E-Commerce: Business. Technology. Society

E-commerce
business. technology. society.

Sixth Edition
Kenneth C. Laudon
Carol Guercio Traver
Copyright © 2010 Pearson Education, Inc.

Chapter 3
The Internet and
World Wide Web:
E-commerce Infrastructure
Copyright © 2007
2010 Pearson Education, Inc. Slide 1-2
Wikitude.me
Class Discussion
 Have you used Wikitude.me? If so, has it been useful; if
not, is it a service that seems interesting? Why or why
not?
 Are there any privacy issues raised by geo-tagging?
 What are the potential benefits to consumers and firms
of mobile services? Are there any disadvantages?
 What revenue models could work for providers of mobile
services such as Layar and Slifter?
Copyright © 2010 Pearson Education, Inc. Slide 3-3

The Internet: Technology
Background
 Internet
 Interconnected network of thousands of networks and millions of
computers
 Links businesses, educational institutions, government agencies, and

individuals
 World Wide Web (Web)

 One of the Internet’s most popular services
 Provides access to around billions, possibly trillions, of Web pages

The Evolution of the Internet
1961—The Present
 Innovation Phase, 1964–1974
 Creation of fundamental building blocks
 Institutionalization Phase, 1975–1994

 Large institutions provide funding and legitimization
 Commercialization Phase,1995–present
 Private corporations take over, expand Internet backbone
and local service

The Internet:
Key Technology Concepts
 Defined by Federal Networking Commission
as network that:
 Uses IP addressing
 Supports TCP/IP
 Provides services to users, in manner similar to telephone system
 Three important concepts:

1. Packet switching
2. TCP/IP communications protocol
3. Client/server computing

Packet Switching
 Slices digital messages into packets
 Sends packets along different communication paths
as they become available
 Reassembles packets once they arrive at destination
 Uses routers
 Special purpose computers that interconnect the computer networks that
make up the Internet and route packets
 Routing algorithms ensure packets take the best available path toward their
destination
 Less expensive, wasteful than circuit-switching

Packet Switching
Figure 3.3, Page 130

TCP/IP
 Transmission Control Protocol (TCP):
 Establishes connections between sending and receiving Web
computers
 Handles assembly of packets at point of transmission, and
reassembly at receiving end
 Internet Protocol (IP):

 Provides the Internet’s addressing scheme
 Four TCP/IP Layers

1. Network Interface Layer
2. Internet Layer
3. Transport Layer
4. Application Layer
The TCP/IP Architecture and
Protocol Suite
Figure 3.4,
Page 132

Internet (IP) Addresses
 IPv4:
 32-bit number
 Expressed as series of four sets of separate numbers

marked off by periods
 201.61.186.227
 Class C address: Network identified by first three sets, computer

identified by last set
 New version: IPv6 has 128-bit addresses, able to handle up

to 1 quadrillion addresses (IPv4 can only handle 4 billion)

Routing Internet Messages:
TCP/IP and Packet Switching

Domain Names, DNS, and URLs
 Domain Name
 IP address expressed in natural language
 Domain Name System (DNS)

 Allows numeric IP addresses to be expressed in natural
language
 Uniform Resource Locator (URL)

 Address used by Web browser to identify location of
content on the Web
 E.g., http://www.azimuth-interactive.com/flash_test

Client/Server Computing
 Powerful personal computers (clients)
connected in network with one or more
servers
 Servers perform common functions for
the clients
 Storing files, software applications, etc.

Insight on Business
P2P Dukes It Out with Streaming Video
Class Discussion
 How does P2P networking differ from client/server

networking?
 Why is P2P networking a potential money-saver for
corporations and other organizations?
 What are some illegal uses of P2P networking?
 What are some legal uses of P2P networking?
 What other alternatives are there for streaming large video
files?

