Despite the exponential growth of e-commerce on the Internet, little is still known on how the new medium is transforming marketing concepts/practices and their effectiveness. This empirical study aims to fill in this gap. This article first analyzes the Internet's capabilities and features as well as the new virtual market space that Internet advances have fostered. After reviewing models and strategies for Internet marketing, an Internet marketing mix is proposed based on the Internet strategies of hotels in Greece that were investigated. Using a nonparametric technique, the data envelopment analysis (DEA), Internet strategies were also benchmarked to identify best practices and provide suggestions on the development of effective Internet marketing strategies. © 2003 International Council on Hotel, Restaurant and Institutional Education.