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Copyright © 2007 Pearson Education, Inc. Slide 1-1

E-commerce

Kenneth C. LaudonCarol Guercio Traver

business. technology. society.

Fourth Edi t ion

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Chapter 1

The Revolution Is Just

Beginning

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MySpace and Facebook: It’s All About You

Class Discussion

What was the idea behind the creation of

MySpace? Facebook different from MySpace

How is?

Have you used MySpace or Facebook, and if

so, how often? What was your experience?

Do you think these sites will continue togrow?

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E-commerce Trends: 2007-2008

New business models based on socialtechnologies and user-generated content

Search engine marketing dominates online

advertising More and more people/businesses use

Internet to conduct commerce

Broadband and wireless Internet access

growing Continued conflict over copyrights, content

regulation, taxation, privacy, Internet fraudand abuse.

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What is E-commerce?

Involves digitally enabled commercial

transactions between and among

organizations and individuals

Digitally enabled transactions include alltransactions mediated by digital technology

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E-commerce vs. E-business

E-business:

Digital enablement of transactions and processes

within a firm, involving information systems under

firm’s control E-Business in addition to encompassing E-

commerce includes both front and back-office

applications that form the engine for modern E-

commerce

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http://slidepdf.com/reader/full/ch01es 7/46Copyright © 2007 Pearson Education, Inc. Slide 1-7

Why Study E-commerce?

Technology is different and more powerful

than other technologies

Has challenged much traditional business

thinking

Has a number of unique features that help

explain why we have so much interest in e-

commerce

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Unique Features of E-commerce Technology

Ubiquitous

Global reach

Universal standards

Information richness Interactive

Information density

Personalization/customization Social technology

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Web 2.0

The “new” Web

Applications and technologies that allow usersto: create, edit, and distribute content

share preferences, bookmarks, and online personas

participate in virtual lives

Examples

YouTube, Photobucket, Flickr MySpace, Facebook, LinkedIn

Second Life

Wikipedia

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Types of E-commerce

Classified by nature of market relationship Business-to-Consumer (B2C) : A transaction that occurs

between a company and a consumer

Business-to-Business (B2B)

Consumer-to-Consumer (C2C)

Classified by type of technology used

Peer-to-Peer (P2P) : Peer-to-peer refers to the design of

a service that does not rely on centralized networkingservices. Ex: File sharing

Mobile commerce (M-commerce)

http://www.investorwords.com/5046/transaction.html

http://www.investorwords.com/5046/transaction.html

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The Internet

Worldwide network of computer networks built

on common standards

Created in late 1960s

Services include the Web, e-mail, file transfers, etc.

Can measure growth by looking at number of

Internet hosts with domain names

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The Growth of the

Internet, Measuredby Number of

Internet Hosts with

Domain NamesFigure 1.3, Page 23

SOURCE: Internet Systems Consortium, Inc. (www.isoc.org), 2007.

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The Web

The most popular service on the Internet

Developed in early 1990s

Provides access to Web pages (HTML documents)

Can include text, graphics, animations, music,videos

Web content in form of Web pages has grown

exponentially, from over 2 billion pages in 2000 to

over 50 billion pages in 2007

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The Growth of

Web ContentFigure 1.4, Page 24

SOURCE: Based on data from Google Inc., 2007.

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Insight on Technology: Spider Webs, Bow

Ties, Scale-Free Networks, and the Deep WebClass Discussion

What is the “small world” theory of the Web?

What is the significance of the “bow-tie” formof the Web?

Why does Barabasi call the Web a “scale-free

network” with “very connected super nodes”?

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Origins and Growth of E-commerce

Precursors include Baxter Healthcare

Electronic Data Interchange (EDI)

French Minitel (1980s videotext system)

None of precursor systems had the functionalityof the Internet

We date the beginning of e-commerce to 1995

Since then, has been fastest growing form ofcommerce in U.S.

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The Growth of B2C E-commerceFigure 1.5, Page 25

SOURCES: Based on data from eMarketer, Inc., 2007a; U.S. Census Bureau, 2007;

Forrester Research, 2007a; authors’ estimates.

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The Growth of B2B E-commerceFigure 1.6, Page 28

SOURCES: Based on data from U.S. Census Bureau, 2007; authors’ estimates.

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Technology and E-commerce in Perspective

The Internet and Web are just two of a long

list of technologies, such as automobiles and

radio, that have followed a similar historical

path.

Although e-commerce has grown explosively,

eventually its growth will cap as it confronts

its own fundamental limitations.

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Potential Limitations on the Growth of

B2C E-commerce Expensive technology

Complex software interface

Sophisticated skill set Persistent cultural attraction of physical

markets and traditional shopping experiences

Persistent global inequality limiting access totelephones and computers

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The Visions and Forces Behind E-commerce:

1995 –2000 For computer scientists, vindicated a vision of

universal communications and computing

environment For economists, vision of a perfect Bertrand

market and friction-free commerce

For entrepreneurs, their financial backers and

marketing professionals, represented anextraordinary opportunity to return far above

normal returns on investment.

