^-commerce
business, technology, society.
F I F T H E D I T I O N
Kenneth C. Laudon Carol Guercio TraverNew York University Azimuth Interactive, Inc.
PEARSON
PrenticeHall
Prentice Hall, Upper Saddle River, New Jersey 07458
C o n t e n t s
PARTI Introduction to E-commerce
THE REVOLUTION IS JUST BEGINNING 1-1
Learning Objectives 1-1
MySpace and Facebook: It's All About You 1-2
1.1 E-commerce: The Revolution Is Just Beginning 1-5The First Thirty Seconds 1-9What Is E-commerce? 1-9The Difference between E-commerce and E-business 1-10
Why Study E-commerce? 1-11
Eight Unique Features of E-commerce Technology 1-11Ubiquity 1-13
Global Reach 1-13Universal Standards 1-13Richness 1-14Interactivity 1-14Information Density 1-15
Personalization/Customization 1-16
Social Technology: User Content Generation and Social Networking 1-16Web 2:0: Play My Version 1-17Types of E-commerce 1-19
Business-to-Consumer (B2C) E-commerce 1-19Business-to-Business (B2B) E-commerce 1-19
Consumer-to-Consumer (C2C) E-commerce 1-20Peer-to-Peer (P2P) E-commerce 1-20
Mobile Commerce (M-commerce) 1-21Growth of the Internet and the Web 1-21Origins and Growth of E-commerce 1-23
Insight on Technology: Spider Webs, Bow Ties, Scale-Free Networks, and the Deep
x v i i i C o n t e n t s
Web 1-25
Technology and E-commerce in Perspective 1-27
Potential Limitations on the Growth of B2C E-commerce 1-28
1.2 E-commerce: A Brief History 1-29
E-commerce 1995-2000: Innovation 1-29
Insight on Business: Dot-com De'ja vu 1-34
E-commerce 2001-2006: Consolidation 1-36
E-commerce 2006-Present: Reinvention 1-36
Assessing E-commerce: Successes, Surprises and Failures 1-36
Predictions for the Future: More Surprises 1-39
1.3 Understanding E-commerce: Organizing Themes 1-42
Technology: Infrastructure 1-42 ^
Business: Basic Concepts 1-44
Society: Taming the Juggernaut 1-44
Insight on Society: Holding On To Your Privacy Online 1-45
Academic Disciplines Concerned with E-commerce 1-48
Technical Approaches 1-48
Behavioral Approaches 1-49
1.4 Case Study: P2P Networks Rock, Music Industry Rolls 1-50
1.5 Review 1-54
Key Concepts 1-54
Projects , 1-58
Questions 1-59
Web Site Resources 1-59
E-COMMERCE BUSINESS MODELS AND CONCEPTS 2-1
Learning Objectives 2-1
Online Groceries: Up from the Embers 2-2
2.1 E-commerce Business Models 2-5 '
Introduction 2-5
Eight Key Elements of a Business Model 2-5
Value Proposition 2-6
Revenue Model 2-7
Market Opportunity 2-9
Competitive Environment 2-10
Competitive Advantage 2-11
Market Strategy 2-12
Organizational Development 2-12
Management Team 2-13
Categorizing E-commerce Business Models: Some Difficulties 2-13
C o n t e n t s xix
2.2 Major Business-to-Consumer (B2C) Business Models 2-14
Portal 2-14
E-tailer 2-16
Insight on Technology: Search, Ads and Apps: The Future for Google(and Microsoft) 2-17
Content Provider 2-20Transaction Broker 2-21Market Creator 2-22Service Provider 2-23Community Provider 2-24
2.3 Major Business-to-Business (B2B) Business Models 2-25
E-distributor 2-25
E-procurement 2-26
Exchanges 2-27
Insight on Business: Onvia Evolves 2-28
Industry Consortia 2-29Private Industrial Networks 2-30
2.4 Business Models in Emerging E-commerce Areas 2-31
Consumer-to-Consumer (C2C) Business Models 2-31
Peer-to-Peer (P2P) Business Models 2-32
M-commerce Business Models 2-32
