<B>권호명 : < / B>1 CONTENTS Part 1 Introduction to E-commerce 1 THE REVOLUTION IS JUST BEGINNING ... 2 Learning Objectives ... 2 Amazon.com, Before and After ... 3 1.1 E-commerce : The Revolution Is Just Beginning ... 6 What Is E-commerce? ... 6 The Difference between E-commerce and E-business ... 7 Why Study E-commerce? ... 7 Seven Unique Features of E-commerce Technology ... 9 Ubiquity ... 9 Global Reach ... 10 Universal Standards ... 10 Richness ... 11 Interactivity ... 11 Information Density ... 12 Personalization／Customization ... 12 Types of E-commerce ... 13 Business-to-Consumer(B2C) ... 13 Business-to-Business(B2B) ... 14 Ccnsumer-to-Consumer(C2C) ... 14 Peer-to-Peer(P2P) ... 15 Mobile commerce(M-commerce) ... 15 Growth of the Internet and the Web ... 15 Insight on Technology : Spider Webs and Bow Ties ... 18 Origins and Growth of E-commerce ... 19 Technology and E-commerce in Perspective ... 21 Potential Limitations on the Growth of B2C E-commerce ... 22 1.2 E-commerce Ⅰ and Ⅱ ... 23 The Visions and Forces behind E-commerce Ⅰ : 1995-2000 ... 24 E-commerce Ⅱ : 2001-2006 ... 27 Insight on Business : A Short History of Dot.com IPOs ... 28 E-commerce Today : Successes and Failures ... 30 Predictions for the Future ... 31 1.3 Understanding E-commerce : Organizing Themes ... 36 Technology : Infrastructure ... 36 Business : Basic Concepts ... 38 Society : Taming the Juggernaut ... 38 Academic Disciplines Concerned with E-commerce ... 39 Thchnical Approaches ... 39 Insight on Society : Keeping Your Clickstream Private ... 40 Behavioral Approaches ... 41 1.4 Case Study Napster Rocked. But Was it Legal? ... 43 1.5 Review ... 47 Key Concepts ... 47 Questions ... 51 Projects ... 52 Web Site Resources ... 53 2 E-COMMERCE BUSINESS MODELS AND CONCEPTS ... 54 Learning Objectives ... 54 Kozmo Finally Crashes ... 55 2.1 E-commerce Business Models ... 57 Introduction ... 57 Eight Key Elements of a Business Model ... 57 Value Proposition ... 57 Revenue Model ... 59 Market Opportunity ... 61 Competitive Environment ... 62 Competitive Advantage ... 63 Market Strategy ... 64 Organizational Development ... 65 Management Team ... 65 Categorizing E-commerce Business Models : Some Difficulties ... 66 2.2 Major Business-to-Consumer(B2C) Business Models ... 67 Portal ... 68 E-tailer ... 69 Content Provider ... 70 Transaction Broker ... 71 Market Creator ... 72 Service Provider ... 73 Community Provider ... 74 Insight on Technology : Google.com - Searching for Profits ... 75 2.3 Major Business-to-Business(B2B) Business Models ... 77 Marketplace／Exchange(B2B Hub) ... 77 E-distributor ... 79 B2B Service Provider ... 79 Matchmaker ... 80 Infomediary ... 80 Insight on Business - e-Steel.com Breaks Its Mold ... 87 2.4 Business Models in Emerging E-commerce Areas ... 82 Consumer-to-Consumer(C2C) Business Models ... 82 Peer-to-Peer(P2P) Business Models ... 83 M-commerce Business Models ... 83 Insight on Society - Who's Calling : Wireless Privacy ... 85 E-commerce Enablers : The Gold Rush Model ... 86 2.5 How the Internet and the Web Change Business : Basic Business Concepts ... 87 Industry Structure ... 88 Industry Value Chains ... 90 Firm Value Chains ... 91 Business Strategy ... 91 2.6 Case Study Priceline.com - Can This Business Model Be Saved? ... 96 2.7 Review ... 99 Key Concepts ... 99 Questions ... 101 Projects ... 102 Web Site Rewources ... 103 Part 2 Technology Infrastructure for E-commerce 3 THE INTERNET AND WORLD WIDE WEB : E-COMMERCE INFRASTRUCTURE ... 106 Learning Objectives ... 106 Akamai Technologies : Speeding Internet Performance with Math ... 107 3.1 The Internet : Ichnology Background ... 109 The Evolution of the Internet 1961-2000 ... 109 The Internet : Key Thchnology Concepts ... 114 Packet Surtching ... 115 TCP／IP ... 116 Client／Server Computing ... 120 Other Internet Protocols and Utility Program ... 