Electronic Commerce: Definitions and Concepts electronic commerce (EC) The process of buying, selling, or exchanging computer networks

EC is defined through these perspectives Communications Commercial (trading) Business process Service Learning Collaborative Community Electronic Commerce: Definitions and Concepts e-business A broader definition of EC that includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organization Pure Versus Partial EC EC takes several forms depending on the degree of digitization (the transformation from physical to digital) (1) the product (service) sold, (2) the process, (3) the delivery agent (or intermediary)

products, services, or information via

Exhibit 1.1 The Dimensions of Electronic Commerce

Electronic Commerce: Definitions and Concepts EC organizations

brick-and-mortar organizations Old-economy organizations (corporations) that perform most of their business off-line, selling physical products by means of physical agents virtual (pure-play) organizations Organizations that conduct their business activities solely online click-and-mortar (click-and-brick) organizations Organizations that conduct some e-commerce activities, but do their primary business in the physical world Electronic Commerce: Definitions and Concepts Where EC is conducted electronic market (e-marketplace) An online marketplace where buyers and sellers meet to exchange goods, services, money, or information interorganizational information systems (IOSs) Communications system that allows routine transaction processing and information flow between two or more organizations intraorganizational information systems Communication systems that enable e-commerce activities to go on within individual organizations The Benefits of EC Benefits to Organizations Expands the marketplace to national and international markets Decreases the cost of creating, processing, distributing, storing and retrieving paperbased information Allows reduced inventories and overhead by facilitating pull-type supply chain management Benefits of EC The pull-type processing allows for customization of products and services which provides competitive advantage to its implementers Supports business processes reengineering (BPR) efforts Lowers telecommunications cost - the Internet is much cheaper than value added networks (VANs) Benefits of EC Benefits to consumers Enables consumers to shop or do other transactions 24 hours a day, all year round from almost any location Provides consumers with more choices Provides consumers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons Benefits of EC

Allows quick delivery of products and services (in some cases) especially with digitized products Consumers can receive relevant and detailed information in seconds, rather than in days or weeks Makes it possible to participate in virtual auctions Allows consumers to interact with other consumers in electronic communities and exchange ideas as well as compare experiences Facilitates competition, which results in substantial discounts

Benefits of EC Benefits to society Enables more individuals to work at home, and to do less traveling for shopping, resulting in less traffic on the roads, and lower air pollution Allows some merchandise to be sold at lower prices, benefiting less affluent people Enables people in Third World countries and rural areas to enjoy products and services which otherwise are not available to them Facilitates delivery of public services at a reduced cost, increases effectiveness, and/or improves quality The Limitations of EC Technical limitations There is a lack of universally accepted standards for quality, security, and reliability The telecommunications bandwidth is insufficient Software development tools are still evolving There are difficulties in integrating the Internet and EC software with some existing (especially legacy) applications and databases. Special Web servers in addition to the network servers are needed (added cost). Internet accessibility is still expensive and/or inconvenient Exhibit 1.7 Limitations of EC

Business Pressures The term business environment refers to the social, economic, legal, technological, and political actions that affect business activities Business pressures are divided into the following categories: Market (economic) Societal Technological Major Business Pressures & the Role of EC

Organizational Responses

Strategic Planning and Systems Provide organizations with strategic advantages, enabling them to: Increase their market share Better negotiate with their suppliers Prevent competitors from entering into their territory Organizational Responses Continuous improvement efforts Many companies continuously conduct programs to improve: Productivity Quality Customer service Business process reengineering (BPR) Strong business pressures may require a radical change Such an effort is referred to as business process reengineering (BPR) Organizational Responses Business alliances Alliances with other companies, even competitors, can be beneficial Virtual corporationelectronically supported temporary joint venture Special organization for a specific time-limited mission Electronic markets Optimize trading efficiency Enable their members to compete globally Require the collaboration of the different companies and competitors Organizational Responses Reduction in cycle time and time to market Cycle time reductionshortening the time it takes for a business to complete a productive activity from its beginning to end Extremely important for increasing productivity and competitiveness Extranet-based applications expedite steps in the process of product or service development, testing, and implementation Organizational Responses Empowerment of employees and collaborative work Employees given the authority to act and make decisions on their own improves Productivity Customer relationship management (CRM) Empowered sales people and customer service employees: Make customers happy quickly Help increase customer loyalty Organizational Responses Supply chain improvements Help reduce supply chain delays, inventories and eliminate other inefficiencies Mass customizationproduction of large quantities of customized items Business problem is how to efficiently provide customization

EC is an ideal facilitator of mass customization by enabling electronic ordering to reach the production facility in minutes Introduction Data is growing at a phenomenal rate Users expect more sophisticated information How? Data Mining Objective: Fit data to a model Potential Result: Higher-level meta information that may not be obvious when looking at raw data Similar terms Exploratory data analysis Data driven discovery Deductive learning Data Mining Algorithm Objective: Fit Data to a Model Descriptive Predictive Preferential Questions Which technique to choose? ARM/Classification/Clustering Answer: Depends on what you want to do with data? Search Strategy Technique to search the data Interface? Query Language? Efficiency Database Processing vs. Data Mining Processing Query Well defined SQL Query Poorly defined No precise query language

Query Examples Database

Data Mining Data Mining Models and Tasks Basic Data Mining Tasks Classification maps data into predefined groups or classes Supervised learning Pattern recognition Prediction

Regression is used to map a data item to a real valued prediction variable. Clustering groups similar data together into clusters. Unsupervised learning Segmentation Partitioning Basic Data Mining Tasks Summarization maps data into subsets with associated simple descriptions. Characterization Generalization Link Analysis uncovers relationships among data. Affinity Analysis Association Rules Sequential Analysis determines sequential patterns. Ex: Time Series Analysis Example: Stock Market Predict future values Determine similar patterns over time Classify behavior Data Mining vs. KDD Knowledge Discovery in Databases (KDD): process of finding useful information and patterns in data. Data Mining: Use of algorithms to extract the information and patterns derived by the KDD process. Knowledge Discovery Process Data mining: the core of knowledge discovery process.

KDD Process Ex: Web Log Selection: Select log data (dates and locations) to use Preprocessing: Remove identifying URLs Remove error logs Transformation: Sessionize (sort and group) Data Mining: Identify and count patterns Construct data structure Interpretation/Evaluation: Identify and display frequently accessed sequences. Potential User Applications: Cache prediction Personalization Data Mining Development KDD Issues

Human Interaction Overfitting Outliers Interpretation Visualization Large Datasets High Dimensionality KDD Issues Multimedia Data Missing Data Irrelevant Data Noisy Data Changing Data Integration Application Social Implications of DM Privacy Profiling Unauthorized use Data Mining Metrics Usefulness Return on Investment (ROI) Accuracy Space/Time Database Perspective on Data Mining Scalability Real World Data Updates Ease of Use DB & OLTP Systems Schema (ID,Name,Address,Salary,JobNo) Data Model ER Relational Transaction Query: SELECT Name FROM T WHERE Salary > 100000 DM: Only imprecise queries

Fuzzy Sets and Logic Fuzzy Set: Set membership function is a real valued function with output in the range [0,1]. f(x): Probability x is in F. 1-f(x): Probability x is not in F.

EX:

T = {x | x is a person and x is tall} Let f(x) be the probability that x is tall Here f is the membership function

DM:

Prediction and classification are fuzzy. Fuzzy Sets Classification/Prediction is Fuzzy Information Retrieval Information Retrieval (IR): retrieving desired information from textual data. Library Science Digital Libraries Web Search Engines Traditionally keyword based Sample query: Find all documents about data mining. DM: Similarity measures; Mine text/Web data.