E-commerce Enablers: The Gold Rush Model 2-34
Insight on Society: Is Privacy Possible in'a Wireless World? 2-35
2.5 How the Internet and the Web Change Business: Strategy, Structure,and Process 2-37Industry Structure 2-37Industry Value Chains 2-40Firm Value Chains 2-41Firm Value Webs 2-42Business Strategy 2-43
2.6 Case Study: Priceline.com and the Search for a Business Model thatWorks 2-47
2.7 Review 2-51
Key Concepts 2-51 ^
Projects 2-53
Questions 2-53
Web Site Resources 2-54
xx C o n t e n t s
PART 2 Technology Infrastructure for E-commerce
THE INTERNET AND WORLD WIDE WEB: E-COMMERCE INFRASTRUCTURE 3
Learning Objectives 3-.1
All Mashed Up 3-2
3.1 The Internet: Technology Background 3-5
The Evolution of the Internet 1961—The Present 3-6The Internet: Key Technology Concepts 3-7
Packet Switching 3-10Transmission Control Protocol/Internet Protocol (TCP/IP) 3-12IP Addresses 3-12Domain Names, DNS, and URLs 3-14Client/Server Computing 3-14
Insight on Business: Peer-to-Peer Networks Rescue Hollywood c
and TV Studios 3-17
Other Internet Protocols and Utility Programs 3-20Internet Protocols: HTTP, E-mail Protocols, FTP, Telnet, and SSL 3-20Utility Programs: Ping, Tracert, and Pathping 3-21
3.2 The Internet Today 3-22
The Internet Backbone 3-24Internet Exchange Points 3-25Campus Area Networks (CANs) 3-25Internet Service Providers 3-27Intranets and Extranets 3-28
Who Governs the Internet? 3-29
Insight on Society: Government Regulation of the Internet 3-313.3. Internet II: The Future Infrastructure 3-33
Limitations of the Current Internet 3-33The Internet2® Project 3-34The Larger Internet II Technology Environment: The First Mile and theLast Mile 3-35
Fiber Optics and the Bandwidth Explosion in the First Mile 3-36The Last Mile: Mobile Wireless Internet Access 3-37
Benefits of Internet II Technologies 3-45IP Multicasting 3-45
C o n t e n t s | xx i
Latency Solutions 3-45Guaranteed Service Levels and Lower Error Rates 3-47Declining Costs 3-47
3.4 The World Wide Web 3-47
Hypertext 3-48
Markup Languages 3-49Standardized Generalized Markup Language (SGML) 3-49
HyperText Markup Language (HTML) 3-49
Extensible Markup Language (XML) 3-51Web Servers and Clients 3-53Web Browsers 3-54
3.5 The Internet and the Web: Features 3-55
E-mail 3-55Instant Messaging 3-55Search Engines 3-56Intelligent Agents (Bots) 3-59Online Forums and Chat 3-60
Insight on Technology: Chatterbots Meet Avatars 3-61
Streaming Media 3-62Cookies 3-63Web 2.0 Features and Services 3-63
Blogs 3-63 •'
Really Simple Syndication (RSS) ; 3-64
Podcasting 3-65Wikis 3-66New Music and Video Services 3-66Internet Telephony 3-66
Internet Television 3-68Video Conferencing 3-69Online Software and Web Services: Web Apps, Widgets and Gadgets 3-69M-commerce Applications: The Next Big Thing 3-70
3.6 Case Study: Akamai Technologies: The Web's Jukebox 3-71
3.7 Review 3-75
Key Concepts 3-75Projects 3-78Questions 3-79
Web Site Resources 3-79
xxii C o n t e n t s
BUILDING AN E-COMMERCE WEB SITE 4-1
Learning Objectives 4-1
Right-Sizing a Web Site 4-2
4.1 Building an E-commerce Web Site: A Systematic Approach 4-4Pieces of the Site-Building Puzzle 4-4
Planning: The Systems Development Life Cycle - 4-5
Systems Analysis/Planning: Identify Business Objectives, System Functionality,
and Information Requirements 4-6
System Design: Hardware and Software Platforms 4-8