121 HTTP : Hypertext Documents ... 121 SMTP, POP, and IMAP : Sending E-Mail ... 121 FTP : Transferring Files ... 122 SSL : Security ... 122 Telnet : Running Remote ... 123 Finger : Finding People ... 123 Ping : Testing the Address ... 123 Tracert : Checking Routes ... 123 3.2 The Internet Today ... 124 The Internet Backbone ... 126 Network Access Points and Metropolitan Area Exchanges ... 127 Campus Networks ... 129 Internet Service Providers ... 129 Intranets and ExtTanets ... 131 Who Governs the Internet? ... 132 Insight on Society : Yahoo! France-Government Regulation of the Internet ... 134 3.3 Internet Ⅱ : The Future Infrastructure ... 133 Limitations of Internet Ⅰ ... 133 The Internet Proiect ... 135 Advanced Network Infrastructure ... 135 New Networking Capabilities ... 135 Middleware ... 136 Advanced Applications ... 136 The Larger Internet Ⅱ Thchnology Environment ... 137 Fiber Optics and the Bandwidth Explosion ... 137 Wireless Web and 3G Thchnologies ... 139 Insigbt on Business : Enkido- A View of the Future of Networks ... 141 Wireless LANs ... 142 Internet Appliances : The Changing Client Computer ... 143 Benefits of Intemet Ⅱ Technologies ... 144 IP Multicasting ... 144 Latency Solutions ... 144 Guaranteed Service Levels ... 144 Lower Error Rates ... 145 Declining Costs ... 145 3.4 The World Wide Web ... 146 Development of the Web ... 146 Hypertext ... 147 Markup Languages ... 148 SGML ... 148 HTML ... 149 XML ... 150 Web Servers and Clients ... 152 Web Browsers ... 154 3.5 The Internet and the Web : Features ... 154 E-mail ... 154 Search Engines ... 155 Intelligent Agents(Bots) ... 157 Instant Messaging ... 157 Chat ... 158 Music, Video, and Other Standard Files ... 159 Streaming Media ... 159 Cookies ... 159 Insight on Technology : ChatterBots at Work ... 160 Internet Ⅱ and E-commerce : Emerging Features and Serices ... 161 Internet Telephony ... 161 Digital Libraries ... 162 Distributed Storage ... 162 Distance Learning ... 164 Digital Video ... 164 Video Teleconferencing ... 164 Tele-immersion ... 164 M-commerce Applications ... 164 3.6 Case Study Into Networks ... 166 3.7 Review ... 168 Key Concepts ... 168 Questions ... 172 Projects ... 173 Web Site Resources ... 175 4 BUILDING AN E-COMMERCE WEB SITE ... 176 Learning Objectives ... 176 Loudcloud : What Is 100% Uptime Worth? ... 177 4.1 Building an E-commerce Web Site : A Systematic Approach ... 179 Pieces of the Site-Building Puzzle ... 179 Planning : The Systems Development Life Cycle ... 180 Systems Analysis : Identify Business Objectives, Systems Functionality, and Information Requirements ... 181 System Design : Hardware and Software Platforms ... 181 Building the System : In-House vs. Outsourcing ... 184 Build Your Own vs. Outsourcing ... 184 Host Your Own vs. Outsourcing ... 186 Testing the System ... 187 Implementation and Maintenance ... 187 Insight on Technology : What Boo Did Wrong ... 189 4.2 Choosing Serer Software ... 188 Simple vs. Multi-tiered Web Site Architecture ... 190 Web Server Soware ... 192 Site Management Tools ... 193 Dynamic Page Generation Tools ... 194 Application Servers ... 196 E-commerce Merchant Server Functionality ... 197 Online Catalog ... 197 Shopping Cart ... 198 Credit-Card Processing ... 198 Merchant Server Software packages(E-commerce Suites) ... 198 Choosing an E-commerce Suite ... 198 Building Your Own E-Commerce Software ... 200 Insight on Business : Small Town Doesn't Mean Small BusinessAnymore ... 201 4.3 Choosing the Hardware for an E-commerce Site ... 202 Right-sizing Your Hardware Platform : The Demand Side ... 202 Right-Sizing Your Hardware Platform : The Supply Side ... 207 4.4 Other E-commerce Site Tools ... 211 Web Site Design : Business Considerations ... 211 Tools for Interactivity and Active Content ... 211 CGI ... 212 Java, Java Server Pages(JSP) and JavaScript ... 