http://www.angelfire.com/biz/khawar/ecomm1.html

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 new term, “e-business,” are often used interchangably. For online retail selling, the term e-tailing is sometimes used.

E-commerce can be divided into:-

  E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes gathered into a "virtual mall".

  The gathering and use of demographic data through Web contacts.

  Electronic Data Interchange (EDI), the business-to-business exchange of data

  E-mail and fax and their use as media for reaching prospects and established customers (for example, with newsletters).

  Business-to-business buying and selling.

  The security of business transactions.

E-tailing or The Virtual Storefront and the Virtual Mall As a place for direct retail shopping, with its 24-hour availability, a 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. Apart from computer and network products, books (Amazon.com), gardening products (Garden.com), music on compact disks (CDNow), and office supplies (SuppliesOnline) were a few of the better-known e-commerce sites. By early 1999, even businesses that have always counted on face-to-face customer interaction were planning e-commerce Web sites and many businesses were planning how to coordinate in-store and Web store retail approaches. Meanwhile, new businesses based entirely on Web sales were being invented daily. 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 -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. 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 transactors, controlling access to resources such as Web pages for registered or selected users, encrypting communications, and, in general, ensuring the privacy and effectiveness of transactions. Among the most widely-used security technologies are SSL and Secure Electronic Transactions is an emerging industry standard.