This study aims to examine the factors that influence the diffusion of the electronic commerce. In order to explain diffusion of the electronic commerce, innovation-IT-diffusion theory is used. Internal and external factors were found to influence the adoption level of the electronic commerce. Internal factors include top management support, existence of champion, cost incentive, inclination toward new technology, and absorptive capacity. External factors indicate institutional support, competitors move, and customer pressure. Those factors will explain the level of adoption such as non-adopter, made adoption decisions, implementation. To test hypotheses, "Nonparametric Test" analysis is used. The results may give some implication to the manager of the companies that intend to participate or already participated in electronic commerce.