Information Retrieval (contd) Similarity: measure of how close a query is to a document. Documents which are close enough are retrieved. Metrics: Precision = |Relevant and Retrieved| |Retrieved| Recall = |Relevant and Retrieved| |Relevant| IR Query Result Measures and Classification The EC Framework, Classification, and Content Networked computing is the infrastructure for EC, and it is rapidly emerging as the standard computing environment for business, home, and government applications Networked computing connects multiple computers and other electronic devices located in several different locations by telecommunications networks, including wireless ones Allows users to access information stored in several different physical locations and to communicate and collaborate with people separated by great geographic distances The EC Framework intranet An internal corporate or government network that uses Internet tools, such as Web browsers, and Internet protocols extranet A network that uses the Internet to link multiple The EC Framework, Classification, and Content An EC Frameworksupports five policymaking support areas People

intranets

Public policy Marketing and advertisement Support services Business partnerships

Exhibit 1.2 A Framework for Electronic Commerce EC Classification Classification by nature of the transactions or interactions business-to-business (B2B) E-commerce model in which all of the participants are businesses or other organizations business-to-consumer (B2C) E-commerce model in which businesses sell to individual shoppers EC Classification e-tailing Online retailing, usually B2C business-to-business-to-consumer (B2B2C) E-commerce model in which a business provides some product or service to a client business that maintains its own customers EC Classification consumer-to-business (C2B) E-commerce model in which individuals use the Internet to sell products or services to organizations or individuals seek sellers to bid on products or services they need consumer-to-consumer (C2C) E-commerce model in which consumers sell directly to other consumers EC Classification peer-to-peer Technology that enables networked peer computers to share data and processing with each other directly; can be used in C2C, B2B, and B2C e-commerce mobile commerce (m-commerce) E-commerce transactions and activities conducted in a wireless environment EC Classification location-based commerce (l-commerce) M-commerce transactions targeted to individuals in specific locations, at specific times intrabusiness EC E-commerce category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organization EC Classification business-to-employees (B2E) E-commerce model in which an organization delivers services, information, or products to its individual employees collaborative commerce (c-commerce) E-commerce model in which individuals or groups communicate or collaborate online

e-learning The online delivery of information for purposes of training or education EC Classification exchange (electronic) A public electronic market with many buyers and sellers exchange-to-exchange (E2E) E-commerce model in which electronic exchanges formally connect to one another for the purpose of exchanging information e-government E-commerce model in which a government entity buys or provides goods, services, or information to businesses or individual citizens The Future of EC Overall, the growth of the field will continue to be strong into the foreseeable future Despite the failures of individual companies and initiatives, the total volume of EC is growing by 15 to 25% every year Digital Evolution Drives EC digital economy An economy that is based on digital technologies, including digital communication networks, computers, software, and other related information technologies; also called the Internet economy, the new economy, or the Web The digital revolution accelerates EC by providing competitive advantage to organizations and enabling innovations Business Environment Drives EC Economic, legal, societal, and technological factors have created a highly competitive business environment in which customers are becoming more powerful Business Environment Drives EC The environmentresponsesupport model Companies must not only take traditional actions such as lowering costs and closing unprofitable facilities, but also introduce innovative actions such as customizing, creating new products, or providing superb customer service Exhibit 1.4 Major Business Pressures and the Role of EC Business Environment Drives EC Categories of business pressures market (economic) societal technological

Business Environment Drives EC Organizational response strategies Strategic systems Agile systems Continuous improvement efforts and business process restructuring

Customer relationship management Business alliances Electronic markets Business Environment Drives EC Reductions in Cycle Time and Time-to-Market cycle time reduction Shortening the time it takes for a business to complete a productive activity from its beginning to end Empowerment of Employees EC allows the decentralization of decision making and authority via empowerment and distributed systems, but simultaneously supports a centralized control Supply Chain Improvements EC can help reduce supply chain delays, reduce inventories, and eliminate other inefficiencies Business Environment Drives EC Mass Customization: Make-to-Order in Large Quantities mass customization Production of large quantities of customized items Intrabusiness: From Sales Force Automation to Inventory Control knowledge Management (KM) The process of creating or capturing knowledge, storing and protecting it, updating and maintaining it, and using it Benefits of EC Global Reach Cost Reduction Supply Chain Improvements Extended Hours Customization New Business Models Vendors Specialization Rapid Time-to-Market Lower Communication Costs Efficient Procurement Improved Customer Relations Up-to-Date Company Material No City Business Permits and Fees Other Benefits Benefits of EC Ubiquity More Products and Services Customized Products and Services Cheaper Products and Services Instant Delivery Information Availability Participation in Auctions Electronic Communities No Sales Tax

Benefits of EC Benefits to Society Telecommuting Higher Standard of Living Homeland Security Hope for the Poor Availability of Public Services Networks for EC corporate portal A major gateway through which employees, business partners, and the public can enter a corporate Web site

Exhibit 1.8 The Networked Organization Managerial Issues Is it real? Why is B2B e-commerce so attractive? There are so many EC failureshow can one avoid them? How do we transform our organization into a digital one? How should we evaluate the magnitude of business pressures and technological advancement? What should be my companys strategy toward EC? What are the top challenges of EC? TCP/IP and the Internet In 1969 the Advanced Research Projects Agency (ARPA) funded a research and development project to create an experimental packet-switching network. This network, called the ARPANET, was built to study techniques for providing robust, reliable, vendor-independent data communications. Many techniques of modern data communications were developed in the ARPANET. The experimental ARPANET was so successful that many of the organizations attached to it began to use it for daily data communications. In 1975 the ARPANET was converted from an experimental network to an operational network, and the responsibility for administering the network was given to the Defense Communications Agency (DCA). [1] However, development of the ARPANET did not stop just because it was being used as an operational network; the basic TCP/IP protocols were developed after the ARPANET was operational. TCP/IP Features The popularity of the TCP/IP protocols did not grow rapidly just because the protocols were there, or because connecting to the Internet mandated their use. They met an important need (worldwide data communication) at the right time, and they had several important features that allowed them to meet this need. These features are: Open protocol standards, freely available and developed independently from any specific computer hardware or operating system. Because it is so widely supported, TCP/IP is ideal for uniting different hardware and software, even if you don't communicate over the Internet.

TCP/IP Features Independence from specific physical network hardware. This allows TCP/IP to integrate many different kinds of networks. TCP/IP can be run over an Ethernet, a token ring, a dial-up line, an FDDI net, and virtually any other kind of physical transmission medium. A common addressing scheme that allows any TCP/IP device to uniquely address any other device in the entire network, even if the network is as large as the worldwide Internet. Standardized high-level protocols for consistent, widely available user services. Protocol Standards Protocols are formal rules of behavior. In international relations, protocols minimize the problems caused by cultural differences when various nations work together. By agreeing to a common set of rules that are widely known and independent of any nation's customs, diplomatic protocols minimize misunderstandings; everyone knows how to act and how to interpret the actions of others. Similarly, when computers communicate, it is necessary to define a set of rules to govern their communications. Overview of HTML elements Elements for the HEAD section TITLE - Document title ISINDEX - Primitive search META - Meta-information LINK - Site structure BASE - Document location SCRIPT - Inline script STYLE - Style information Elements for the BODY section Headings H1 - Level 1 header H2 - Level 2 header H3 - Level 3 header H4 - Level 4 header H5 - Level 5 header H6 - Level 6 header Lists UL - Unordered list OL - Ordered list DIR - Directory list MENU - Menu item list LI - List item DL - Definition list DT - Definition term DD- Definition Elements for the BODY section Text containers

P - Paragraph PRE - Preformatted text BLOCKQUOTE - Large quotation ADDRESS - Address information Others DIV - Logical division CENTER - Centered division FORM - Input form HR - Horizontal rule TABLE - Tables Text-level elements These elements are used to mark up text inside block level elements. Some block level elements exclude certain text level elements, and some text level elements may only appear inside specific block level elements. Text-level elements Logical markup EM - Emphasized text STRONG - Strongly emphasized DFN - Definition of a term CODE - Code fragment SAMP - Sample text KBD - Keyboard input VAR - Variable CITE - Short citation Text-level elements Physical markup TT - Teletype I - Italics B - Bold U - Underline STRIKE - Strikeout BIG - Larger text SMALL - Smaller text SUB - Subscript SUP - Superscript Text-level elements Special markup A - Anchor BASEFONT - Default font size IMG - Image APPLET - Java applet PARAM - Parameters for Java applet FONT - Font modification BR - Line break

