The prevalence of the Internet and the World Wide Web in higher education has been transforming higher educational institutions in various degrees. There are a wide variety of terms indicating such phenomenon, ranging from "web-based instruction" and "online courses" to "cyber degrees" and "virtual universities." These terms are often used without clear definition. This paper presents a taxonomy of higher education institutions in cyberspace that includes the following six categories: online course catalogs/clearing house, university brokerages, virtual university consortia, virtual universities, online campuses, and unaccredited online campuses. Three elements of online courses (course material presentation/distribution, communication, and assessment) are discussed in order to give a framework to designing online courses. Competency-based assessment and the future trend of educational institutions are also addressed. (Author/DLS)