"EDI streamlines document exchange, like purchase orders, between

Businesses . For instance, a retailer can send orders to suppliers electronically,

saving time. However, drawbacks include initial setup costs and potential
compatibility issues between different systems. Nonetheless, the efficiency
gained usually outweighs these challenges."
The Dot-Com Boom was a period of rapid growth in internet-based businesses
in the late 1990s. It was followed by the Dot-Com Bust, where many companies
collapsed due to overvaluation and unsustainable business models. However,
this was followed by a Rebirth period marked by the emergence of more
sustainableinternet businesses like Amazon and Google, leading to the
modern digital economy Value-added network (VAN) is a service that helps
businesses exchange electronic data securely. For example, a company can send
purchase orders, invoices, and shipping notices to suppliers through a VAN.
This simplifies communication and ensures data security. However, using
a VAN may involve additional costs for businesses.

Advantages of Electronic Commerce:

Increased Profitability: E-commerce boosts sales and cuts costs.
Global Reach: Small businesses can advertise globally.
Targeted Marketing: Virtual communities help reach niche markets.
Efficient Transactions: Faster, accurate information exchange lowers costs.
Convenience: Buyers access products anytime, customize choices.
Challenges:
Building Buyers: Some products need a critical mass of online customers.
Integration Costs: Merging existing systems into e-commerce can be pricey.
Security Worries: Concerns about online transactions may deter consumers.
Legal Complexities: Laws governing e-commerce are unclear.
Talent Recruitment: Finding skilled employees for e-commerce can be challenging.

Retail merchants have years of traditional commerce experience in creating

store environments that help convince customers to buy. This combination
of store design, layout, andproduct display knowledge is called Merchandising.
Transaction costs are the total of all costs that a buyer and seller incur as
they gather information and negotiate a purchase-and-sale transaction.
Although brokerage fees and sales commissions can be a part of transaction
costs, the cost of information search and acquisition is often far larger.
Vertical integration is the practice of a company acquiring ownership or control
of its suppliers or distributors.
A strategic alliance is a partnership between two or more companies that allows
them to coordinate their resources and expertise. Companies form strategic
alliances to enter new markets, develop new products, or share resources.

The law of diminishing returns says that the more you consume something,
the less additional benefit you get from each additional unit. A network effect
is the opposite - the more people who join a network, the more valuable
it becomes for everyone involved.
Key international commerce issues
Trust -Important to establish trusting relationships with customers
Difficult for online businesses
Culture-Select icons carefully / Dramatic cultural overtones
Language-Mandatory translation into all supported languages
Business must adapt to local cultures
Government-Unrestricted Internet access forbidden / Internet censorship
Infrastructure-Freight forwarder / Customs broker

Online Business / Web Catalog:

Businesses sell products or services through online catalogs, allowing customers to
browse and purchase items.
*Digital Content: Revenue is generated through the sale of digital products
such as e-books, music, videos, or software.
*Advertising-Supported: Businesses offer free content or services
online, generating revenue through advertisements displayed on their platforms.
*Advertising-Subscription Mixed: Combination of free and premium
subscription-based services, supplemented by advertising revenue.
**Fee-Based: Customers pay a fee for accessing certain online content or services.
Same Model for Both Sale Types: Some businesses employ the same revenue-generating
model for both business-to-consumer (B2C) and business-to-business (B2B) transactions.

The personal shopper is an intelligent agent program that learns the customer’s
Preferences And makes suggestions. The virtual model is a graphic image built
from customer measurements and descriptions on which customers can try clothes.
Web Site Usability
Current Web presences
*Few businesses accomplish all goals
*Most fail to provide visitors sufficient interactive contact opportunities
*Improving Web presence -Accessible to more people -Easier to use
-Encourage visitors’ trust
Fee-for-Content Revenue
*Academic information aggregation services
-Purchase rights and resell rights in subscription packages to schools, libraries,
-Dow Jones provides business-focused publications online
Newspaper, magazine, and journal materials
*Electronic books -Steady sales growth anticipated
Sales include: Books (sold individually)
*Online music-Largest stores: Amazon MP3, Apple’s iTunes,
*Online video -Issues hampering prior sales 1Large file size 2Inability to
play on variety of devices -Overcoming the issues 1delivery 2New technologies
improving 3Web browser availability for alternate devices
*Electronic books -Forms of digital audio books
*Audible sells subscriptions -Allows monthly download of a certain number of books
*Amazon.com -Offers books, newspapers, magazines, and other digital format items

In the fee-for-transaction revenue model, businesses offer services for which

they charge a fee that is based on the number or size of transactions they process.
*Service fee charged-Based on transaction number or size
*Web site offers visitor transaction information Personal service formerly provided by a
human agent *Value chain –Disintermediation Intermediary (human agent) removed
Reintermediation -New intermediary (fee-for-transaction Web site) introduced
Travel -Travel agency revenue model: receive fee for facilitating a transaction
Travel agents earn commissions on each airplane ticket, hotel reservation, auto rental, or
vacation that they book. /Web site advertising fees
Popular travel Web sites Travelocity /Expedia
Advertising-Supported Revenue
*Web portals (portal) – Site used as a launching point to enter the Web
*Web directory- Listing of hyperlinks to Web pages
*Targeted classified advertising sites -Can command higher rates than general advertising
*Growth of classified advertising Web sites -Very bad for newspapers
*Web employment advertising-Most successful targeted classified advertising category
-Used vehicle sites -AutoTrader.com

A computer network is any technology that allows people to connect

computers to eachother. An internet (small “i”) is a group of computer
networks that have been interconnected. Web, is a subset of the computers
on the Internet that are connected to one another in a specific way that makes
them and their contents easily accessible to each other.
ORIGIN OF INTERRNET
Cold War fear led US military to develop ARPANET, a super-tough network that
used packet-switching technology. ARPANET became the seed of today’s internet.
National Science Foundation (NSF)
Provided funding/ Prohibited commercial network traffic
Businesses turned to commercial e-mail providers

Growth of the Internet

*1991 Further easing of commercial Internet activity restrictions
*1995: privatization of the Internet
-Operations turned over to privately owned companies
*Network access providers
-Sell Internet access rights directly to larger customers
-Use Internet service providers (ISPs)
Internet hosts: directly connected computers
*Internet growth -Billions of dollars change hands yearly
-Nearly every country involved -Used by millions of people

A network of computers that are located close together—for example, in the

Same building—is called a local area network. Networks of computers
that are connectedover greater distances are called Wide Area Networks.
The combination of telephone lines and the closed switches that connect
them to each other is called a Circuit. Circuit switching creates a dedicated
pathway for communication between devices before data transfer.
*Circuit switching (cont’d.) -Works well for telephone calls
-Does not work as well for:Sending data across large WAN and
interconnected network (Internet)
*Circuit-switched network problem -Connected circuit failure
Solution-Packet switching: move data between two points

Packet-switched network
*Packets-Small pieces labeled electronically -Travel along interconnected
networks -Can take different paths *Destination computer -Collects packets
-Reassembles original file or e-mail message
*Routing computers
-Decide how best to forward each packet
-Also known as: Router computers, routers, gateway computers, border routers
*Routing algorithms Programs on routing computers
*Variety of rules and standards for creating packets
*Hubs, switches, and bridges
Devices that move packets
*Routers connect networks
-Translate packets into standard format -Internet backbone consists of backbone
routers and telecommunication lines