2. Internet & Digital Economy n What is Internet? n What is Electronic Commerce? n A Framework for EC n Benefits of EC n Categories of EC Applications n Internet Shopping Malls n Electronic Payment Systems n Agent Technology

3. What is Internet? n ARPANET created in 1969 by DOD n Evolved into a worldwide network linking educational, research, business and governmental organizations n Based on TCP/IP communications protocol n Open network architecture

4. Services Available on Internet n electronic mail –allows for exchange of personal messages between individuals n FTP (File Transfer Protocol) –uploads/downloads files n telnet –permits log-ins to access resources in remote locations n usenet (user’s network) –designed to let user groups exchange information of their interest n WWW (Worldwide Web) –uses a graphically-oriented user interface to share multi-media info.

5. Company Uses of the Web for Electronic Commerce 1.Market place awareness http:/www.fritolay.com/; http:/www.gatorade.com/ 2.Customer Support http://www.developer.ibm.com/ ; http://netwire.novell.com/servsup/ 3.Sales 1) Indirect http://www.jcpenney.com/; http://www.ultranet.com/~adamo/CA_Gold/products.htm 2) Direct http://www.800flowers.com/shop/index.html; http://www.midcoast.com/cybermall/indexcm.htm 3) Virtual Companies http://www.condom.com/; http://www.nwpros.com/Mall/mall.html 4.Advertising http://www.publicita.com/homepage.html; http://www.ultimate.org/; http://www.wp.com/CYBERPAGE/ 5.Electronic Information Services 1) Subscription-Based http://www.espnnet.com/; http://www.mids.com/ 2) Non Subscription-Based http://www.disneychannel.com/ 3) Local/Regional Broadcast Stations (TV/Radio) http://www.kzps.com/kzps; http://www.kxas.com/

6. Electronic Commerce n EC is defined as the buying and selling of products, services, and information via computer networks, including the Internet. n Evolution of EC –EFT –EDI or e-mail (VAN-based) –Internet n Categories of EC transactions: –business-to-business –business-to-consumer

7. A Framework for EC EC Applications People Public Policy Public Policy Organi- zations Infra: (1) Common Business Services Infra. (security smart cards, electronic payment) (2) Messaging and Info. Distribution Infra. (EDI, e-mail, Hypertext) (3) Multimedia Content and Network Publishing Infra. (HTML, JAVA, WWW, VRML) (4) Network Infra. (Telecom, CATV, wireless, Internet) (5) Interfacing Infra. (to DB, customers, applications)

8. Benefits of EC n Benefits to Organizations –EC decreases the cost of creating, processing, distributing, storing, and retrieving paper-based info, as well as telelcom cost –EC allows reduced inventories and overhead by facilitating SCM –EC allows small businesses to compete against larger ones n Benefits to Consumers –EC provides consumers with more choices (more vendors/products) –EC keeps the costs of products and services down –EC provides the opportunity to shop 365 days a year, 24 hours a day n Benefits to Society/Economy –EC decreases the need to travel for business transactions –EC lowers the prices of merchandise, allowing poor people to buy more and improve their quality of living

9. B-to-B EC Applications n EDI(Electronic Data Interchange): –defined as the electronic movement of specially formatted standard business documents, such as orders, bills, and confirmations sent between businesses –document formatting standards: X12, EDIFACT, etc. –widely used by retailers, manufacturers, insurance companies, and other paperwork-intensive organizations –can significantly lower paperwork-related cost and speed up transactions n There has been a shift from VAN-based EDI to Internet-based EDI n e.g., KTNET(Korea Trade Network)

10. B-to-C EC Applications n Advertising and Online Publishing –websites of most large corporations n Cyberbanking, Personal Finance, and Stock Trading –online decision support tools n Travel and Real Estate –digital photos n Retailers & Internet Shopping Malls –electronic catalogs n Auctions –can invite and collect many bids over the Internet

11. Cyber Auction Site (ebay.com) Seller 구매자 A Buyer A 구매자 B Buyer B 구매자 C Buyer A ‚ Bid submission „ Bid closed  Remittance  Delivery „ Notification of the successful bidder Selection of the successful bidder  Item Registra- tion  ‚ Bid submission How Electronic Auction Works

12. Categories of Internet Shopping Malls IndirectDirect Multiple Single Product Categories Selling Method

13. Direct Sale, Multiple Products

14. Indirect Sale, Multiple Products

15. Direct Sale, Single Product

16. Indirect Sale, Single Product

17. Electronic Payment Systems n Smart Cards –The value is stored on a card; can be either online or offline n Credit Cards –S.E.T. standard developed jointly by Visa & MasterCard n Electronic Cash –Money is drawn at the time of a transaction n Electronic Checks –Money is drawn some time after the time of a transaction

18. Intelligent Agents n A technology designed to alleviate the information overflow problem and facilitate EC n special software that travel from site to site, performing tasks useful for the user Functions of intelligent agents: Functions of intelligent agents: –information access and navigation –decision support and empowerment –repetitive office activity –routine personal activity –search and retrieval –domain experts

19. mySimon.com: an Agent to Aid in Shopping