MAP - Client-side imagemap AREA - Hotzone in imagemap Text-level elements Forms INPUT - Input field, button, etc. SELECT - Selection list OPTION - Selection list option TEXTAREA - Input area Tables CAPTION - Table caption TR - Table row TH - Header cell TD - Table cell Cryptography

INTRODUCTION There are many aspects to security and many applications, ranging from secure commerce and payments to private communications and protecting passwords. One essential aspect for secure communications is cryptography it is important to note that while cryptography is necessary for secure communications, it is not by itself sufficient. THE PURPOSE OF CRYPTOGRAPHY Within the context of any application-to-application communication, there are some specific security requirements, including: Authentication: The process of proving one's identity. (The primary forms of host-to-host authentication on the Internet today are name-based or address-based, both of which are notoriously weak.) Privacy/confidentiality: Ensuring that no one can read the message except the intended receiver. Integrity: Assuring the receiver that the received message has not been altered in any way from the original. Non-repudiation: A mechanism to prove that the sender really sent this message. TYPES OF CRYPTOGRAPHIC ALGORITHMS Secret Key Cryptography (SKC): Uses a single key for both encryption and decryption Public Key Cryptography (PKC): Uses one key for encryption and another for decryption Hash Functions: Uses a mathematical transformation to irreversibly "encrypt" information

UNIT - II E-Commerce & Internet Applications A Framework for EC Advertising An attempt to disseminate information in order to affect buyer-seller transactions Companies must: Deliver ads in an appropriate manner that will stick in the minds of consumers Ensure goods and services are those that meet the needs of consumers

Ensure that advertising is not annoying and does not have a negative impact History

The world wide web was invented by a British scientist in a research and development lab in 1993. Internet Marketing began one year later, with advertising in 1994 when Hotwired.com sold the first banner ad.

Online Advertising The Internet is the fastest growing communication media Each year, the percentage of the advertising industry captured by the online market is growing Utilizes interactive marketing as it allows advertisers to interact directly with consumers Web Advertising (cont.) Internet is the fastest growing medium in history Online Advertising and Revenue Generation Advertising revenue remains a significant source of income for many Internet-based organizations Advertising revenue on the Internet was $8.2 billion in the United States Many dot-com failures were a result of relying on online advertising revenue as the only revenue source Yahoo.com currently relies on its advertising revenue as its major revenue source Opening Case : CD-Max Uses E-mail Lists to Advertise CD- Max Enterprises Web Advertising Advertising is an attempt to disseminate information in order to affect a buyer-seller transaction Why Internet Advertisement? Three-quarters of PC users gave up some television time Internet users are well educated with high-income, which makes them a desired target for advertisers Ads can be updated any time with a minimal cost; therefore they are timely and very accurate Web Advertising Ads can reach very large numbers of potential buyers all over the world

Online ads are much cheaper in comparison to television, newspaper, or radio ads. Such ads are expensive since they are determined by space occupied, how many days (times) they are shown, and on how many national and local television stations and newspapers they are posted. Web ads can be media rich, including voice and video Web ads can be interactive and targeted The use of the Internet is growing very rapidly Web Advertising Interactive Marketing Advertising Methods Banners Banners are everywhere Keyword banners Random banners Benefits be customized to the target audience be customized to one-to-one targeted advertisement Banner Swapping Direct link between ones site to the other site Ad space (a source of revenue for many companies) Banner Advertising Most common form of online advertising So prevalent many users have developed banner blindness Banners can be distributed in a variety of ways Banner success is most often measured by click through rate Banners build brand awareness and increase purchase probability Advertising Methods Splash Screen Capture the users attention Promotion purpose Major advantage : create innovative multimedia Advertising Methods E-mail Several million users can be reached directly Purchase e-mail addresses Send the company information; low cost A wide variety of audiences; customer database Problem: Junk mail or spamming Target a group of people that you know something about Advertising Methods Chat Rooms Virtual meeting ground Can be added to a business site for free Allows advertisers to cycle through messages and target the chatter again and again More effective than banners Used in one-to-one connection Pop Ups

Pop ups are becoming increasing popular (and frustrating! In other situations.solution in the last lines) Very intrusive form of adverting Variety of methods used to attract and keep users attention Internet users and ISPs can provide software packages to block pop ups (Pop-Up Stopper) Advertising Methods URL (Universal Resource Locators) Advantages: minimal cost is associated with it submit your URL to a search engine and be listed keyword search is used Disadvantages: search engines index their listings differently But still very useful method to advertise Keyword Search Currently the fastest growing venue for internet marketing Control $1.3 billion marketing dollars ~Jupiter Research Search engines are now full-fledged media companies Advertisement Strategies Internet-base Ad Design Advertisements should be visually appealing Advertisements must be targeted to specific groups or to individual consumers Advertisements must emphasize brands and a firms image Advertisements must be part of an overall marketing strategy Advertisements should be seamlessly linked with the ordering process Designing Internet ads involve the following factors: Advertisement Strategies Internet-based Ad Design: Important Factors Advertisement Strategies Navigation Efficiency Well-labeled, accurate, meaningful links are a must. Site must be compatible with browsers, software, etc. Online Events, Promotions and Attractions CyberGold (www.cybergold.com), Goldmine (www.goldmine.com) and others connect you with advertisers who pay you real money to read ads and explore the Web. Netstakes runs sweepstakes that requires no skills; in contrast with contests. You register only once and can randomly win prizes (see http://webstakes.com). Prizes are given away in different categories. The site is divided into channels, each has several sponsors. They pay Netstakes to send them traffic. Netstakes runs online ads both on the Web and in several hundred thousand e-mail lists that people requested to be on. Free PCs will be given soon in exchange for obligation to read ads. Push Technology Benefit : instead of spending hours searching the Web, people can have the information they are interested in delivered automatically to their desktop via Web technology and the Internet Pre-specification profile, selection of appropriate content, and download selection Push Technology

Also known as Pointcasting Analogous to mass customization Transmits the most relevant information directly to the user Push on the Intranet Companies use push technology to set up their own channels to pointcast important internal information to either their own employees (on intranets) and/or their supply chain partners (on extranets) The Future of Push Technology Drawback : the bandwidth requirements are large Experts prediction : the technology will never fly Online Catalogs To merchants, the objective of catalogs is advertisement and promotion The purpose of catalogs to customers is providing a source of information and price comparisons Consist of product database, directory and search capability and presentation function Replication of text in paper catalogs More dynamic, customized and integrated Online Catalogs 1) Dynamics of information presentation Static Catalogs: The catalog is presented in textual description and static pictures. Dynamic Catalogs: The catalog is presented in motion pictures and graphics and possibly sound. 2) Customization Ready-made Catalogs: Merchants offer the same catalog to any customer. Customized Catalogs: Deliver customized contents and display depending upon the characteristics of customers. Retailing in Electronic Commerce: Products and Services Internet Marketing and Electronic Retailing Overview of Electronic Retailing electronic retailing (e-tailing) Retailing conducted online, over the Internet e-tailers Retailers who sell over the Internet

Internet Marketing and Electronic Retailing Size and Growth of the B2C Market Reported amounts of online sales deviate substantially based on how the numbers are derived Annual online 2004 sales were estimated to be over $70 billion The average online shopper spent over $350 per quarter Forrester Research estimates that e-tailing will reach $316 billion by 2010 Internet Marketing and Electronic Retailing

