Internet economy is a broader term which includes both e-commerce and e-business. There are various elements governing the process of online trading of goods and services. These elements are classified as different layers as per the framework given by Center for Research and Electronic Commerce (CREC) at the University of Texas in the following manner:
1. Layer1- Internet and Network Infrastructure
This layer is facilitated by the companies that provide enabling hardware, software and networking devices for the internet, internet service providers (ISPs), fiber optic cable makers, PC manufacturers, etc. Examples for such providers include CISCO, AT&T, AOL, etc. This layer also deals with the network framework which establishes an effective connection between the buyer and the supplier. The network lattice on which the internet works today is based on packet switching technique. In this technique, the message is broken down into small packets. Every packet bears the address of its source and destination. This way the message enjoys a flexible and faster medium of communication. These packets are then assembled in order at the destination computer for ultimate delivery. The internet infrastructure works under the governance of certain protocols. These set of rules and regulations are collectively termed as TCP/IP protocol. Here TCP stands for Transmission Control protocol and IP signify Internet protocol.
2. Layer2- Internet Applications Infrastructure
This layer is facilitated by companies that design software products for buyer’s web- interface with the seller. Integrity at this layer enables a secure online transaction. Such companies comprise IBM, Adobe, Oracle, TCS, etc. These companies provide web development design and consultancy services to various online businesses. It is at this layer where the type of e-commerce is determined.
3. Layer3- Internet Intermediaries
This layer facilitates the real scenario of e-commerce. It includes companies that establish links between the buyers and the sellers by creating the virtual market where the online trading takes place. It interfaces the application layer to the users. Interactive catalogs and directory support services are examples of this layer. While the interactive catalog deals with people, the directory catalog deal interacts directly with software applications. Online travel agents like Travelocity; Content Aggregators like Yahoo! and Google, etc are examples of such intermediaries.
4. Layer4- Internet Commerce
This layer is facilitated by companies that sell products or services directly to consumers and businesses. These companies include the online retailers or the E-tailers like Amazon, Dell, eBay, etc.
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