MGMT 382 Ch. 3

Ebusiness Forms and Revenue-Generating Strategies

- Content Providers - Infomediaries - Online marketplaces - Portals - Service providers -Transaction brokers

Ebusiness Advantages

-expanding global reach -opening new markets -reducing costs -improving effectiveness

3 Main drivers of the DTC sales Channel

1) Customer Experience 2) Data Collection 3) Reduced Costs

4 Characteristics of Web 2.0

1. Content sharing through open sourcing 2. User-contributed content 3. Collaboration inside the organization 4. Collaboration outside the organization

Banner Ad

A box running across a website that advertises the products and services of another business, usually another ebusiness.

Click-through

A count of the number of people who visit one site and click an advertisement that takes them to the site of the advertiser.

Really Simple Syndication (RSS)

A family of web feed formats used for web syndication of programs and content.

Website Bookmark

A locally stored URL or the address of a file or Internet page saved as a shortcut

Internet

A massive network that connects computers all over the world and allows them to communicate with one another - Computers connected via the Internet can send and receive information, including text, graphics, voice, video, and software.

Disruptive Technology

A new way of doing things that initially does not meet the needs of existing customers - Tend to open new markets and destroy old ones. - Typically enter the low end of the marketplace and eventually evolve to displace high-end competitors and their reigning technologies.

Internet Corporation for Assigned Names and Numbers (ICANN)

A nonprofit organization that has assumed the responsibility for Internet Protocol (IP) address space allocation, protocol parameter assignment, domain name system management, and root server system management functions previously performed under U.S. government contract.

Applet

A program that runs with another application such as a website.

Doman Name Hosting (web hosting)

A service that allows the owner of a domain name to maintain a simple website and provide email capacity.

Cookie

A small file deposited on a hard drive by a website, containing information about customers and their browsing activities.

Pop-up ad

A small web page containing an advertisement that appears outside of the current website loaded in the browser.

Viral Marketing

A technique that induces websites or users to pass on a marketing message to other websites or users, creating exponential growth in the message's visibility and effect

Freemium

A technique where a business offers a free basic product, giving the customer an option to use an advanced version for a premium cost.

Web 1.0 (Business 1.0)

A term to refer to the World Wide Web during its first few years of operation between 1991 and 2003

Heat Map

A two-dimensional representation of data in which values are represented by colors. - Provides an immediate visual summary of information.

Ebusiness Revenue model

Advertising fees Licensing fees Subscription fees Transaction fees Value-added services

Intermediaries

Agents, software, or businesses that provide a trading infrastructure to bring buyers and sellers together

Affiliate Programs

Allow businesses to generate commissions or referral fees when a customer visiting its website clicks a link to another merchant's website.

Web Browser

Allow users to access the WWW

World Wide Web Consortium (W3C)

An international community that develops open standards to ensure the long-term growth of the web.

Business to Consumer (B2C)

Applies to any business that sells its products or services to consumers over the Internet. - Carfax offers car buyers detailed histories of used vehicles for a fee. - 3 ways to opperate: * Brick and Mortar * Click and Mortar * Pure play

Consumer to Business (C2B)

Applies to any consumer who sells a product or service to a business on the Internet. - Priceline.com ; set their own prices for items such as airline tickets or hotel rooms and wait for a seller to decide whether to supply them.

Business to Business (B2B)

Applies to businesses buying from and selling to each other over the Internet. - Medical billing service - Software sales and licensing - Virtual assistant businesses - 80% of all online business and are more complex with greater security needs than other types. - Oracle & SAP

Transaction feeds

Benefits - Can be directly tied to savings (both process and price savings) - Important revenue source when high level of liquidity (transaction volume) is reached. Challenges: - If process savings are not completely visible, use of the system is discouraged (Incentive to move transactions offline). - Transaction fees likely to decrease with time.

License fees

Benefits - Create incentives to do many transactions - Customization and back - end integration lead to lock in of participants. Challenges - Up-front fee is a barrier to entry for participants - Price differentiation is complicated.

Subscription fees

Benefits - Create incentives to do transactions - Price can be differentiated - Possibility to build additional revenue from new user groups. Challenges - Fixed fee is a barrier to entry for participants.

