3003 IS Chap 9

• began in 1995
• use of the Internet and Web to transact business; digitally enabled transactions.

• -buying and selling products and services
• -collaborating with other customers
• -providing customer service
• -offering vendor support
• -making sw updates available

• -brick and motar
• -click and motar
• -pureplay business

• 1. Ubiquity
• 2.global reach
• 3.Universal Standards
• 4.Richness
• 5. Interactivity
• 6.Information Density
• 7. Personalization/Customize
• 8.Social Technology

available anywhere and anytime

enchanced customer convinience

it reaches across boundaries


billions of customers and millions of businesses worldwide

One set of technology standards

market entry costs- markets must pay merchants to bring goods to market

lower consumers search cost-effort required to find suitable product

the complexity and content of message

e commerce- supports video and audio chat

effect:possible to deliver messages with text, audio to large number of people.

e commerce can provide two way communication between merchant and consumer

consumer becomes co-participant in process of delivering goods

information density-total amount and qualityof information available to all market

• -greater price transparency-the ease of finding a cost of an item
• -great cost transparency- the ability to find out the actual cost to merchants.

enables merchants to engage in price discrimination.

personalization- ability to target marketing messages to specific individuals

customization-modification of a good

social technology-allows users to share and create content

• REDUCES
• -info assymetry
• -search costs
• -transaction costs
• -menu costs

• digital markets enable
• -price discrimination
• -dynamic pricing
• -disintermediation

goods that can be delivered over a digitl network

• costs over the internet very low
• costs of producing the first unit almost entire cost of the product:marginal cost of second product is zero

industires with digital goods are undergoing revolutionary changes

• B2C- business to cosumer
• C2C- Consumer to consumer
• B2B-business to business

• G2C- government to consumer
• G2B- government to business
• G2G- government to government

businesses sell their products to consumers over the interent.

may involve disintermediation

• -ESHOP- online version of retail store
• -Emall-consists of a number of E shops

Priceline? what consumers like about it?

• -menudriven pricing-company sets the price consumer pays
• -reverse pricing-consumer specifies the price he or she is willing to pay, company accepts or rejects

involves transactions between users

• -craigslist
• -ebay

• pricing model
• foward auction:sellers use the site as a selling channel to many buyers and the highest bid wins.

-involves electronic transactions between businesses

• -fastes growing segment of ecommerce
• -tend to be more complex and higer security needs

• - reduces delivery time
• -purchase orders, inventory, inventory status, shipping , logistics, business contacts, other operations

• -Intranets
• -Extranets
• -VPN Virtual Private Networks
• -EDI Electronic data interchange
• -Private Industrial networks
• -Net marketplaces and exchanges

computer comnputer exchange of standard transactions

large firm using extranet to link to its suppliers, distributors, and other key business partners

reverse auction-vendors provide quotes to firm price they sell for, buyer selects the vender with the lowest bid.

-single market for many buyers and sellers

- industry owned by independent intermediary

-generate fees from other transaction fees

involves the use of internet technologies to transform governments by improving the delivery of services and enhancing the quality of interaction between citizen-consumer branches

• G2C-
• G2B
• G2G

-renew drivers license, pasports, visas, medicare, medicaid benefits , social security, food stamps, public service announcemnt

-consumer initiated transactions with government- elections/ voting, census

info about regulations, licenses, import, export , tariff info

business initiated transactions to gov- filing info with SEC/EEO/IRS paying taxes, fees

governments exchaning info

local-health department

state-state budget, education, medicaid programs, statwide criminal records

national-medicare programs,social security,transportation, national crime records, disaster assistance

international-international trade agreements,treaties , immigration info

use of mobile devices using goods

• steadiliy growing
• -location based services
• -banking and financial services
• -wireless advertising
• -games and entertainment

• -Portals
• -Etailer
• -content provider
• -transaction broker
• -market creator
• -service provider
• -community provider

• -banners
• -sells
• -subscirption
• -free/fremium
• -transaction
• -affiliate

social networking

-set up their own profiles

larger number of people can make better decisions about topics than a single person.

variation of crowdsourcing-firms offer incentives to customers for solving a problem or coming up with an idea

prediction market- peer to peer betting markets on specifc outcomes

long tail marketing- ability to reah large audience inexpensively

• behavioral targeting-tracking online behavior of individuals on thousands of websites.
• (clickstream data, personalization)

advertising formats include search engine marketing,display adds, rich media, email

improving the volume or quality of traffic to a website;

• SEO SERVICES
• -editing a sites content and HTML code to increase its relevance to specific keywords.

• REC FOR OPTIMIZING WEB SITE
• -keywords
• -page title
• -impound links

spamdexing-using a variety of deceptive techniques to manipulate search engine rankings

provide content providers with a cost effective method for processing high volumes of very small monetary transactions

• -techonology
• -site design
• -social and info policies
• -hw, sw, and telecommunications infrastructure

not the reverse

• -bandwith
• -accessiblity
• -acceptance
• -security issues
• -potenital liability issues
• -taxation rules