Summary of Reading Assignments: A Taxonomy of The Internet Dr. Deepak Khazanchi

Several Terms Internet Commerce: Commercial activities associated with the Internet Transplanted Real-World Business Models: Business activities which occur naturally in the real-world and have been transplanted onto the Internet Native Internet Business Models: Business activities which have evolved in the Internet environment and are native to it Electronic Commerce: Conduct of business with the assistance of telecommunications and information technology; not limited to business conducted on the Internet

Transplanted Real-World Business Models Mail-Order Model: a Web site shop front is employed to sell physical goods which are then posted or delivered (Amazon.com)Amazon.com Advertising Based Model: where advertising revenues support the operation of a free service(Yahoo.com)Yahoo.com Subscription Model: users subscribe for access to a database of digital products; well suited for combination with digital delivery(INFORMATIONWEEK.com)INFORMATIONWEEK.com Free Trail Model: software is available for free download or distributed on CD-ROM but will only work for a limited period or will not be fully functional until a fee is paid

Transplanted Real-World Business Models(cont) Direct Marketing Model: the use of electronic mail direct marketing (known as spam) Real Estate Model: sell Web space, domain names and addresses Incentive Scheme Models: opportunities to win prizes or to secure “free” or inexpensive goods or services are used to entice people to accept advertising or to provide personal information Business to Business:businesses transact between corporate entities via the Internet, including financial, research, legal and employment services Combinations of the above models

Native Internet Business Models Nature of native Internet economy: unlike the real world the native economy of the Internet is not based on scarcity but on abundance Much of value is created and exchanged on the Internet but that the interactions involved are not financial but may involve the accumulation of “reputation capital”

Native Internet Business Models(cont) Types of Native Internet Business Model Library Model: the Web site that offers free information Freeware Model: provides free software (basic versions may be free but more extended versions are for sale) or open source code Information Barter Model: some sort of exchange of information over the Internet between individuals and organizations

Native Internet Business Models(cont) Digital Products and the Digital Delivery Model Digital Products: images, movies, animation, audio, text, certificates and software Digital Delivery: take places when products are purchased or where information bartered Access Provision Model: provides access to the Internet with enterprises called Internet service Providers(ISPs) Website Hosting and Other Internet Services: hosting web servers, electronic mail and URL and re- direction services

Government and Internet Commerce Some governments support the development of the Internet as a public enterprise Others encourage the Internet as a private initiative, with little governmental involvement

Privacy and Internet Commerce There is considerable value and competitive advantage in exploiting personal information on Internet Development of I-Commerce has already been retarded by privacy abuses The argument that privacy protection will emerge from the action of markets is discredited

I-Commerce and Economic Rationalism Economic Rationalism A set of concepts and beliefs which have shaped and determined government policy A simplistic and nostalgic ideology, harking back to notions initially described by Adam Smith and Charles Darwin Central tenet is that the market should be left unhindered by government regulation and that the free operation of the market will produce maximum prosperity Under economic rationalism, the concentration of wealth in the hands of a small percentage of the world’s population has accelerated alarmingly, which in part is due to divestment by governments of public assets and utilities which have been “privatized” or sold

Disintermediation and Competition Disintermediation is the elimination of the middleman Most native Internet business is disintermediated; most real-world business activity is intermediatory The colonization of the Internet by real-world business enterprises is bound to introduce new layers of intermediation It’s difficult to see how viable profit margins can be maintained by traditional real-world businesses which seek to colonize the Internet