Value Added Services fees

Benefits - Service offering can be differentiated - Price can be differentiated - Possibility to build additional revenue form established and new user groups (third parties) Challenges: - Cumbersome process for customers to evaluate new services continually.

Advertising fees

Benefits - Well targeted advertisements can be perceived as value added content by trading participants - Easy to implement Challenges - Limited revenue potential - Overdone or poorly targeted advertisements can be disturbing elements on the website.

Business 2.0 Communication and Collaboration Tools

Blog Wiki Mashup

Online Marketplaces

Bring together buyers and sellers of products and services

Clickstream Data

Can observe the exact pattern of a consumer's navigation through a site. Can include: - Length of stay on a website - Number of abandoned registrations - Number of abandoned shopping carts.

Collective Intelligence

Collaborating and tapping into the core knowledge of all employees, partners, and customers

Wiki

Collaborative website that allows users to add, remove, and change content. Popular business examples: - National Institute of health, Intelopedia, LexisNexis, Wiki for Higher Education

Search Engine Optimization (SEO)

Combines art with science to determine how to make URLs more attractive to search engines resulting in higher search engine ranking.

Internet Service Provider (ISP)

Company that provides access to the Internet for a monthly fee.

Semantic Web

Component of Web 3.0 that describes things in a way that computers can understand.

Mashup

Content from more than one source to create a new product or service.. Examples: Zillow, Infopedia, Trendsmap, SongDNA, ThisWeKnow

Snackable Content

Content that is designed to be easy for readers to consumer and to share.

Podcasting

Converts an audio broadcast to a digital music player. Can increase marketing reach and build customer loyalty.

Hitbots

Create the illusion that a large number of potential customers are clicking the advertiser's links, when in fact there is no likelihood that any of the clicks will lead to profit for the advertiser.

Network Effect

Describes how products in a network increase in value to users as the number of uses increases.

Direct to Consumer (DTC)

Ebusiness model where companies build, market, sell, and ship their products themselves, without relying on traditional stores or intermediaries.

Ebusiness tools

Email Instant messaging Podcasting Videoconferencing Web conferencing Content management system

Innovator's Dilemma

Established companies can take advantage of disruptive technologies without hindering existing relationships with customers, partners, and stakeholders

Search Engine Ranking

Evaluates variables that search engines use to determine where a URL appears on the list of search results.

Content Providers

Generate revenues by providing digital content such as news, music, photos, or videos

Pay-per-conversions

Generates reven

Pay-per-call

Generates revenue each time a user clicks a link that takes the user directly to an online agent waiting for a call.

Pay-per-click

Generates revenue each time a user clicks a link to a retailer's website.

Ebusiness

Includes ecommerce along with all activities related to internal and external business operations such as servicing customer accounts, collaborating with partners, and exchanging real-time information. - Operates 24/7

Cyborg Anthropologist

Individual who studies the interaction between humans and technology, observing how technology can shape humans' lives.

Expanding Global Reach

Information richness Information Reach

Knowledge Management

Involves capturing, classifying, evaluating, retrieving, and sharing information assets in a way that provides context for effective decisions and actions

Tacit Knowledge

Knowledge contained in people's heads

Paid Search

Links to a company paid to have displayed based on your keywords. On a search results page, you can tell paid results from organic ones because search engines set apart the paid listings, putting them above or to the right of the organic rules, or giving them a shaded backgrounded, border lines, or other visual clues such as the word Ad.

Reducing Costs

Long tail

Ezine

Magazine published only in electronic format on a computer network.

Viral Marketing

Marketing phenomenon that facilitates and encourages people to pass along a marketing message

Opening New Markets

Mass customization Personalization

Interactivity

Measures advertising effectiveness by counting visitor interactions with the target ad, - including time spent viewing the ad, - number of pages viewed, - and number of repeat visits to the advertisement.

Stickiness

Measures the amount of time visitors spend on a website or application. - Can be measured in terms of page views, minutes per month, number of visits (repeat usage), and time spent per visit.

Long Tail

Niche-market ebusiness strategies, referring to the tail of a typical sales curve. Demonstrates how niche products can have viable and profitable business models when selling via ebusiness.

