Preface
Part 1: Introduction
Chapter 1?Introduction to Electronic Commerce3
The Evolution of Electronic Commerce4
Electronic Commerce and Electronic Business5
Categories of Electronic Commerce5
Business Processes6
Relative Size of Electronic Commerce Elements7
The Development and Growth of Electronic Commerce9
Early Electronic Commerce9
The First Wave of Electronic Commerce, 1995–200310
The Second Wave of Electronic Commerce, 2004–200911
The Third Wave of Electronic Commerce, 2010–Present13
The “Boom and Bust” Myth17
Business Models, Revenue Models, and Business Processes17
Focus on Specific Business Processes19
Role of Merchandising19
Product/Process Suitability to Electronic Commerce19
Electronic Commerce: Opportunities, Cautions, and Concerns21
Opportunities for Electronic Commerce21
Electronic Commerce: Current Barriers23
Economic Forces and Electronic Commerce25
Transaction Costs27
Markets and Hierarchies27
Using Electronic Commerce to Reduce Transaction Costs30
Network Economic Structures31
Network Effects32
Identifying Electronic Commerce Opportunities33
Strategic Business Unit Value Chains33
Industry Value Chains35
SWOT Analysis: Evaluating Business Unit Opportunities37
International Nature of Electronic Commerce39
Trust Issues on the Web39
Language Issues40
Cultural Issues41
Infrastructure Issues42
Summary45
Key Terms45
Review Questions46
Exercises47
Cases48
For Further Study and Research51
Chapter 2?Technology Infrastructure: The Internet and the World Wide Web55
The Internet and the World Wide Web57
Origins of the Internet57
New Uses for the Internet58
Commercial Use of the Internet59
Growth of the Internet59
The Internet of Things60
Packet-Switched Networks61
Routing Packets62
Public and Private Networks63
Virtual Private Networks (VPNs)64
Intranets and Extranets64
Internet Protocols65
TCP/IP66
IP Addressing66
Electronic Mail Protocols68
Web Page Request and Delivery Protocols69
Emergence of the World Wide Web70
The Development of Hypertext70
Graphical Interfaces for Hypertext71
The World Wide Web71
The Deep Web72
Domain Names73
Markup Languages and the Web74
Hypertext Markup Language75
Extensible Markup Language (XML)81
Internet Connection Options87
Connectivity Overview87
Voice-Grade Telephone Connections87
Broadband Services88
Leased-Line Connections88
Wireless Connections88
Internet2 and the Semantic Web93
Summary96
Key Terms96
Review Questions98
Exercises99
Cases100
For Further Study and Research101
Part 2: Business Strategies for Electronic Commerce
Chapter 3?Selling on the Web107
Revenue Models for Online Business109
Web Catalog Revenue Models109
Fee-for-Content Revenue Models114
Advertising as a Revenue Model Element118
Fee-for-Transaction Revenue Models124
Fee-for-Service Revenue Models129
Free for Many, Fee for a Few130
Changing Strategies: Revenue Models in Transition131
Subscription to Advertising-Supported Model132
Advertising-Supported to Advertising-Subscription Mixed Model132
Advertising-Supported to Subscription Model132
Multiple Changes to Revenue Models133
Revenue Strategy Issues for Online Businesses135
Channel Conflict and Cannibalization135
Strategic Alliances136
Luxury Goods Strategies136
Overstock Sales Strategies137
Creating an Effective Business Presence Online137
Identifying Web Presence Goals137
Web Site Usability139
How the Web Is Different140
Meeting the Needs of Web Site Visitors140
Trust and Loyalty142
Usability Testing144
Customer-Centric Web Site Design145
Using the Web to Connect with Customers146
The Nature of Communication on the Web146
Summary150
Key Terms150
Review Questions151
Exercises152
Cases153
For Further Study and Research156
Chapter 4?Marketing on the Web159
Web Marketing Strategies160
The Four Ps of Marketing161
Product-Based Marketing Strategies161
Customer-Based Marketing Strategies162
Communicating with Different Market Segments163
Trust, Complexity, and Media Choice163
Market Segmentation166
Market Segmentation on the Web167
Offering Customers a Choice on the Web168
Beyond Market Segmentation: Customer Behavior and Relationship Intensity168
Segmentation Using Customer Behavior168
Customer Relationship Intensity and Life-Cycle Segmentation171
Customer Acquisition: The Funnel Model173
Advertising on the Web175
Display Ads176
Intrusive Ad Formats179
Rich Media and Video Ad Formats179
Text Ads180
Mobile Device Advertising181
Site Sponsorships181
Online Advertising Cost and Effectiveness182
E-Mail Marketing184
Unsolicited Commercial E-Mail (UCE, Spam)184
Permission Marketing185
Combining Content and Advertising185
Outsourcing E-Mail Processing186
Technology-Enabled Customer Relationship Management186
CRM as a Source of Value186
Creating and Maintaining Brands on the Web188
Elements of Branding189
Emotional Branding vs. Rational Branding190
Affiliate Marketing Strategies191
Viral Marketing Strategies and Social Media192
Search Engine Positioning and Domain Names194
