CHAPTER THREE EBUSINESS

Introduction Ebusiness is the conducting of business on the Internet Ebusiness and Ecommerce are not the same Issues Disruptive technology Evolution of the Internet

Disruptive Technology (1) A new technology that changes the accepted way of doing things Digital cameras disrupted Kodak (Film is but a niche market)

Disruptive Technology (2) The Web and online travel reservations disrupted travel agents Online stock trading disrupted the full-service stock broker Nobody carries change in a casino Netflix is disrupting media distribution

Sustaining Technology Using technology to improve a product or service Faster and larger hard drives Improvements in your bank’s Web site Faster wireless A bigger screen

The Internet (1) As mentioned in the “history lesson” The Internet is a global network using TCP/IP as it’s base protocol The Internet provides a range of services including the World Wide Web It was originally text based There was no search engine until Jerry Yang and David Filo created YAHOO (Yet Another Hierarchical Officious Oracle)

The Internet (2) Probably one of the most disruptive technologies affecting business It has flattened the world If it’s repeatable, it can be done anywhere

The Internet (Services) SMTP – Simple Mail Transfer Protocol HTTP – Hypertext Transfer Protocol FTP – File Transfer Protocol SOAP – Simple Object Access Protocol And many more

My Summary of the Net The Internet allows us to buy and sell almost any good or service anywhere in the world at any time

The Internet (Selected Industries) Travel Entertainment Electronics Financial services Retail Automobiles Education and training

Web 1.0 Mass customization (specialized version of a product) Personalization (because we know who you are) Disintermediation

Web 2.0 My opinion is that there exists no normative definition Here is mine “A perceived second generation of the Internet, marked by collaboration, Web-based communities, wikis, and social networking” Facebook / Twitter / You Tube / MySpace

Web 3.0 With a large part of the world’s data out there, how to we find and catalog it? A universal medium for data, information and knowledge exchange (Tim Berners-Lee) Data driven Semantic SOA and Web Services

The Data Driven Web Much of the Web’s data is not well structured or indexed We have some metadata We have links We try to search keywords The data driven Web will add structure to that data

The Semantic Web A eutopic vision of content It requires the data driven Web

Ebusiness and Ecommerce Ecommerce is a subset of Ebusiness Ecommerce is the buying and selling of goods and services online Ebusiness involves conducting business on the Internet largely to reduce transaction costs It’s pervasive B2B exchanges B2C exchanges C2C exchanges

Stock Exchanges BATS CBOE CME NASDAQ NYSE Dark pools

ARCA EX – A sample BtoB Exchange ArcaEx was the first totally electronic stock exchange Trades shares from nearly all exchanges Archipelago was bought by NYSE Euronext Volume January 2005 Nasdaq-100 Index (QQQQ) 517,872,007 shares 23.3% of shares Intel (INTC) 447,356,014 shares 27.8% Microsoft (MSFT) 398,670,288 shares 26% FOREX

Ebusiness Strategies Sales and marketing Communication Financial services Procurement of goods and services Customer service Intermediaries

Ebusiness Stratigies (Sales) It began with direct selling Pure-play retailing Dell / Gateway / Amazon Multichannel retailing JC Penney moves catalog sales to the Internet Expanding reach That little bed and breakfast in Napa

Ebusiness Strategies (Communicaiton) goes without saying Messaging systems Video and Web conferencing Adobe / Citrix GoTo Meeting Blogs Wikis Mashups and APIs

Ebusiness Strategies (Marketing) Popup and other ads RSS – You don’t ask for the data, you just get it How does Google make money? How does Facebook make money?

Ebusiness Stratigies (Financial) Online financial services has seen explosive growth Banking / stocks Online exchanges New industries have emerged PayPal The U.S is quite behind in micropayments

Ebusiness Stratigies (Procurement) It’s now much easier to buy common business items Office supplies / etc B to B exchanges

Ebusiness Strategies (Customer Service) Self-service customer service tools Get current interest rates online Get product information online Repair manuals Electronic funds transfer

Ebusiness (Intermediaries) Match buyers (consumers) and sellers (producers) in new ways Create new markets (Ebay) (Match.com) (AliBaba.com) Aggregate and disseminate content (wsj.com, CNBC) Infomediaries (Web MD) The distinction gets blurry and the roles are not mutually exclusive

Ebusiness (Social Media) LinkedIn for business contacts Here is a non-canonical list _social_networking_websites#A _social_networking_websites#A

Electronic Data Interchange (EDI) Your book does not really talk about this much EDI automates nearly all common transactions Purchase orders / invoices / payments / etc… Very complex to implement creating a barrier to entry

Ebusiness Metrics (1) Click-through tracking Users clicked on a Web site ad for further information Web site pattern usage How users navigate from page to page Per page view times Completed shopping cart transactions

Tracking Web Site Visitors Unidentified We know what you do but not who your are Tracked with cookie We know what you do and verify uniqueness but not identity Identified / Authenticated We know who you are and everything you do?

Ebusiness Challanges International ecommerce laws don’t exist or are not enforceable Security and trust Taxation Monetization of services

Government Trends in Ebusiness Event the government has gotten on the Ebusiness bandwagon IRS electronic tax filings Common DMV transactions are online along with common forms We have done a terrible job with medical healthcare

Mcommerce Mobile commerce is much more than ring tones Common stock and banking transactions Pay per use applications Micropayments