213 ActiveX and VBScript ... 214 ColdFusion ... 214 Personalization Thols ... 214 The Information Policy Set ... 215 Insight on Social Issues : Web Site Accessibility for the Physically Challenged ... 216 4.5 Case Study REI - A Homegrown Success Story ... 218 4.6 Review ... 222 Key Concepts ... 222 Questions ... 225 Projects ... 226 Web Site Resources ... 227 5 SECURTY AND ENCRYPTION ... 228 Learning Objectives ... 228 The Merchant Pays ... 229 5.1 The E-commerce Security Environment ... 231 The Scope of the Problem ... 231 What Is Good E-commerce security? ... 233 Dimensions of E-commerce Security ... 234 The Tension Between Serurity and Other Values ... 236 Ease of Use ... 236 Public Safety and the Criminal Uses of Security ... 236 5.2 Security Threats in the E-commerce Environment ... 237 Malicious Code ... 238 Hacking and Cybervandalism ... 241 Credit Card Fraud ... 243 Insight on Social Issues : E-Sigatures - Bane or Boon to E-Commerce? ... 244 Spoofing ... 245 Denial of Service(DoS) Attacks ... 245 Sniffing ... 246 Insider Jobs ... 246 5.3 Technology Solutions ... 247 Protecting Internet Communications ... 247 Encryption ... 248 Symmetric Key Encryption ... 248 Public Key Encryption ... 250 Public Key Encryption Using Digital Signatures and Hash Digests ... 250 Digital Envelopes ... 253 Digital Cerificates and Public Key Infrastructure(PKI) ... 254 Limitations to Encryption Solutions ... 256 Securing Channels of Communication ... 257 Insight on Technology : Everlasting Security? ... 258 Secure Sockets Layer(SSL) ... 257 S-HTTP ... 260 Virtual Private Networks(VPN) ... 260 Protecting Networks ... 261 Firewalls ... 261 Proxy Servers ... 261 Protecting Servers and Clients ... 263 Operating System Controls ... 263 Anti- Virus Software ... 263 5.4 Policies, Procedures, and Laws ... 263 A Security Plan : Management Policies ... 264 CERT ... 266 The Role of Laws and Public Policy ... 268 Insight on Business : Tiger Teams - Hiring Hackers to Locate Threats ... 267 Government Policies and Controls on Encryption Software ... 269 5.5 Case Study Verisign - The Web's Security Blanket ... 271 5.6 Review ... 274 Key Concepts ... 274 Questions ... 278 Projects ... 279 Web Site Resources ... 279 6 E-COMMERCE PAYMENT SYSTEMS ... 280 Learning Objectives ... 280 PayPal : The Money's in the E-mail ... 281 6.1 Payment Systems ... 283 Types of Payment Systems ... 283 Cash ... 283 Checking Transfer ... 284 Credit Card ... 286 Stored Value ... 286 Accumulating Balance ... 287 Overview of Current E-commerce Payment Systems ... 289 Current Online Payment Systems ... 289 6.2 Credit Card E-commerce Transactions ... 291 How an Online Credit Card Transaction Works ... 291 Credit Card E-commerce Enablers ... 292 Limitations of Online Credit Card Payment Systems ... 293 SET : Secure Electronic Transaction Protocol ... 293 Insight on Society - The Right to Shop ... 294 6.3 E-commerce Digital Payment Systems in the B2C Arena ... 296 Digital Wallets ... 296 Digital Cash ... 302 Online Stored Value Systems ... 304 Smart Cards as Stored Value Systems ... 306 Insight on Business - Rocketcash.com ... 307 Digital Accumulating Balance Payment Systems ... 308 Digital Credit Card Payment Systems ... 309 Digital Checking Payment Systems ... 311 Digital Payment Systems and the Wireless Web ... 313 Insight on Technology : Do You Take Wireless? ... 315 6.4 B2B Payment Systems ... 314 Electronic Billing Presentment and Payment ... 317 Market Size and Growth ... 319 Types of EBPP Systems ... 319 6.5 Case Study CheckFree - On Top of Electronic Billing for Now ... 322 6.6 Review ... 325 Key Concepts ... 325 Questions ... 327 Projects ... 328 Web Site Resources ... 329 Part 3 Business Concepts and Social Issues 7 E-COMMERCE MARKETING CONCEPTS ... 332 Learning Objectives ... 332 MyPoints.com : Loyalty and Brands ... 