Building the System: In-House versus Outsourcing 4-8
Build Your Own versus Outsourcing 4-8
Host Your Own versus Outsourcing 4-12
Insight on Business: Curly Hair and Tattoos: Getting Started on the Cheap 4-13
Testing the System 4-15
Implementation and Maintenance 4-15
Factors in Optimizing Web Site Performance 4-16
. Web Site Budgets 4-17 ,
4.2 Choosing Software 4-18
Simple versus Multi-tiered Web Site Architecture 4-18
Web Server Software 4-20
Site Management Tools 4-21
. Dynamic Page Generation Tools 4-22
Application Servers 4-24
E-commerce Merchant Server Software Functionality 4-25
Online Catalog 4-26
Shopping Carts 4-26
Credit-Card Processing 4-26
Merchant Server Software Packages (E-commerce Suites) 4-26
Choosing an E-commerce Suite 4-27% Building Your Own E-commerce Site: Web Services and Open Source
Options 4-28
4.3 Choosing the Hardware for an E-commerce Site 4-29
Right-Sizing Your Hardware Platform: The Demand Side 4-30
Right-Sizing Your Hardware Platform: The Supply Side 4-33
4.4 Other E-commerce Site Tools 4-37
Web Site Design: Business Considerations 4-37
Tools for Web Site Optimization 4-39
Tools for Interactivity and Active Content 4-40
Bling for Your Blog: Web 2.0 Design Elements 4-40
C o n t e n t s xxiii
CGI (Common Gateway Interface) 4-41Active Server Pages (ASP) 4-41Java, Java Server Pages (JSP), and JavaScript 4-41
Insight on Technology: Pumping Up the Customer Experience Using AJAXandFlash 4-43
ActiveX and VBScript 4-44
ColdFusion 4-44
Personalization Tools 4-45
The Information Policy Set 4-45
Insight on Society: Designing for Accessibility with Web 2.0 4-46
4.5 Case Study: REI Climbs the Web Mountain 4-49
4.6 Review 4-54Key Concepts 4-54Projects 4-57 ,Questions 4-58
Web Site Resources 4-59
ONLINE SECURITY AND PAYMENT SYSTEMS 5-l_
Learning Objectives 5-1 ' /
Cyberwar Becomes a Reality 5-2
5.1 The E-commerce Security Environment 5-4The Scope of the Problem 5-4 /
The Underground Economy Marketplace: The Value of StolenInformation 5-8
What Is Good E-commerce Security? 5-9Dimensions of E-commerce Security 5-10The Tension Between Security and Other Values 5-12
Ease of Use 5-12Public Safety and the Criminal Uses of Security 5-12
5.2 Security Threats in the E-commerce Environment 5-14Malicious Code 5-15Unwanted Programs 5-17Phishing and Identity Theft ^ 5-19Hacking and Cybervandalism 5-21Credit Card Fraud/Theft 5-22Spoofing (Pharming) and Spam (Junk) Web Sites 5-23Denial of Service (DoS) and Distributed Denial of Service (dDoS) Attacks 5-24
Sniffing 5-24Insider Attacks 5-25
Poorly Designed Server and Client Software 5-25
x x i v C o n t e n t s
5.3 Technology Solutions 5-26
Protecting Internet Communications 5-26
Encryption 5-26
Symmetric Key Encryption 5-28
Public Key Encryption 5-29
Public Key Encryption Using Digital Signatures and Hash Digests 5-29
Digital Envelopes 5-32
Digital Certificates and Public Key Infrastructure (PKI) 5-32
Limitations to Encryption Solutions 5-35
Securing Channels of Communication 5-35 . ,
Secure Sockets Layer (SSL) 5-35
Insight on Society: In Pursuit of E-mail Security 5-36
Secure Hypertext Transfer Protocol (S-HTTP) 5-38
Virtual Private Networks (VPN) 5-39
Protecting Networks 5-39
Firewalls 5-39
Protecting Servers and Clients 5-40
Operating System Security Enhancements 5-40
Anti-Virus Software 5-41 ' .
