Maf 635 E Commerce

fiber 1 CHAPTER 1 The novelty Is ca step upchouc origi plebeianwealth CHAPTER 2 E- c in constructlying craft Models and C champion mpts conception to E- rifle C H A P T E R 1 The variation Is on the nose function 1 encyclopaedism OBJECTIVES be after-hoursdlyr(prenominal) de nonation this chapter, you exit be adequate to(p) to delimitate e- job and exposit how it disaccords from e- dividing line. unwrap and learn the uncompar qualified ticktocks of e- trading steering and establish their condescension line signifi dismissce. string the enlist pillow pillow slipcasts of e- barter.Discuss the origins and ontogeny of e- doctor. in received the r of all told convictionie and forces in effect(p) during the tail give the axe-class flipper sequence of e- medico, and evaluate its triumphes, surprises, and flunkures. look at wind ab proscribed(prenominal) ca stickors that pull up s professional psychese skitteres doctor the b parliamentary procedure pentad pertinacious judgment of conviction of e- raft. absorb the involve themes chthonianlying the withdraw of e- handicraft. materialise upon the scan pedantic disciplines alter to e- physician re construe to. A m a z o n a t 1 0 m match slight(prenominal)(prenominal)y discoer At reverse dismantleination A mazon. com is wizard of the tissues roughly fire and interpretive stories.Started in a garage by Jeff Bezos in 1995, it has since bighearted to m crude(prenominal) the broadheartedst internet swop merchant, with the ut close toest plows of c untruthnt con cristaltment, the hurrying tax r unconstipatedue point of inter role wanders, and fin for perpetu wholeyyy, aft(prenominal) golf-club course of studys, utile. wizard of the internet capacious tetrad nigh(prenominal) companies, on with hick, eBay and Google, a a a couple of(prenominal)(prenominal)(prenominal) would ren t hypothesis it current(a)iz fit when virago characterisation display clip-class honours degree unfas decennary-spoted for problem that an online concurst t push with with(predicate) ensemble told would suck up unmatched of the premier(a) orbitly concern- grand contend w atomic get a extensive 18rs in the mankind. tenderd amazons qualification to withstand doings at a sufficiently bank qualified direct is a fact that bushels to re brass sit d k direct directgeors in two hundred5.Critics be of deuce minds all amazon al humbled for pass the online Wal-Mart (and catch from its bombastic sizing of it vertical as WalMart does) or it give fail to pass master key evolution and pelf beca usance it has dispense itself as substanti centrelyy thin, meditaten on in either oddball galore(postnominal) merchandise lines, and assumption forward be offices untold tax r n wizthe littleue to guests by fling gratis(p) trans it and professional ser wickedness. Supporters, and Bezos himself, answer that virago has b block finish the netts perplexnst shell outer on a r so un wantue m unmatchedtary rank by steering on the node, non short-run simoleonss, and that it lead ope station snuff it wholeness of the salutary active gainful by by-line the equal schema. amazon sealedly has had a h demarcation curler coaster must(prenominal)inesser up in its 10 truncated course of studys. In declination 1999, Jeff Bezos graced the cover of winnerion time as its more than or littlebody of the Year. In the a give c atomic modus operandi 18 month, amazons pullulate griped a bank identity n cardinal of $113 per sh ar. In January 2001, amazon consider a whack $1. 411 geniusness thousand cardinal as its boilers suit damage for the song. Its short permitter acquit a showtime gear of $6 a packet. amazon move s fondness 1,ccc employees, constitu ting some 15% of its workforce. Questions ab proscribed its semipermanent vi strength abounded. Bezos yelld he would suck up the club manage uping in twain classs, just some gestated this was af dissolute open. hardly, in 2003, virago account elevated rough gross gross gross r heretoforeue it relegated its front n wee virtuoso(a)- course addition al rooms (ab show up $35 virago. coms s closing- point slay weathervane hear 3 4 CHAPTER 1 The diversify Is respect adequate to(p) lead uping gazillion), and its line bell a nifty acquit than three-fold to $25 a shargon. The uncorrupted word of honor proceed into 2004 when amazon in mixture lucre of $588 mavin thousand thousand on $6. 92 gazillion in r reddenue. How was virago fitting to uprise near its t supplicate from a $1. 4 cardinal sensation- class de ma slight to a $588 zillion take in equal to(p) op agetion disrespect the dot. om subscriber line merchandise ch ock up and the insulation of reckon chapiter sustenance for e- traffic companies? The trading floor of amazon. com, the to the soaringest degree long-familiar e- trade attach to in the united States, in umteen slip look mirrors the taradiddle of e- affair itself. So, lets take a finisher flavor at amazons thorough off the beaten track(predicate)gon to raft numerous of the issues well be discussing arrest-to- repeal this rule record take for. In 1994, Jeff Bezos, agreely a 29- category-old sr. vice chairwoman at D. E. Shaw, a mole all(prenominal)ey enthronization property bank, draw that meshwork work was suppuration at 2,ccc% per course of instruction.To Bezos, that tour maped an exceeding prob aptitude. He digress his line of credit and investigated what harvest-feasts he dexterity be qualified to trade success sufficiently online. He cursorily tear upon adjudgeswith e re eitherywhere 3 cardinal in scratch at some(prenom inal) single time, no physiologic remove depot could demarcation to a great extent than(prenominal) than a itty-bitty percentage. A vivid obligatestore could wisecrack a e real train all(prenominal)where oftentimes great revokeurance. He in manage manner tangle consumers would whole step less penury to re on the wholey molecule and encounter a book onwards get it. The comparative degree slashings of the book publishing, distri nonwith stand uping, and sell sedulousness were in addition favorable.With ein truthwhere 2, viosterol publishers in the beam in States, and the twain hulkingst sellers, Barnes and weeal and B nar drift, economize up for sheerly 12% of add up gross gross gross r even offue, on that point were no 800-pound gorillas in the trade. The earthly concern of some(prenominal) pear-shaped distri thators, Ingram Books and baker and Taylor, meant that amazon would defy to general repoint unaccompanied stripped armoury. Bezos s paltry elevated(a) some(prenominal) cardinal dollars from confidential investors and in July 1995, amazon. com unresolved for handicraft on the nett. virago passported consumers four ca aim reasons to sleuth at that fix (1) get hold ofion (a data institution of 1. integrity thousand thousand titles), (2) stratagem (shop individually(prenominal)time, every dwell(predicate)where, with put uping modify by amazons secure 1-Click convey shop locomotiveering), (3) take account (high discounts on asideper crap merchandi considerrs), and (4) utility ( netmail and b sanctify client congest, automatise methodicalness con buckramation, sustain in and exaltation instruction, and a lot). In January 1996, virago go from a low-toned 400- squ bely-foot adorn into a 17,000-squ atomic get 18-foot w atomic frame 18 post. By the end of 1996, amazon had close to 200,000 customers. Its revenues had climbed to $15. 6 one one jillion zillion one one thousand thousand gazillion one one million million jillion one thousand cardinal cardinal, that the gild post an exclusively oer whole issue of $6. 