Computer hardware and software Consumer electronics Office supplies Sporting goods Books and music Toys Health and beauty Apparel and clothing Jewelry Cars Services Others Internet Marketing and Electronic Retailing Characteristics of Successful E-Tailing High brand recognition A guarantee provided by highly reliable or well-known vendors Digitized format Relatively inexpensive items Frequently purchased items Commodities with standard specifications Well-known packaged items that cannot be opened even in a traditional store E-Retailing Business Models Classification by Distribution Channel Mail-order retailers that go online Direct marketing from manufacturers Pure-play e-tailers Click-and-mortar retailers Internet (online) malls E-Retailing Business Models direct marketing Broadly, marketing that takes place without intermediaries between manufacturers and buyers; in the context of this book, marketing done online between any seller and buyer E-Retailing Business Models Direct Sales by Manufacturers Sellers can understand their markets better because of the direct connection to consumers Consumers gain greater information about the products through their direct connection to the manufacturers E-Retailing Business Models virtual (pure-play) e-tailers Firms that sell directly to consumers over the Internet without maintaining a physical sales channel click-and-mortar retailers

Brick-and-mortar retailers that offer a transactional Web site from which to conduct business E-Retailing Business Models brick-and-mortar retailers Retailers who do business in the non-Internet, physical world in traditional brick-andmortar stores multichannel business model A business model where a company sells in multiple marketing channels simultaneously (e.g., both physical and online stores) E-Retailing Business Models Retailing in Online Malls Referring Directories Malls with Shared Services Representative B2C Services Postal Services Services and Products for Adults Wedding Channels Gift Registries Travel and Tourism Services Online Online travel is probably the most successful e-commerce implementation Services provided include: General information Reserving and purchasing tickets, accommodations, and entertainment Travel tips Electronic travel magazines Fare comparisons Travel and Tourism Services Online Benefits of Online Travel Services Benefits to consumers Large amount of free information available 24/7 Substantial discounts can be found Benefits to providers Airlines, hotels, and cruise lines are selling otherwise-empty spaces Direct selling saves the providers commission and its processing Travel and Tourism Services Online Limitations of Online Travel Services Many people do not use the Internet The amount of time and the difficulty of using virtual travel agencies may be significant Complex trips or those that require stopovers may not be available online because they require specialized knowledge and arrangements Travel and Tourism Services Online Corporate Travel To reduce corporate travel costs, companies can make arrangements that enable employees to plan and book their own trips using online optimization tools provided by travel companies, such as those offered by Rosenbluth International

Travel authorization software that checks availability of funds and compliance with corporate guidelines is usually provided by travel companies

Travel and Tourism Services Online Intelligent Agents in Travel Services Software agents emulate the work and behavior of human agents in executing organizational processes like travel authorization, planning or decision making Each agent is capable of acting autonomously, cooperatively, or collectively to achieve the stated goal Employment Placement and the Job Market Online The Internet Job Market Job seekers Employers seeking employees Job agencies Government agencies and institutions The Internet is a global online portal for job seekers Employment Placement and the Job Market Online Limitations of the Electronic Job Market Many people do not use the Internet. This limitation is even more serious with nontechnology-oriented jobs Security and privacy: resumes and other online communications are usually not encrypted, so ones job-seeking activities may not be secure Exhibit 3.7 Intelligent Agents Match Resumes with Available Jobs Real Estate, Insurance, and Stock Trading Online Real Estate Applications Advice to consumers on buying or selling a home Commercial real estate listings Listings of residential real estate in multiple databases The National Association of Realtors (realtor.com) has links to house listings in all major cities Real Estate, Insurance, and Stock Trading Online Real Estate Applications Maps are available Information on current mortgage rates Mortgage brokers can pass loan applications over the Internet and receive bids from lenders who want to issue mortgages Online lenders can tentatively approve loans online Automated closing of real estate transactions Real Estate, Insurance, and Stock Trading Online Real Estate Applications Property management companies (residential, commercial, and industrial) are using the Internet for many applications ranging from security to communication with tenants

Sites for persons who want to sell their homes privately, without using a real estate agent Rental properties are listed Real Estate, Insurance, and Stock Trading Online Insurance Online An increasing number of companies use the Internet to offer standard insurance policies (auto, home, life, or health) at a substantial discount Third-party aggregators offer free comparisons of available policies Several large insurance and risk-management companies offer comprehensive insurance contracts online Exhibit 3.8 Online Electronic Stock Trading

Real Estate, Insurance, and Stock Trading Online Investment Information Online Current financial news Municipal bond prices Many tools are available to help investors in the bond market Free guru (expert) advice Stock screening and evaluation tools Real Estate, Insurance, and Stock Trading Online Investment Information Online Articles from the Journal of the American Association of Individual Investors Schwab Trader encourages consumers to practice trading strategies The latest on funding and pricing of IPOs Earnings estimates The major risk of online trading is security Banking and Personal Finance Online electronic banking (e-banking) Various banking activities conducted from home or the road using an Internet connection; also known as cyberbanking, virtual banking, online banking, and home banking Exhibit 3.9 Online Banking Capabilities Banking and Personal Finance Online Virtual Banks Virtual banks have no physical location, but only conduct online transactions International and Multiple-Currency Banking Hong Kong and Shanghai Banking Corporation (hsbc.com.hk) Tradecard and MasterCard for global transactions (see tradecard.com) Bank of America and most other major banks Fxall.com is a multidealer foreign exchange service Banking and Personal Finance Online Implementation Issues in Online Financial Transactions Securing financial transactions

Access to banks intranets by outsiders Using imaging systems Pricing online versus off-line services Risks Banking and Personal Finance Online Online Billing and Bill Paying Automatic transfer of mortgage payments Automatic transfer of funds to pay monthly utility bills Paying bills from online banking accounts Merchant-to-customer direct billing Using an intermediary for bill consolidation Person-to-person direct payment Pay bills at bank kiosks Taxes On-Demand Delivery Services and E-grocers on-demand delivery service Express delivery made fairly quickly after an online order is received e-grocer A grocer that takes orders online and provides deliveries on a daily or other regular schedule or within a very short period of time

Online Delivery of Digital Products, Entertainment, and Media Certain goods, (software, music, or news stories) may be distributed in a physical form or they may be digitized and delivered over the Internet For sellers, the costs associated with the manufacture, storage, and distribution of physical products can be enormous Inventory management also becomes a critical cost issue, and so does delivery and distribution Online Delivery of Digital Products, Entertainment, and Media Interactive Entertainment Web browsing Internet gaming Fantasy sport games Single and multiplayer games Adult entertainment Card games Participatory Web sites Reading Online Delivery of Digital Products, Entertainment, and Media Noninteractive Entertainment Event ticketing Restaurants

Information retrieval Retrieval of audio and video entertainment Live events Online Purchase-Decision Aids shopping portals Gateways to e-storefronts and e-malls; may be comprehensive or niche oriented shopping robots (shopping agents or shopbots) Tools that scout the Web on behalf of consumers who specify search criteria Wireless Shopping ComparisonsEnable shoppers to compare prices any time from anywhere, including from any physical store Online Purchase-Decision Aids Business Ratings Sites Trust Verification Sites Other Shopper Tools Escrow services Communities of consumers who offer advice and opinions E-wallet (or e-purse) Online Purchase-Decision Aids Other Shopper Tools Amazon.coms A9 Search Engine Remembers information A user can make notes about any Web page and search them Offers a new way to store and organize bookmarks Recommends new sites and favorite old sites specifically for the user to visit Successful Click-and-Mortar Strategies A traditional brick-and-mortar store with a mature Web site uses a click-and-mortar strategy to: Speak with one voice Leverage the multi channels Empower the customer Problems with E-tailing and Lessons Learned Dont ignore profitability Manage new risk exposure Watch the cost of branding Do not start with insufficient funds The Web site must be effective Keep it interesting UNIT - III Issues in E-Tailing disintermediation The removal of organizations or business process layers responsible for certain intermediary steps in a given supply chain reintermediation The process whereby intermediaries (either new ones or those that had been disintermediated) take on new intermediary roles Exhibit 3.12 Disintermediation and Reintermediation in the B2C Supply Chain

