1 ELC 200 Introduction to E-Commerce Copyright, Tony Gauvin, UMFK, 2006

2 Introduction Class roll call Instructor Introduction Instructor’s Educational Philosophy BlackBoard accounts Syllabus review General Information about class Classroom Contract Discussion The Revolution Is Just Beginning

3 Instructor Tony Gauvin  Associate Professor Of E-Commerce  216 Nadeau Hall  (207) or Extension 7519   BlackBoard  Tony's Resume Tony's Resume  WebSite (

4 Instructional Philosophy Out-Come based education Would rather discuss than lecture  Requires student preparation Hate grading assignments  Especially LATE assignments Use class interaction, assignments, quizzes and projects to determine if outcomes are met.

5 ELC 200 Survival Primer Read Material BEFORE the class discussion  Summary & Key Concepts at EOC  Projects and Questions in EOC Use textbook’s website  Check BlackBoard Often Use the additional resources identified in syllabus & in BlackBoard ASK questions about what you didn’t understand in readings DON’T do homework at last minute. REVEIW lectures and notes Seek HELP if you are having difficulties OFFER feedback and suggestions to the instructor in a constructive manner

6 ELC 200 Specifics Blackboard used to augment course Two Desired outcomes  E-Commerce’s impact on Business, Global Economies and Society  Entrepreneurship Students have the ability to create the framework for a viable e- commerce initiative Managerial Perspectives instead of technical  Technical Portions will be covered in COS XXX classes  Understanding “Why” instead of “How”

7 Blackboard Login  name and password Help with Blackboard is available from Blake Library staff All quizzes and assignments will be administered from BlackBoard New version of BlackBoard

8 Computer Accounts Computer login  Sys admin Pete Cyr (x7547) or Art Drolet (x7809)  Applications MSDN Academic Alliance  Free Stuff  See Dr. Ray Albert Access Cards  $10 deposit  See Lisa Fournier

9 Syllabus review Requirements Grading Course outline Special Notes Subject to change

10 Contract on Classroom Behavior A contract for students and Professor on what is expected and encouraged behavior in the classroom Created through a collaborative process

11 Premise to Contract The Business Management, eCommerce and Computer Application programs are preparing students for professional positions where professional behaviors will be expected of them. These behaviors will be reinforced by requiring the students to adopt the rules agreed to in this contract. Adherence to the rules in this contract will be part of the student’s grade in this class. Learning is a group activity, and the behavior of each person in class in some way or the other affects the learning outcomes of others. If we keep these thoughts and the following rules in mind, the classroom experience will be a better one for everyone involved. More serious breeches of student behavior in the classroom will be dealt with through the UMS Student Conduct Code procedures outlined in the conduct code booklet which can be found at the following link. 

12 My thoughts Most students exhibit appropriate behavior in class, but there is some disagreement what “appropriate” behavior is. At times, a consumer culture creeps into the classroom, with students sometimes perceiving faculty as employees hired to serve them. This is not the appropriate comparison – a professor is not here to give you what you want, but rather to help you obtain what you need. A professor is more like a physician. Just as any doctor who tells you “everything is fine” so that you’ll be happy (when everything isn’t fine) should be sued for malpractice, any faculty member who gives you an “A” regardless of your performance or allows anything to happen primarily because that is what will make you happy is doing you and other students a disservice.

13 Suggested rules (Professor) This professor  Will be knowledgeable and current on the topics  Will be a role model of a professional in the discipline  Will provide prompt feedback on assignments and quizzes (within one week)  Will not cancel classes without a good reasons and will inform students promptly of his absence  Will make time available outside of classes for student professor meetings  Will be fair and impartial in student assessments  Will follow published UMFK policy  Will be sensitive to issues of gender, diversity, disability and student privacy  Will “stick” to the syllabus and will not make any unnecessary changes to the class that adversely effects student learning outcomes  ???

1947 HD FLH “knucklehead” 2010 Audi R Buick RoadMaster  Convertible or Sedanette 1972 SS 402 El Camino 1970 Oldsmobile 442 (W-30 option) 1965 Shelby Cobra S/C Ferrari 348 Spyder 2006 Dodge Viper SRT10 Bribe List (2010) Copyright 2005 Prentice Hall Ch 1 -14

15 UMFK’s Definition of E-Commerce An attempt to achieve transactional efficiency in all aspects of the design, production, marketing and sales of products or services for existing and developing marketplaces through the utilization of current and emerging electronic technologies E-Commerce IS NOT  E-Business  DOT-COMS (or Dot-Bombs)  E-Marketing  Easy or Cheap  NEW

16 E-Commerce Degree Program Combination of Technical Skills and Management know-how Prepares students for Leadership Roles  Cadre (team) building  Broad-based technical underpinnings with one or two specialist areas  Understanding of implications of E-Commerce within an organizational context and within broader social issues