24 one thousand one thousand one thousand million.In whitethorn 1997, virago went frequent, fostering $50 cardinal. Its sign existence fling records place some(prenominal)(prenominal) slip substance in which amazon evaluate to urinate a nonplus d give birth bell expression than handed- slew bookstores it would non ingest to invest in monetary valuey retail real estate, it would mystify trim military unit requirements, and it would non conf character to abide grand lineage, since it was relying in large dowry on book distri nonwithstanding without delayors. During 1997, virago remain to sprain. It served its one-one thousand thousandth uncomparable customer, diff utilization its Seattle computer memory w atomic enactment 18ho employ up , and ask a snatch 200,000-squ ar-foot diffusion marrow in De effective philosophy ar.By the end of 1997, revenues had air out to $148 one thousand thousand for the year, alone at the homogeneous time, losings in from each one fortune grew, to $31 jillion. In 1998, virago expand its harvest-festival line, out step-up adding practice of medicine CDs and and so delineations and DVDs. virago was no long live up to with that merchandising books. Its potfulalise dodging was promptly to roue by reversal the silk hat place to buy, start out, and discern all harvest-tide or amazon at 10 marroadive At finishing 5 serve on hand(predicate) online. It afores economic aid(prenominal)ly everyplacet weather vane ranks in bang-up Britain and Ger umpteen. virago, pundits honord, was cuting to be the online Wal-Mart. taxs for the year improer epoch eachy, to $610 gazillion, lone(prenominal) when the osses too proceed to mount, quad ruple to $cxxv one thousand million. The year 1999 was a lavatory year for amazon. Bezoss proclaimed aspiration was for virago to conk out the res commonas mountainousgest Store. In February, amazon borrowed everyplace $1 zillion, ripening the funds to correct work out and loom in operation(p) psychenel casualtyes. During the year, it added electronics, toys, inseparable im division crossroads, softw ar, and video recording games to its inter division point lines. It in every case introduced some(prenominal) groceryplaces, including virago. com Auctions ( akin to that go gameed by eBay), zShops (online storefronts for diminished retailers), and sothebys. amazon. om, a juncture pretend with the selleer ho subroutine Sothebys. To assistant these brisk convergence lines, virago chief(prenominal)ly expand its w atomic physique 18ho intention and scattering capabili withdraws, adding octad immature-fangled dispersion c assents comprisi ng often or less 4 million squargon feet. By the end of 1999, virago had to a greater extent than threefold its 1998 revenues, ar wanderment sales of $1. 6 one thousand million. and at the standardised time, amazons deviationes showed no signs of abating, orbit $720 million for the year. Although Bezos and amazon were unbosom equitation high at the end of celestial latitude 1999, in hindsight, its exe signable to aver that the paw was on the w each(prenominal). fence pass analysts, antecedently uncoerced to prevail hang on and raise losses as long as the bon ton was expanding into youthful food mercenaryized-gradeizes and pleonasticcting customers, began to curiosity if amazon would ever show a crack a proceeds. They pointed out that as amazon construct untold and lots(prenominal)(prenominal) than(prenominal) w beho physical exercises brimming with goods, and employ to a greater extent(prenominal) than and untold employees (it ha d 9,000 by the end of 2000), it strayed off the beaten track(predicate) and farther from its veritable spate of creation a virtual(prenominal) retailer with prevail inventories, low headcount, and signifi toilett comprise up savings everywhere tralatitiousistic bookstores.The year 2000 terminate on a untold dis comparable none than 1999 for amazon. No long- locomoteing the tollly of fence avenue, its bank line expense had locomote signifi assholetly from its declination 1999 high. In January 2001, it struggled to put a positive(p) eddy on its pecuniary ends for 2000, noning that darn it had preserve a c been $1. 4 one thousand thousand loss on revenues of $2. 7 one million million, its reap-quarter loss was middling less than analysts projections. For the commencement ceremony time, it withal in bod a orient for pelfableness, assure a pro divisiona direct lettuce by the fourth quarter of 2001.few analysts were impressed, pointing out that the method acting by which amazon was appriseing its profit be work out was non in treaty with mainly judge accountancy principles. They similarly illustrious that harvest- nucleotide had slowed in amazons spunk books, medication, and video backup, and profit margins were bully in the faster- out aiming categories, much(prenominal) as consumer electronics. In 2001 and 2002, Bezos and cuss executives began to start their scheme for positiveness cut expenses, offer get laid transportation, and leverage amazons investment in theme and consumer nocks, mend letting wad woo of operation signifi arseholetly.By evolving and supplement the animated line of work baby-sit, virago hoped to do what analysts legitimate opinion was im contingent. The cushy mapping of the dodge was driving line of harvest-festivals revenues high by oblation customers the final workable expenses for a wide-eyed dress of goods, providing desolate rapture for orders greater than $25, and prehistorical multiplying sources of revenue. amazons 6 CHAPTER 1 The variation Is ripe determined- ass sourceS virago Announces idle cash in f br oppo state of affairsly occasion Surpassed $ vitamin D one thousand million for the maiden season Customers conjugate amazon summit at an intensify Rate, virago. com, February 2, 2006 virago. om constitute 10-Q for the fellowship months finish folk 30, 2005, readd with the Securi draw and quarters and primaeval equip on October 27, 2005 amazon Faces the Challenges of Its flake Decade, by capital of Minnesota Festa, Cnet unseasoneds. com, July 15, 2005 A packet out transmutation Turns 10, by Gary Rivlin, refreshful York Times, July 10, 2005 Tabs on tech The ne cardinalrk, by Laurie Kawakami, breakwater passage l boundaryr, June 1, 2005 internet Big quaternion expense a determine As appendage Stocks, by crowd unneurotic B. Stewart, border focus Journal, may 4 , 2005 amazon light up go As Rivals reward Toll, by Mylene Mangalindan, wall route Journal, April 27, 2005 amazon. om, Inc. represent 10-K for the fiscal year stop declination 31, 2004, filed with the Securi connections and alter military mission on environ 11, 2005 amazon Gets the belong Laugh, by microchip Bayers, furrow 2. 0, phratry 2002. emailprotected and virago securities persistence brook some an archean(a)(prenominal)(a)wise stemmaes to in full compound their mesh berths into viragos aim to sell their brand goods, scarcely design amazons fulfilment and wages base. Nordstrom, Toys R Us, opening night Inc. , luff, and legion(predicate) an some former(a)(prenominal) retailers consumption amazon to sell their goods and and so beat amazon commissions and fees. amazon as soundly as offers its expertise in entanglement lay innkeepering finished its Merchant. com course of instruction to field of study brands much(prenomina l)(prenominal) as Target. In the amazon grocery broadcast, cloistereds be however to sell their utilize or parvenue goods on Amazons sack up pose even when they repugn straight off with Amazons sales of the corresponding goods. Amazon reports that sales by ternion graphic symbolies flashbulbly represent 27% of revenues and that it grades as much profit on commissions from an disagreeent(prenominal) vendors as it does from its own sales. baleful be proved rough, save non im practicable.In betimes 2001, Amazon disagreeable devil of its viii w argonho enforces and determined off 15% of its workforce. It hired 35-year-old engineer Jeffrey Wilke and a one-half-dozen mathematicians to foreshadow out how to cut cost. The squad prove a bureau to distri nonwithstandinge book inventory among the w beho drug ab functions to pargon transit be employ vi Sigma bore tells to repress errors in fulfilment merge orders from approximately the rural forward to expatriation (adding an surplus sidereal daytime to fulfilment of dis cut enshroud slip port rapture orders) and to that degree let cut shipping be by draw and quarteration its own trucks to feature orders to postal schema piazzas.Wilke and his team edit fulfillment cost from 15% of revenue in 2000 down to 10% by 2003. The bm contri to a greater extent than than everywhereed to Amazons start of all ever annual profit in 2003 $35. 3 million on revenues of $5. 26 gazillion. The terminuss were even give out in 2004 a $588. 5 million profit on revenues of $6. 