333 7.1 Consumers Online : The Internet Audience and Consumer Behavior ... 335 The Internet Audience ... 335 Internet Thaffic Patterns : The Online Consumer Profile ... 335 Intensity of Usage ... 336 Scope of Use ... 336 Demographics and Access ... 337 Ethnicity ... 339 Education ... 339 Gender ... 339 Lifestyle Impacts ... 340 Media Choices ... 340 Consumer Behavior Models ... 340 Psychographic Profiles of Online Consumers ... 343 The Purchasing Decision ... 343 A Model of Online Consumer Behavior ... 343 Shoppers : Browsers and Buyers ... 348 What Consumers Shop for and Buy Online ... 350 Intentional Acts : How Shoppers Find Vendors Online ... 351 Why More People Don't Shop Online ... 352 7.2 Basic Marketing Concept ... 352 Feature Sets ... 354 Products, Brands, and the Branding Process ... 354 Segmenting, Targeting, and Positioning ... 357 Are Brands Rational? ... 357 Do Brands Last Forever? ... 357 Can Brands Survive the Internet? ... 357 7.3 Internet Marketing Technologies ... 360 The Revolution in Internet Marketing Technologies ... 360 Web Transaction Logs ... 360 Supplementing the Logs : Cookies and Web Bugs ... 364 A Typical Netscape Cookie File ... 364 Insight on Society : Should Web Bugs Be Illegal? ... 366 Databases, Data Warehouses, and Data Mining : Developing Profiles ... 368 Databases ... 368 Data Warehouses and Data Mining ... 368 Advertising Networks ... 371 Insight on Technology : Collaborative Filtering ... 372 Customer Relationship Management(CRM) Systems ... 374 7.4 B2C and B2B E-commerce Marketing and Branding Strategies ... 377 Market Entry Strategies ... 377 Establishing the Customer Relationship ... 379 Permission Marketing ... 379 Affiliate Marketing ... 380 Viral Marketing ... 381 Leveraging Brands ... 382 Customer Retention : Strengthening the Customer Relationship ... 383 Personalization and One-to-One Marketing ... 383 Customization and Customer Co-Production ... 385 Transactive Content ... 386 Customer Service ... 386 Net Pricing Strategies ... 388 It's Free! ... 390 Versioning ... 391 Bundling ... 391 Dynamic Pricing ... 393 Channel Strategies : Managing Channel Conflict ... 394 7.5 Online Market Research : Knowing Your Customer ... 395 Primary Research ... 395 Insight on Business : Zoomerang.com ... 397 Secondary Research ... 398 7.6 Case Study America Online ... 400 7.7 Review ... 404 Key Concepts ... 404 Questions ... 407 Projects ... 408 Web Site Resources ... 409 8 E-COMMERCE MARKETING COMMUNICATIONS ... 410 Learning Objectives ... 410 NextCard-Effective Impressions ... 417 8.1 Online Marketing Communications ... 413 Online Advertising ... 413 Banner and Rich Media Ads ... 416 Paid Search Engine Inclusion and Placement ... 419 Sponsorships ... 422 Affiliate Relationships ... 422 Direct E-mail Marketing ... 422 Insight on Society : Targeting Children ... 423 Online Catalogs ... 424 Public Relations ... 425 Mixing Offline and Online Marketing Communications ... 426 Insight on Business : Tiffany & Co. ... 428 8.2 Understanding the Costs and Benefits of Online Marketing Communications ... 427 Online Marketing Metrics : Lexicon ... 427 Does Online Advertising Work? ... 432 The Costs of Online Advertising ... 433 Software for Measuring Online Marketing Results ... 436 Insight on Technology : WebSideStory ... 437 8.3 The Web Site as a Marketing Communications Tool ... 438 Domain Names ... 438 Search Engine Optimization ... 438 Web Site Functionality ... 441 8.4 Case Study Ad Bombs, Ambush Marketing, and Other Invasive Marketing Techniques Grow on the Internet ... 443 8.5 Review ... 447 Key Concepts ... 447 Questions ... 449 Projects ... 450 Web Site Resources ... 451 9 ETHICAL, SOCIAL, AND POLITICAL ISSUES IN E-COMMERCE ... 452 Learning Objectives ... 452 Hacker to the Slammer - Piracy and Free Speech ... 453 9.1 Understanding Ethical, Social, and Political Issues in E-commerce ... 