Issues in E-Tailing cybermediation (electronic intermediation) The use of software (intelligent) agents to facilitate intermediation hypermediation Extensive use of both human and electronic intermediation to provide assistance in all phases of an e-commerce venture Issues in E-Tailing channel conflict Situation in which an online marketing channel upsets the traditional channels due to real or perceived damage from competition Determining the right price Personalization Fraud and illegal activities How to make customers happy Managerial Issues What should our strategic position be? Are we financially viable? Should we recruit out of town? Are there international legal issues regarding online recruiting? Do we have ethics and privacy guidelines? How will intermediaries act in cyberspace? Should we set up alliances? Consumer Behavior, Market Research, and Advertisement Learning about Consumer Behavior Online A Model of Consumer Behavior Online The purpose of a consumer behavior model is to help vendors understand how a consumer makes a purchasing decision Independent (or uncontrollable) variables Intervening or moderating variables Dependent variables Roles people play in the decision-making process: Initiator Influencer Decider Buyer User The Consumer Decision-Making Process A Generic Purchasing-Decision Model product brokering Deciding what product to buy

merchant brokering Deciding from whom (from what merchant) to buy a product One-to-One Marketing, Loyalty, and Trust in EC one-to-one marketing Marketing that treats each customer in a unique way One of the benefits of doing business over the Internet is that it enables companies to better communicate with customers and better understand customers needs and buying habits Exhibit 4.3 The New Marketing Model One-to-One Marketing, Loyalty, and Trust in EC personalization The matching of services, products, and advertising content with individual consumers user profile The requirements, preferences, behaviors, and demographic traits of a particular customer cookie A data file that is placed on a users hard drive by a Web server, frequently without disclosure or the users consent, that collects information about the users activities at a site

One-to-One Marketing, Loyalty, and Trust in EC collaborative filtering A personalization method that uses customer data to predict, based on formulas derived from behavioral sciences, what other products or services a customer may enjoy; predictions can be extended to other customers with similar profiles Variations of collaborative filtering Rule-based filtering Content-based filtering Activity-based filtering One-to-One Marketing, Loyalty, and Trust in EC Customer Loyalty Customer loyalty is the degree to which a customer will stay with a specific vendor or brand for repeat purchasing Customer loyalty is expected to produce more sales and increased profits over time e-loyalty Customer loyalty to an e-tailer One-to-One Marketing, Loyalty, and Trust in EC Satisfaction in EC Satisfaction is one of the most important consumer reactions in the B2C online environment

Recent statistics show: 80% of highly satisfied online consumers would shop again within 2 months 90% would recommend the Internet retailers to others However, 87% of dissatisfied consumers would permanently leave their Internet retailers without any complaints One-to-One Marketing, Loyalty, and Trust in EC trust The psychological status of involved parties who are willing to pursue further interaction to achieve a planned goal How to Increase Trust in EC Trust between buyers and sellers Brand recognition EC security mechanisms can help solidify trust Market Research for EC The Goal of Market Research To find information and knowledge that describes the relationships among consumers, products, marketing methods, and marketers The Aim of Market Research To discover marketing opportunities and issues, to establish marketing plans, to better understand the purchasing process, and to evaluate marketing performance Market Research for EC market segmentation The process of dividing a consumer market into logical groups for conducting marketing research, advertising, and sales Segmentation is done with the aid of tools such as data modeling and data warehousing Market Research for EC Online Market Research Methods Implementing Web-based surveys Online focus groups Hearing directly from customers Customer scenarios Market Research for EC Tracking Customer Movements transaction log A record of user activities at a companys Web site clickstream behavior Customer movements on the Internet

Market Research for EC Web bugs Tiny graphics files embedded on e-mail messages and in Web sites that transmit information about the users and their movements to a Web server

spyware Software that gathers user information over an Internet connection without the users knowledge Market Research for EC Analysis of B2C Clickstream Data clickstream data Data that occur inside the Web environment; they provide a trail of the users activities (the users clickstream behavior) in the Web site Market Research for EC Web Analytics Enable retailers to make site adjustments on the fly, manage online marketing campaigns and EC initiatives, and track customer satisfaction If a company redesigns its Web site, it can gain almost-instant feedback on how the new site is performing Web analytics help marketers decide which products to promote and merchandisers achieve a better understanding of the nature of demand Market Research for EC Limitations of Online Market Research Too much data may be available To use data properly, it should be organized, edited, condensed, and summarized The solution to this problem is to automate the process by using data warehousing and data mining Some of the limitations of online research methods are: Accuracy of responses Loss of respondents because of equipment problems The ethics and legality of Web tracking Lack of representative ness in samples of online users Internet Marketing in B2B Organizational Buyer Behavior Organizations buy large quantities of direct materials and indirect materials Transaction volumes are far larger Terms of negotiations and purchasing are complex

Internet Marketing in B2B Methods for B2B Online Marketing Targeting customers Electronic wholesalers Other B2B marketing services Affiliate programs Infomediaries and online data mining services Web Advertising Overview of Web Advertising interactive marketing Online marketing, enabled by the Internet, in which advertisers can interact directly with customers and consumers can interact with advertisers/vendors

Two major business models for advertising online: Using the Web as a channel to advertise a firms own products and services Making a firms site a public portal site and using captive audiences to advertise products offered by other firms Web Advertising Some Internet Advertising Terminology ad views The number of times users call up a page that has a banner on it during a specific time period; known as impressions or page views Button Page click (click-through or ad click) A count made each time a visitor clicks on an advertising banner to access the advertiser s Web site Web Advertising CPM (cost per thousand impressions) The fee an advertiser pays for each 1,000 times a page with a banner ad is shown conversion rate The percentage of visitors who actually make a purchase click-through rate (or ratio) The percentage of visitors that are exposed to a banner ad and click on it Web Advertising click-through ratio The ratio between the number of clicks on a banner ad and the number of times it is seen by viewers; measures the success of a banner in attracting visitors to click on the ad hit A request for data from a Web page or file visit A series of requests during one navigation of a Web site; a pause of a certain length of time ends a visit Web Advertising unique visit A count of the number of visitors to a site, regardless of how many pages are viewed per visit stickiness Characteristic that influences the average length of time a visitor stays in a site Web Advertising Why Internet Advertising? Television viewers are migrating to the Internet Advertisers are limited in the amount of information they can gather about the television and print ads Other reasons why Web advertising is growing rapidly: Cost Richness of format Personalization

Timeliness Location-basis Digital branding Web Advertising advertising networks Specialized firms that offer customized Web advertising, such as brokering ads and targeting ads to select groups of consumers Advertising Methods Banners banner On a Web page, a graphic advertising display linked to the advertisers Web page keyword banners Banner ads that appear when a predetermined word is queried from a search engine random banners Banner ads that appear at random, not as the result of the users action Advertising Methods Benefits of Banner Ads By clicking on them users are transferred to an advertisers site, and frequently directly to the shopping page of that site The ability to customize them for individual surfers or a market segment of surfers Viewing of banners is fairly high because forced advertising is used Banners may include attention-grabbing multimedia Advertising Methods Limitations of Banner Ads Cost A limited amount of information can be placed on the banner Viewers have become somewhat immune to banners and simply do not notice them as they once did

Advertising Methods banner swapping An agreement between two companies to each display the others banner ad on its Web site banner exchanges Markets in which companies can trade or exchange placement of banner ads on each others Web sites Advertising Methods pop-up ad An ad that appears in a separate window before, during, or after Internet surfing or when reading e-mail pop-under ad An ad that appears underneath the current browser window, so when the user closes the active window, he or she sees the ad interstitial