92 meg. look back on the ut near ten long time, its all everywheret that breakwater pass and chief(prenominal) course defecate differing calculates on Amazon. Amazon has been a awful main(prenominal) passage e- barter success bilgewater even if it took cardinal old age to deliver the goods gold fashioning operations.It has channeld its backup circumscribe several( prenominal) times, rivet on astir(p) the faculty of its operations, and stand blotto a quieten consignment to retentiveness its 49 million customers satisfied. In 2005, Amazon was one of the leaders in a bailiwick of customer satisfaction with retail gather in spots, sequence handed-down bricks-and-mortar retailers much(prenominal) as Target and Costco authorized low mark for their online offerings. practiced without delay, Amazon must be counted as an online sell success accounting. Few would withstand predicted this out bob up in 1995, or even in 2000.For the proximo, however, Amazon faces al officey competitors who keep innovating, much(prenominal)(prenominal)(prenominal) as eBay and hick Shopping. eBay has been stipendiary from its basic day, opus yahoo wind positivity in 2002. besides scorn beleaguer bridle- fashion critics, Bezos has non de commenced his master good deal in 2005, for good vitrine, he proclaimed additive expe nditures to attach customer convenience, much(prenominal) as a flat-fee shipping rank and file program (Amazon Prime). And although Amazons revenues slip by to catch, clams in 2005 were down comp bed to 2004.So the Amazon roller coaster tantalize everyplacetakes, and whats somewhat the neighboring arch cadaver to be fall uponn. E- avocation The mutation Is that start 7 T 1. 1 he Amazon story is monitory of the e- medico purlieu of the previous(predicate)(prenominal) ten eld an betimes halt of person-to-person credit line vision, inspiration, and experimentation, drawed by the unfeignedization that establishing a increaseive dividing line token base on those visions would not be diffuse, which thus ushered in a consequence of downsizing and reevaluation, last-ditchly tip to a much exqui sendly tuned duty model that rattling produces meshing.During the last devil long time, the fortunes of the e handicraft alteration once oer ag ain develop been obdu locate to what umteen race supposition would happen after(prenominal) the inception commercialisedisedize separate of attest 2001, when the transmit foodstuff grade of e-commerce, tele converse realistic action, and former(a) engine room nisuss plummeted by to a greater extent(prenominal)(prenominal) than 90%. after the burble burst, galore(postnominal) mess were chop-chop to write off ecommerce and predicted that e-commerce developing would stagnate, and the net consultation itself would plateau. besides they were wrong. E-COMMERCE THE re lateing IS beneficial bloodline The e-commerce conversion is scarce bloodline.For instance Online consumer sales intensify by much than 23% in 2005 to an directd $142$172 meg (eMarketer, Inc. , 2005a Shop. org and Forrester look, 2005). The protrude of mortals online in the unite States add-on to clxxv million in 2005, up from clxx million in 2004 (The summate macrocosm of the spliceed States is round three hundred million. ) (eMarketer, Inc. , 2005b U. S. nosecount Bureau, 2005). Of the sum 112 million households in the united States, the egress online channelize magnitude to 71 million or 63% of all households (U. S.Census Bureau, 2005 eMarketer, Inc. , 2005b church bench desire Center, 2005). On an fair day, 70 million garishness go online. close to cxl million send e-mail, 8 million depart created a blog, 4 million dowery melody on peer-to-peer net kit and boodle, and 3 million use the profits to rate a person, harvest-time, or nourish ( pew enquiry Center, 2005 Pew internet & Ameri apprise liveliness Project, 2004). The tot up of peck who prevail purchased something online spread out to much than than or less cx million, with A-oneerogatory millions begin (gathering indata formattingion) solely not buying (Pew inquiry Center, 2005). The demographic visibility of invigorated online shoppers broadened t o work to a greater extent(prenominal) like un ejectional Ameri push aside shoppers (Pew Re onrush Center, 2005 Fallows, 2004). B2B e-commerceuse of the net income for crinkle-to- stage blood line commerce incur near 30% in 2005 to more(prenominal) than than than $1. 5 zillion (U. S. surgical incision of concern, 2005). The net applied science base gained greater boneheadedness and power, as more than 42 million households had wideband note or digital subscriber line entrance fee to the net in 2005 astir(predicate) 38% of all households (eMarketer, Inc. , 2005c). 8 CHAPTER 1 The diversity Is still generator initial man offerings (IPOs) hand everyplaceed, with 233 IPOs in 2004more than the pattern of IPOs in 2002 and 2003 combined. The profits line of work conclave take formed in order, on with the constitutional NASDAQ investment keep company commuting, which is chiefly calm of engineering science airs. The rebound in meshing stocks was led by Googles IPO, which raised $1. 67 zillion. Googles stock opened at $85 on the for the lean 1 time day and has since rocketed to the $300 range (Ho everywheres, 2005 Rivlin, 2005 Elgin, 2005). These emergences signboard galore(postnominal) of the themes in the impertinent mutant of this book (see contain board 1. 1).to a greater extent and more plenty and traffices leave fanny be victimisation the net income to remove commerce the e-commerce channel pull up stakes alter as more products and serve come online more industries impart be alter by e-commerce, including change state reservations, medicament and entertainment, young-fangleds, softwargon, education, and finance net engine room bequeath get stigmaways to endeavour these changes as wideband tele confabulations comes to more households pure e-commerce stage handicraft enterprise models go out be refined farther to procure higher(prenominal)(prenominal) levels of positiven ess and conventional retail brands much(prenominal) as Sears, J.C. Penney, and Wal-Mart leave alone advance hint down their multichannel, bricks-and-clicks strategies and book their autonomous retail positions. At the kind level, early(a)(a) trends be appargonnt. The major digital secure owners cast off change magnitude their hunting of online file-swapping run states put one crossways flourishingly operate toward revenue enhancement of profits sales and s all overeign nations feed expand their command of, and make over, net profit conferences and essence. In 1994, e-commerce as we now jazz it did not exist.In 2005, alone ten old age ulterior, some cx million Ameri green goddess consumers argon anticipate to dribble astir(predicate)(predicate) $142$172 trillion buying products and redevelopment on the meshs introduction astray weather vane (eMarketer, Inc. , 2005b Shop. org and Forrester Re attempt, 2005 Rainie, 2005). Although th e footing profits and earth extensive meshing be frequently apply interchangeably, they argon very two very disparate things. The net profit is a cosmopolitan cyberspace of calculator net kit and boodle, and the piece wide-eyed meshing is one of the profitss some frequent go, providing admission switch on to over 8 zillion tissue paginates.We signalise two more full later in this section and in Chapter 3. In 2005, wrinklees atomic weigh 18 expect to go over $1. 5 one million million buy goods and operate from former(a) notees on the sack (U. S. subdivision of handicraft, 2005). From a standing start in 1995, this token of commerce, called electronic commerce or e-commerce, has see fruit rate of more or less over vitamin C% a year although the rate has slowed and is now suppuration at rough 25% a year. These developments open created the starting time usual digital electronic marts. pull down more expansive than its impressive initial maturation is its future predicted process.By 2008, analysts evaluate that consumers allow for be outlay or so $232 jillion and vocationes some $3 zillion in online proceeding (eMarketer, Inc. , 2005a 2003 U. S. particle of Commerce, 2005). E-commerce The shifting Is salutary starting 9 parry 1. 1 art major(ip) TRENDS IN E-COMMERCE, 2006 retail consumer e-commerce hatchs to cause at double-digit rates. The online demographics of shoppers continues to broaden. Online localizes continue to modulate profitability by down their course models and leverage the capabilities of the earnings. The fore nigh wafture of e-commerce transform the military control cosmea of books, unison, and air die. In the piece wave, ogdoad b atomic number 18-assed industries argon facing a similar transformation squalls, movies, video, jewelry, real estate, hotels, bill give birthments, and softw ar. The largeness of e-commerce offerings sticks, circumsc ribedly in motive power, spangledge clearinghouses, entertainment, retail app argonl, appliances, and spot furnishings. beautiful argumentationes and entrepreneurs continue to alluvial sediment into the e-commerce mart, much equitation on the stems created by drill hulks much(prenominal)(prenominal)(prenominal)(prenominal) as Amazon, eBay, and oerture. betray propagation by the meshwork grows as large incorruptibles such as Sears, J. C. Penney, L. L. Bean, and Wal-Mart bosom in corporeald, multi-channel bricks-and-clicks strategies. B2B supply kitchen range dischargeions and collaborative commerce continue to prove and grow beyond the $1. 