455 A Model For Organizing the Issues ... 456 Basic Ethical Concepts : Responsibility, Accountability, and Liability ... 459 Analyzing Ethical Dilemmas ... 460 Candidate Ethical Principles ... 461 9.2 Privacy and Information Rights ... 462 Information Collected at E-commerce Sites ... 463 Profiling : Privacy and Advertising Networks ... 463 The Concept of Privacy ... 467 Infonned Consent ... 468 Legal Protections ... 470 Statutory and Regulatory Protections of Online Privacy ... 470 Private Industry Self-Regulation ... 474 The European Directive on Data Protection ... 476 Insight on Business : Chief Privacy Oifficers - New Execs on the Job ... 478 Privacy Advocacy Groups ... 479 Technological Solutions to Privacy Invasion on the Web ... 480 Insight on Technology : Tug of War ... 482 9.3 Intellectual Property Rights ... 481 Types of Intellectual Property Protection ... 483 Copyright : The Problem of Perfect Copies and Encryption ... 484 Look and Feel ... 485 The Fair Use Doctrine ... 485 The Digital Millennium Copyright Act of 1998 ... 486 Patents : Business Methods and Processes ... 488 E-commerce Patents ... 490 "Business Methods" Patents ... 490 Trademarks : Online Infringement and Dilution ... 493 Trademarks and the Internet ... 493 Cybersquatting ... 494 Cyberpiracy ... 495 Metatagging ... 496 Keywording ... 497 Linking ... 497 Framing ... 498 E-commerce Ⅱ : Balancing the Protection of Property with Other Values ... 498 9.4 Governance ... 499 Who Governs E-commerce and the Internet? ... 498 Can the Internet Be Controlled? ... 500 Public Government and Law ... 501 Taxation ... 501 9.5 Public Safety and Welfare ... 504 Protecting Children ... 504 Gambling, Cigarettes, and Drugs : Is the Web Really Borderless? ... 506 Equity and the Digital Divide ... 507 Insight on Society : Cot Orders Viagro - the Internet Drug Bazaar ... 508 9.6 Case Study There's a Hailstorm in Your Future ... 510 9.7 Review ... 515 Key Concepts ... 515 Questions ... 519 Projects ... 520 Web Site Resources ... 521 Part 4 E-Commerce in Action 10 RETAILING ON THE WEB Learning Objectives ... 524 Wal-Mart Moves Online ... 525 10.1 The Retail Sector ... 527 The Retail Industry ... 528 Online Retailing ... 531 E-commerce Ⅰ : The Vision ... 531 E-commerce Ⅱ : The Online Retail Sector Tbday ... 532 Insight on Business : eVineyard Is a Survivor - for Now ... 536 10.2 Analyzing the Viability of Online Firms ... 535 Strategic Analysis ... 537 Financial Analysis ... 538 10.3 E-commerce in Action : E-tailing Business Models ... 540 Virtual Merchants ... 541 General Merchandiser : Buy.com ... 541 Niche Merchandiser : Ashford.com ... 545 Clicks and Mortar ... 549 JCPenney.com ... 550 Catalog Merchants ... 553 Landsend. com ... 553 Insight on Society : Internet Taxation ... 558 Online Malls ... 559 Fashionmall.com ... 560 Manufacturer-Direct ... 563 Dell. com ... 565 10.4 Some Common Themes in E-commerce Ⅱ Online Retailing ... 568 Insight on Technology : Predictive Modeling Builds on CRM ... 571 10.5 Case Study L.L. Bean - Webward Bound ... 573 10.6 Review ... 576 Key Concepts ... 576 Questions ... 530 Projects ... 580 Web Site Resources ... 581 11 ONUNE SERVICE INDUSTRIES ... 582 Learning Objectives ... 582 One by Net, Two by Land - NetBank Expands ... 583 11.1 The Service Sector : Offline and Online ... 585 What Are Services? ... 587 Categorizing the Service Industries ... 588 Knowledge and Information Intensity ... 588 Personalization and Customization ... 588 11.2 Online Financial Services ... 589 Online Asset Growth ... 589 Online Financial Consumer Behavior ... 589 Financial Services Industry Trends ... 592 Online Banking and Brokerage ... 595 Multichannel vs. Pure Online Financial Services Firms ... 595 Customer Acquisition, Conversion, and Retention ... 597 E-commerce in Action : E*Trade.com ... 597 Financial Portals : Comparison