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Insight on Business: Dot-com IPOs: it’s

Déjà Vu All Over AgainClass Discussion

What explains the rapid growth in private investmentin e-commerce firms in the period 1998 –2000? Was

this investment irrational? Why do you think investors in 2007 are once again

interested in investing in or purchasing e-commercecompanies? Would you invest in an e-commercecompany today?

What’s happening today? Go to thePricewaterhouseCoopers MoneyTree Web site forthe latest information:

http://www.pwcmoneytree.com/moneytree/index.jsp

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Assessing E-commerce: Successes,

Surprises and Failures A stunning technological success

Early years have been a mixed success from

a business perspective Many visions developed during early days of

e-commerce not fulfilled

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Predictions for the Future

E-commerce technology will continue to propagatethrough all commercial activity

E-commerce prices will rise to cover the real cost ofdoing business on the Web and pay investors

reasonable rate of return E-commerce margins and profits will rise to levels

more typical of all retailers

In B2C and B2B, traditional Fortune 500 companieswill play growing and dominant role

Number of successful pure online companies willdecline and most successful e-commerce firms willadopt mixed “clicks and bricks” strategies

Growth of regulatory activity worldwide

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Understanding E-commerce: Organizing

Themes Technology: Development and mastery of

digital computing and communications

technology Business: New technologies present

businesses and entrepreneurs with new ways

of organizing production and transacting

business Society: Intellectual property, individual

privacy, and public policy

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The Internet

andthe Evolution

of Corporate

ComputingFigure 1.10, Page 44

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Insight on Society: Holding On to Your

Privacy OnlineClass Discussion

What are the techniques of privacy invasiondescribed in the case?

Which of these techniques is the mostprivacy-invading? Why?

Is the Internet and e-commerce any differentthan traditional markets with respect to

privacy? Don’t merchants always want toknow their customer?

How do you protect your privacy on the Web?

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Privacy Online Techniques

https://www.eff.org/wp/effs-top-12-ways-protect-your-online-privacy

1) Do not reveal personal information inadvertently.

2) Turn on cookie notices in your Web browser, and/or use

cookie management software or infomediaries.3) Keep a "clean" e-mail address.

4) Don't reveal personal details to strangers or just-met

"friends“

5) Realize you may be monitored at work, avoid sendinghighly personal e-mail to mailing lists, and keep sensitive

files on your home computer.



















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Privacy Online Techniques

https://www.eff.org/wp/effs-top-12-ways-protect-your-online-privacy 6. Beware sites that offer some sort of reward or prize in

exchange for your contact information or other personal details

7. Do not reply to spammers, for any reason.8. Be conscious of Web security.

9. Be conscious of home computer security.

10. Examine privacy policies and seals.

11. Remember that YOU decide what information about yourself to

reveal, when, why, and to whom.

12. Use encryption!



















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The significance of the “bow-tie” form of the Web

It is important to understand the foundational form of the Web. It

can be described as a "bow tie" when examining it on a macro

level.

The Core: The center of the model is the core. It consists ofintensely linked sites; much like a network where starting at one

site you can eventually find all the websites in the core through

their links.

Origination Sites: These are sites that have outward links

connecting it to the core sites. They can therefore be hard to find

because they do not have many links back from the core.

Termination Sites: Termination sites are the opposite of

origination sites. They have links coming from the core but not

back to the core.Copyright © 2007 Pearson Education, Inc. Slide 1-30

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My Space : is a place where people come to connect,

discover, and share.


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The difference between Myspace and Facebook

Myspace is used by people of all ages from 13-whatever, people usually talk to people they know and

people they don’t know on myspace, myspace has

music, a profile for most musicians with music players

with their songs on their page, myspace has "myspacetv" like youtube and many other features

Facebook is really straightforward, nicely organized

easy and efficient to use mostly used by high schoolers

and college people but used by other age groups too,

facebook has a lot of "applications" and groups


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The difference between Myspace and Facebook


Criteria Myspace Facebook

Layouts All kinds of personalities in the

designs

The design is clean and clear with

not as much information or style.

Information You can put a great deal more

information in the profile in

Myspace

You will not be putting in as much

information

Privacy Myspace was targeted to amuch larger target group and

therefore was more open to

many visitors.

It was set up with a great dealmore privacy

Target Myspace has been formed with

entertainment and music inmind

The interface is based around

information. The pages are cleanand clear with information and

technology.

Technology Myspace is more popular and

well designed.

The favorite of many is the history

tracker that helps show visitors

and the owner of the page what

has happened new.

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Second Life Second L i fe is an online virtual world developed by Linden Lab.

It was launched on June 23, 2003. A number of free client

programs, or Viewers,[1][2] enable Second Life users, to interact

with each other through avatars (Also called Residents).