An initial Web page or a portion of it that is used to capture the users attention for a short time while other content is loading Advertising Methods E-Mail Advertising E-Mail Advertising ManagementFour guidelines that marketers should consider to leverage customer insights throughout the e-mail marketing campaign lifecycle: Thinking about customer experience; Making privacy protection a part of their brand promise; Ensuring their recipients know about their privacy protection; and Measuring impact. Advertising Methods Search Engine AdvertisementThe major advantage of using URLs as an advertising tool is that it is free Improving a companys search-engine ranking (optimization) Paid search-engine inclusion Advertising in chat rooms Advertising in newsletters Advertising Methods advertorial An advertisement disguised to look like editorial content or general information associated ad display (text links) An advertising strategy that displays a banner ad related to a term entered in a search engine

Advertising Strategies and Promotions Online affiliate marketing A marketing arrangement by which an organization refers consumers to the selling companys Web site viral marketing Word-of-mouth marketing by which customers promote a product or service by telling others about it Webcasting A free Internet news service that broadcasts personalized news and information, including seminars, in categories selected by the user Advertising Strategies and Promotions Online Customizing Ads Online Events, Promotions, and Attractions admediation Third-party vendors that conduct promotions, especially large-scale ones

Exhibit 4.10 Framework for Admediation Advertising Strategies and Promotions Online Online Events, Promotions, and Attractions Major considerations when implementing an online ad campaign: Target audience of online surfers clearly understood Traffic to the site should be estimated, and a powerful enough server used handle the expected traffic volume Assessment of results is needed to evaluate the budget and promotion strategy Consider co-branding Special Advertising Topics Permission Advertising spamming Using e-mail to send unwanted ads (sometimes floods of ads) permission advertising (permission marketing) Advertising (marketing) strategy in which customers agree to accept advertising and marketing materials

Special Advertising Topics ad management Methodology and software that enable organizations to perform a variety of activities involved in Web advertising (e.g., tracking viewers, rotating ads) localization The process of converting media products developed in one environment (e.g., country) to a form culturally and linguistically acceptable in countries outside the original target market Internet radio A Web site that provides music, talk, and other entertainment, both live and stored, from a variety of radio stations Special Advertising Topics Ad Content The content of ads is extremely important, and companies use ad agencies to help in content creation for the Web just as they do for other advertising media Content is especially important to increase stickiness Software Agents in Marketing and Advertising Applications A Framework for Classifying EC Agents: Agents that Support: Need identification (what to buy) Product brokering (from whom to buy) Merchant brokering and comparisons Buyer-seller negotiation Purchase and delivery After-sale service and evaluation Software Agents in Marketing and Advertising Applications

Character-Based Animated Interactive Agents avatars Animated computer characters that exhibit humanlike movements and behaviors social computing An approach aimed at making the human-computer interface more natural chatterbots Animation characters that can talk (chat) Managerial Issues Do we understand our customers? Should we use intelligent agents? Who will conduct the market research? Are customers satisfied with our Web site? Can we use B2C marketing methods and research in B2B? How do we decide where to advertise? Managerial Issues What is our commitment to Web advertising, and how will we coordinate Web and traditional advertising? Should we integrate our Internet and non-Internet marketing campaigns? What ethical issues should we consider? Are any metrics available to guide advertisers?

UNIT - IV ELECTRONIC PAYMENTS Using Payments Cards Online Key participants in processing credit card payments online include the following: Acquiring bank Credit card association Customer Issuing bank Merchant Payment processing service Processor Using Payments Cards Online Fraudulent Credit Card Transactions Address Verification System (AVS) Detects fraud by comparing the address entered on a Web page with the address information on file with cardholders issuing bank Using Payments Cards Online card verification number (CVN) Detects fraud by comparing the verification number printed on the signature strip on the back of the card with the information on file with the cardholders issuing bank Using Payments Cards Online Fraudulent Credit Card Transactions Additional tools used to combat fraud include: Manual review Fraud screens and decision models

Negative files Card association payer authentication services

Using Payments Cards Online virtual credit card An e-payment system in which a credit card issuer gives a special transaction number that can be used online in place of regular credit card numbers

Smart Cards smart card An electronic card containing an embedded microchip that enables predefined operations or the addition, deletion, or manipulation of information on the card Exhibit 12.2 Smart Card Smart Cards Types of Smart Cards contact card A smart card containing a small gold plate on the face that when inserted in a smart card reader makes contact and passes data to and from the embedded microchip

Smart Cards Types of Smart Cards contactless (proximity) card A smart card with an embedded antenna, by means of which data and applications are passed to and from a card reader unit or other device without contact between the card and the card reader Smart Cards smart card reader Activates and reads the contents of the chip on a smart card, usually passing the information on to a host system smart card operating system Special system that handles file management, security, input/output (I/O), and command execution and provides an application programming interface (API) for a smart card Smart Cards Applications of Smart Cards Retail Purchases e-purse Smart card application that loads money from a card holders bank account onto the smart cards chip Common Electronic Purse Specification (CEPS)

Standards governing the operation and interoperability of e-purse offerings Transit Fares E-Identification Smart Cards Applications of Smart Cards Transit Fares To eliminate the inconvenience of multiple types of tickets used in public transportation, most major transit operators in the United States are implementing smart card fare-ticketing systems E-Identification Because they have the capability to store personal information, including pictures, biometric identifiers, digital signatures, and private security keys, smart cards are being used in a variety of identification, access control, and authentication applications

Smart Cards Applications of Smart Cards in Health Care Storing vital medical information in case of emergencies Preventing patients from obtaining multiple prescriptions from different physicians Verifying a patients identity and insurance coverage Speeding up the hospital or emergency room admissions process Smart Cards Applications of Smart Cards in Health Care Storing vital medical information in case of emergencies Providing medical practitioners with secure access to a patients complete medical history Speeding up the payment and claims process Enabling patients to access their medical records over the Internet Smart Cards Securing Smart Cards Smart cards store or provide access to either valuable assets or to sensitive information Because of this, they must be secured against theft, fraud, or misuse The possibility of hacking into a smart card is classified as a class 3 attack, which means that the cost of compromising the card far exceeds the benefits Stored-Value Cards stored-value card A card that has monetary value loaded onto it and that is usually rechargeable

E-Micropayments e-micropayments Small online payments, typically under US $10 Companies with e-micropayment products:

BitPass (bitpass.com) Paystone (paystone.com) PayLoadz (payloadz.com) Peppercoin (peppercoin.com) E-Checking e-check A legally valid electronic version or representation of a paper check Automated Clearing House (ACH) Network A nationwide batch-oriented electronic funds transfer system that provides for the interbank clearing of electronic payments for participating financial institutions E-Checking Benefits of e-check processing: It reduces the merchants administrative costs by providing faster and less paper intensive collection of funds It improves the efficiency of the deposit process for merchants and financial institutions E-Checking Benefits of e-check processing: It speeds the checkout process for consumers It provides consumers with more information about their purchases on their account statements It reduces the float period and the number of checks that bounce because of insufficient funds (NSFs) Exhibit 12.3 Processing E-Checks with Authorize.Net

Electronic Bill Presentment and Payment electronic bill presentment and payment (EBPP) Presenting and enabling payment of a bill online. Usually refers to a B2C transaction

Exhibit 12.4 E-Bill Presentment

Electronic Bill Presentment and Payment Types of E-Billing Online banking Biller direct Bill consolidator Electronic Bill Presentment and Payment Advantages of E-Billing Reduction in expenses related to billing and processing payments Electronic advertising inserts can be customized to the individual customer

Reduces customers expenses Exhibit 12.5 E-Billing Process for Single Biller

Exhibit 12.6 E-Billing Processes for Bill Consolidator

B2B Electronic Payments Current B2B Payment Practices Financial supply chains of most companies are characterized by inefficiencies created by a number of factors, including: The time required to create, transfer, and process paper documentation The cost and errors associated with manual creation and reconciliation of documentation The lack of transparency in inventory and cash positions when goods are in the supply chain Disputes arising from inaccurate or missing data Fragmented point solutions that do not address the complete end-to-end processes of the trade cycle B2B Electronic Payments Enterprise Invoice Presentment and Payment enterprise invoice presentment and payment (EIPP) Presenting and paying B2B invoices online EIPP Models Seller Direct Buyer Direct Consolidator B2B Electronic Payments EIPP Options ACH Network purchasing cards (p-cards) Special-purpose payment cards issued to a companys employees to be used solely for purchasing nonstrategic materials and services up to a preset dollar limit B2B Electronic Payments Fedwire or Wire Transfer letter of credit (LC) A written agreement by a bank to pay the seller, on account of the buyer, a sum of money upon presentation of certain documents Exhibit 12.7 Clareon Online Transaction Service

The Sales Tax Issue Because of the complexities, many online businesses (B2C and B2B) rely on specialized third-party software and services to calculate the taxes associated with a sale Managerial Issues What B2C payment methods should we use? What B2B payment methods should we use? Should we use an in-house payment mechanism or outsource it? How secure are e-payments?