5.4 Management Policies, Business Procedures, and PublicLaws 5-42
A Security Plan: Management Policies 5-42 /
Insight on Technology: Securing Your Information: Cieversafe Hippie Storage5-45 j
The Role .of Laws and Public Policy 5-46/
Private and Private-Public Cooperation Efforts 5-48
Government Policies and Controls on Encryption Software 5-48
OECD Guidelines 5-48
5.5 Payment Systems 5-49
Types of Payment Systems 5-49
Cash 5-49
Checking Transfer 5-50
Credit Card 5-50
Stored Value 5-51
Accumulating Balance 5-51
5.6 - E-commerce Payment Systems 5-53
Online Credit Card Transactions 5-54
Credit Card E-commerce Enablers 5-55
Limitations of Online Credit Card Payment Systems 5-56
Digital Wallets 5-56
Digital Cash 5-57
Online Stored Value Systems 5-57
Digital Accumulating Balance Payment Systems 5-59
Digital Checking Payment Systems 5-59
C o n t e n t s xxv
Wireless Payment Systems 5-60
5.7 Electronic Billing Presentment and Payment 318
Market Size and Growth 5-61
Insight on Business: Mobile Payment's Future: WavePayMe, TextPayMe 5-62
EBPP Business Models 5-64
5.8 Case Study: PayPal Has Company 5-675.9 Review 5-71
Key Concepts 5-71
Projects 5-76
Questions 5-77
Web Site Resources 5-77
PART 3 ;iness Concepts and Social Issues
E-COMMERCE MARKETING CONCEPTS 6-1
Learning Objectives 6-1
Netflix Develops and Defends Its Brand 6-2
6.1 Consumers Online: The Internet Audience and ConsumerBehavior 6-5 /The Internet Audience 6-5
Internet Traffic Patterns: The Online Consumer Profile 6-6
Intensity and Scope of Usage 6-6
Demographics and Access 6-6
Type of Internet Connection: Broadband Impacts 6-10
Community Effects: Social Contagion 6-11
Lifestyle and Sociological Impacts 6-12
Media Choices and Multitasking : The Internet versus Other Media
Channels 6-12
Consumer Behavior Models 6-12
Profiles of Online Consumers 6-15
The Online Purchasing Decision 6-16
A Model of Online Consumer Behavior 6-17
Shoppers: Browsers and Buyers 6-20
What Consumers Shop for and Buy Online 6-22
Intentional Acts: How Shoppers Find Vendors Online 6-22
Why More People Don't Shop Online 6-23
Trust, Utility, and Opportunism in Online Markets 6-24
x x v i C o n t e n t s
6.2 Basic Marketing Concepts 6-24Feature Sets - 6-25Products, Brands, and the Branding Process 6-26Segmenting, Targeting, and Positioning 6-28Are Brands Rational? 6-29Do Brands Last Forever? 6-30Can Brands Survive the Internet? Brands and Price Dispersion on theInternet 6-31
6.3 Internet Marketing Technologies 6-33
The Revolution in Internet Marketing Technologies 6-33Web Transaction Logs 6-35 " /
Supplementing the Logs: Cookies and Web Bugs 6-37Databases, Data Warehouses, and Data Mining: Developing Profiles 6-39
Insight on Society: Marketing with Web Bugs 6-40 •
Databases 6-42
Data Warehouses and Data Mining 6-43 J
Insight on Technology: The Long Tail: Big Hits and Big Misses 6-46'
Customer Relationship Management (CRM) Systems 6-48
6.4 B2C and B2B E-commerce Marketing and Branding Strategies 6-50
Market Entry Strategies 6-50Establishing the Customer Relationship 6-52
Advertising Networks 6-52 •
Permission Marketing 6-54Affiliate Marketing 6-55
Viral Marketing in the Web 2.0 Milieu 6-56 .Blog Marketing 6-57 .Social Network Marketing and Social Shopping 6-58
Leveraging Brands 6-58 *
Insight on Business: Social Network Marketing: New Influences Among the
Chattering Masses 6-59
Customer Retention: Strengthening the Customer Relationship 6-61
Personalization and One-to-One Marketing 6-61
Customization and Customer Co-Production 6-63Transactive Content 6-64 j
' j
Customer Service 399Net Pricing Strategies 6-66
It's Free! 6-68Versioning 6-68Bundling 6-69Dynamic Pricing 6-70
Channel Strategies: Managing Channel Conflict 6-71
C o n t e n t s j xxvii
6.5 Case Study: Liquidation.com: B2B Marketing Success Story 6-73
6.6 Review 6-77Key Concepts 6-77Projects 6-80Questions 6-81Web Site Resources 6-82