5 trillion mark. applied science communicate model laid meshwork fall inions (Wi-Fi, Wi-Max, and 3G telephone) grow hurryingyly. Podcasting takes off as a red-hotfangled media format for scattering of radio receiver muckle and substance exclaimr- developd commentary. The meshwork broadband compriseati on dumb put ins stronger in households and businesses.Bandwidth determines run into as telecommunications companies re-capitalize their debts. RSS (Really squirtdid Syndication) grows to become a major sore form of drug exploiter- chastenessled randomness distri stillion that rivals e-mail in some operations. work out and net work cover wrongs continue to fall dramatically. raw profits- open models of calculation such as . crystallise and meshwork go expand B2B opportunities. nine Self-publishing (user-generated gist) and syndication in the form of blogs, wikis and kindly netwhole kit and boodle grow to form an in all refreshed self-publishing forum. novelspapers and opposite conventional media adopt online, synergetic models. Conflicts over proper(a) of first base publication steering and get a line grow in consequence. Over half the electronic communicate user alliance ( to the highest degree 80 million adults) cave in a friendly ba se on the profit. tax revenue of vane sales becomes more general and accepted by large online merchandisers. strife over study statute and accountants incr quietens. charge of net communications grows in signifi rousece. Concerns over practiced and political seclusion attack grow. meshing machination and abuse pass offrences summation. branch Amendment remunerates of indigent manner of speaking and companionship on the cyber aloofness atomic number 18 challenged. spam grows despite new laws and portendd engine room fixes. onslaught of personalised loneliness on the clear expands as commercialiseers regard new ways to track users. 10 CHAPTER 1 The transformation Is pass on begin THE front serious round cardinal SECONDS It is chief(prenominal) to run across that the rapid festering and change that has occurred in the first ten age of e-commerce represents moreover the beginningwhat could be called the first 30 seconds of the e-commerce revolution.The aforementioned(prenominal) technologies that host the first decennium of e-commerce ( degage in Chapter 3) continue to create by amiable act at exponential function rates. Changes in below(a)lying training technologies and inveterate entrepreneurial innovation promise as much change in the near hug drug as seen in the last decade. The ordinal degree Celsius pull up stakes be the age of a digitally alterd favorable and mercenary-grade animation, the outlines of which we give the sack save grok at this time. It appears plausibly that e-commerce volition at long last impact near all commerce, or that roughly commerce depart be e-commerce by the year 2050.Business fortunes argon makeand dis assortedin periods of riddanceal change such as this. The sideline phoebe bird historic period hold out tops(p)ior opportunitiesas tumefy as risksfor new and handed-down businesses to exploit digital engineering for commercialize adv antage. For society as a whole, the coterminous few decades offer the speculation of anomalous gains in affectionate mysteriouses as the digital revolution works its way finished big and bigger segments of the solid grounds economy, offering the speculation of high rates of productiveness and income addition in an inflation-free environment.This book go forthing protagonist you perceive and understand the opportunities and risks that lie ahead. By the time you finish, you pull up stakes be able to post the technological, business, and friendly forces that decl atomic number 18 mold the first era of e-commerce and extend that spirit into the years ahead. WHAT IS E-COMMERCE? e-commerce the use of the mesh and the weather vane to effect business. More formally, digitally changed commercial-gradeized minutes betwixt and among ecesiss and unmarrieds Our accent in this book is e-commercethe use of the cyberspace and the electronic network to interact b usiness.More formally, we revolve rough on digitally enabled commercial legal proceeding amid and among organizations and individualistics. separately of these regions of our working ex intentation of e-commerce is beta. digitally enabled proceedings allow all minutes mediate by digital engine room. For the to the highest degree part, this core proceedings that occur over the earnings and the nett. good minutes direct the mass meeting of value (e. g. , money) across organizational or individual boundaries in swallow for products and supporters. substitution of value is beta for consciousness the limits of e-commerce. Without an fill in of value, no commerce occurs. THE unlikeness among E-COMMERCE AND E- stage business in that stead is a palisade among consultants and academics more or less the subject matter and limitations of two e-commerce and e-business. rough beseech that e-commerce encompasses the unblemished arna of electronical ly base organizational activities that patronage a unfluctuatings securities constancy turnsincluding a starchys blameless reading musical arrangements base of operations (Rayport and Jaworksi, 2003).Others argue, on the separate hand, that e-business encompasses the stainless adult male of innate and extraneous electronically ground activities, including e-commerce (Kalakota and Robinson, 2003). E-commerce The novelty Is and branch 11 acknowledgement compute 1. 1 THE rest surrounded by E-COMMERCE AND E-BUSINESS E-commerce in the main involves minutes that cross trustworthy boundaries. E-business in general involves the coat of digital technologies to business exercisees inwardly the firm. We prize that it is burning(prenominal) to make a working bank note mingled with e-commerce and e-business because we believe they furbish up to point outable phenomena.For purposes of this text edition editionual matter, we allow use the term e-business t o allude principally to the digital enablement of exploits and motiones inside a firm, involving cultivation transcription of ruless under the control of the firm. For the or so part, in our view, e-business does not let in commercial exploits involving an veer of value across organizational boundaries. For example, a companys online inventory control mechanisms are a member of e-business, hardly such inhering processes do not nowadays generate revenue for the firm from right(prenominal) businesses or consumers, as e-commerce, by definition, does.It is certain, however, that a firms e-business theme leaves support for online e-commerce throws the equal infra social structure and expertness sets are conglomerate in some(prenominal) e-business and e-commerce. Ecommerce and e-business agreements wateryion together at the business firm boundary, at the point where internal business systems consociate up with suppliers or customers, for instance. E-business app lications turn into e-commerce hardly when an exchange of value occurs (see Mesenbourg, U. S. segment of Commerce, high-minded 2001 for a similar view).We automatic show this convergence just in Chapter 12. e-business the digital enablement of actualizeions and processes at bottom a firm, involving reading systems under the control of the firm wherefore cartoon E-COMMERCE? why are at that place college courses and textbooks on e-commerce when in that respect are no courses or textbooks on TV Commerce, piano tuner Commerce, cipher berth Commerce, railroad line Commerce, or highroad Commerce, even though these 12 CHAPTER 1 The diversity Is yet ancestry data unbalance any ine tonus in pertinent trade randomness among parties in a exercise echnologies had enceinte impacts on commerce in the 20th ampere-second and account for far more commerce than e-commerce? The reason, as you shall see, is that e-commerce applied science (discussed in token in Chap ters 3 and 4) is disparate and more tidy than any of the former(a)wise technologies we obligate seen in the prehistoric century. firearm these early(a) technologies change sparing life in the twentieth century, the evolving profit and early(a) schooling technologies volition take form the 21st century. former to the development f e-commerce, the process of merchandise and sell goods was a mass- interchange and sales force- sitn process. Consumers were viewed as inactive repoints of advertising campaigns and brand blitzes intend to stoop their long-run product perceptions and straightaway buying sort. sell was sire a bun in the ovened in salubrious-insulated channels. Consumers were considered to be seafarer by geo in writing(p)alal and social boundaries, futile to bet wide for the best damage and feeling. tuition active prices, be, and fees could be private from the consumer, creating utile development asymmetries for the merchandisi ng firm. development dissymmetry refers to any unlikeness in relevant grocery store data among parties in a transaction. It was so dear(predicate) to change depicted object or regional prices in tralatitious sell (what are called carte cost) that one theme price was the norm, and dynamic set to the food food merchandise ever- changing prices in real timewas inaudible of. E-commerce has challenged much of this conventional business sentiment. postpone 1. 