The New Client: The Emerging
Mobile Platform
 Within a few years, primary Internet
access will be through:
Netbooks
 Designed to connect to wireless Internet
 Under 2 lbs, solid state memory, 8” displays
 $200–400
Smartphones
 Disruptive technology: Processors, operating systems

Cloud Computing
 Firms and individuals obtain computing
power and software over Internet
 E.g., Google Apps
 Fastest growing form of computing

 Radically reduces costs of:
 Building and operating Web sites
 Infrastructure, IT support
 Hardware, software

Other Internet Protocols and
Utility Programs
 Internet protocols
 HTTP
 E-mail: SMTP, POP3, IMAP
 FTP, Telnet, SSL
 Utility programs
 Ping
 Tracert
 Pathping

The Internet Today
 Internet growth has boomed without
disruption because it is based on:
Client/server computing model
 Hourglass, layered architecture
 Network Technology Substrate
 Transport Services and Representation Standards
 Middleware Services
 Applications

The
Hourglass
Model of the
Internet
SOURCE: Adapted from Computer

Science and Telecommunications
Board (CSTB), 2000.

Internet Network Architecture
 Backbone:
 High-bandwidth fiber-optic cable networks
 Private networks owned by a variety of NSPs
 Bandwidth: 155 Mbps–2.5 Gbps
 Built-in redundancy
 IXPs: Hubs where backbones intersect with regional and

local networks, and backbone owners connect with one
another
 CANs: LANs operating within a single organization that
leases Internet access directly from regional or national
carrier

Internet Network Architecture

Internet Service Providers (ISPs)
 Provide lowest level of service to individuals,
small businesses, some institutions
 Types of service
 Narrowband (dial-up)
 Broadband
 Digital Subscriber Line (DSL)
 Cable modem
 T1 and T3
 Satellite
Intranets and Extranets
 Intranet
TCP/IP network located within a single

organization for communications and
processing
 Extranet
Formed when firms permit outsiders to

access their internal TCP/IP networks

Who Governs the Internet?
 Organizations that influence Internet and
monitor its operations include:
 Internet Architecture Board (IAB)
 Internet Corporation for Assigned Names and Numbers
(ICANN)
 Internet Engineering Steering Group (IESG)
 Internet Engineering Task Force (IETF)
 Internet Society (ISOC)
 World Wide Web Consortium (W3C)
 International Telecommunications Union (ITU)

Insight on Society
Government Regulation and
Surveillance of the Internet
Class Discussion
 How is it possible for any government to “control” or censor
the Web?
 Does the Iranian government, or the U.S. government, have
the right to censor content on the Web?
 How should U.S. companies deal with governments that want
to censor content?
 What would happen to e-commerce if the existing Web split
into a different Web for each country?

Internet II: The Future
Infrastructure
 Limitations of current Internet
 Bandwidth limitations
 Quality of service limitations

 Latency
 “Best effort” QOS
 Network architecture limitations
 Language development limitations

 HTML
 Wired Internet limitations

The Internet2® Project
 Consortium of 200+ universities,
government agencies, and private
businesses collaborating to find ways to
make the Internet more efficient, faster
 Primary goals:
 Create leading edge very-high speed network for national
research community
 Enable revolutionary Internet applications
 Ensure rapid transfer of new network services and

applications to broader Internet community
The Larger Internet II
Technology Environment:
The First Mile and the Last Mile
 GENI Initiative
 Proposed by NSF to develop new core
functionality for Internet
 Most significant private initiatives

 Fiber optics
 Mobile wireless Internet services

Fiber Optics and the Bandwidth
Explosion in the First Mile
 “First mile”: Backbone Internet services that carry
bulk traffic over long distances
 Older transmission lines being replaced with fiber-
optic cable
 Much of fiber-optic cable laid in United States is
“dark”, but represents a vast digital highway that can
be utilized in the future
 Photonic technologies expand capacity of existing fiber
lines
The Last Mile: Mobile Wireless
Internet Access
 “Last mile”: From Internet backbone to
user’s computer, cell phone, PDA, etc.
 Two different basic types of wireless
Internet access:
1. Telephone-based (mobile phones, smartphones)
2. Computer network-based

Telephone-based Wireless
Internet Access
 Competing 3G standards
 GSM: Used primarily in Europe
 CDMA: Used primarily in the United States
 Evolution:
 2G cellular networks: relatively slow, circuit-switched
 2.5G cellular networks: interim networks
 3G cellular networks: next generation, packet-switched
 3.5G (3G+)
 4G (WiMax, LTE)