E-COMMERCE MARKETING COMMUNICATIONS 7-l_
Learning Objectives 7-1 -
Video Ads Cure Banner Blindness: String Master 7-2
7.1 Marketing Communications 7-5Online Advertising 7-5
Display Ads: Banners and Pop-Ups 7-7Rich Media/Video Ads 7-10Search Engine Advertising: Paid Search Engine Inclusion and Placement 7-12
Sponsorships 7-19Referrals (Affiliate Relationship Marketing) 7-19
E-mail Marketing and the Spam Explosion 7-20Online Catalogs 7-24Social Marketing: Blogs, Social Networks and Games 7-26
Blog Advertising 7-26
Social Network Advertising 7-27Game Advertising 7-27
Behavioral Targeting: Getting Personal 7-28
Insight on Society: Marketing to Children of the Web in the Age of SocialNetworks 7-29
Mixing Offline and Online Marketing Communications 7-33 '
7.2 Understanding the Costs and Benefits of Online MarketingCommunications 7-34Online Marketing Metrics: Lexicon 7-34
Insight on Business: The Very Rich Are Different from You and Me: Nieman Marcus,Tiffany ft Co., and Armani 7-35
How Well Does Online Advertising Work? 7-40The Costs of Online Advertising 7-43Software for Measuring Online Marketing Results 7-45
7.3 The Web Site as a Marketing Communications Tool 7-45Domain Names 7-46Search Engine Optimization 7-47
Insight on Technology: It's 10 P.M. Do You Know Who Is On Your Web Site? 7-48
Web Site Functionality 7.-50
x x v i i i C o n t e n t s
7.4 Case Study: Adware, Spy ware, Ad Bombs, Ambush Marketing, andCustomer Hijacking: Invasive Marketing Techniques Grow on theWeb 7-53
7.5 Review 7-59
Key Concepts 7-59
Projects 7-62 . . •:Questions 7-62Web Site Resources 7-63 '.
ETHICAL, SOCIAL, AND POLITICAL ISSUES IN E-COMMERCE 8-1 t
. 1 j.
Learning Objectives 8-1 {
Second Life Gets a Life: Discovering Law and Ethics in Virtual Worlds 8-2 \
8.1 Understanding Ethical, Social, and Political Issuesin E-commerce 8-4 jA Model For Organizing the Issues 8-5 . , IBasic Ethical Concepts: Responsibility, Accountability, and Liability 8-7 ;Analyzing Ethical Dilemmas 8-9 " |Candidate Ethical Principles 8-9 I
8.2 Privacy and Information Rights 8-11 1Information Collected at E-commerce Sites 8-12 IProfiling and Behavioral Targeting 8-13The Internet and Government Invasions of Privacy:E-commerce Surveillance 8-17Legal Protections 8-19
Informed Consent 8-19The FTC's Fair Information Practices Principles 8-22The European Directive on Data Protection 8-24 ',
Private Industry Self-Regulation 8-25Privacy Advocacy Groups 8-26
Technological Solutions 8-26
Insight on Business: Chief Privacy Officers 8-28
Insight on Technology: The Privacy Tug of War 8-32
8.3 Intellectual Property Rights 8-32
Types,of Intellectual Property Protection 8-34Copyright: The Problem of Perfect Copies and Encryption 8-35
Look and Feel 8-36Fair Use Doctrine 8-36 l
The Digital Millennium Copyright Act of 1998 8-37Patents: Business Methods and Processes ,8-39
E-commerce Patents 8-41Patent Reform 8-41
C o n t e n t s xxix
Trademarks: Online Infringement and Dilution 8-44
Trademarks and the Internet 8-44
Cybersquatting 8-45
Cyberpiracy 8-45
Metatagging 8-47
Keywording 8-48
Linking 8-49
Framing 8-49
Challenge: Balancing the Protection of Property with Other Values 8-50
8.4 Governance 8-51
Who Governs E-commerce and the Internet? 8-51
Can the Internet Be Controlled? 8-53
Public Government and Law 8-54
Taxation 8-54
Net Neutrality 8-56
8.5 Public Safety and Welfare 8-57
Protecting Children ° 8-57
Cigarettes, Gambling, and Drugs: Is the Web Really Borderless? 8-58
Insight on Society: The Internet Drug Bazaar 8-61
8.6 Case Study: Print the Library [Online]: Is Google Playing Fair, or JustOut to Make a Buck? 8-63
8.7 Review 8-66Key Concepts, 8-66 j
Projects 8-70 ''
Questions 8-71
Web Site Resources 8-72
PART 4 hrnmerce in Action
ONLINE RETAILING AND SERVICES 9-1
Learning Objectives 9-1
Blue Nile Sparkles For Your Cleopatra 9-2