Disintermediation

Occurs when a business sells directly to the customer online and cuts out the intermediary. - Lets the company shorten the order process and add value with reduced costs or more responsive and efficient service.

Personalization

Occurs when a company knows enough about a customer's likes and dislikes that it can fashion offers more likely to appeal to that person, say by tailoring its website to individuals or groups based on profile information, demographics, or prior transactions.

Paradigm Shift

Occurs when a new, radical form of business enters the market that reshapes the way companies and organizations behave -Ebusiness created a paradigm shift, transforming entire industries and changing enterprisewide business processes that fundamentally rewrote traditional business rules.

Blog

Online journal that allows users to post their own comments, graphics, and videos. Popular business examples include Sweet leaf Tea, Stoneyfield Farm, Nuts about Southwest, Disney Parks

Web Real-Time communications (WebRTC)

Open source project that seeks to embed real-time voice, text, and video communications capabilities in web browsers.

Portals

Operate a central website for users to access specialized content and other services

Two Types of Search Engine Results

Organic Search Paid Search

Ebusiness Model

Plan that details how a company creates, delivers, and generates revenue on the Internet. - B2B - B2C - C2B - C2C

Business Model

Plan that details how a company creates, delivers, and generates revenues.

Dark Web

Portion of the Internet that is intentionally hidden from search engines, uses masked IP addresses, and is accessible only with a special web browser.

Click Fraud

Practice of artificially inflating traffic statistics for online advertisements. Some unethical individuals or click fraud scammers even use automated clicking programs called hitbots.

MicroBlogging:

Practice of sending brief posts to a personal blog, either publicly or to a private group of subscribers who can read the posts as IMs or as Text messages.

Clickstream Analytics

Process of collecting, analyzing, and reporting aggregate data about which pages a website visitor visits- and in what order.

Transaction brokers

Process online sales transactions

Sustaining Technology

Produces an improved product customers are eager to buy, such as a faster car or larger hard drive.

Service Providers

Provide services such as photo sharing, video sharing, online backup, and storage

Infomediaries

Provide specialized information on behalf of producers of goods and services and their potential customers.

World Wide Web

Provides access to Internet information through documents including text, graphics, audio, and video files that use a special formatting language called HTML

Hypertext Markup Language (HTML)

Publishes hypertext on the WWW, which allows users to move from one document to another simply by clicking a hot spot or link

Instant Messaging

Real-time exchange of messages, files, audio, and/or video with another online user

Cybermediation

Refers to the creation of new kinds of intermediaries that simply could not have existed before the advent of ebusiness

Social Media

Refers to websites that rely on user participation and user-contributed content.

Javascript

Scripting language often used to create interactive web pages developed by Netscape , a big driver of Business 2.0.

Application Programming interface (API)

Set of routines, protocols, and tools for building software applications.

Open Source

Software that is created for free use by everyone

Shopping Cart

Software used to make a website's product catalog available for online ordering, whereby visitors may select, view, add/delete, and purchase merchandise. - These virtual shopping carts were the primary driver of ebusiness.

Deep Web (invisible web)

Sometimes called the invisible web, is the large part of the Internet that is inaccessible to conventional search engines. The dep web is the protion of the web not indexed by search engines.

Tags

Specific keywords or phrases incorporated into website content for means of classification or taxonomy

Reintermediation

Steps are added to the value chain as new players find ways to add value to the business process

Hypertext Transfer Protocol (HTTP)

The Internet protocol web browsers use to request and display web pages using universal resource locators (URLs)

HTML 5

The current version of HTML delivers everything from animation to graphics and music to movies; it can also be used to build complicated web applications and works across platforms, including a PC, tablet, smartphone, or smart TV

Web 2.0 (Business 2.0)

The next generation of Internet use—a more mature, distinctive communications platform characterized by new qualities such as collaboration, sharing, and free. - Encourages user participation and the formation of communities that contribute to content. - Technical skills are no longer required to use and publish information to the WWW, eliminating entry barriers for online business.

Social Networking

The practice of creating networks of friends, associates and clients who can discuss topics in common. Online social networking is a powerful concept used by individuals and businesses worldwide.