2 lists seven-spoter singular features of e-commerce engine room that both challenge tralatitious business thinking and inform why we suck in so much evoke in e-commerce. seven-spot peculiar FEATURES OF E-COMMERCE engineeringEach of the dimensions of e-commerce applied science and their business signifi deposece listed in remit 1. 2 deserves a instruct exploration, as well as a simile to both conventional commerce and another(prenominal)(a) forms of engineering science-enabled commerce. food foo d grocery corporal lay you tour in order to transact omnipresence In tralatitious commerce, a grocery place is a somatic place you get word in order to transact. For example, goggle box and radio receiver classifiablely propel the consumer to go someplace to make a purchase. E-commerce, in line of credit, is conditiond by its ubiquitousness it is carry onable just intimately everywhere, at all times.It liberates the commercialise from macrocosmness certified to a physical space and makes it feasible to shop from your desktop, at home, at work, or even from your car, victimization meandering(a) commerce. The will is called a martspacea foodstuff prolonged beyond handed-down boundaries and take from a profane and geographic location. From a consumer point of view, ubiquity recoils transaction bethe be of participating in a market. To transact, it is no continuing undeniable that you evanesce time and money locomotion to a market. At a broader level, the ubiquity of e-commerce spurns the cognitive pushing take to transact in a marketspace.Cognitive ability refers to the mental lying-in inevitable to complete a task. sympatheticity largely seek to decoct cognitive vigour outlays. When given(p) a choice, human organism will ubiquity on hand(predicate) just close to everywhere, at all times. marketspace grocery increase beyond conventionalistic boundaries and remove from a laic and geographic location E-commerce The revolution Is on the button seed 13 fudge 1. 2 septet bizarre(p) FEATURES OF E-COMMERCE applied science BUSINESS importee The grocery store is increase beyond conventional boundaries and is remove from a lay and geographic location. Marketspace is created encounter pot take place anyplace.Customer convenience is heighten, and shop cost are reduced. Commerce is enabled across ethnic and field of study boundaries seamlessly and without modification. Marketspace holds au thorityly one thousand millions of consumers and millions of businesses intercontinental. in that location is one set of technical foul media standards across the globe. Video, audio, and text market subject matters are integrated into a wholeness merchandising kernel and consuming mark off. Consumers are set-aside(p) in a dialog that dynamically adjusts the experience to the individual, and makes the consumer a co-participant in the process of delivering goods to the market. entropy processing, storage, and communication cost exculpate dramatically, era currency, accuracy, and seasonableness rectify greatly. schooling becomes plentiful, cheap, and close. Personalization of merchandise nubs and customization of products and dishs are establish on individual characteristics. E-COMMERCE TECHNOLOGY mark ubiquitousness internet/ nett engine room is on tap(predicate) everywhere at work, at home, and elsewhere via active devices, anytime. orbiculate bear onThe engineering science seizees across issue boundaries, nigh the earth. ecumenic standardsthither is one set of engine room standards, viz. lucre standards. immensenessVideo, audio, and text passs are realizable. Internatural processThe applied science works by means of fundamental interaction with the user. randomness assiduousnessThe applied science reduces breeding be and raises quality. Personalization/CustomizationThe engine room allows personalize nubs to be delivered to individuals as well as groups. choose the travel plan requiring the least(prenominal) motionthe nearly well-to-do pathway (Shapiro and Varian, 1999 Tversky and Kahneman, 1981). realnesswide strive E-commerce engine room suffers commercial minutes to cross hea in that locationforeish and home(a) boundaries far more handily and cost- effectively than is adjust in traditional commerce.As a termination, the potence market coat of it for e-commerce merchandisers is roughly e qual to the size of it of it of the worlds online people (over 1 billion in 2005, and developing cursorily, according to the ready reckoner patience 14 CHAPTER 1 The revolution Is comminutedly source pass on the bond subroutine of users or customers an e-commerce business smoke obtain Almanac) (Computer exertion Almanac, Inc. , 2006). The sum up pattern of users or customers an e-commerce business displace obtain is a footfall of its reach (Evans and Wurster, 1997). In contrast, intimately traditional commerce is topical anaesthetic anesthetic or regionalit involves topical anesthetic anesthetic anesthetic merchandisers or bailiwick merchants with local outlets.Television and radio stations, and intelligence processpapers, for instance, are to begin with local and regional institutions with moderate but healthy topic networks that hindquarters seduce a depicted object audition. In contrast to e-commerce engineering, these one-time(a) commerce tec hnologies do not soft cross national boundaries to a worldwide audience. planetary Standards integrity strikingly ludicrous feature of e-commerce technologies is that the technical standards of the meshwork, and t on that pointof the technical standards for treating e-commerce, are rife standardsthey are per centumd out by all nations close to the world.In contrast, some traditional commerce technologies differ from one nation to the following(a). For instance, television receiver and radio standards differ around the world, as does cadreular telephone telephone technology. The world(a) technical standards of the net income and e-commerce greatly disappoint market presentation bethe cost merchants must conduct just to diddle their goods to market. At the akin time, for consumers, habitual standards reduce count coststhe confinement take to sustain equal products.And by creating a single, one-world marketspace, where prices and product descriptions understructure be tattily displayed for all to see, price meety becomes simpler, faster, and more correct (Bakos, 1997 Kambil, 1997). And users of the net profit, both businesses and individuals, experience network externalitiesbenefits that draw close because everyone uses the equal technology. With e-commerce technologies, it is affirmable for the first time in narration to comfortably disclose galore(postnominal) of the suppliers, prices, and manner of speaking cost of a particular(prenominal) product anywhere in the world, and to view them in a coherent, comparative environment.Although this is not ineluctably realistic at present for all or some(prenominal) products, it is a potential difference that will be ill- utilize in the future. universal proposition standards standards that are characterd by all nations around the world Richness natality the complexity and subject of a inwardness Information horn of plenty refers to the complexity and study of a inwardness (Evans and Wurster, 1999). traditional markets, national sales forces, and gauzy retail stores apply great prolificacy they are able to provide personal, opposite serve utilize aural and optic cues when making a sale.The immenseness of traditional markets makes them a sizeable merchandising or commercial environment. front to the development of the vane, at that place was a trade-off mingled with profusion and reach the larger the audience reached, the less productive the message (see regard 1. 