9.1 The Online Retail Sector 9-6
The Retail Industry 9-7
Online Retailing 9-9
E-commerce Retail: The Vision 9-9
The Online Retail Sector Today 9-11
Multi-channel Integration 9-13
xxx C o n t e n t s
9.2 Analyzing the Viability of Online Firms 9-14
Strategic Analysis 9-14
Financial Analysis 9-15
9.3 E-commerce in Action: E-tailing Business Models 9-17
Virtual Merchants 9-17
E-commerce in Action: Amazon.com 9-18
Multi-channel Merchants: Brick-and-Clicks 9-26
Catalog Merchants 9-28
Manufacturer-Direct 9-29
Common Themes in Online Retailing 9-31
9.4 The Service Sector: Offline and Online 9-32
Insight on Technology: Using the Web to Shop 'Till You Drop 9-33
What Are Services? 9-35
Categorizing Service Industries 9-35
Knowledge and Information Intensity 9-35
Personalization and Customization 9-36
9.5 Online Financial Services 9-36
Financial Services Industry Trends 9-36
Online Financial Consumer Behavior 9-38
Online Banking and Brokerage 9-39
Multi-channel vs. Pure Online Financial Services Firms 9-40
Financial Portals and Account Aggregators 9-41
Online Mortgage and Lending Services 9-42
Online Insurance Services 9-44
Online Real Estate Services 9-45
9.6 Online Travel Services 9-48
Insight on Society: Turf Wars-Antitrust and the Online Real Estate Market 9-49
Why Are Online Travel Services So Popular? 9-51 '
The Online Travel Market 9-52
Online Travel Industry Dynamics 9-54
Insight on Business: Zipcars 9-55
Opportunities for Disintermediation and Re-intermediation 9-57
E-commerce in Action: Expedia.com 9-58
9.7 Online Career Services 9-64
It's Just Information: The Ideal Web Business? 9-64
Recruitment Market Segments 9-67
Online Recruitment Industry Dynamics: Consolidation, Diversification,Localization, and Job Search Engines 9-67
9.8 Case Study: IAC/InterActiveCorp: Online Services Spin-off ^9-69
9.9 Review 9-74
Key Concepts 9-74
C o n t e n t s XXXI
Projects 9-81Questions 9-82Web Site Resources 9-83
ONLINE CONTENT AND MEDIA 10-1
Learning Objectives 10-1
The Wall Street Journal Online Discovers Web 2.0 10-2
10.1 Online Content 10-5Content Audience and Market: Where Are the Eyeballs and the Money? 10-5
Media Utilization 10-6Internet and Traditional Media: Cannibalization VersusComplementarity 10-7Media Revenues 10-8Two Models of the Digital Content Delivery: Paid and User-GeneratedContent 10-9Free or Fee: Attitudes About Paying for Content and the Tolerance forAdvertising 10-11
Media Industry Structure 10-12Media Convergence: Technology, Content, and Industry Structure 10-13
Technological Convergence 10-13Content Convergence 10-13Industry Convergence 10-15 '
Online Content Revenue Models and Business Processes 10-16Making a Profit with Online Content: From Free to Fee 10-18
Key Challenges Facing Content Producers and Owners 10-19Technology 10-19Cost 10-20 ,Distribution Channels and Cannibalization 10-21Digital Rights Management (DRM) 10-21
10.2 The Online Publishing Industry 10-22Online Newspapers 10-22
Insight on Business: DRM: Who Owns Your Files? 10-23
Audience Size and Growth 10-25
Online Newspaper Revenue Models and Results 10-27Convergence 10-28Challenges: Disruptive Technologies 10-29
Books: The Evolution of E-books 10-30E-books 10-31
Book Audience Size and Growth 10-33Content: Advantages and Disadvantages of E-books 10-34E-book Industry Revenue Models 10-35
xxxi i C o n t e n t s
Convergence 10-37
Insight on Society: The Future of Books 10-40
E-commerce in Action: CNET Networks, Inc. 10-42
10.3 The Online Entertainment Industry 10-47
Online Entertainment Audience Size and Growth 10-48
Online Traditional Entertainment 10-49 ,
User-Generated Content: Where Does It Fit? 10-49'
Content 10-50
Online Entertainment Industry Revenue Models 10-51
Convergence 10-51
Insight on Technology: Hollywood Needs a New Script: Pass_the Cash Cow Please 10-55
