Internet marketing, also referred to as web marketing, online marketing, or e-marketing, is the marketing of products or services over the Internet. Online marketing includes a wider range of marketing elements than traditional business marketing due to the extra channels and marketing mechanisms available on the Internet. It ties together creative and technical aspects of the Internet, including design, development, advertising, and sale. In the past few years, the internet and e-commerce business activities have become one of the fastest growing technologies that playing a significant role in the daily life of human beings. Today, online marketing is one of the most emerging technologies in IT and E-Commerce sector. It helps to find out the right audience to whom goods and services are to be provided by the business organizations. The internet-based communication technologies had contributed to the restructuration of major economic sectors in India including marketing. It established speed, information flow and access in buying and selling of products. This in turn created a virtual market for actual products globally. This has brought about different businesses incredible gains. However, this new method also involves its special disadvantages, e.g. lack of personal contact, security and privacy, etc. which should be taken account for. This paper starts with defining online marketing and reviewing historical background to utilization of online marketing and different kinds of online marketing. The study continues with growth and challenges, such as problems of security, privacy, etc., emerged in the field of online marketing from implementation of virtual space produces. This paper focuses on the opportunities and challenges for online marketing in Indian business environment.