Copyright © 2010 Pearson Education, Inc. E-commerce Kenneth C. Laudon Carol Guercio Traver business. technology. society. Sixth Edition

Copyright © 2010 Pearson Education, Inc. Copyright © 2007 Pearson Education, Inc. Slide 1-18 Chapter 1 The Revolution Is Just Beginning

Objectives Define e-commerce and describe how it differs from e-business. Identify and describe the unique features of e-commerce technology and discuss their business significance. Recognize and describe Web 2.0 applications. Describe the major types of e-commerce. Discuss the origins and growth of e-commerce. Understand the evolution of e-commerce from its early years to today. Identify the factors that will define the future of e-commerce. Describe the major themes underlying the study of e-commerce. Identify the major academic disciplines contributing to e-commerce. 19

Copyright © 2010 Pearson Education, Inc. Facebook and MySpace: It’s All About You How is Facebook different from MySpace? Have you used Facebook or MySpace, and if so, how often? What was your experience? Why do you think Facebook has overtaken MySpace as the most popular social networking site? Slide 1-20

Copyright © 2010 Pearson Education, Inc. E-commerce Trends 2009–2010 New business models based on social technologies, consumer-generated content, and services 2009 a flat year, but growth expected to resume in 2010 Broadband and wireless access continue to grow Mobile e-commerce begins to take off Traditional media losing subscribers Slide 1-21

22 Retail E-Commerce (Non-Travel) Growth Rates Excludes Auctions, Autos and Large Corporate Purchases Total U.S. – Home/Work/University Locations Source: comScore, Inc. QuarterE-Commerce Spending ($ Millions) Y/Y Percent Change Q1 2007$27,97017% Q2 2007$27,17623% Q3 2007$28,44123% Q4 2007$39,13219% Q1 2008$31,17811% Q2 2008$30,58113% Q3 2008$30,2746% Q4 2008$38,071-3% Q1 2009$31,0310% Q2 2009$30,169-1% Q3 2009$29,552-2% Q4 2009$39,0453% US Census Bereau 2008 e-Stats report

Copyright © 2010 Pearson Education, Inc. The First 30 Seconds First 15 years of e-commerce  Just the beginning  Rapid growth and change Technologies continue to evolve at exponential rates  Disruptive business change  New opportunities Slide 1-23

Copyright © 2010 Pearson Education, Inc. What is E-commerce? Use of Internet and Web to transact business More formally:  Digitally enabled commercial transactions between and among organizations and individuals Slide 1-24

Copyright © 2010 Pearson Education, Inc. E-commerce vs. E-business E-business:  Digital enablement of transactions and processes within a firm, involving information systems under firm’s control  Does not include commercial transactions involving an exchange of value across organizational boundaries Slide 1-25

Copyright © 2010 Pearson Education, Inc. Why Study E-commerce? E-commerce technology is different, more powerful than previous technologies E-commerce bringing fundamental changes to commerce Traditional commerce:  Passive consumer  Sales-force driven  Fixed prices  Information asymmetry Slide 1-26

Copyright © 2010 Pearson Education, Inc. Unique Features of E- commerce Technology 1. Ubiquity 2. Global reach 3. Universal standards 4. Information richness 5. Interactivity 6. Information density 7. Personalization/customization 8. Social technology Slide 1-27

Copyright © 2010 Pearson Education, Inc. Web 2.0 Applications, technologies that allow users to:  Create and share content, preferences, bookmarks, and online personas  Participate in virtual lives  Build online communities Examples  YouTube, Photobucket, Flickr, Google, iPhone  MySpace, Facebook, LinkedIn  Second Life  Wikipedia Slide 1-28

Copyright © 2010 Pearson Education, Inc. Types of E-commerce Classified by market relationship  Business-to-Consumer (B2C)  Business-to-Business (B2B)  Consumer-to-Consumer (C2C) Classified by technology used  Peer-to-Peer (P2P)  Mobile commerce (M-commerce) Slide 1-29

Copyright © 2010 Pearson Education, Inc. The Internet Worldwide network of computer networks built on common standards Created in late 1960s Services include the Web, , file transfers, etc. Can measure growth by looking at number of Internet hosts with domain names Slide 1-30

Copyright © 2010 Pearson Education, Inc. The Growth of the Internet, Measured by Number of Internet Hosts with Domain Names Figure 1.3, Page 23 Slide 1-31 SOURCE: Internet Systems Consortium, Inc., 2009.

