1. Risks and Revenues Virtual Business Copyright © Texas Education Agency, 2012. All rights reserved

2. “Copyright and Terms of Service Copyright © Texas Education Agency. The materials found on this website are copyrighted © and trademarked ™ as the property of the Texas Education Agency and may not be reproduced without the express written permission of the Texas Education Agency, except under the following conditions: 1)Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the Materials and Related Materials for the districts’ and schools’ educational use without obtaining permission from the Texas Education Agency; 2) Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual personal use only without obtaining written permission of the Texas Education Agency; 3) Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered and unchanged in any way; 4) No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged. Private entities or persons located in Texas that are not Texas public school districts or Texas charter schools or any entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written approval from the Texas Education Agency and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty fee. Copyright © Texas Education Agency, 2012. All rights reserved 2

3. What are the Risks of a Virtual Business? Business will lose money Debt Have to start over Damage to reputation 3 Copyright © Texas Education Agency, 2012. All rights reserved

4. Risk Analysis – External Threats Malware Denial of service attack Malicious hackersOnline fraud 4 Copyright © Texas Education Agency, 2012. All rights reserved

5. Malware Viruses – A program that attaches itself to other programs and reproduces. Worms – Replicate themselves and spreads to other computers on a network. Trojans – Performs unwanted activities on your computer but does not replicate itself. Adware – Unwanted ads. Spyware – Tracks your personal information and sends it to the originator of the program. 5 Copyright © Texas Education Agency, 2012. All rights reserved

6. Denial of Service Attack Designed to overload a server Deliberate action that can result in a computer or a network being shut down Web sites can also be temporarily shut down 6 Copyright © Texas Education Agency, 2012. All rights reserved

7. Malicious Hacker Someone who bypasses security to gain access to a computer or network Can access secure information 7 Copyright © Texas Education Agency, 2012. All rights reserved

8. Online Fraud Phishing – Emails recommending that you update information for certain accounts – Personal information is captured Pharming – When an email directs you to a link which is actually bogus – Links to a site that looks just like a legitimate site Scams designed to obtain your credit card information 8 Copyright © Texas Education Agency, 2012. All rights reserved

9. Risk Analysis – Internal Threats Human error Accidentally deleting information System failures Malicious intent Dishonest employees 9 Copyright © Texas Education Agency, 2012. All rights reserved

10. Safeguards Change passwords regularly Back up information often and regularly Perform system maintenance Conduct software updates – Automatic update feature Block traffic from suspicious IP addresses Shut down your computers daily 10 Copyright © Texas Education Agency, 2012. All rights reserved

11. Combating Crime Electronic forensics – Tracks computer criminals Secured Sockets Layer (SSL) – Signals you are entering a secure area of a site Require a card code (on the back of a card) Computer security software Limiting use of a site’s documents Firewall – Protects your network 11 Copyright © Texas Education Agency, 2012. All rights reserved

12. Rewards of a Virtual Business Revenue Self satisfaction Customer satisfaction Good reputation in the business community 12 Copyright © Texas Education Agency, 2012. All rights reserved

13. Business Models that Generate Revenue Broker – Brings buyers and sellers together – Airline and travel sites Advertising – Classifieds – Portals, such as search engines Merchant – E-tailers strictly selling on Internet – Mail order with catalogs, online and in print 13 Copyright © Texas Education Agency, 2012. All rights reserved

14. More Revenue Models Manufacturer – Direct selling from the product manufacturer – Certain computer brands Affiliate – Do not sell directly but are included on other sites – Sponsorship – “Hits” to the site – Ad results – Click to Pay – Banner ads 14 Copyright © Texas Education Agency, 2012. All rights reserved

15. More Revenue Models (continued) Community – Social networking sites Subscription – Internet Service Providers – Free content in addition to “subscription” content such as video rentals or family and friends search tool Complementary sites – Sites that sell complementary products and services Trade and industry organizations – Links from organization’s site, to which you belong, to your site 15 Copyright © Texas Education Agency, 2012. All rights reserved

16. Independent Practice Assignments Risk/Reward Diagram Assignment #1 – Create a diagram analyzing the risks and rewards for a number of different situations. For example, the risks/rewards for taking a certain job, getting accepted to a certain college, or lowering the price you charge for a product. Students should show five situations and list a risk and reward for each. They will put them in order from least risky to most risky. The risks and rewards should not be duplicated for any of the situations. Gift Shop Web Site Proposal Assignment #2 – Students have been approached to create a web site for a local gift shop that also sells gift baskets for special occasions. They would like to increase revenues for their gift baskets. You are not the only one who has been approached so you must write a proposal that explains the type of revenue model you would use for the site. You must also include recommendations for security measures that should be included on the site. 16 Copyright © Texas Education Agency, 2012. All rights reserved

17. Independent Practice Assignments (continued) Web Site Cost Research Document Assignment #3 – Because rewards are usually associated with some type of cost, it is important to understand that businesses pay a cost for advertising which generates revenue for the business. Students will prepare a document of their choosing that details at least five different costs associated with having a business web site. These can include prices for different types and sizes of ads, hosting fees for your web site, registering your domain name, intangible costs of creating your site, or any other costs that students can think of. 17 Copyright © Texas Education Agency, 2012. All rights reserved