Page 227 - Business Principles and Management

Unit 3

9.1 Business and the Internet

Goals Terms
• Describe the recent growth of • e-commerce • Voice over Internet
the Internet. • Internet domain Protocol (VoIP)
• Discuss common business uses
of the Internet other than
e-commerce.

eople are sitting down at their computers in ever-increasing numbers to use the
Internet. Sometimes it is hard to believe that the Internet has a relatively short
Phistory. It developed from the first efforts to link computers less than 50 years
ago. The introduction of the personal computer in the late 1970s began to expand
computer access onto business desktops and into homes. Today, through low-cost
or free connections to the Internet, millions of people throughout the world can
instantly access information and communicate with each other.
The Internet has become a very important business tool. E-commerce means
doing business online. It includes the use of the Internet to buy and sell prod-
ucts as well as to exchange business-related information, such as transmitting
purchase orders electronically or advertising online. E-commerce is now a multi-
billion-dollar part of our economy.
The Internet has allowed many small businesses to compete with larger, estab-
lished companies and to reach consumers all over the world. Currently less than
11 percent of all business sales are completed using the Internet, but that figure
is growing rapidly. Businesses need to plan for e-commerce.

The Growth of the Internet

Since its infancy as a military and research tool in the 1950s, the Internet has
grown impressively, as shown in Figure 9-1. Over 400 million Internet domain
sites were online by January 2006. An Internet domain is a registered Web site,
such as www.thomsonlearning.com. Millions more domains are being added
Ethics tip each year. Since the invention of the World Wide Web in the late 1960s, access
to the Internet has grown to an estimated 1 billion people around the world.
More than 77 million homes in the United States had access to the Internet in
2005, up from just 13 million in 1995. The United States currently leads the
Many young people think world in Internet use, with approximately 20 percent of all users. China’s Inter-
that downloading songs or net growth could put it ahead of the United States within a decade. Internet use
movies from the Internet is is growing all over the world, as shown in Figure 9-2.
not theft because they do Business use of the Internet is increasing rapidly as well. Although there are
not take it from a store. many other business uses of the Internet, as we will discuss in the next section,
Digital products are intellec- an important measure of business Internet use is the sale of products and ser-
tual property that are owned vices. According to the U.S. Census Bureau, U.S. Internet sales to consumers in
by a producer. Illegal down- 2004 totaled $130 billion—$71 billion in retail sales and $59 billion in selected
loads are the same as theft. services. These seem like very large figures, until they are compared to business-

214