What is e-Commerce?

E-commerce (electronic commerce or EC) is the buying and selling of goods and services on the Internet, especially the World Wide Web. In practice, this term and a newer term, “e-business,” are often used interchangeably. For online retail sales, the term “e-tailing” is sometimes used.

E-commerce can be divided into:

e-tailing or The Virtual Storefront and the Virtual Mall
As a place for direct retail shopping with its 24-hour availability, global reach, the ability to interact and provide custom information and ordering and multimedia prospects, the Web is rapidly becoming a multibillion dollar source of revenue for the world's businesses. A number of businesses already report considerable success. As early as the middle of 1997, Dell Computers reported orders of a million dollars a day. By early 1999, projected e-commerce revenues for business were in the billions of dollars and the stocks of companies deemed most adept at e-commerce were skyrocketing. Although many so-called dotcom retailers disappeared in the economic shakeout of 2000, several Web retailing at sites (Amazon.com, for example) continue to grow.

Market Research
In early 1999, it was widely recognized that because of the interactive nature of the Internet, companies could gather data about prospects and customers in unprecedented amounts. This is done through site registration, questionnaires, and as part of taking orders. The issue of whether data was being collected with the knowledge and permission of market subjects had been raised. (Microsoft referred to its policy of data collection as "profiling" and a proposed standard has been developed that allows Internet users to decide who can have what personal information.)

Electronic Data Interchange (EDI)
EDI is the exchange of business data using an understood data format. It predates today's Internet. EDI involves data exchange among parties that know each other well and make arrangements for one-to-one (or point-to-point) connection, usually dial-up. EDI is expected to be replaced by one or more standard XML formats, such as ebXML.

E-Mail, Fax, and Internet Telephony
E-commerce is also conducted through the more limited electronic forms of communication called e-mail, facsimile or fax, and the emerging use of telephone calls over the Internet. Most of this is business-to-business, with some companies attempting to use e-mail and fax for unsolicited ads (usually viewed as online junk mail or spam) to consumers and other business prospects. An increasing number of business Web sites offer e-mail newsletters for subscribers. A new trend is opt-in e-mail in which Web users voluntarily sign up to receive e-mail (usually sponsored or containing ads) about product categories or other subjects they are interested in.

Business-to-Business Buying and Selling
Thousands of companies that sell products to other companies have discovered that the Web provides not only a 24-hour-a-day showcase for their products but a quick way to reach the right people in a company for more information.

The Security of Business Transactions
Security includes authenticating business transactions, controlling access to resources such as Web pages for registered or selected users, encrypting communications, and ensuring the privacy and effectiveness of transactions in general. Among the most widely-used security technologies is the Secure Sockets Layer (SSL), which is built into both of the leading Web browsers.