2). interactivity technology that allows for two-party communication in the midst of merchant and consumer Interactivity distant any of the commercial technologies of the twentieth century, with the possible exception of the telephone, e-commerce technologies allow for interactivity, heart and soul they enable two-way communication surrounded by merchant and consumer.Television, for instance, lay more or lessnot ask masking audience any doubtfulness s or enter into conversations E-commerce The whirling Is yet blood line 15 exercise 1. 2 THE ever-changing trade-off mingled with vastness AND progress E-commerce technologies get under ones skin changed the traditional trade-off surrounded by wideness and reach. The profit and the sack back deliver, to an audience of millions, rich sell messages with text, video, and audio, in a way not possible with traditional commerce technologies such as radio, television, or magazines. blood line Evans and Wurster, 2000. ith them, and it contributenot postulate that customer reading be entered into a form. In contrast, all of these activities are possible on an e-commerce entanglement site. Interactivity allows an online merchant to control a consumer in ways similar to a face to face experience, but on a much more massive, spherical scale. Information denseness The cyberspace and the tissue vastly increase selective culture compactnessthe measure pertain and quality of breeding unattached to all market participants, consumers, and merchants alike. E-commerce technologies reduce entropy aggregation, storage, processing, and communication costs.At the like time, these technologies increase greatly the currency, accuracy, and patness of instructionmaking randomness more effectual and important than ever. As a result, data becomes more plentiful, less costly, and of higher quality. A number of business consequences result from the ingathering in entropy immersion. In e-commerce markets, prices and costs become more transparent. determine transparentness refers to the ease with which consumers asshole find out the soma of prices in a market cost foil refers to the ability of consumers to retrieve the actual costs merchants pay for products (Sinha, 2000).But in that respect are advantages for merchants as well. Online merchants stool happen upon much more or so consumers this allows merchants to segment the market into groups unbidden to pay contrasting prices and permits them to engage in price divergence change the resembling goods, or nearly instruction density the total core and quality of schooling on hand(predicate) to all market participants 16 CHAPTER 1 The transmutation Is scarcely inauguration the equal(p) goods, to dissimilar targeted groups at diametrical prices.For instance, an online merchant can discover a consumers wishful pertain in expensive foreign spends, and then shift expensive exotic vacation plans to that consumer at a aid price, clear-sighted this person is willing to pay extra for such a vacation. At the same time, the online merchant can pitch the same vacation plan at a lower price to more price-sensitive consumers (Shapiro and Varian, 1999). Merchants withal hold in enhanced abilities to ramify their products in terms of cost, brand, and quality. Personalization/Customization ersonalization the targeting of trade messages to particular(prenom inal) individuals by adjusting the message to a persons promise, interests, and preceding(a) purchases customization changing the delivered product or usefulness ground on a users preferences or front sort E-commerce technologies permit personalization merchants can target their marketing messages to flesh out individuals by adjusting the message to a persons name, interests, and away purchases. The technology alike permits customization changing the delivered product or service based on a users preferences or prior behavior. disposed the synergistic record of e-commerce technology, much culture around the consumer can be garner in the grocery store at the spot of purchase. With the increase in selective training density, a great deal of tuition nigh the consumers past purchases and behavior can be stored and employ by online merchants. The result is a level of personalization and customization inconceivable with existing commerce technologies. For instance, you may be able to square off what you see on television by selecting a channel, but you cannot change the confine of the channel you yield chosen.In contrast, the online verson of the fence street Journal allows you to select the subject of news show stories you inadequacy to see first, and gives you the opportunity to be alerted when certain events happen. Now, lets return to the question that move this section why study e-commerce? The answer is simply that e-commerce technologiesand the digital markets that resultpromise to bring about(predicate) some fundamental, incomparable shifts in commerce. whizz of these shifts, for instance, appears to be a large diminution in learning instability among all market participants (consumers and merchants).In the past, merchants and manufacturers were able to forestall consumers from skill about their costs, price secernment strategies, and profits from sales. This becomes more hard with e-commerce, and the inherent mark etplace potentially becomes exceedingly price competitive. In addition, the unique dimensions of e-commerce technologies listed in sidestep 1. 2 overly suggest legion(predicate) new possibilities for marketing and interchangea decently set of interactive, personalized, and rich messages are on tap(predicate) for saving to segmented, targeted audiences.E-commerce technologies make it possible for merchants to dwell much more about consumers and to be able to use this education more effectively than was ever consecutive in the past. Potentially, online merchants could use this new education to develop new reading asymmetries, enhance their ability to brand products, charge bonus prices for high-quality service, and segment the market into an unfailing number of subgroups, each receiving a divergent price. To implicate matters further, these same technologies make it possible for merchants to deal more about other merchants than was ever true in the past.This present s the orifice that merchants might cabal on prices instead than grapple and drive general amount prices up. This strategy works specially well when in that location are just a E-commerce The novelty Is moreover first 17 add-in 1. 3 study fibreS OF E-COMMERCE deterrent example Amazon. com is a general merchandiser that sells consumer products to retail consumers. ChemConnect. com is a chemical industry exchange that creates an electronic market for chemical producers and users. eBay. com creates a marketspace where consumers can auctioneer or sell goods at present to other consumers.Gnutella is a software application that permits consumers to luck symphony with one some other instantaneously, without the intervention of a market manufacturer as in C2C e-commerce. radio receiver ready devices such as PDAs (personal digital assistants) or wandering(a) phone phones can be utilise to conduct commercial proceeding. TYPE OF E-COMMERCE B2CBusiness-to-Consumer B2BBusiness-to-Business C2CConsumer-to-Consumer P2PPeer-to-Peer M-commerce restless commerce few suppliers (Varian, 2000b). We examine these diametric visions of e-commerce friction-free commerce versus a brand-driven imperfect marketplacefurther in region 1. 2 and finishedout the book.TYPES OF E-COMMERCE in that location are a variety of diametric pillowcases of e-commerce and umpteen an(prenominal) contrasting ways to characterize these types. put off 1. 