Wireless Local Area Networks
(WLANs)
 Wi-Fi
 High-speed, fixed broadband wireless LAN, different versions for
home and business market, limited range
 WiMax
 High-speed, medium range broadband wireless metropolitan area
network
 Bluetooth
 Low-speed, short range connection
 Ultra-Wideband (UWB)
 Low power, short-range high bandwidth network
 Zigbee
 Short-range, low-power wireless network technology for remotely
controlling digital devices

Wi-Fi Networks

Benefits of Internet II Technologies
 IP multicasting:
 Enables efficient delivery of data to many locations on a network
 Latency solutions:
 diffserv (differentiated quality of service)
 Assigns different levels of priority to packets depending on type of data being
transmitted
 Guaranteed service levels and lower error

rates
 Ability to purchase right to move data through network at guaranteed
speed in return for higher fee
 Declining costs
Development of the Web
 1989–1991: Web invented
 Tim Berners-Lee at CERN
 HTML, HTTP, Web server, Web browser
 1993: Mosaic Web browser w/GUI

 Andreesen and others at NCSA
 Runs on Windows, Macintosh, or Unix
 1994: Netscape Navigator, first commercial

Web browser
 Andreessen, Jim Clark
 1995: Microsoft Internet Explorer

Hypertext
 Text formatted with embedded links
Links connect documents to one another,

and to other objects such as sound, video,
or animation files
 Uses Hypertext Transfer Protocol (HTTP)
and URLs to locate resources on the Web
 Example URL
http://megacorp.com/content/features/082602.html
Markup Languages
 Generalized Markup Language (GML)—1960s
 Standard Generalized Markup Language
(SGML)—early GML,1986
 Hypertext Markup Language (HTML)
 Fixed set of predefined markup “tags” used to format text
 Controls look and feel of Web pages
 eXtensible Markup Language (XML)

 New markup language specification developed by W3C
 Designed to describe data and information
 Tags used are defined by user

Web Servers and Web Clients
 Web server software:
 Enables a computer to deliver Web pages to clients on networks that
request this service by sending an HTTP request
 Apache and Microsoft IIS
 Basic capabilities: security services, FTP, search engine, data capture
 Web server
 Can refer to Web server software or physical server
 Specialized servers: database servers, ad servers, etc.
 Web client:
 Any computing device attached to the Internet that is capable of
making HTTP requests and displaying HTML pages

Web Browsers
 Primary purpose to display Web pages
 Internet Explorer (67%) and Firefox (23%)

dominate the market
 Other browsers include:
 Netscape
 Opera
 Safari (for Apple)
 Google’s Chrome

The Internet and Web: Features
 Internet and Web features on which the
foundations of e-commerce are built
include:
 E-mail
 Instant messaging
 Search engines
 Intelligent agents (bots)
 Online forums and chat
 Streaming media
 Cookies

E-mail
 Most used application of the Internet
 Uses series of protocols for transferring

messages with text and attachments
(images, sound, video clips, etc.,) from
one Internet user to another
 Can be an effective marketing tool
 Spam a worsening problem

Instant Messaging
 Displays words typed on a computer
almost instantly, and recipients can then
respond immediately in the same way
 Different proprietary systems offered by
AOL, MSN, Yahoo, and Google
 Meebo, Digsby: allow users to
communicate across platforms

Search Engines
 Identify Web pages that match queries based
on one or more techniques
 Keyword indexes, page ranking
 Also serve as:

 Shopping tools
 Advertising vehicles (search engine marketing)
 Tool within e-commerce sites
 Outside of e-mail, most commonly used

Internet activity

How Google Works

Intelligent Agents (Bots)
 Software programs that gather and/or
filter information on a specific topic and
then provide a list of results
 Search bot
 Shopping bot
 Web monitoring bot
 News bot
 Chatter bot

Online Forums and Chat
 Online forum:
 AKA message board, bulletin board, discussion group,
board, or forum
 Web application that enables Internet users to
communicate with each other, although not in real time
 Members visit online forum to check for new posts
 Online chat:
 Similar to IM, but for multiple users
 Typically, users log into chat room

Streaming Media
 Enables music, video, and other large
files to be sent to users in chunks so that
when received and played, file comes
through uninterrupted
 Allows users to begin playing media files
before file is fully downloaded

Cookies
 Small text files deposited by Web site on
user’s computer to store information
about user, accessed when user next
visits Web site
 Can help personalize Web site
experience
 Can pose privacy threat

