Is this paraphrasing or plagiarism? - example two 

Original Passage: Despite its origin in scientific research and educational pursuits, it did not take long for marketers, advertisers, and public relations practitioners to find the Internet. What they found was an uncharted land that rivaled their wildest dreams. More than a decade later the web remains the least regulated of all mass media. Although the dot com bust of the early 2000s slowed the commercial expansion of the web, we are beginning to witness a strong rebound in every area, including online advertising. Today, the one feature that best defines the web is its unrelenting commercialism.*

Summary: Although it began as a non-commercial medium, its relative lack of regulation quickly made the Internet attractive to business. Despite some ups and downs, commercial use of the web is now obvious and pervasive (Ebersole, 2005).

Is this paraphrasing or plagiarism?

Paraphrasing! The writer used his own words. The ideas presented in the original passage remain, but the words are now his. He has also given the original author credit (using APA format for in-text citations).

 *Ebersole, Samuel E. "On Their Own: Student's Academic Use of the Commercialized Web." Library Trends 53.4 (Spring 2005): 530-38. Academic Search Elite. Web. 13 Sep. 2010.