SEO and SEM are components of internet marketing. The goal of Internet marketing is to increase the rankings of a website in search engine result pages (SERPs). SEM includes different methods such as search engine optimization (also known as SEO or website optimization), paid placement (pay-per-click campaigns) and paid inclusion. (The most common one is Yahoo! Directory)
The main goal of Internet Marketing is to convert visitors into sales and create a loyalty towards your website. Make your website a reference in your category.