Copyright © 2010 Pearson Education, Inc. The Web Most popular Internet service Developed in early 1990s Provides access to Web pages  HTML documents that may include text, graphics, animations, music, videos Web content has grown exponentially  2 billion Web pages in 2000  At least 40–50 billion pages today Slide 1-32

Copyright © 2010 Pearson Education, Inc. Insight on Technology: Spider Webs, Bow Ties, Scale-Free Networks, and the Deep Web Class Discussion What is the “small world” theory of the Web? What is the significance of the “bow-tie” form of the Web? Why does Barabasi call the Web a “scale- free network” with “very connected super nodes”? Slide 1-33

Copyright © 2010 Pearson Education, Inc. Origins & Growth of E-commerce Precursors:  Baxter Healthcare  Electronic Data Interchange (EDI)  French Minitel (1980s videotext system)  None had functionality of Internet 1995: Beginning of e-commerce  First sales of banner advertisements Since then, e-commerce fastest growing form of commerce in the United States Slide 1-34

Copyright © 2010 Pearson Education, Inc. The Growth of B2C E-commerce Figure 1.4, Page 25 Slide 1-35 SOURCES: eMarketer, Inc., 2009a; U.S. Census Bureau, 2009b; authors’ estimates.

Copyright © 2010 Pearson Education, Inc. The Growth of B2B E-commerce Figure 1.5, Page 28 Slide 1-36 SOURCES: U.S. Census Bureau, 2009a; authors’ estimates.

Copyright © 2010 Pearson Education, Inc. Technology and E-commerce in Perspective The Internet and Web: Just two of a long list of technologies that have greatly changed commerce  Automobiles  Radio E-commerce growth will eventually cap as it confronts its own fundamental limitations. Slide 1-37

Copyright © 2010 Pearson Education, Inc. Potential Limitations on the Growth of B2C E-commerce Expensive technology Sophisticated skill set Persistent cultural attraction of physical markets and traditional shopping experiences Persistent global inequality limiting access to telephones and computers Saturation and ceiling effects Slide 1-38

Copyright © 2010 Pearson Education, Inc. E-commerce: A Brief History 1995–2000: Innovation  Key concepts developed  Dot-coms; heavy venture capital investment 2001–2006: Consolidation  Emphasis on business-driven approach 2006–Present: Reinvention  Extension of technologies  New models based on user-generated content, social networking, services Slide 1-39

Copyright © 2010 Pearson Education, Inc. Early Visions of E-commerce Computer scientists:  Inexpensive, universal communications and computing environment accessible by all Economists:  Nearly perfect competitive market and friction-free commerce  Lowered search costs, disintermediation, price transparency, elimination of unfair competitive advantage Entrepreneurs:  Extraordinary opportunity to earn far above normal returns on investment—first mover advantage Slide 1-40

Copyright © 2010 Pearson Education, Inc. Insight on Business The Internet Investment Rollercoaster Class Discussion What explains the rapid growth in private investment in e-commerce firms in the period 1998–2000? Was this investment irrational? What was the effect of the big bust of March 2000 on e-commerce investment? What is the value to investors of a company such as YouTube which has yet to show profitability? Why do you think investors today would be interested in investing in or purchasing e-commerce companies? Would you invest in an e-commerce company today? Slide 1-41

Copyright © 2010 Pearson Education, Inc. Assessing E-commerce Many early visions not fulfilled  Friction-free commerce Consumers less price sensitive Considerable price dispersion  Perfect competition Information asymmetries persist  Disintermediation  First mover advantage Fast-followers often overtake first movers Slide 1-42

Copyright © 2010 Pearson Education, Inc. Predictions for the Future Technology will propagate through all commercial activity Prices will rise to cover the real cost of doing business E-commerce margins and profits will rise to levels more typical of all retailers Cast of players will change  Traditional Fortune 500 companies will play dominant role  New startup ventures will emerge with new products, services Number of successful pure online stores will remain smaller than integrated offline/online stores Growth of regulatory activity worldwide Influence of cost of energy Slide 1-43

Copyright © 2010 Pearson Education, Inc. Understanding E-commerce: Organizing Themes Technology:  Development and mastery of digital computing and communications technology Business:  New technologies present businesses with new ways of organizing production and transacting business Society:  Intellectual property, individual privacy, public welfare policy Slide 1-44

Copyright © 2010 Pearson Education, Inc. The Internet and the Evolution of Corporate Computing Figure 1.9, Page 44 Slide 1-45

Copyright © 2010 Pearson Education, Inc. Insight on Society Privacy Online: Does Anybody Care? Class Discussion What techniques of privacy invasion are described in the case? Which of these techniques is the most privacy- invading? Why? Is e-commerce any different than traditional markets with respect to privacy? Don’t merchants always want to know their customer? How do you protect your privacy on the Web? Slide 1-46

Copyright © 2010 Pearson Education, Inc. Academic Disciplines Concerned with E-commerce Technical approach  Computer science  Management science  Information systems Behavioral approach  Information systems  Economics  Marketing  Management  Finance/accounting  Sociology Slide 1-47