed on company's web pages. Such e-promotion tools influence the buyer behaviour and alter
the demand curve in favour of the company's product.

MARKETING STRATEGIES
Online strategies are required to attract and retain customers. Following are some of the
marketing strategies that can be opted by business organizations to attract and retain customers.

E-mail Marketing Strategies: Business organizations send e-mail messages to people who have
requested information about a specific product. This is called opt-in-email and this strategy is called
Permission Marketing Strategy.

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 E-mail has the potential to serve as a direct marketing tool. E-mail allows marketers to deliver
different advertisements to different customers based on market segmentation. E-mail allows users to
see graphic images and text that really impresses the customers. Browsers that have been integrated
in the e-mail system allow graphics and links. The users get transported to the related website by
clicking on the link in the message.
The behaviour of the customer collected from the database can be integrated by the marketers
to send sales promotion e-mails to the customers. For example, if a visitor had visited the website of
UNIVERCELL to read about the latest arrival of Mobile phones, then the information can be utilized
by UNIVERCELL to send a coupon or information through direct e-mail to the customer. This will
help to attract the customer and may result in purchase of mobile phones. Some marketers send e-
mail without receiving any request for information from the customers. Such unsolicited commercial
e-mails are known as "Spam". This method is generally adopted to grab as many customers as
possible without any concern for long-term relationships. Customers who receive unsolicited mail
generally behave negatively and do not have a good image about the organization. Unsolicited e-
mails also rise privacy issues.
Under opt-in-method, customers visit the website of an organization and mention the areas
that they are interested in receiving mail or information. This method is well received by the
customer. Thus, opte-mail method helps business organizations to acquire and retain customers.
E-mail is very cost effective. It has got the ability to reach a large number of customers at a
nominal cost. E-mail helps to retain customers. Hence, it can be considered as an effective customer
relationship management tool. The response of the customers to the e-mail can also be tracked. When
a customer clicks through the e-mail to the advertiser's website, the behaviour of the type of
customers responding to the offer and the reach of the offer can be assessed. For example,
yesmail.com offers opt-in-email services.
1. E-mail
2. Popular Online marketing
3. Display Advertisements
4. Branded sponsorship
5. Blogs, online games, social networks, virtual world
6. Referrals.

Affiliate Marketing Strategy

Affiliate marketing strategy has gained popularity in the current e-market. It is a creative way
of promoting web business. Low budget websites are using affiliate marketing strategy to generate
revenues. Affiliate's firm website contains description, rating and information about a product that is
linked to another organization’s website that offers the product for sale.
Marketers pay affiliates to forward customers to their websites. The pioneer of affiliate
marketing is amazon com. Affiliate member must feature a link to amazon's site. When an Internet
user buys any product on amazon's website after having gone there through a link, the affiliate
member link which had forwarded the buyer to amazon.com receives the commission. An excellent
example is proflowers.com. It has got many affiliates. Any customer who visits the affiliate firm and

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clicks on the pro flowers com link and orders flowers at proflowers.com, then commission shall be
paid on the ale to the affiliate.
There are three types of affiliate marketing programs.
Click through – Affiliates are paid for each visitor who clicks through the banner or button
/link and goes to the sellers page
Lead generation – Affiliates are paid if the marketer is able to register the user
Revenue sharing – Affiliates are paid when the customer makes a purchase.
Viral Marketing Strategy
Viral Marketing Strategy approaches individual customers to inform other persons about the
products and services of a business organization. Business organizations believe that this marketing
strategy can build good business as there is no face to face contact in electronic marketing.
Blue Mountain Arts - an electronic greeting company adopts the viral marketing strategy. A
greeting card recipient sends electronic greeting cards to several of her friends. The friends who had
received those greeting cards in turn send greeting cards to their circle of friends. This method
adopted by Blue Mountain Arts has helped it to grow as the most visited site on the web.
Brand leveraging Strategy
An organization leverages its dominant position by adding more features to the website that
are useful to existing customers. This is called Brand Leveraging Strategy. For example, Yahoo
adopts this strategy. Yahoo added a search engine function and leveraged its dominant position by
acquiring other web businesses and expanded its existing offerings.
American Marketing Association defines advertising as "any paid form of non-personal
presentation and promotion of ideas, goods or services by an identified sponsor". Advertising on the
Internet is called online advertising or E-advertising. Customers buying goods through online have
rapidly increased due to the penetration of Internet. Due to convenience and cost savings, consumers
prefer to buy goods through Internet. So, at this stage, it is essential for companies to attract and
retain customers through Internet or web.
Internet has allowed business organizations to send personalized messages through e-mail changing
their behaviourial pattern. The behaviour of the consumers has changed. The number of customers
purchasing goods through online has increased. Hence, e-advertising should be opted to attract the
customers who have changed due to technological changes.
Online marketing
Online marketing refers to a set of powerful tools and methodologies used for promoting
products and services through the Internet. Online marketing includes a wider range of marketing
elements than traditional business marketing due to the extra channels and marketing mechanisms
available on the Internet.
Online marketing can deliver benefits such as:
 Growth in potential
 Reduced expenses
 Elegant communications
 Better control
 Improved customer service
 Competitive advantage

