This chapter conceptualizes a model for the assimilation of Internet-based technologies in small and medium enterprises (SMEs). The research examines the factors influencing the assimilation of Internet-based technologies and the penetration of these technologies in SMEs. Internet-based technologies are complex organizational technologies. The model uses the learning related scale, related knowledge and diversity, together with several control variables like host size, IT size, specialization and education. Several external factors, such as influence of customers, suppliers, vendors and competitors, that have been suggested in studies of SMEs have also been included to explain the assimilation and diffusion of innovation. The results of an exploratory survey are presented and future research is discussed.