Fundamental Concepts of Internet

This post is a continuation of our previous Information Systems class, where we were introduced to the fundamental terms of the Internet Technology. Having worked for almost 5 years in Cisco, I felt obliged to share my knowledge with all of you.

In the beginning I would like to point out that all the technical concepts of Internet communication have been inspired from the real world. I mean that the different protocols that are currently being used by computers to communicate with each other are very similar to the ones we use in our daily life.

The fundamental unit of information in computer networking is known as Packet.  Each Packet holds all the data that is being communicated between computers in the internet. Now, to send this packet from one computer to another we require addresses. Compare this situation to the one where we send letters from one address to the other. The terminology used in the Internet technology is known as IP Addresses. Each computer connected to the internet should have a unique IP Address associated with it. When packets are being transmitted from one computer to another, they are stamped with both the Source IP Address and Destination IP Address. Both the source and destination addresses are mandatory for the communication. When the packet reaches the destination, the destination computer processes the packet and then it replies back to the source. In order to reply to the source, the IP addresses are swapped, i.e. the source IP address becomes the destination and vice-versa.

An IP address (according to IP version 4) is of the format x.x.x.x, where each x is a number between 0-255. So there can be a total of 2^32 unique IP addresses, which is like a huge number of addresses. But the amazing fact is that we are already short of addresses by using this scheme of addressing!! The internet has grown so massively that even 4,294,967,296 addresses fell short. So, we are now gradually migrating towards a new format of IP addressing scheme called as IPV6 (version 6). For further readings on the IP Addresses you can take a look at the following links:

http://en.wikipedia.org/wiki/IP_address

http://computer.howstuffworks.com/internet/basics/question549.htm

There are millions and millions of computer in the internet. Imagine the number of packets that are flowing in the internet constantly! It’s humongous. So there are lots and lots of intelligent devices working in the background and making sure that the traffic flow is smooth, fast and reliable. Some of the most fundamental backbone devices of the internet are”

Switches and Routers:

 To understand the functionality of these devices clearly you have to understand the concept of Network Layers, which I will cover in one of the future posts. As of now you can think of these devices as traffic controllers, which make sure all you packets reach their destination by taking the shortest possible path and time. They also do error correction control and make the system more reliable.

Firewall:

This is one of those devices which control the security of your network. You can define your policies and based on those policies, the firewall inspects every incoming packet. If the policy criteria match with the packet details, the specified action will be taken on that packet. The action can be one of Accept or Drop.

There are plenty of other devices like the Server Load Balancers, VMWare servers, Global Site Selectors, Security threat detector and protector etc…

I am going to cover the functionality of all the devices mentioned above in my future posts.  This  is just the beginning…

Revenue and Social Networking websites...

 Social Networking Websites and $$$$...

I have always wondered about how social networking websites make their money.  I am planning to be an entrepreneur myself with an online presence. So, I thought I might do some research and figure out how do facebook, orkut , Myspace or linkedin generate millions of dollars.

The social networking sites have the following primary sources of income:

i.                     Investments from Venture Capitalists

ii.                   Acquisition by well established players in the market

iii.                  Advertising

iv.                 Fees for Premium accounts

In the beginning, when an entrepreneur with an innovative idea decides to transform his innovation to a venture, s/he approaches several venture capitalists. S/he tries to convince them about the idea and the project. If a venture capitalist picks up the idea and decides to invest on the project then the entrepreneur can start implementing the project right away. In most of the cases the seed capital is a combination of several sources like individual savings, money pooled in from friends, families and venture capital.

Now, as the business starts growing and the operational costs increase the entrepreneur has to think of other smarter ways to fund the project. S/he can choose to approach other investors again. But that is not a long term scalable approach. In some cases if the business has already created a large number of users the owner can decide to sell to other big players in the market.  Take the example of Youtube. Google acquired Youtube for 1.65 billion$ back in 2006.

But for entrepreneurs (like Facebook) who decide not to sell, they use advertising as one of their main sources of revenue. Web advertising is still an emerging market. Web advertising is broadly classified under 2 categories:

i.                     Cost per click (cpc): Pay whenever the advertisement is clicked by an user

ii.                   Cost per view  (cpv) or Pay per view (cpv) : Pay whenever the advertisement is viewed by an unique viewer

Although the television industry currently earns the maximum chunk from advertising, the fate of online advertising will see a radical change in future. A lot of research is currently being done to figure out the best way to advertise online without annoying the users.

Another way of generating revenue is to make users sign up for premium accounts. Businesses who sign up with the website can get premium facilities to market their products.

The popularity of social networking websites is growing exponentially. Now, with additional gadgets like IPhone and Blackberry’s they have an additional advantage to generate more traffic and more money.

Sources: 

http://computer.howstuffworks.com/internet/social-networking/information/how-social-networking-sites-make-money1.htm

http://techcrunch.com/2006/11/13/google-closes-youtube-acquisition/

http://en.wikipedia.org/wiki/Online_advertising

My Journey Begins

The most difficult part of starting my own blog is to choose a topic to start off with...Damn! I have just wasted more than an hour trying to figure out something that will appeal to my readers! I even missed out the soccer match!!

So, finally I put my foot down and decide that I have to write something. It's peer pressure you know. And to add to my woes I already went through some of the blogs written by my classmates. The more I read my fellowmates' blogs the more I feel "I was just going to write that and my idea has already been taken"...

I have been digging different sites to formulate something. But there is so much information over there and I feel puzzled. Should I write about "Why HP is buying Palm", "Google's war with Apple" or analyze the famous quote with which I started my coveted MBA degree - "I Know Nothing". And through this blog writing assignment I realized I really know nothing about what to write in my first blog. You might have already sensed it!

But I am hoping that as I get more and more grilled, crushed, tortured and tormented in my mba, I will soon have lot of things to write and share my ideas with you all...I always believe in seeing the Glass half-full :)

Enrique, my sincere apologies for not being able to contribute something meaningful in my first one...But I have faith on you and your immense abilities and I am sure by the time I am doing your second or third session I am going to write something meaningful. Please feel free to add your comments and encourage me. Your comments will surely add sense to what I have written :D... At least I tried!