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 Online marketing is also known as Internet marketing, Web marketing, digital marketing and
search engine marketing (SEM).
Techopedia explains Online Marketing
The broad online marketing spectrum varies according to business requirements. Effective online
marketing programs leverage consumer data and customer relationship management (CRM) systems.
Online marketing connects organizations with qualified potential customers and takes
business development to a much higher level than traditional marketing/advertising.
Online marketing synergistically combines the Internet's creative and technical tools,
including design, development, sales and advertising, while focusing on the following primary
business models:
 E-commerce
 Lead-based websites
 Affiliate marketing
 Local search
Online marketing has several advantages, including:
 Low costs: Large audiences are reachable at a fraction of traditional advertising budgets,
allowing businesses to create appealing consumer ads.
 Flexibility and convenience: Consumers may research and purchase products and services at their
leisure.
 Analytics: Efficient statistical results are facilitated without extra costs.
 Multiple Options: Advertising tools include pay-per-click advertising, email marketing and
local search integration (like Google Maps).
 Demographic Targeting: Consumers can be demographically targeted much more
effectively in an online rather than an offline process.
The main limitation of online marketing is where goods are being sold, the lack of tangibility
means that consumers are unable to try out, or try on items they might wish to purchase. Generous
return policies are the main way to circumvent such buyer apprehension.
Online marketing has outsold traditional advertising in recent years and continues to be a high-
growth industry.
Online Display Advertising
The high-traffic, high-visibility placements are available throughout Amazon.com site
including the home page, search pages, product detail pages, and the order conformation page.
Format for web advertising An ideal advertisement format on the web is given below:
1. Banner Ad: A banner contains a short text or graphics to promote a product or service.
Banner ad is an object on the webpage. It provides a hyper link to the advertiser's website.
Banner ad allows the users to open the advertiser's website as and when they click them. It
provides information and at the same time persuades the buyer to buy the product.
2. Pop-up Ad: Pop-up ad appears in its own window, when the user opens or closes a web page
generally pop-up-ads are considered very annoying and also irritating.
3. Interstitial add: Interstitial add opens in one’s own browser window when a user clicks a
ling to a new web page. The ad appears for few moments before the intended web page gets
loaded. Man interstitial ads close automatically and allow the intended page to open in the
existing browser window.
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 4. Coupons: Certain companies offer their members discount coupons which they can print and
use for both online and offline retainers. Coupons encourage customer to save money and
enjoy discounts while shopping. When a customer clicks on certain coupons, it is easy for
marketer to know the type of' products the customers is interested in purchasing. The coupons
enable the marketers to monitor the customer behavior. People get motivated by online
coupons, as online coupons help save money. For example, cool savings.com provides Online
Coupons from major online retailers and department stores, it saves time and money when
consumers shop online and they can use discount codes. The coupons offered by them include
health, education, clothing, travel, snacks, groceries, beauty products, etc.
5. Reward Programs: When consumers purchase product on Internet, they get reward points. Once the
reward points get accumulated, it is used for the purchase of products in future. The idea behind
offering reward points is to encourage customers to make large purchases and earn more reward points
to get more benefits. For example, Taj Hotels allow customers to earn reward points and enjoy a host
of exciting benefits when they use their services around the world.
6. Pay per advertising view: Companies pay customer to view their advertisements. Example: Cyber
Gold.
7. Banner Swapping: It involves a direct exchange of links between websites. "A" company
may agree to display the banner of company "B", which in turn will display the banner of
company "A" in the form of a link.
8. Tracking: The response of the viewer of the ad or e-mail can be tracked by placing tiny files
called "Cookies" on viewer's computer. It helps advertisers to receive information on what
type of consumers are responding to different offers and also to know the kind of offers that
evoke generally good response.
9. E-mail: E-mail has the ability to reach global audience at low cost. Unsolicited e-mail creates
negative response and solicited e-mail is well received by customers. Sulekha.com has
emerged as one of the most successful online advertising media to reach Asian Indians,
particularly those living in U.S; Sulekha offers Banner Advertising and Email Advertising.
According to Sulekha.com following are the benefits of online media:
1) Massive reach
2) Remarkably educated and affluent audience
3) Unparallel targeting
4) Real-time tracking,
5) Rich media branding
6) Lead generation and direct sales.
9. Sky Scrappers: Sky scrapers are very long skinny ads. It runs down the left or right side of a website.
Value Chain on the Web
A value chain consists of a chain of activities. A product passes through various activities of
the chain in order. Each activity creates some value. The value created by the activities exceeds the
cost of providing the product or service. The difference between the value and the cost generates
gain. The values gained from the activities are more than the sum of added values of all activities.
The goal of value chain activities is to maximize the values and minimize the cost.
The activities involved in value chain can be classified into primary activities and supporting
activities. Primary activities are directly concerned with the creation or delivery of a product or