Web 2.0 Features and Services
 Blogs
 Personal Web page that typically contains a series

of chronological entries by its author, and links to
related Web pages
 Really Simple Syndication (RSS)
 Program that allows users to have digital content

automatically sent to their computers over the
Internet

 Podcasting
 Audio presentation stored as an audio file and available
for download from Web
 Wikis
 Allows user to easily add and edit content on Web page
 New music and video services

 Videocasts
 Digital video on demand

 Internet telephony (VOIP)
 Uses Voice Over Internet Protocol (VOIP) and

Internet’s packet-switched network to transmit
voice and other forms of audio communication
over the Internet
 Internet television (IPTV)
 Telepresence and video conferencing

 Online software and Web services
 Web apps, widgets, and gadgets
 Digital software libraries, distributed storage
 M-commerce applications
 Beginning to take off

Insight on Technology
All Mashed Up
Class Discussion
 What are Web mashups and what technology makes
them possible?
 Why would Google and others allow their software to be
combined with other software?
 What is the potential benefit to consumers?
 If mashups ultimately make money, how will the
revenues be divided?
 Why would mashups be supportive of contextual
advertising?
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mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright © 2010 Pearson Education, Inc.

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Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc. Slide 3-3

 Links businesses, educational institutions, government agencies, and

 World Wide Web (Web)

 Provides access to around billions, possibly trillions, of Web pages

Copyright © 2010 Pearson Education, Inc. Slide 3-4

 Institutionalization Phase, 1975–1994

Copyright © 2010 Pearson Education, Inc. Slide 3-5

 Three important concepts:

Copyright © 2010 Pearson Education, Inc. Slide 3-6

 Less expensive, wasteful than circuit-switching

Copyright © 2010 Pearson Education, Inc. Slide 3-7

Copyright © 2010 Pearson Education, Inc. Slide 3-8

 Internet Protocol (IP):

 Four TCP/IP Layers

Copyright © 2010 Pearson Education, Inc. Slide 3-10

 Expressed as series of four sets of separate numbers

 Class C address: Network identified by first three sets, computer

 New version: IPv6 has 128-bit addresses, able to handle up

Copyright © 2010 Pearson Education, Inc. Slide 3-11

Copyright © 2010 Pearson Education, Inc. Slide 3-12

 Domain Name System (DNS)

 Uniform Resource Locator (URL)

Copyright © 2010 Pearson Education, Inc. Slide 3-13

Copyright © 2010 Pearson Education, Inc. Slide 3-14

 How does P2P networking differ from client/server

Copyright © 2010 Pearson Education, Inc. Slide 3-15

Copyright © 2010 Pearson Education, Inc. Slide 3-16

 Fastest growing form of computing

Copyright © 2010 Pearson Education, Inc. Slide 3-17

Copyright © 2010 Pearson Education, Inc. Slide 3-18

Copyright © 2010 Pearson Education, Inc. Slide 3-19

SOURCE: Adapted from Computer

Copyright © 2010 Pearson Education, Inc. Slide 3-20

 IXPs: Hubs where backbones intersect with regional and

Copyright © 2010 Pearson Education, Inc. Slide 3-21

Copyright © 2010 Pearson Education, Inc. Slide 3-22

TCP/IP network located within a single

Formed when firms permit outsiders to

Copyright © 2010 Pearson Education, Inc. Slide 3-24

Copyright © 2010 Pearson Education, Inc. Slide 3-25

Copyright © 2010 Pearson Education, Inc. Slide 3-26

 Quality of service limitations

 Network architecture limitations

 Language development limitations

 Wired Internet limitations

Copyright © 2010 Pearson Education, Inc. Slide 3-27

 Ensure rapid transfer of new network services and

 Most significant private initiatives

Copyright © 2010 Pearson Education, Inc. Slide 3-29

Copyright © 2010 Pearson Education, Inc. Slide 3-31

Copyright © 2010 Pearson Education, Inc. Slide 3-32

Copyright © 2010 Pearson Education, Inc. Slide 3-33

Copyright © 2010 Pearson Education, Inc. Slide 3-34

 Guaranteed service levels and lower error

 1993: Mosaic Web browser w/GUI

 1994: Netscape Navigator, first commercial