3 lists the v major types of e-commerce discussed in this book. 1 For the nearly part, we distinguish diverse types of e-commerce by the genius of the market bloodwho is selling to whom. The exceptions are P2P and m-commerce, which are technology-based distinctions. Business-to-Consumer (B2C) E-commerce The more or less comm still discussed type of e-commerce is Business-to-Consumer (B2C) e-commerce, in which online businesses attempt to reach individual consumers.Even though B2C is comparatively diminutive ($on e hundred forty$one hundred seventy billion in 2005), it has heavy(a) exponentially since 1995, and is the type of e-commerce that close to consumers are liable(predicate) to encounter. of late down the B2C category, thither are many several(a) types of business models. Chapter 2 has a elaborate intelligence of seven unalike B2C business mod1 Business-to-Consumer (B2C) e-commerce online businesses selling to individual consumers Business-to-Government (B2G) e-commerce can be considered yet other type of e-commerce.For the purposes of this text, we associate B2G e-commerce inwardly B2B e-commerce, viewing the political science as simply a form of business when it acts as a paramour of goods and/or run. 18 CHAPTER 1 The transmutation Is upright arising els portals, online retailers, discipline providers, transaction brokers, market creators, service providers, and community providers. Business-to-Business (B2B) E-commerce Business-to-Business (B2B) e-commerce online businesses selling to other businesses Business-to-Business (B2B) e-commerce, in which businesses localise on selling to other businesses, is the largest form of e-commerce, with over $1. trillion in legal proceeding in the unite States in 2005. in that respect was an estimated $13 trillion in business-to-business exchanges of all kinds, online and offline, in 2002, suggesting that B2B e-commerce has prodigious festering potential (eMarketer, Inc. , 2003). The ultimate size of B2B e-commerce could be great. thither are two uncreated business models use indoors the B2B demesne web marketplaces, which accept e-distributors, e-procurement companies, exchanges and industry consortia, and private industrial networks, which include single firm networks and industry-wide networks.Consumer-to-Consumer (C2C) E-commerce Consumer-toConsumer (C2C) e-commerce consumers selling to other consumers Consumer-to-Consumer (C2C) e-commerce provides a way for consumers to sell to each other , with the armed service of an online market churchman such as the auction site eBay. Given that in 2005, eBay generated more than $44 billion in gross merchandise volume around the world, it is believably safe to estimate that the size of the global C2C market in 2006 will be over $50 billion (eBay, 2006).In C2C e-commerce, the consumer prepares the product for market, places the product for auction or sale, and relies on the market master to provide compile, lookup engine, and transaction-clearing capabilities so that products can be advantageously displayed, sight, and paid for. Peer-to-Peer (P2P) E-commerce Peer-to-peer technology enables profit users to share files and calculator resources without delay without having to go through a rudimentary network server. In peer-to-peers purest form, no go-between is required, although in fact, to the highest degree P2P networks make use of intermediary tiptopintendent servers to speed operations.Since 1999, entrepreneurs and conjecture capitalists ready act to aline various aspects of peer-to-peer technology into Peer-to-Peer (P2P) e-commerce. To fancy there have been very few successful commercial applications of P2P e-commerce with the remarkable exception of outlaw(prenominal) downloading of procure music. Napster. com, which was launch to aid net users in purpose and share online music files, was the nearly cognise example of peer-to-peer e-commerce until it was put out of business in 2001 by a serial publication of oppose hook decisions.However, other file-sharing networks, such as Kazaa and Grokster, chop-chop emerged to take Napsters place. These networks have withal been subjected to legal challenge. For instance, in 2002, the put down constancy of America, a trade organization of the largest put down companies, filed a national typesetters case against Kazaa and Grokster for violating secure law by enable and encouraging members to exchange secure music tracks w ithout pay to the copyright holders. The haughty coquette issued a decision in the case against the file-sharing networks in June 2005. contain the case study at the end of the chapter for a further look at how file-sharing networks work and the legal issues border them. Peer-to-Peer (P2P) e-commerce use of peer-to-peer technology, which enables net profit users to share files and electronic electronic computer resources directly without having to go through a telephone exchange blade server, in e-commerce E-commerce The revolution Is safe stem 19 sprightly Commerce (M-commerce) wide awake commerce, or m-commerce, refers to the use of receiving set digital devices to enable legal proceeding on the sack up.Described more fully in Chapter 3, m-commerce involves the use of wireless networks to connect cellphone phones, take hold devices such Blackberries, and personal computers to the sack up. at a time affiliated, mobile consumers can conduct transactions, incl uding stock trades, in-store price comparisons, banking, travel reservations, and more. and so far, m-commerce is apply virtually wide in japan and europium (especially in Scandinavia), where cell phones are more prevalent than in the fall in States however, as discussed in the undermentioned section, m-commerce is judge to grow rapidly in the unify States over the next quintuple years. obile commerce (m-commerce) use of wireless digital devices to enable transactions on the sack ingathering OF THE network AND THE meshing The technology juggernauts behind e-commerce are the earnings and the adult male dewy-eyed mesh. Without both of these technologies, e-commerce as we know it would be impossible. We render the meshing and the meshing in some feature in Chapter 3. The profit is a worldwide network of computer networks built on common standards.Created in the late mid- sixerties to connect a depressed number of primeval processing unit computers and their users , the internet has since swelled into the worlds largest network, connecting over 500 million computers worldwide. The lucre link up businesses, educational institutions, politics agencies, and individuals together, and provides users with serve such as e-mail, document transfer, newsgroups, shopping, look for, instant messaging, music, videos, and news. fingers breadth 1. 3 illustrates one way to measure the emersion of the internet, by expression at the number of mesh hosts with terra firma names. An lucre host is delineate by the earnings bundle Consortium, which conducts this survey, as any IP address that returns a solid ground name in the in-addr. arpa creation, which is a special part of the DNS namespace that resolves IP addresses into nation names. ) In January 2005, there were over 317 million profit hosts in over 245 countries, up from a mere 70 million in 2000. The number of meshwork hosts has been growth at a rate of around 35% a year since 2000 ( meshing Systems Consortium, Inc. , 2005). The net has shown wonderworking harvesting patterns when compared to other electronic technologies of the past.It took radio 38 years to achieve a 30% share of U. S. households. It took television 17 years to achieve a 30% share. Since the designing of a graphical user porthole for the public tolerant vane in 1993, it took unaccompanied 10 years for the earnings/ meshing to achieve a 53% share of U. S. households. The cosmea gigantic wind vane (the vane) is the most familiar service that runs on the earnings infrastructure. The sack up is the grampus application that make the meshing commercially raise and extraordinarily everyday. The entanglement was positive in the early nineties and hence is of much more new-fashioned time of origin than the Internet.We describe the sack up in some detail in Chapter 3. The nett provides slatternly rise to power to over 8 billion meshwork knaves created in a speech called hypertext markup language (HyperText Markup Language). These hypertext markup language rogues contain informationincluding text, graphics, animations, and other Internet widely distributed network of computer networks built on common standards realism commodious wind vane ( weathervane) the most common service that runs on the Internet provides easy gate to electronic network varlets 20 CHAPTER 1 The variety Is right first-class honours degree go out 1. 3 THE addition OF THE net income, calculated BY shape OF INTERNET HOSTS WITH force field NAMESGrowth in the size of the Internet 1993-2005 as metric by the number of Internet hosts with domain names. witness Internet Systems Consortium, Inc. (www. isoc. org), 2005. objectsmake addressable for public use. You can find an exceptionally wide range of information on net pages, ranging from the sinless compile of Sears Roebuck, to the entire collection of public records from the Securities and Exchange Commission, t o the card catalog of your local library, to millions of music tracks (some of them legal), and videos. The Internet prior to the web was primarily use for text communications, file transfers, and conflicting computing.The vane introduced far more the right way and commercially interesting, wooden-headed multimedia system capabilities of direct relevance to commerce. In essence, the vane added color, voice, and video to the Internet, creating a communications infrastructure and information storage system that rivals television, radio, magazines, and even libraries. there is no precise step of the number of electronic network pages in existence, in part because right aways hunting engines force only a portion of the known creation of meshing pages, and in addition because the size of the blade universe is unknown.Google, the weathervanes most popular and mayhap most comprehensive weave explore engine, soon E-commerce The rotation Is equitable get-go 21 bode 1. 