10.4 Case Study: Google and YouTube Together: Can Google MonetizeYouTube? 10-58
10.5 Review 10-61Key Concepts 10-61
Projects 10-67
Questions 10-67
Web Site Resources 10-68
SOCIAL NETWORKS, AUCTIONS, AND PORTALS d_ 11-1
Learning Objectives 11-1i
Social Network Fever Spreads to the Professions 11-2
11.1 Social Networks and Online* Communities 11-4What Is an Online Social Network? 11-5
The Difference Between Social Networks and Portals 11-5
The Growth of Social Networks and Online Communities 1̂ -6
Turning Social Networks Into Businesses 11-7
Types of Social Networks and Their Business Models 11-8
Social Network Features and Technologies 11-10
The Future of Social Networks 11-10
11.2 Online Auctions 11-11
Defining and Measuring the Growth of Auctions and Dynamic Pricing 11-11
Insight on Technology: Social Operating Systems: Facebook vs. Google 11-12
Insight on Society: Dynamic Pricing: Is This Price Right? 11-15
Why Are Auctions So Popular? Benefits and Costs of Auctions 11-18
Benefits of Auctions 11-18
Risks and Costs of Auctions for Consumers and Businesses 11-19
Market-Maker Benefits: Auctions as an E-commerce Business Model 11-21
Types and Examples of Auctions 11-21
Internet Auction Basics 11-21
C o n t e n t s xxxiii
Types of Auctions 11-23When to Use Auctions (and for What) in Business 11-28Seller and Consumer Behavior at Auctions 11-30
Seller Profits: Arrival Rate, Auction Length, and Number of Units 11-30Auction Prices: Are They the Lowest? 11-31Consumer Trust in Auctions 11-32
When Auction Markets Fail: Fraud and Abuse in Auctions 11-33
11.3 E-commerce Portals 11-33
The Growth and Evolution of Portals 11-35
Types of Portals: General Purpose and Vertical Market 11-36
Insight on Business: Battle of the Portals 11-37
Portal Business Models 11-41
E-commerce in Action: Yahoo! Inc. 11-42
11.4 Case Study: iVillage Discovers the Path to Success, But Has It SinceLost Its Way? 11-50
11.5 Review 11-52Key Concepts 11-52Projects 11-57Questions 11-58Web Site Resources 11-58
B2B E-COMMERCE: SUPPLY CHAIN MANAGEMENT AND COLLABORATIVE COMMERCE 766_
i
Learning Objectives 12-1 ''
Volkswagen Builds Its B2B, Net Marketplace 12-2
12.1 B2B E-commerce and Supply Chain Management 12-5Defining and Measuring the Growth of B2B Commerce 12-5The Evolution of B2B Commerce 12-6The Growth of B2B E-commerce 2001 -2012 12-8
Industry Forecasts 12-8Potential Benefits of B2B E-commerce 12-10The Procurement Process and the Supply Chain 12-10
Types of Procurement 12-11The Role of Existing Legacy Computer Systems 12-13
Trends in Supply Chain Management and Collaborative Commerce 12-14Supply Chain Simplification 12-14 -Electronic Data Interchange (EDI) 12-14
Supply Chain Management Systems 12-17Collaborative Commerce 12-18
Insight on Technology: RFID Autoidentification: Making Your SupplyChain Visible 12-19
x x x i v C o n t e n t s
Main Types of Internet-based B2B Commerce 12-22
12.2 Net Marketplaces ' 12-23 ?
The Variety and Characteristics of Net Marketplaces 12-23Types of Net Marketplaces 12-23
E-distributors 12-25
E-procurement 12-26E-commerce in Action: Ariba 12-28
Exchanges 12-35Industry Consortia 12-37
The Long-Term Dynamics of Net Marketplaces 12-40
12.3 Private Industrial Networks 12-41
What Are Private Industrial Networks? 12-41
Insight on Society: Are Net Marketplaces Anti-competitive Cartels? 12-42
Characteristics of Private Industrial Networks r 12-44
Private Industrial Networks and Collaborative Commerce 12-45
Insight on Business: Wal-Mart Develops a Private Industrial Network 12-47
Implementation Barriers 12-48
Industry-Wide Private Industrial Networks 12-49
The Long-Term Dynamics of Private Industrial Networks • 12-49
12.4 Case Study: Siemens Clicks with Click2procure 12-52
12.5 Review 12-55
Key Concepts 12-55 „Projects 12-59
Questions 12-60
Web Site Resources 12-60References R-l
Index 1-1
Credits C-l , ,