UNIT - V Legal, Ethical, and Social Impacts of EC Legal Issues Versus Ethical Issues ethics The branch of philosophy that deals with what is considered to be right and wrong

Legal Issues Versus Ethical Issues The Major Ethical and Legal Issues Discussed in this Chapter Privacy Intellectual property rights and online piracy Unsolicited electronic ads and spamming Free speech versus censorship Consumer and merchant protection against fraud Legal Issues Versus Ethical Issues EC Ethical Issues Non-Work-Related Use of the Internet Employees are tempted to use e-mail and the Web for non-work-related purposes In some companies, this use is tremendously out of proportion with its workrelated use The utility of monitoring employee usage can be considered one of the most controversial EC issues Legal Issues Versus Ethical Issues Codes of Ethics: Useful guidelines for a corporate Web policy: Issue written policy guidelines about employee use of the Internet Make it clear to employees that they cannot use copyrighted trademarked material without permission Post disclaimers concerning content, such as sample code, that the company does not support Post disclaimers of responsibility concerning content of online forums and chat sessions

Legal Issues Versus Ethical Issues Codes of Ethics: Useful guidelines for a corporate Web policy: Make sure that Web content and activity comply with the laws in other countries Make sure that Web content and activity comply with the laws in other countries Make sure that the companys Web content policy is consistent with other company policies Appoint someone to monitor Internet legal and liability issues. Have attorneys review Web content to make sure that there is nothing unethical, or illegal, on the companys Web site Privacy privacy The right to be left alone and the right to be free of unreasonable personal intrusions Collecting Information about Individuals Web Site Registration Cookies Spyware and Similar Methods RFIDs Threat to Privacy Privacy of Employees Privacy of Patients Privacy Protection of Privacy Notice/awareness Choice/consent opt-out clause Agreement that requires computer users to take specific steps to prevent the collection of personal information opt-in clause Agreement that requires computer users to take specific steps to allow the collection of personal information Privacy Protection of Privacy Access/participation Integrity/security Enforcement/redress Privacy The USA Patriot Act E-mail and Internet searches Nationwide roving wiretaps Requirement that ISPs hand over more user information Expanded scope of surveillance based on new definitions of terrorism Government spying on suspected computer trespassers with no need for court order Wiretaps for suspected violations of the Computer Fraud and Abuse Act

Privacy The USA Patriot Act Dramatic increases in the scope and penalties of the Computer Fraud and Abuse Act General expansion of Foreign Intelligence Surveillance Act (FISA) authority

Increased information sharing between domestic law enforcement and intelligence FISA detours around federal domestic surveillance limitations; domestic surveillance detours around FISA limitations

Privacy Privacy Protection in Other Countries In 1998, the European Union passed a privacy directive (EU Data Protection Directive) reaffirming the principles of personal data protection in the Internet age The directive aims to regulate the activities of any person or company that controls the collection, storage, processing, or use of personal data on the Internet Intellectual Property Rights intellectual property Creations of the mind, such as inventions, literary and artistic works, and symbols, names, images, and designs, used in commerce Intellectual Property Rights copyright An exclusive grant from the government that allows the owner to reproduce a work, in whole or in part, and to distribute, perform, or display it to the public in any form or manner, including over Internet Literary works Musical works Dramatic works Artistic works Sound recordings, films, broadcasts, cable programs Intellectual Property Rights Copyrights Piracy of Software, Music, and Other Digitizable Material Copyright Protection Approaches digital watermarks Unique identifiers embedded in digital content that make it possible to identify pirated works Digital Rights Management Intellectual Property Rights trademark A symbol used by businesses to identify their goods and services; government registration of the trademark confers exclusive legal right to its use Domain Name Disputes and Resolutions cyber squatting The practice of registering domain names in order to sell them later at a higher price Intellectual Property Rights patent A document that grants the holder exclusive rights to an invention for a fixed number of years Fan and Hate Sites cyberbashing The registration of a domain name that criticizes an organization or person

Unsolicited Electronic Ads: Problems and Solutions E-Mail Spamming unsolicited commercial e-mail (UCE) The use of e-mail to send unwanted ads or correspondence What Drives UCE? Many spammers are just trying to get peoples financial information Unsolicited Electronic Ads: Problems and Solutions Why It Is Difficult to Control Spamming Spammers send millions of e-mails, shifting Internet accounts to avoid detection Spammers use different methods to find their victims Solutions to Spamming Junk-mail filters Automatic junk-mail deleters Blocking certain URLs and e-mail addresses Exhibit 17.1 How Spam Blockers Work

Unsolicited Electronic Ads: Problems and Solutions E-Mail Spamming Anti-spam Legislation Do-not-spam lists Protecting employees

Unsolicited Electronic Ads: Problems and Solutions Protecting against Pop-Up Ads Pop-Up stoppers Concluding Remarks The spam situation has not yet been resolved. However, it seems that both e-mail spamming and pop-ups are not increasing, and they may even be declining Free Speech Versus Censorship and Other Legal Issues On the Internet, censorship refers to governments attempt to control, in one way or another, the material that is presented Donhams First Law of Censorship. This semiserious precept states: Most citizens are implacably opposed to censorship in any formexcept censorship of whatever they personally happen to find offensive. Childrens Online Protection Act (COPA) exemplifies the protective approach

Free Speech Versus Censorship and Other Legal Issues Other Legal Issues Electronic Contracts A legally binding contract requires a few basic elements: an offer, acceptance, and consideration These requirements are difficult to establish when the human element in the processing of the transaction is removed and the contracting is performed electronically Intelligent Agents and Contracts Uniform Computer Information Transactions Act ( 2000), makes clear that contracts can be formed even when a human is not directly involved Free Speech Versus Censorship and Other Legal Issues Taxing Business on the Internet This issue is extremely important because it is related to global EC, as well as to fairness in competition when EC competes with off-line marketing channels, which requires the collection of taxes Free Speech Versus Censorship and Other Legal Issues The Tax-Exemption Debate The Internet Tax Freedom Act 1(998) sought to promote e-commerce through tax incentives, by barring any new state or local sales taxes on Internet transactions until October 2001 The U.S. Congress extended the tax moratorium until 2006, giving it time to digest the contents of the report and hash out contentious tax issues Free Speech Versus Censorship and Other Legal Issues The Tax-Exemption Debate Proposed Taxation in the United States The National Governors Association, the National League of Cities, and the U.S. Conference of Mayors fought the Tax Free Bill for the Internet The U.S. Congress blocked state and local governments from taxing connections that link consumers to the Internet, at least until November 2007 EC Fraud and Consumer and Seller Protection Fraud on the Internet Online Auction Fraud Internet Stock Fraud Other Financial Fraud EC Fraud and Consumer and Seller Protection Fraud on the Internet Identity Theft and Phishing

identity theft A criminal act in which someone presents himself (herself) as another person and uses that persons social security number, bank account numbers, and so on, to obtain loans, purchase items, make obligations, sell stocks, etc. EC Fraud and Consumer and Seller Protection Consumer Protection Third-Party Assurance Services TRUSTes Trustmark Better Business Bureau WHICHonline Web Trust Seal and Others Online Privacy Alliance Evaluation by Consumers Authentication and Biometric Controls EC Fraud and Consumer and Seller Protection Seller Protection Customers who deny that they placed an order Customers who download copyrighted software and/or knowledge and sell it to others Customers who give false payment (credit card or bad checks) information in payment for products and services provided Use of their name by others Use of their unique words and phrases, names, and slogans and their Web addresses by others EC Fraud and Consumer and Seller Protection What can Sellers Do? Use intelligent software to identify possibly questionable customers Identify warning signals for possibly fraudulent transactions Ask customers whose billing address is different from the shipping address to call their bank and have the alternate address added to their bank account Societal Issues digital divide The gap between those who have and those who do not have the ability to access electronic technology in general, and the Internet and EC in particular Other Societal Issues Education Public safety, criminal justice, and homeland security Health aspects