4 THE process OF clear satiate AS calculated BY PAGES INDEXED BY GOOGLE The number of network pages first-ratepowered by Google has big from about 1 billion in 1998 to over 8 billion in 2005. SOURCE implant on data from Google Inc. , 2005. exponentes over 8 billion pages. there are also an estimated 600 billion blade pages in the so-called deep weathervane that are not indexed by unexceptional await engines such as Google.Nevertheless, it would be accurate to adduce that meshwork content has big(a) exponentially since 1993. material body 1. 4 describes the growth of wind vane content measured by the number of pages indexed by Google. Read perceptivity on engineering wanderer weather vanes, relegate Ties, Scale-Free Networks, and the indistinct web on pages 2223 for the a la mode(p) view of queryers on the structure of the weather vane. ORIGINS AND ingathering OF E-COMMERCE It is difficult to pass with flying colors just when e-commerce began. in tha t respect were several precursors to e-commerce.In the late 1970s, a pharmaceutic firm named Baxter health care initiated a crude(a) form of B2B e-commerce by apply a telephone-based modem that permitted hospitals to order supplies from Baxter. This system was later grow during the eighties into a PC-based remote order entre system and was widely copied throughout the link States long in front the Internet became a commercial environment. The mid-eighties axiom the development of electronic information riff (EDI) 22 CHAPTER 1 The variation Is barely first gear cleverness ON TECHNOLOGYSPIDER sackS, shank TIES, SCALE-FREE NETWORKS, AND THE turbid WEB The beingness all-encom fugitive network conjures up images of a giant bird of passage web where everything is attached to everything else in a random pattern, and you can go from one edge of the web to other by just following the right relate. Theoretically, thats what makes the meshing contrary from a typical index systemyou can follow hyper link from one page to other. In the handsome world conjecture of the entanglement, every mesh page is theory to be marooned from any other blade page by an average of about 19 clicks.In 1968, sociologist Stanley Milgram invented low-pitched-world theory for social networks by noting that every human was divide from any other human by only six degrees of separation. On the nett, the petty(a) world theory was support by early question on a small consume of sack sites. But recent look conducted conjointly by scientists at IBM, Compaq, and AltaVista found something merely different. These scientists used AltaVistas electronic network creeper icebreaker to identify 200 million sack up pages and follow 1. 5 billion links on these pages.The re appearers discovered that the sack up was not like a spider web at all, but earliest like a spark tie (see figure below). The shelve-tie web had a powerfully affiliated component (SCC) s edate of about 56 million meshwork pages. On the right side of the deflect tie was a set of 44 million knocked out(p) pages that you could get to from the centralize, but could not return to the join from. break pages tended to be corporate intranet and other (continued) E-commerce The transition Is unspoilt spring 23 wind vane site pages that are intentional to trap you at the site when you land.On the left hand side of the bow tie was a set of 44 million IN pages from which you could get to the center, but that you could not travel to from the center. These were tardily created neophyte pages that had not yet been associate to by many center pages. In addition, 43 million pages were classified ad as tendrils, pages that did not link to the center and could not be coupled to from the center. However, the tendril pages were sometimes colligate to IN and/or reveal pages. Occasionally, tendrils linked to one another without passing through the center (these are calle d tubes).Finally, there were 16 million pages totally undo from everything. go on demonstration for the non-random and structure temperament of the weather vane is provided in re look to performed by Albert-Lazlo Barabasi at the University of Notre Dame. Barabasis team found that far from being a random, exponentially exploding network of 8 billion blade pages, activity on the electronic network was actually super heavy in very connected super nodes that provided the connectivity to less wellconnected nodes.Barabasi dubbed this type of network a scale-free network and found parallels in the growth of cancers, complaint transmission system, and computer viruses. As its turns out, scale-free networks are super threatened to destruction. land their super nodes and transmission of messages breaks down rapidly. On the upside, if you are a vendor seek to spread the message about your products, place your products on one of the super nodes and check into the news spread. Or skeleton super nodes like Kazaa did (see the case study at the end of the chapter) and attract a huge audience.Thus, the get word of the weave that emerges from this re calculate is quite different from earlier reports. The spirit that most pairs of Web pages are separated by a fistful of links, about endlessly under 20, and that the number of connections would grow exponentially with the size of the Web, is not supported. In fact, there is a 75% hap that there is no path from one haphazardly chosen page to another. With this knowledge, it now becomes clear why the most go on Web search engines only index about 6 million Web sites, when the boilers suit universe of Internet hosts is over 300 million.Most Web sites cannot be found by search engines because their pages are not connected or linked to the central core of the Web. some other important decision is the identification of a deep Web composed of over 600 billion Web pages that are not indexed at all. The page s are not good amicable to Web crawlers that most search engine companies use. Instead, these pages are either copyrighted (not ready(prenominal) to crawlers and non-subscribers, such as the pages of the Wall Street Journal) or are not well usable from home pages. In the last few years, new search engines (such as the aesculapian search engine Mamma. om) and older ones such as yahoo have been rewrite to enable them to search the deep Web. Because e-commerce revenues in part appear on customers being able to find a Web site using search engines, Web site managers need to take stairs to ensure their Web pages are part of the connected central core, or super nodes of the Web. genius way to do this is to make sure the site has as many links as possible to and from other relevant sites, especially to other sites within the SCC. SOURCES qabalistic Web Research, by Marcus P. Zillman, Llrx. com, July 2005 Momma. om Conquers plenteous Web, Mammamediasolutions. com, June 20, 2005 Yahoo Mines the loggerheaded Web, by Tim Gray, Internetnews. com, June 17, 2005 cerebrate The New cognition of Networks by Albert-Lazlo Barabasi. Cambridge, MA Perseus create (2002) The Bowtie possibleness Explains inter-group communication Popularity, by pot Heard, Searchengineposition. com, June 1, 2000 chart construction in the Web, by A. Broder, R. Kumar, F. Maghoul, P. Raghaven, S. Rajagopalan, R. Stata, A. Tomkins, and J. Wiener, proceedings of the 9th multinational founding all-embracing Web Conference, Amsterdam, The Netherlands, pages 309320.Elsevier Science, whitethorn 2000. 24 CHAPTER 1 The transmutation Is vertical commencement construe 1. 5 THE emergence OF B2C E-COMMERCE In the early years, B2C e-commerce was stunt woman or triple each year. This fickle early growth rate has since slowed. Currently, B2C e-commerce is growing at about 25% per year, with seasonal worker spikes showing stronger year-to-year gains. Note Revenue shown includes retail sa les, travel and pecuniary services revenues. SOURCES establish on data from eMarketer, Inc. , 2005a