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service. Each of these primary activities is linked to supporting activities and they help to improve
their efficiency.
The primary activities consist of:
(a) Inbound logistics: It includes receiving, warehousing, inventory control of input.
(b) Operations (production) : It consists of value adding activities that convert the input into final
product.
(c) Outbound logistics: It takes the finished goods to the customer.
(d) Marketing and sales: it consists of activities involved in advertising about the product and
stimulating the buyers to buy the product.
(e) Maintenance: it includes after sales and service.
The traditional value chain typically states that there is flow of information sequentially
through the processes with input or output to the supplier at the back end and to the customer at the
front end. In reality business organizations engaging in electronic commerce can share information
with their customers and suppliers at many stages of the value chain. A customer in ecommerce
environment car: access the firm's information system at every phase of the business transaction. The
customer can receive product specification, check the status of order, shipping details etc .The
customer can check the progress of an order once he has placed an order with the supplier in e-
commerce.
Today, the value chain on the web has undergone several changes.
Internet plays an important role where the information regarding inventories or order
fulfillment could be passed on instantly. For example, if there is a system for information exchange in
textile business, the availability of stock can be easily checked and the information can be easily
transferred between the various parties in the value chain. This reduces the costs of physically
exchanging the documents.
With the advent of Internet, the information could be passed easily and online businesses can
deliver value to their customers and develop e-customer relationship. The online business houses
have given birth to infomediaries. Infomediaries act as purchase agents for customers and sales
agents for sellers. The online business houses have also shortened the value chain. They sell directly
to customers. The cost is reduced by eliminating the retailers in online business. Today, online
businesses allow mass customization where consumers can purchase products of their choice. For
example, Dell offered customized computers to customers which were built as per the order of the
customers. They are it sold over Internet, avoiding the dealer network.
Review questions
1. What do you mean by e-marketing?
2. Define traditional marketing.
3. List out the problems of traditional marketing.
4. What are the goals of web presence?
5. What is e-marketing value chain?
6. Explain the advantages of e-marketing?
7. Elucidate the elements of e-marketing mix.
8. Describe the objectives of e-marketing.
9. Explain the strategies used in e-marketing.
10. Describe the various kinds of online advertising method.

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