Chapter 3 McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Ebusiness

Chapter 3 SECTION 3.1 BUSINESS AND THE INTERNET 3-3

Chapter 3 DISRUPTIVE TECHNOLOGY Digital Darwinism What companies/industries are in danger of extinction? 3-6

Chapter 3 DISRUPTIVE VERSUS SUSTAINING TECHNOLOGY Disruptive technology Sustaining technology 3-7

Chapter 3 DISRUPTIVE VERSUS SUSTAINING TECHNOLOGY 3-8

Chapter 3 DISRUPTIVE VERSUS SUSTAINING TECHNOLOGY 3-10

Chapter 3 THE INTERNET – BUSINESS DISRUPTION Organizations must be able to transform as markets, economic environments, and technologies change 3-11

Chapter 3 THE INTERNET – BUSINESS DISRUPTION Estimates predict more than 3 billion Internet users by

Chapter 3 THE INTERNET – BUSINESS DISRUPTION 3-13

Chapter 3 THE INTERNET – BUSINESS DISRUPTION The Internet has had an impact on almost every industry including:  Travel  Entertainment  Electronics  Financial services  Retail  Automobiles  Education and training 3-14

Chapter 3 EVOLUTION OF THE INTERNET Internet origins Military  Business  Internet  Protocol 3-15

Chapter 3 EVOLUTION OF THE WORLD WIDE WEB World Wide Web (WWW) Hypertext transport protocol (HTTP) 3-16

Chapter 3 EVOLUTION OF THE WORLD WIDE WEB Reasons for growth of the WWW  Microcomputer revolution  Advancements in networking  Easy browser software  Speed, convenience, and low cost of  Web pages easy to create and flexible 3-17

Chapter 3 EVOLUTION OF THE WORLD WIDE WEB The Internet’s impact on information  Easy to compile  Increased richness  Increased reach  Improved content 3-18

Chapter 3 EVOLUTION OF THE WORLD WIDE WEB File formats offered over the WWW 3-19

Chapter 3 EVOLUTION OF THE WORLD WIDE WEB The Internet makes it possible to perform business in ways not previously imaginable It can also cause a digital divide 3-20

Chapter 3 WEB

Chapter 3 WEB 2.0 Timeline of Web 1.0 and Web

Chapter 3 MASHUPS Web mashup  Application programming interface (API)  Mashup editor 3-23

Chapter 3 THE FUTURE – WEB 3.0 Semantic web encompasses the following: 1. Transforming the web into a database 2. An evolutionary path to artificial intelligence 3. The realization of semantic web and SOA 4. Evolution toward 3D 3-24

Chapter 3 ACCESSING INTERNET INFORMATION Four tools for accessing Internet information 1. Intranet 2. Extranet 3. Portal 4. Kiosk 3-25

Chapter 3 PROVIDING INTERNET INFORMATION Three common forms of service providers 1. Internet service provider (ISP) 2. Online service provider (OSP) 3. Application service provider (ASP) 3-26

Chapter 3 PROVIDING INTERNET INFORMATION Common ISP services include:  Web hosting  Hard-disk storage space  Availability  Support Service level agreements (SLA) 3-27

Chapter 3 PROVIDING INTERNET INFORMATION Wireless Internet service provider (WISP) 3-28

Chapter 3 SECTION 3.2 EBUSINESS 3-29

Chapter 3 EBUSINESS BASICS Ecommerce Ebusiness 3-32

Chapter 3 EBUSINESS BASICS Industries Using Ebusiness 3-33

Chapter 3 EBUSINESS MODELS Ebusiness models 3-34

Chapter 3 BUSINESS-TO-BUSINESS (B2B) Electronic marketplace (emarketplace) 3-37

Chapter 3 BUSINESS-TO-CONSUMER (B2C) Common B2C ebusiness models include:  Eshop  Emall Business types include:  Brick-and-mortar business  Pure-play business  Click-and-mortar business 3-38

Chapter 3 CONSUMER-TO-CONSUMER (C2C) Online auctions  Electronic auction (eauction)  Forward auction  Reverse auction 3-40

Chapter 3 CONSUMER-TO-CONSUMER (C2C) C2C Communities  Communities of interest  Communities of relations  Communities of fantasy 3-41

Chapter 3 ORGANIZATIONAL STRATEGIES FOR EBUSINESS Primary business areas taking advantage of ebusiness include:  Marketing/sales  Financial services  Procurement  Customer service  Intermediaries 3-42

Chapter 3 MARKETING/SALES Generating revenue on the Internet  Online ad (banner ad)  Pop-up ad  Associate program (affiliate program)  Viral marketing  Mass customization 3-43

Chapter 3 MARKETING/SALES Generating revenue on the Internet (cont.)  Personalization  Blog  Real simple syndications (RSS)  Podcasting 3-44

Chapter 3 MARKETING/SALES Generating revenue on the Internet (cont.)  Search engine optimization (SEO)  Spamdexing 3-45

Chapter 3 FINANCIAL SERVICES Online consumer payments include:  Financial cybermediary  Electronic check  Electronic bill presentment and payment (EBPP)  Digital wallet 3-46

Chapter 3 FINANCIAL SERVICES Online business payments include:  Electronic data interchange (EDI) o Value-added network (VAN)  Financial EDI (financial electronic data interchange) 3-47

Chapter 3 FINANCIAL SERVICES Electronic trading network 3-48

Chapter 3 PROCUREMENT Maintenance, repair, and operations (MRO) materials (also called indirect materials)  Eprocurement  Electronic catalog 3-49

Chapter 3 CONSUMER PROTECTION Issues for consumer protection  Unsolicited goods and communications  Illegal or harmful goods, services, and content  Insufficient information about goods  Invasion of privacy  Cyberfraud and cybercrime 3-51

Chapter 3 CONSUMER PROTECTION Ebusiness security  Encryption  Secure socket layer (SSL)/Transaction Layer Security (TLS)  Secure electronic transaction (SET) 3-52

Chapter 3 INTERMEDIARIES Intermediaries Disintermediation Reintermediation 3-53

Chapter 3 MEASURING EBUSINESS SUCCESS Website Traffic Sales Volume 3-54

Chapter 3 MEASURING EBUSINESS SUCCESS Website traffic analysis can include:  Cookie  Click-through  Banner ad  Interactivity 3-55

Chapter 3 WEBSITE METRICS Clickstream Clickstream data can reveal:  Number of pageviews  Pattern of websites visited  Length of stay on a website  Date and time visited  Number of customers with shopping carts  Number of abandoned shopping carts 3-56

Chapter 3 WEBSITE METRICS Website metrics include:  Visitor metrics  Exposure metrics  Visit metrics  Hit metrics 3-57

Chapter 3 EBUSINESS BENEFITS AND CHALLENGES  Highly accessible  Increased customer loyalty  Improved information content  Increased convenience  Increased global reach  Decreased cost  Protecting consumers  Leveraging existing systems  Increasing liability  Providing security  Adhering to taxation rules BenefitsChallenges 3-58

Chapter 3 EBUSINESS BENEFITS AND CHALLENGES There are numerous advantages and limitations in ebusiness revenue models including:  Transaction fees  License fees  Subscription fees  Value-added fees  Advertising fees 3-60

Chapter 3 MCOMMERCE (Mobile Commerce) 3-63

Chapter 3