Residents can explore the world (known as the grid), meet other

residents, socialize, participate in individual and group activities,and create and trade virtual property and services with one

another. Second Life is intended for people aged 16 and over.[3]

Built into the software is a three-dimensional modeling tool

based on simple geometric shapes that allows residents to buildvirtual objects. There is also a procedural scripting language,

Linden Scripting Language, which can be used to add

interactivity to objects.


http://en.wikipedia.org/wiki/Virtual_world

http://en.wikipedia.org/wiki/Linden_Lab

http://en.wikipedia.org/wiki/Client_%28computing%29


http://en.wikipedia.org/wiki/Second_Life

http://en.wikipedia.org/wiki/Avatar_%28computing%29

http://en.wikipedia.org/wiki/Resident_%28Second_Life%29

http://en.wikipedia.org/wiki/Virtual_good


http://en.wikipedia.org/wiki/3D_modeling

http://en.wikipedia.org/wiki/Procedural_programming

http://en.wikipedia.org/wiki/Linden_Scripting_Language

http://en.wikipedia.org/wiki/Linden_Scripting_Language

http://en.wikipedia.org/wiki/Procedural_programming





http://en.wikipedia.org/wiki/Virtual_good

http://en.wikipedia.org/wiki/Resident_%28Second_Life%29

http://en.wikipedia.org/wiki/Avatar_%28computing%29





http://en.wikipedia.org/wiki/Linden_Lab

http://en.wikipedia.org/wiki/Virtual_world

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Second Life


Second Life is a world created from theundiluted dreams and desires of

thousands of people.

It's a virtual world called Second Life,where imaginary goods are traded forlegal tender, and at least one participantin the online program has made a milliondollars.

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Small word theory of the web

We all have friends and they have furtherfriends who have friends again and so on. In

fact, this multiplication effect quickly leads to a

huge number of connections with people within

relatively few friendship 'hops'.


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Mobile e-commerce

It was developed in 1997 to mean "the deliveryof electronic commerce capabilities directly into

the consumer’s hand, anywhere, via wireless

technology.“ "a retail outlet in your customer’s

pocket.“

Products and services: Mobile Money Transfer;

ATM; ticketing; banking; brokerage; auctions,

browsing, purchase, marketing and advertising;information services; vouchers, coupons and

loyalty cards


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The difference between E-commerce & E-Business

E-commerce is buying and selling using an electronic medium. It isaccepting credit and payments over the net, doing banking transactions

using the Internet, selling commodities or information using web.

E-Business in addition to encompassing E-commerce includes both front

and back-office applications that form the engine for modern E-commerce.

E-business is not just about E-commerce transactions; it's about re-defining old business models, with the aid of technology to maximize

customer value. E-Business is the overall strategy and E-commerce is an

extremely important facet of E-Business.

Thus e-business involves not merely setting up the company website and

being able to accept credit card payments or being able to sell products orservices on time. It involves fundamental re-structuring and streamlining of

the business using technology by implementing enterprise resource

planning (ERP) systems, supply chain management, customer relationship

management, data ware housing, data marts, data mining, etc.


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Spider Web

A software program that travels the Web(hence the name "spider"), locating and

indexing websites for search engines.

All the major search engines, such as Google

and Yahoo!, use spiders to build and update

their indexes.

These programs constantly browse the Web,

traveling from one hyperlink to another.


http://www.techterms.com/definition/hyperlink

http://www.techterms.com/definition/hyperlink

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Bow -t ies

They have been developed for demonstratingmanagement of security, information technology,

business interruption and project risks.

It provides a readily understood visualization of

the relationships between the causes of

business upsets, the escalation of such events,

the controls preventing the event from occurring

and the preparedness measures in place to limitthe business impact


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Bow -t ies (Fig)


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Scale-Free Network


All nodes would be connected

to the same degree, most would

have a number of connections

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Deep Web Class Discussion

Online discussions among students by leading

to a deeper understand


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PricewaterhouseCoopers

MoneyTree Web site The MoneyTree Report is a quarterly study of venture capital

investment activity in the United States.

The MoneyTree Report is the definitive source of information

on emerging companies that receive financing and the venturecapital firms that provide it. The study is a staple of the financial

community, entrepreneurs, government policymakers and the

business press worldwide.


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Project 1 - Scope

The history of the business;

history of the firm’s e-commerce activity;

implications of e-commerce for the firm’s sales, costs,

and profits; firm’s needs or requirements with respect to hardware,

software, skilled labor , and supportive institutions and

services; and programs/services available locally to

facilitate the adoption of e-commerce.


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Project 1 - Discussion

Each case study firm was asked to comment on:(1) The problems or costs associated with adopting

an e-commerce strategy and

(2) Anything that they would do differently withrespect to e-commerce if they had the opportunity

to start the process over.

Documents

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