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Part 1:Introduction 2

Chapter 1 The Second Wave of Global E-Business 2

Electronic Commerce:The Second Wave 4

Electronic Commerce and Electronic Business 4

Categories of Electronic Commerce 4

The Development and Growth of Electronic Commerce 8

The Dot-Com Boom,Bust,and Rebirth 9

The Second Wave of Electronic Commerce 10

Business Models,Revenue Models,and Business Processes 14

Focus on Specific Business Processes 14

Role of Merchandising 15

Product/Process Suitability to Electronic Commerce 15

Advantages and Disadvantages of Electronic Commerce 17

Advantages of Electronic Commerce 17

Disadvantages of Electronic Commerce 19

Economic Forces and Electronic Commerce 21

Transaction Costs 22

Markets and Hierarehies 24

Using Electronic Commerce to Reduce Transaction Costs 25

Network Economic Structures 26

Network Effects 27

Using Electronic Commerce to Create Network Effects 28

Identifying Electronic Commerce Opportunities 28

Strategic Business Unit Value Chains 28

Industry Value Chains 30

SWOT Analysis:Evaluating Business Unit Opportunities 32

International Nature of Electronic Commerce 34

Trust Issues on the Web 34

Language Issues 35

Cultural Issues 36

Culture and Government 38

Infrastructure Issues 40

Summary 43

Key Terms 43

Review Questions 44

Exercises 44

Cases 45

Chapter 2 E-Business Technology Basics 50

The Internet and the World Wide Web 52

Origins of the Internet 53

New Uses for the Internet 53

Commercial Use of the Internet 54

Growth of the Internet 55

Emergence of the World Wide Web 56

Packet-Switched Networks 59

Routing Packets 59

Internet Protocols 61

TCP/IP 61

IP Addressing 62

Domain Names 63

Web Page Request and Delivery Protocols 65

Electronic Mail Protocols 66

Unsolicited Commercial E-Mail（UCE,Spam） 67

Markup Languages and the Web 68

Markup Languages 69

Hypertext Markup Language 69

Extensible Markup Language（XML） 76

HTML and XML Editors 81

Intranets and Extranets 82

Public and Private Networks 82

Virtual Private Network（VPN） 83

Internet Connection Options 83

Connectivity Overview 84

Voice-Grade Telephone Connections 84

Broadband Connections 85

Leased-Line Connections 86

Wireless Connections 87

Internet2 and the Semantic Web 91

Summary 93

Key Terms 94

Review Questions 96

Exercises 96

Cases 98

Part 2:Business Strategies for Electronic Commerce 102

Chapter 3 E-Business Revenue Models 102

Revenue ModeIs 103

Web Catalog Revenue Models 104

Digital Content Subscription Revenue Models 111

Advertising-Supported Revenue Models 112

Advertising-Subscription Mixed Revenue Models 117

Fee-for-Transaction Revenue Models 119

Fee-for-Service Revenue Models 127

Free for Many,Fee for a Few 128

Revenue Models in Transition 129

Subscription to Advertising-Supported Model 129

Advertising-Supported to Advertising-Subscription Mixed Model 129

Advertising-Supported to Fee-for-Services Model 130

Advertising-Supported to Subscription Model 130

Multiple Transitions 131

Revenue Strategy Issues 132

Channel Conflict and Cannibalization 132

Strategic Alliances 133

Creating an Effective Web Presence 133

Identifying Web Presence Goals 134

Web Site Usability 138

How the Web Is Different 138

Meeting the Needs of Web Site Visitors 139

Trust and Loyalty 141

Rating Electronic Commerce Web Sites 142

Usability Testing 142

Customer-Centric Web Site Design 143

Connecting with Customers 144

The Nature of Communication on the Web 144

Summary 148

Key Terms 148

Review Questions 149

Exercises 149

Cases 150

Chapter 4 Selling to Consumers Online 154

Web Marketing Strategies 156

Product-Based Marketing Strategies 157

Customer-Based Marketing Strategies 158

Communicating with Different Market Segments 159

Trust,Complexity,and Media Choice 160

Market Segmentation 162

Market Segmentation on the Web 164

Offering Customers a Choice on the Web 164

Beyond Market Segmentation:Customer Behavior and Relationship Intensity 165

Segmentation Using Customer Behavior 165

Customer Relationship Intensity and Life-Cycle Segmentation 168

Acquisition,Conversion,and Retention of Customers 170

Customer Acquisition,Conversion,and Retention:The Funnel Model 171

Advertising on the Web 172

Banner Ads 173

Text Ads 175

Other Web Ad Formats 176

Site Sponsorships 177

Online Advertising Cost and Effectiveness 178

Effectiveness of Online Advertising 180

E-Mail Marketing 180

Permission Marketing 181

Combining Content and Advertising 181

Outsourcing E-Mail Processing 182

Technology-Enabled Customer Relationship Management 182

CRM as a Source of Value in the Marketspace 183

Creating and Maintaining Brands on the Web 185

Elements of Branding 186

Emotional Branding vs.Rational Branding 187

Brand Leveraging Strategies 187

Brand Consolidation Strategies 187

Costs of Branding 188

Affiliate Marketing Strategies 188

Viral Marketing Strategies 189

Search Engine Positioning and Domain Names 190

Search Engines and Web Directories 190

Paid Search Engine Inclusion and Placement 191

Web Site Naming Issues 195

Summary 198

Key Terms 198

Review Questions 200

Exercises 200

Cases 201

Chapter 5 Selling to Businesses Online 205

Purchasing,Logistics,and Support Activities 207

Purchasing Activities 208

Direct vs.Indirect Materials Purchasing 210

Logistics Activities 212

Support Activities 213

E-Government 214

Network Model of Economic Organization in Purchasing 216

Electronic Data Interchange 217