URL Shortening

Translation of a long URL into an abbreviated alternative that redirects to the longer URL. Provides users with: - The ability to track, analyze, and graph traffic statistics. - Bookmarklets that enable URL shortening without visiting the site. - The ability to customize shortened URL extensions. - A preview function.

Organic Search

Unpaid entries in a search engine results page that were derived based on their contents' relevance to the keyword query.

Mashup editors

WYSIWYG tools. Provide a visual interface to build a mashup, often allowing the user to drag and drop data points into a web application.

Real Simple Syndication (RSS)

Web format used to publish frequently updated works, such as blogs, newsheadlines, audio, and video, in a standardized format.

Search Engine

Website software that finds other pages based on keyword matching similar to Google.

Keyword

Word used in a performing a search.

Hashtag

a keyword or phrase used to identify a topic and is preceded by a hash or pound sign (#)

Associate (affiliate program)

allows a business to generate commissions or referral fees when a customer visiting its website clicks a link to another merchant's website

Videoconference

allows people at two or more locations to interact via two-way video and audio transmissions simultaneously as well as share documents, data, computer displays, and whiteboards

Social Bookmarking

allows users to share, organize, search, and manage bookmarks

Social Network

application that connects people by matching profile information

Web conferencing (webinar)

blends videoconferencing with document sharing and allows the user to deliver a presentation over the web to a group of geographically dispersed participants

Reputation System

buyers post feedback on sellers EX: eBay buyers voluntarily comment on the quality of service, their satisfaction ith the item trades, and promptness of shipping. Sellers comment about prompt payment from buyers or respond to comments left by the buyer > most popular form of user-generated content

asynchronous communication

communication such as email in which the message and the response do not occur at the same time

Synchronous communication

communication that occurs in real time

Explicit Knowledge

consists of anything that can be documented, archived, and codified, often with the help of IT/MIS

Open System

consists of nonproprietary hardware and software based on publicly known standards that allow third parties to create add-on products to plug into or interoperate with the system

Source Code

contains instructions written by a programmer specifying the actions to be performed by computer software

User-contributed content (user-generated content)

created and updated by many users for many users

Social Tagging

describes the collaborative activity of marking shared online content with keywords or tags as a way to organize it for future navigation, filtering, or search

Email

exchange of digital messages over the internet

Content Management Systems (CMSs)

help companies manage the creation, storage, editing, and publication of their website content - User friendly; most include web-based publishing, search, navigation, and indexing to organize information; and they let users with little or no technical expertise make website changes.

Digital Darwinism

implies that organizations that cannot adapt to the new demands placed on them for surviving in the info age are doomed to extinction - Polaroid when digital cameras and one hour film processing came about

Adwords

keywords that advertisers choose to pay for and appear as sponsored links on the Google results pages

Social Networking Analysis (SNA)

maps group contacts identifying who knows each other and who works together

Information reach

measures the number of people a firm can communicate with all over the world

Real-time communication

occurs when a system updates information at the same rate it receives it

Native Advertising

online marketing concept in which the advertiser attempts to gain attention by providing content in the context of the user's experience in terms of its content, format, style, or placement

Closed Source

proprietary software licensed under exclusive legal right of the copyright holder

Information Richness

refers to the depth and breadth of details contained in a piece of textual, graphic, audio, or video information

Crowdsourcing

refers to the wisdom of the crowd

Social Graphs

represent the interconnection of relationships in a social network

Collaboration System

set of tools that supports the work of teams of groups by facilitating the sharing and flow of information

Folksonomy

similar to taxonomy except that crowdsourcing determines the tags or keyword-based classification system

Crowdfunding

sources capital for a project by raising many small amounts from a large number of individuals, typically via the internet

Mass Customization

the ability to offer individually tailored products or services using the same production resources as mass production - Customers can order M&M in special colors or with customized sayings such as "marry me".

Universal Resource Locator (URL)

the address of a file or resource on the web such as www.apple.com or www.microsoft.com

Ecommerce

the buying and selling of goods and services over the Internet; refers only to online transactions

Taxonomy

the scientific classification of organisms into groups based on similarities of structure or origin