Internet Marketing is, essentially, exactly what it sounds like: Promoting a product or service by means of the Internet. The obvious first step is to build a website. After that, there are basically three aspects of the web marketing process. You want to 1) create avenues through which people can find your site, 2) strategically locate potential customers, and 3) build a relationship that could lead to sales.
The following strategies each serve to satisfy one of those three aspects of Internet Marketing:
SEO (Search Engine Optimization)
Search Engine Optimization is the focused process of improving a site's ranking on major search engines. If you owned a restaurant, where would you rather put it, on Main Street or behind an old factory? Main Street, of course. The same principle is at work in SEO: The more easily people can find you, the more customers you will find.
PPC (Pay Per Click)
You've probably seen Pay Per Click links before. They appear at the top and sides of major search engine results. The positioning of a given link is determined by how much each advertiser is willing to pay for every click. It's like a silent auction. The advantage to Pay Per Click is that the process is fairly strait-forward and controllable. The downside, as opposed to SEO, is that it may be a good bit more expensive in the long run.
Email
Email marketing, when handled correctly, can be a powerful tool for reaching out to a web audience. The beauty of this is that the very measures that make Email marketing more ethical is also what makes it more successful! By only emailing individuals that have signed up to receive such promotions, you are both focusing on a prime audience and avoiding irritation.
Web Relationship
Web Relationship Marketing is a multifaceted effort to create interaction through the web and generate grassroots interest in your product or service. This operates on fairly traditional principles (word of mouth, etc), but it implements them in a contemporary medium.
The web is a big place, and simply owning a site is not enough to win in the business race. Any successful site will carry an Internet Marketing plan of some kind. So be sure you don't fall behind!