Virtual (Internet) Communities virtual (Internet) community A group of people with similar interests who interact with one another using the Internet Characteristics of Communities

One possibility is to classify members as traders, players, just friends, enthusiasts, or friends in need

Virtual (Internet) Communities Search communities Trading communities Education communities Scheduled events communities Subscriber-based communities Community consulting firms E-mail-based communities Advocacy communities CRM communities Mergers and acquisitions activities Virtual (Internet) Communities Types of Virtual Communities Transaction Purpose or interest Relations or practice Fantasy Financial Viability of Communities: Revenue model of communities can be based on: Sponsorship Membership fees Sales commissions Advertising Combination of these

Exhibit 17.5 Value Creation in Electronic Communities Virtual (Internet) Communities Increase traffic and participation in the community Focus on the needs of the members; use facilitators and coordinators Encourage free sharing of opinions and informationno controls Obtain financial sponsorship. This factor is a must. Significant investment is required Consider the cultural environment Provide several tools and activities for member use; communities are not just discussion groups Involve community members in activities and recruiting Guide discussions, provoke controversy, and raise sticky issues. This keeps interest high

Virtual (Internet) Communities Key Strategies for Successful Online Communities Handle member data sensitively

Maintain stability of the Web site with respect to the consistency of content, services, and types of information offered Provide fast reaction time of the Web site Offer up-to-date content Offer continuous community control with regard to member satisfaction Establish codes of behavior (netiquette/guidelines) to contain conflict potential

The Future of EC Non technological Success Factors Internet Usage Opportunities for Buying M-Commerce Purchasing Incentives Increased Security and Trust Efficient Information Handling Innovative Organizations Virtual Communities

The Future of EC Non technological Success Factors Payment Systems B2B EC B2B Exchanges Auctions Going Global E-Government Intra-business EC E-Learning EC Legislation The Future of EC EC Technology Trends Clients Embedded Clients Wireless Communications and M-Commerce Pervasive Computing Wearable Devices RFID Servers and Operating Systems Networks The Future of EC EC Technology Trends EC Software and Services

Search Engines Peer-to-Peer Technology Integration Web Services Software Agents Interactive TV Tomorrows Internet

The Future of EC EC Technology Trends utility computing Computing resources that flow like electricity on demand from virtual utilities around the globealways on and highly available, secure, efficiently metered, priced on a pay-as-you-use basis, dynamically scaled, self-healing, and easy to manage Grid Computing coordinates the use of a large number of servers and storage, acting as one computer The Future of EC Integrating the Marketplace with Marketspace Probably the most noticeable integration of the two concepts is in the click-andmortar organization A major problem with the click-and-mortar approach is how the two outlets can cooperate in planning, advertising, logistics, resource allocation, and so on and how the strategic plans of the marketspace and marketplace can be aligned The impact of EC on our lives will be as much as, and possibly more profound than, that of the Industrial Revolution Managerial Issues What sorts of legal and ethical issues should be of major concern to an EC enterprise? What are the most critical ethical issues? Should we obtain patents? What impacts on business is EC expected to make? Do we have a community? Types Of E-Commerce There are a number of different types of E-Commerce B2B - Business to Business B2C - Business to Consumer C2B - Consumer to Business B2E - Business to Employee C2C - Consumer to Consumer Internet : 1: The Internet is a Big Collection of Computers and Cables.

The Internet is named for "interconnection of computer networks". It is a massive hardware combination of millions of personal, business, and governmental computers, all connected like roads and highways. The Internet started in the 1960's under the original name "ARPAnet". ARPAnet was originally an experiment in how the US military could maintain communications in case of a possible nuclear strike. With time, ARPAnet became a civilian experiment, connecting university mainframe computers for academic purposes. As personal computers became more mainstream in the 1980's and 1990's, the Internet grew exponentially as more users plugged their computers into the massive network. Today, the Internet has grown into a public spiderweb of millions of personal, government, and commercial computers, all connected by cables and by wireless signals. No single person owns the Internet. No single government has authority over its operations. Some technical rules and hardware/software standards enforce how people plug into the Internet, but for the most part, the Internet is a free and open broadcast medium of hardware networking. 2: The Web Is a Big Collection of HTML Pages on the Internet. The World Wide Web, or "Web" for short, is that large software subset of the Internet dedicated to broadcasting HTML pages. The Web is viewed by using free software called web browsers. Born in 1989, the Web is based on hypertext transfer protocol, the language which allows you and me to "jump" (hyperlink) to any other public web page. There are over 40 billion public web pages on the Web today. 3 , Definition: IP (Internet Protocol) is the primary network protocol used on the Internet, developed in the 1970s. On the Internet and many other networks, IP is often used together with the Transport Control Protocol (TCP) and referred to interchangeably as TCP/IP. IP supports unique addressing for computers on a network. Most networks use the Internet Protocol version 4 (IPv4) standard that features IP addresses four bytes (32 bits) in length. The newer Internet Protocol version 6 (IPv6) standard features addresses 16 bytes (128 bits) in length. Data on an Internet Protocol network is organized into packets. Each IP packet includes both a header (that specifies source, destination, and other information about the data) and the message data itself. IP functions at layer 3 of the OSI model. It can therefore run on top of different data link interfaces including Ethernet and Wi-Fi. 4, File Transfer Protocol (FTP) is a standard network protocol used to transfer files from one host or to another host over a TCP-based network, such as the Internet. FTP is built on a client-server architecture and uses separate control and data connections between the client and the server.[1] FTP users may authenticate themselves using a clear-text sign-in protocol, normally in the form of a username and password, but can connect anonymously if the server is configured to allow it. For secure transmission that hides (encrypts) the username and password, and encrypts the content, FTP is often secured with SSL/TLS ("FTPS"). SSH File Transfer Protocol ("SFTP") is sometimes also used instead.

5, Intranets and Extranets An "intranet" is the generic term for a collection of private computer networks within an organization. An "extranet" is a computer network that allows controlled access from the outside for specific business or educational purposes. Intranets and extranets are communication tools designed to enable easy information sharing within workgroups.

6 , Electronic data interchange (EDI) is the structured transmission of data between organizations by electronic means, which is used to transfer electronic documents or business data from one computer system to another computer system, i.e. from one trading partner to another trading partner without human intervention.[1] It is more than mere e-mail; for instance, organizations might replace bills of lading and even cheques with appropriate EDI messages. It also refers specifically to a family of standards.

7 , A micropayment is a financial transaction involving a very small sum of money and usually one that occurs online. PayPal defines a micropayment as a transaction of less than 12 USD[1] while Visa prefers transactions under 20 Australian dollars,[2] and though micropayments were originally envisioned to involve much smaller sums of money, practical systems to allow transactions of less than 1 USD have seen little success.

8 , Definition of 'Electronic Check' A form of payment made via the internet that is designed to perform the same function as a conventional paper check. Because the check is in an electronic format, it can be processed in fewer steps and has more security features than a standard paper check. Security features provided by electronic checks include authentication, public key cryptography, digital signatures and encryption, among others. Also referred to as an "echeck".