1. Internet Marketing & e-Commerce Ward Hanson Kirthi Kalyanam Requests for permission to copy any part of the material should be addressed to: PERMISSIONS DEPARTMENT THOMSON BUSINESS and ECONOMICS 5109 Natorp Boulevard Mason, OH Phone: (800)

2. Part One: Chapter Three Networks
“The science of networks has taught us that distance is deceiving. That two individuals can be connected through a short chain of network ties – through only six degrees – is a claim about the social world that has fascinated generation after generation.”
Duncan Watts, Six Degrees: The Science of a Connected Age

3. The Evolving Internet
A decade of rapid growth ends with the transition to a more mature market

4. The Evolving Internet
A decade of rapid growth ends with the transition to a more mature market
Experienced users more likely to engage in online commerce and upgrade to faster connection services

5. The Evolving Internet
A decade of rapid growth ends with the transition to a more mature market
Experienced users more likely to engage in online commerce and upgrade to faster connection services
The seasoned user also moves away from exploratory “surfing the Net”

6. The Evolving Internet
A decade of rapid growth ends with the transition to a more mature market
Experienced users more likely to engage in online commerce and upgrade to faster connection services
The seasoned user also moves away from exploratory “surfing the Net”
A shift to deeper connections

7. Changing Patterns in Global Net Use The declining share of U. S
Changing Patterns in Global Net Use The declining share of U.S. Internet users
Source: World Bank, U.S. Census

8. An Information Explosion, On the Go
Music, books, x-rays and home videos all contribute to a sea of information

9. An Information Explosion, On the Go
Music, books, x-rays and home videos all contribute to a sea of information
Internet users increasingly obtain information from mobile devices

10. An Information Explosion, On the Go
Music, books, x-rays and home videos all contribute to a sea of information
Internet users increasingly obtain information from mobile devices
Instant messaging and text messaging create new frontier for marketers

11. An Information Explosion, On the Go
Music, books, x-rays and home videos all contribute to a sea of information
Internet users increasingly obtain information from mobile devices
Instant messaging and text messaging create new frontier for marketers
Blogs, podcasts and beyond create new challenges for reaching audience

12. Age Gap: Email vs. Instant Messaging
Internet users who use IM
Users who use IM more than
Users who
more than IM
Gen Y
62%
57%
19%
Gen X 37 16 24
Trailing Boomers 33 18
Leading Boomers 29 7
Matures 25
<1
Source: Pew Internet & American Life Project Training Survey, February 2004

13. Second Generation Internet
The early Internet served basic documents to anonymous users, helping drive widespread use but limiting its performance and security

14. Second Generation Internet
The early Internet served basic documents to anonymous users, helping drive widespread use but limiting its performance and security
Second Generation Internet focuses on more descriptive content – the semantic web – and ways to reliably authenticate users

15. Understanding Social Networks
Network connections grow faster than the number of participants

16. Understanding Social Networks
Network connections grow faster than the number of participants
Extensive local clustering: friends tend to have the same group of friends

17. Understanding Social Networks
Network connections grow faster than the number of participants
Extensive local clustering: friends tend to have the same group of friends
Small worlds: connecting any two people on a network with limited steps

18. Understanding Social Networks
Network connections grow faster than the number of participants
Extensive local clustering: friends tend to have the same group of friends
Small worlds: connecting any two people on a network with limited steps
Hubs and Connectors spread information more quickly than other members

19. Understanding Social Networks
Network connections grow faster than the number of participants
Extensive local clustering: friends tend to have the same group of friends
Small worlds: connecting any two people on a network with limited steps
Hubs and Connectors spread information more quickly than other members
OK to lose members randomly, but networks vulnerable to deliberate attack

20. Metcalfe’s Law Growth of a communications network strongly enhances its value
Assuming equal value among network members, if v = 1, full value of a conversation is $2
In networks with changing communication value, value rises at a slower rate

21. The value of a complete network rises rapidly, but not every link shares the same value

22. Clusters and Connections
Within clusters, connections made even more rapidly
Any two members can usually be connected with only a few links
Kevin Bacon and Six (or fewer) Degrees of Separation

23. Marketing Value in Networks
Networks are most valuable when they are ubiquitious: the power of the ever present

24. Marketing Value in Networks
Networks are most valuable when they are ubiquitious: the power of the ever present
Increased speed can transform business

25. Marketing Value in Networks
Networks are most valuable when they are ubiquitious: the power of the ever present
Increased speed can transform business
Participants expectations are important and can be shaped by publicity and hype

26. Marketing Value in Networks
Networks are most valuable when they are ubiquitious: the power of the ever present
Increased speed can transform business
Participants expectations are important and can be shaped by publicity and hype
Resource sharing benefits knowledge

27. Marketing Value in Networks
Networks are most valuable when they are ubiquitious: the power of the ever present
Increased speed can transform business
Participants expectations are important and can be shaped by publicity and hype
Resource sharing benefits knowledge
Greater opportunity for specialization and challenges in branding

28. Virtual Value Activities
Creating value from reams of available information is a key skill in online marketing
First step: Gathering
Second step: Selecting and Organizing
Third step: Synthesizing
Fourth step: Distributing