Understanding the New Internet Economy

Chapter 1

Electronic Commerce• The process of buying or selling goods or

services across a telecommunications network

• Many technologies facilitate E-commerce– Electronic funds transfer– Electronic data interchange– Internet / World Wide Web

Networks

Networks

• A network is a group of computers connected by cable, telephone, or wireless device.

• Networks can be “local” or “wide” area.• The Internet is a wide area network.

The Internet

The Internet

• The Internet is a collection of interconnected networks that use common universally accepted protocols.

• The Internet is a world-wide network.

The Internet

• The Internet contains computers that are either servers or clients.

• Servers provide the basic resources that users (clients) need.

Common Internet Services

The World Wide Web• The WWW or Web is one of the common

Internet services.• A Web Server is able to serve or supply

Web pages containing text, graphics, and multimedia.

E-Business Advantages

E-Business Disadvantages

The Value Chain

• A value chain or network is the collection of activities involved in the production of a class of goods or services.

• E-commerce can facilitate these chains or networks by using IT to exchange information between network members.

Value Chains and E-Commerce

• E-Commerce can “shorten” a Value chain by linking manufacturers with ultimate customers.

• E-Commerce can eliminate intermediaries such as distributors, and in some cases retailers.

The Value Chain

A Value Network

E-Business Models

Business to Consumer (B2C)• Direct to customer commerce• Shortens the supply chain to consumers• Results in higher margin to business or

higher value for customer or both• Can take a variety of forms• Examples…

Ashford.com

Barnes&Noble.com

Harry and David

Business to Business (B2B)

• Direct exchanges between businesses• Many forms and facilitating technologies• Can be used to form stronger links between

members

Elements of B2B Exchanges

B2B Summary

Business to Government (B2G)

• Similar to B2B model• Facilitates sales to governmental entities

eFederal.com

Consumer to Consumer (C2C)• Exchanges between consumers• Some sites similar to the “Want-Ads”• eBay provides a C2C auction function • InfoRocket provides a link to independent

expert consultants who answer questions for money

InfoRocket.com

Consumer to Business (C2B)

• Reverse auction or demand collection model

• Name price for commodity or service

priceline.com