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Management Information Systems, 3rd EditionEffy Oz
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Chapter 7E-Commerce: The Internet,
Intranets, and Extranets
Management Information Systems, 3rd EditionEffy Oz
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Learning Objectives
• When you finish this chapter, you will – Know what the Internet is.
– Know the features for information exchange that can be conducted over the World Wide Web.
– Understand how the Web facilitates electronic commerce.
– Be able to generate basic ideas for new business ventures utilizing the Web.
– Appreciate the major risks and limitations of using the Web for business activities.
Management Information Systems, 3rd EditionEffy Oz
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What is the Internet?• The Development of the Internet
• ARPANET was an open system designed for the free flow of information, but available only to members of academic institutions and some in the defense industry.
• U.S. government decided to split the network into a civilian one and a military one.
– Civilian network became the Internet
• Internet is now a network of networks.
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What is the Internet?
Figure 7.1 The Internet connects millions of servers.
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What is the Internet?
• Growth of the Internet– Number of servers
• From a few hundred in 1991, to more than 115,000,000 by mid-2000
– Number of users• More than 200 million; increased rapidly during 1999
• Commercial Online Services– Companies like America Online provide “online” service
to paying subscribers on their private networks.
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What is the Internet?
Figure 7.2 World growth of the Internet
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What is the Internet?
Figure 7.3 The number of Internet domain servers continues to grow
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Internet Domains
• A domain name is assigned to each IP address.
• Domain names are registered by one of a group of companies authorized to assign unique names.
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Internet Domains
• What’s on the Internet?– E-mail and file transfer– News groups– Internet Relay Chat (IRC)– Telephoning on the Web
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The World Wide Web
• Hypertext transfer protocol (HTTP)– Allows shared communication of text, full-color
graphics, tables, forms, video, and animation
• Hypertext Mark-Up Language (HTML)– Code for tagging Web files for display
• Browsers– Software to access the Web
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The World Wide Web
• Creating Web Files– HTML
• System of standardized “tags” that format elements text, graphics, and animation
– Web page editors• Translate well-known or intuitive commands into code
– Java, ActiveX, and XML• Web scripting languages
– Common Gateway Interfaces (CGI) and Forms• Allow a computer that is accessing a particular Web site to
have some similar functions
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The World Wide Web
– Frames• Sections of a Web page that let a browser explore a site in
different ways on the same page
– VRML (Virtual Reality Modeling Language)• Standard for describing interactive three-dimensional scenes
delivered across the Internet
– Cookies• Special file a Web site saves on the surfer’s hard disk so the
site can remember something about the surfer later
– Creating Your Own Web Pages• Search the Web for HTML tutorials• View and study the source document of a Web page
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Intranets and Extranets
– Intranet• A within-organization computer network
that uses Internet technologies to communicate
– Extranet • Uses Internet technologies to facilitate
communication and trade between an organization and its business partners, such as suppliers
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Intranets and Extranets
Figure 7.7 An intranet, an extranet, and the Internet from an individual user’s perspective
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Intranets and Extranets
Figure 7.8 Internet, intranet, and extranet potential for productivity enhancement
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Establishing a Web Site
• Site Name
• Points of Presence
• Line Capacity
• Site Maintenance
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Business on the Internet
• Business-to-Business Trading
• Electronic Data Interchange
• Exchanges and Auctions– E-catalogs
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Business on the Internet
• Business-to-Consumer Trading– Advertising
• Portals• Free Internet applications
– E-Shopping• E-Payment• Auctions and reverse auctions• Selling content• Selling software• Data push• Stock trading for all
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Business on the Internet
Figure 7.14 Web-shopping benefits
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Business Considerations
• Web Costs– The least costly sites are those
constructed simply to showcase the company’s products or services.
– The most expensive sites are those designed to enable electronic commerce.
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Business Considerations
Figure 7.16 Do’s and Don’ts in Web site construction for commercial purposes
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Business Considerations• Risks to Organizations
– Computer viruses– Interception of passwords and codes by an
unauthorized hacker– Interception of charge account numbers– Illegal or socially objectionable use of a
site– Potential misrepresentation
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Business Considerations
• Risks to Consumers
– Eavesdropping and interception
– Misrepresentation
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The Nations:Who is on the Net?
• While the U.S. is leading in developing new technologies for the Net, other nations are not far behind.– Finland has the highest ratio of Internet servers to users.
– Israeli companies are heavily involved in developing high-quality Internet phone software.
– Singapore’s government has invested over $2 billion in state-of-the-art technology infrastructure.
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Ethical and Societal IssuesRoad Bumps on the Electronic Superhighway
• Free Speech• From the advent of the Web, ‘inappropriate’
material has been posted and disseminated throughout the world.
• There have been calls to sensor what is transmitted, especially pornography, violence, and racial slurs.
• Spamming• Flooding a party’s e-mail box with messages as a
means of protest is disruptive.