Early Business Information Interchange Efforts 217

Emergence of Broader EDI Standards 218

How EDI Works 220

Value-Added Networks 224

EDI Payments 227

EDI on the Internet 227

Supply Chain Management Using Internet Technologies 228

Value Creation in the Supply Chain 228

Increasing Supply Chain Efficiencies 230

Using Materials-Tracking Technologies with EDI and Electronic Commerce 231

Creating an Ultimate Consumer Orientation in the Supply Chain 234

Building and Maintaining Trust in the Supply Chain 234

Electronic Marketplaces and Portals 235

Independent Industry Marketplaces 235

Private Stores and Customer Portals 237

Private Company Marketplaces 237

Industry Consortia-Sponsored Marketplaces 238

Summary 240

Key Terms 240

Review Questions 241

Exercises 241

Cases 242

Chapter 6 Virtual Communities 246

From Virtual Communities to Social Networks 247

Virtual Communities 248

Early Web Communities 248

Social Networking in the Second Wave of Online Communities 249

Revenue Models for Social Networking Sites 253

Mobile Commerce 256

Mobile Operating Systems and Applications 256

The Future of Mobile Commerce 258

Online Auctions 259

Auction Basics 259

Online Auctions and Related Businesses 263

Auction-Related Services 271

Summary 275

Key Terms 275

Review Questions 276

Exercises 277

Cases 277

Part 3:Technologies for Electronic Commerce 282

Chapter 7 Web Hosting and E-Business Software 282

Web Hosting Alternatives 284

Basic Functions of Electronic Commerce Software 286

Catalog Display 287

Shopping Cart 289

Transaction Processing 294

Advanced Functions of Electronic Commerce Software 295

Databases 295

Middleware 296

Enterprise Application Integration 296

Integration with ERP Systems 297

Web Services 298

Electronic Commerce Software for Small and Midsize Companies 302

Basic Commerce Service Providers 302

Mall-Style Commerce Service Providers 303

Estimating Operating Expenses for a Small Web Business 304

Electronic Commerce Software for Midsize to Large Businesses 305

Web Site Development Tools 306

Electronic Commerce Software for Large Businesses 308

Enterprise-Class Electronic Commerce Software 308

Customer Relationship Management Software 310

Supply Chain Management Software 312

Content Management Software 313

Knowledge Management Software 313

Summary 315

Key Terms 315

Review Questions 316

Exercises 316

Cases 318

Chapter 8 Online Security 321

Online Security Issues Overview 323

Computers and Security:A Brief History 323

Computer Security and Risk Management 324

Elements of Computer Security 325

Security Policy and Integrated Security 326

Security for Client Computers 328

Cookies 328

Web Bugs 330

Active Content 330

Java Applets 331

JavaScript 332

AetiveX Controls 333

Graphics and Plug-Ins 333

Viruses,Worms,and Antivirus Software 334

Digital Certificates 339

Steganography 342

Physical Security for Clients 343

Communication Channel Security 343

Secrecy Threats 344

Integrity Threats 346

Necessity Threats 347

Threats to the Physical Security of Internet Communications Channels 347

Threats to Wireless Networks 348

Encryption Solutions 349

Ensuring Transaction Integrity with Hash Functions 356

Ensuring Transaction Integrity with Digital Signatures 357

Security for Server Computers 358

Web Server Threats 358

Database Threats 359

Other Programming Threats 359

Threats to the Physical Security of Web Servers 360

Access Control and Authentication 362

Firewalls 363

Organizations that Promote Computer Security 365

CERT 365

Other Organizations 366

Computer Forensics and Ethical Hacking 366

Summary 367

Key Terms 368

Review Questions 369

Exercises 370

Cases 370

Chapter 9 Online Payment Systems 373

Online Payment Basics 375

Payment Cards 377

Advantages and Disadvantages of Payment Cards 378

Payment Acceptance and Processing 379

Electronic Cash 382

Micropayments and Small Payments 383

Privacy and Security of Electronic Cash 384

Holding Electronic Cash:Online and Offline Cash 384

Advantages and Disadvantages of Electronic Cash 385

Electronic Cash Systems 386

Electronic Wallets 389

Microsoft Windows Live ID 390

Yahoo!Wallet 390

Stored-Value Cards 391

Magnetic Strip Cards 391

Smart Cards 391

Internet Technologies and the Banking Industry 393

Check Processing 393

Mobile Banking 395

Criminal Activity and Payment Systems:Phishing and Identity Theft 395

Phishing Attacks 395

Using Phishing Attacks for Identity Theft 398

Phishing Attack Countermeasures 400

Summary 401

Key Terms 401

Review Questions 402

Exercises 402

Cases 403

Part 4:Integration 408

Chapter 10 Implementing E-Business Initiatives 408

Identifying Benefits and Estimating Costs of Electronic Commerce Initiatives 410

Identifying Objectives 410

Linking Objectives to Business Strategies 410

Identifying and Measuring Benefits 411

Identifying and Estimating Costs 413

Funding Online Business Startups 416

Comparing Benefits to Costs 417

Return on Investment（ROI） 417

Strategies for Developing Electronic Commerce Web Sites 419

Internal Development vs.Outsourcing 420

New Methods for Implementing Partial Outsourcing 423

Managing Electronic Commerce Implementations 425

Project Management 425

Project Portfolio Management 426

Staffing for Electronic Commerce 426

Postimplementation Audits 429

Change Management 430

Summary 431

Key Terms 431

Review Questions 432

Exercises 432

Cases 433

For Further Study and Research 437