Search Engines and Web Directories194
Paid Search Engine Inclusion and Placement195
Web Site Naming Issues198
Summary201
Key Terms201
Review Questions203
Exercises204
Cases206
For Further Study and Research208
Chapter 5?Business-to-Business Activities:
Improving Efficiency and Reducing Costs213
Purchasing, Logistics, and Business Support Processes215
Outsourcing and Offshoring215
Purchasing Activities216
Logistics Activities219
Business Process Support Activities220
E-Government222
Network Model of Economic Organization
in Purchasing: Supply Webs224
Electronic Data Interchange225
Early Business Information Interchange Efforts225
Emergence of Broader Standards: The Birth of EDI226
How EDI Works226
Value-Added Networks231
EDI Payments234
Supply Chain Management Using Internet Technologies234
Value Creation in the Supply Chain234
Increasing Supply Chain Efficiency and Cooperation237
Materials-Tracking Technologies238
Creating an Ultimate Consumer Orientation in the Supply Chain240
Building and Maintaining Trust in the Supply Chain241
Online Business Marketplaces and Networks242
Independent Industry Marketplaces242
Private Stores and Customer Portals244
Private Company Marketplaces244
Industry Consortia-Sponsored Marketplaces245
Summary246
Key Terms246
Review Questions247
Exercises248
Cases250
For Further Study and Research252
Chapter 6?Social Networking, Mobile Commerce,
and Online Auctions255
From Virtual Communities to Social Networks256
Virtual Communities257
Early Web Communities257
Social Networking Emerges258
Business Uses of Social Networking262
Revenue Models for Social Networking Sites265
Mobile Commerce269
Mobile Phones269
Tablet Devices270
Mobile Device Operating Systems271
Mobile Apps272
Mobile Payment Apps274
Online Auctions274
Auction Basics275
Online Auctions and Related Businesses277
Auction-Related Services285
Summary287
Key Terms287
Review Questions288
Exercises289
Cases290
For Further Study and Research292
Part 3: Technologies for Electronic Commerce
Chapter 7?Electronic Commerce Security299
Online Security Issues Overview301
Origins of Security on Interconnected Computer Systems301
Computer Security and Risk Management301
Elements of Computer Security303
Establishing a Security Policy303
Security for Client Devices305
Cookies and Web Bugs305
Active Content307
Graphics and Plug-Ins308
Viruses, Worms, and Antivirus Software308
Digital Certificates313
Steganography317
Physical Security for Client Devices318
Client Security for Mobile Devices318
Communication Channel Security319
Secrecy Threats319
Integrity Threats322
Necessity Threats322
Threats to the Physical Security of Internet Communications?Channels323
Threats to Wireless Networks323
Encryption Solutions324
Encryption in Web Browsers328
Hash Functions, Message Digests, and Digital Signatures330
Security for Server Computers332
Password Attack Threats332
Database Threats333
Other Software-Based Threats334
Threats to the Physical Security of Web Servers334
Access Control and Authentication335
Firewalls336
Organizations That Promote Computer Security338
CERT338
Other Organizations338
Computer Forensics and Ethical Hacking339
Summary340
Key Terms340
Review Questions342
Exercises343
Cases343
For Further Study and Research345
Chapter 8?Payment Systems for Electronic Commerce349
Common Online Payment Methods350
Electronic Bill Presentment and Payment Systems351
Micropayments and Small Payments352
Payment Cards353
Advantages and Disadvantages of Payment Cards354
Payment Acceptance and Processing355
Stored-Value Cards359
Digital Cash360
The Double Spending Issue361
Advantages and Disadvantages of Digital Cash362
Digital Wallets363
Software-Based Digital Wallets363
Hardware-Based Digital Wallets364
Internet Technologies and the Banking Industry365
Check Processing365
Mobile Banking367
Payment System Threats: Phishing and Identity Theft367
Phishing Attacks367
Using Phishing Attacks for Identity Theft369
Phishing Attack Countermeasures371
Summary372
Key Terms372
Review Questions373
Exercises374
Cases375
For Further Study and Research377
Part 4: Integration
Chapter 9 Managing Electronic Commerce Implementations381
Identifying Benefits and Estimating Costs of Online Business Initiatives382
Identifying Objectives382
Linking Objectives to Business Strategies383
Identifying and Measuring Benefits384
Identifying and Estimating Costs386
Funding Online Business Startups388
Comparing Benefits to Costs389
Return on Investment (ROI)390
Strategies for Developing Electronic Commerce Web Sites391
Internal Development versus Outsourcing392
Incubators394
Accelerators396
Managing Electronic Commerce Implementations396
Project Management397
Project Portfolio Management398
Staffing for Electronic Commerce398
Postimplementation Audits401
Change Management402
Summary403
Key Terms404
Review Questions404
Exercises405
Cases406
For Further Study and Research408
Glossary411