Management Information Systems Chapter 10

Advertising Revenue Model

A Web site generates revenue by attracting a large audience of visitors who can then be exposed to advertisements

Subscription Revenue Model

A Web site offering content or services charges a subscription free for access to some or all of its offerings on an ongoing basis

Transaction Fee Revenue Model

A company receives a fee for enabling or executing a transaction

Social Graph

A mapping of all significant online social relationships

Marketspace

A marketplace extended beyond traditional boundaries and removed from a temporal and geographic location

Podcasting

A method of publishing audio or video broadcasts via the Internet, allowing subscribing users to download audio or video files onto their personal computers or portable music players

Streaming

A publishing method for music and video files that flows a continuous stream of content to a user's device without being stored locally on the device

Indirect Goods

All other goods not directly involved in the production process, such as office supplies or products for maintenance and repair

Sharing Economy

Based on the idea of a market creator building a digital platform where supply meets demand

Market Creators

Build a digital environment in which buyers and sellers can meet, display products, search for products, and establish prices

Customization

Changing the delivered product or service based on a user's preferences or prior behavior

E-tailers

Comes in all sizes, from giant Amazon to tiny local stores that have Web sites

Sales Revenue Model

Companies derive revenue by selling goods, information, or services to customers

Private Industrial Networks

Consist of a large firm using a secure Web site to link to its suppliers and other key business partners Aka Private Exchange

Revenue Model

Describes how the firm will earn revenue, generate profits, and produce a superior return on investment

Consumer-to-consumer (C2C)

Electronic commerce involves consumers selling directly to consumers

Business-to-consumer (B2C)

Electronic commerce involves retiling products and services to individual shoppers

Business-to-business (B2B)

Electronic commerce involves sales of goods and services among businesses

Electronic Data Interchange (EDI)

Enables the computer-to-computer exchange between two organizations of standard transactions such as invoices, bills of lading, shipment schedules, or purchase orders

Prediction Markets

Established as peer-to-peer betting markets where participants make bets on specific outcomes of, say, quarterly sales of a new product, designs for new products, or political elections

Information Asymmetry

Exists when one party in a transaction has more information that is important for the transaction than the other party

Crowdsourcing

Firms can be actively helped in solving some business problems through this method

Free/Freemium Revenue Model

Firms offer basic services or content for free, while charging a premium for advanced or special features

Portal

Gateways to the Web, and are often defined as those sites which users set as their home page

Digital Goods

Goods that can be delivered over a digital network

Direct Goods

Goods used in a production process, such as sheet still for auto body production

Location-Based Services

Include geosocial services, geo-advertising, and geo-information services

Exchanges

Independently owned third-party Net marketplaces that connect thousands of suppliers and buyers for spot purchasing

Personalization

Merchants can target their marketing messages to specific individuals by adjusting the message to a person's clickstream behavior, name, interests, and past purchases

Menu Costs

Merchants' costs of changing prices

Micropayment Systems

Provide content providers with a cost-effective method for processing high volumes to very small monetary transactions

Intellectual Property

Refers to all forms of human expression that can be put into a tangible medium such as text, CDs, or DVDs, or stored on any digital (or other) media, including the web

Cost Transparency

Refers to the ability of consumers than in the past

Richness

Refers to the complexity and content of a message

Price Transparency

Refers to the ease with which consumers can find out the variety of prices in a market

Price Discrimination

Selling the same goods, or nearly the same goods, to different targeted groups at different prices

Social Shopping

Sites like Pinterest, Caboodle, ThisNext, and Stylehive, you can swap shopping ideas with friends

Community Providers

Sites that create a digital online environment where people with similar interests can transact (buy and sell goods); share interests, photos, videos, communicate with like-minded people; receive interest-related information; and even play out fantasies by adopting online personalities called avatars

"The Wisdom of Crowds"

Some argue that large numbers of people can make better decisions about a wide range of topics or products than a single person or even a small committee of experts

Net Marketplaces

Sometimes called e-hubs, provide a single digital marketplace based on Internet technology for many different buyers and sellers

Behavioral Targeting

Techniques to increase the effectiveness of banners, rich media, and video ads

Market Entry Costs

The cost merchants must pay simply to bring their goods to market

Transaction Costs

The costs of participating in a market

Search Costs

The effort required to find suitable products

Dynamic Pricing

The price of a product varies depending on the demand characteristics of the customer or the supply situation of the seller

Disintermediation

The removal of organizations or business process layers responsible for intermediary steps in a value chain

Information Density

The total amount and quality of information available to all market participants, consumers, and merchants alike

Geoinformation Services

This can tell you the price of a house you are looking at, or about special exhibits at a museum you are passing

Geoadvertising Services

This can tell you where to find the nearest Italian restaurant

Geosocial Service

This can tell you where your friends are meeting

Affiliate Revenue Model

Web sites send visitors to other Web sites in return for a referral fee or percentage of the revenue from any resulting sales