Ecommerce Lec

ECOMMERCE
Myspace and Facebook
 Tv programs vs online venture
 2008 Survey for a US Tv show(12 M) vs
facebook(40 M) and myspace(72 M) of total
111 M.
 World wide 130M facebook and 115 M
myspace
 Both sites have more than 100 M profiles

Myspace history
 Founders:Tom Anderson and Chris DeWolfe
(2003)
 People to talk about the things they loved and
in personal way
 bulletin board type building your own website,
promote themselves
 Top 100 sites over the world

Myspace
 They started advertising
 Big Companies willing to pay for the audience.
 They used popular pages/sites on myspace to
promote their products.
 Toyota, Proctor & Gamble
Myspace
 In 2005 they sold myspace for $580 M
 User profiles banned.
 Downfall- 2011 they sold it for $35 M

Facebook (2004)
 As rival of myspace Marck Zukerberg created
facebook with a new thefacebook.com as
hobby at Harward.
 Digital version of traditional student class
picture
 Became popular and expanded to 3000
colleges and unv.
Facebook
 Originally restricted to college students.
 They opened it for all in 2006.
 At start they have fixed templates rather than
user designed web pages
 Opened up its Web pages to thousands of
widgets
 Allow users to create apps on their site.
Some facts about E-commerce
 Online consumer sales (retail, travel and
online content) to an estimated $255 billion.
 Shop electronics, home furnishings, and
apparel.
 About 78 % of US population use internet

Some facts about E-commerce
 On an average day, 112 million people go
online. Around 97 million send e-mail, 33
million share music and 35 million research a
product.
What is E-commerce?
 Use of Internet and Web to transact business
 More formally:
 Digitally enabled commercial transactions
between and among organizations and individuals
E-commerce
E-commerce involves
 Digitally enabled transactions this means
transactions that occur over the Internet and
the Web
 Commercial transactions involve the exchange
of value across organizational or individual
boundaries in return for products or services

E-commerce vs. E-business
 E-business:
Digital enablement of transactions and
processes within a firm, involving information
systems under firm’s control
Does not include commercial transactions
involving an exchange of value across
organizational boundaries
E-commerce vs E-Business
Unique Features of E-commerce
Technology
1. Ubiquity
2. Global reach
3. Universal Standards
4. Information richness
5. Interactivity
6. Information density
7. Personalization/customization
8. Social technology
Ubiquity
 Traditional comm. Marketplace is physical.
 television and radio typically motivate
 Its is available everywhere. (home,job)
 Came out of being restricted to a physical
place.
 Reduce transaction cost (time + money)
 Lower the Cognitive energy.

Universal Standards
 There is one set of technology standards,
namely Internet technology.
 most traditional commerce technologies differ
from one nation to the next
 lower market entry costs.
 Lower search costs
 Users can find any type of product any where
in the world
Global Reach
 permits commercial transactions to cross
cultural and national boundaries far more
conveniently and cost-effectively than is true in
traditional commerce.
 potential market size for e-commerce
merchants is roughly equal to the size of the
world’s online population.
 Traditional comm. Has limited reach.

Richness
 Trad comm do face to face sales
 More information richeness.
 Chatting with online users
 Sell complex goods that require face to face
presentation.

Interactivity
 Two way interaction (telephone,ecomm)
between merchant and consumer.
 Trad tevel commercials can’t ask any question
or enter in to conversation.

Information Density
 Information processing, storage and
communication costs drop dramatically, while
currency and accuracy improve greatly.
 Information becomes plentiful, cheap, and
accurate.
Personalization/Customization
 merchants can target their marketing
messages to specific individuals
 They will store the past purchased of customer
and show them to others
Social Technology
 the Internet and e-commerce technologies
have evolved to be much more social by
allowing user to create and share content.
 Traditional forms are one to many. (press,
broadcasting model)


Web 2.0
 Technologies that allow users to:
 Create and share content, preferences,
bookmarks, and online personas
 Participate in virtual lives
 Build online communities
 E.g. Twitter, YouTube, Facebook, Second Life,
Wikipedia
Types of E-commerce
 Classified by market relationship
 Business-to-Consumer (B2C)
 Business-to-Business (B2B)
 Consumer-to-Consumer (C2C)
 Classified by technology used
 Peer-to-Peer (P2P)
 Mobile commerce (M-commerce)
Business-to-Consumer E-
commerce
 Most commonly discussed type
 Online businesses attempt to
reach individual consumers
 Consumers will spend $255
billion in 2008.

Business-to-Business E-
commerce
 Businesses focus on sell to other
businesses
 Largest form of e-commerce
 $3.8 trillion in transactions in 2008

Consumer-to-Consumer E-
commerce
 Provide a way for consumers to
sell to each other
 Estimated $5 billion market
 Ebay and craiglist
 Consumer:
 prepares the product for market
 places the product for auction or
sale
 relies on market maker to provide
catalog, search engine, and
transaction clearing capabilities
Peer-to-Peer E-commerce
 Enables Internet users to share
files and computer resources
 BitTorrent
Mobile E-commerce
 Wireless digital devices enable to
transactions on the Web
 involves the use of wireless
networks to connect cell phones
once connected they can
conduct transcation through their
Iphone, Andriod etc.
 Used most widely in Japan and
Europe
The Internet
 Worldwide network of computer networks
built on common standards
 Created in late 1960s
 Services include the Web, e-mail, file
transfers, etc.
 Can measure growth by looking at number
of Internet hosts with domain names
The Growth of the
Internet, Measured
by Number of
Internet Hosts with
Domain Names

Figure 1.3, Page 23

SOURCE: Internet Systems Consortium,
Inc. , 2010.
The Web
 Most popular Internet service
 Developed in early 1990s
 Provides access to Web pages
 HTML documents that may include text, graphics,
animations, music, videos
 Web content has grown exponentially
 Google indexes between 75 – 100 billion pages
Origins & Growth of E-commerce
 Precursors:
 Baxter Healthcare
 Electronic Data Interchange (EDI)
 French Minitel (1980s videotex system)
 None had functionality of Internet
 1995: Beginning of e-commerce
 First sales of banner advertisements
 E-commerce fastest growing form of
commerce in United States
The Growth of B2C E-commerce
Figure 1.4, Page 25

SOURCES: Based on data from eMarketer, Inc., 2010; authors’ estimates.
The Growth of B2B E-commerce
Figure 1.5, Page 28

SOURCES: Based on data from U.S. Census Bureau, 2010; authors’ estimates.
 Search the Web for an example of each of the
five major types of e-commerce. Create a
written report describing each Web site (take a
screenshot of each), and explain why it fits into
one of the five types of e-commerce.