LECTURE 1

Definition of Electronic Commerce (EC)

 The process of buying, selling, or exchanging products, services, or
information via computer or any electronic means.
 Commerce refers to activity of selling and buying, especially on
large scale.
E-Business
 A broader definition of EC that includes not just the buying and
selling of goods and services, but also servicing customers,
collaborating with business partners, delivering e-learning and
conducting electronic transactions within an organization
PURE VS. PARTIAL EC
 EC can be either pure or partial depending on the nature of its
three major activities: ordering and payments, order fulfillment,
and delivery to customers.
 Each activity can be physical and digital.
 If all activities are digital, we have pure EC, in none are digital we
have non EC, otherwise we have partial EC.
CATEGORIES OF E-COMMERCE
 A common classification of EC is by the “Nature of the transactions”
or “The relationship among participants”.
B2B (Business-to-Business)
 Businesses sell products or services to other businesses.
B2C (Business-to-Consumer)
 Businesses sell products or services to individual
shopper/consumers.
 E.g. most likely ALL the shopping websites that you (students) have
encountered.
B2B2C (Business-to-Business-to-Consumer)
 Business sell products or services to a client business. The client
business maintains its own customers, who may be its own
employees, to whom the product/service is provided without
adding any value to it.
 E.g. Startbucks sells branded stored value cards to companies to
give as gifts to their employees or customers.
C2C (Consumer-to-Consumer)
 Consumers transact directly with other consumers.
 E.g. eBay.com allows consumers trade with each other through its
web site.
 In addition, many auction sites allow individuals to place items up
for auction.
C2B (Consumer-to-Business)
 Individuals use the Internet to sell products or services to
organizations. Alternatively, individuals use C2B to bid on products
or services.
 E.g. Priceline.com is a well-known organizer of C2B travel service
transactions.
 A customer can utilize their blog to links back to a product sold on
the company's ecommerce website
Collaborative Commerce (c-commerce)
 C-commerce refers to online activities and communication done by
parties working to attain the same goal.
 When E.g. Business partners in different locations may design a
product together using screen sharing.
 Business interactions among an enterprise's internal personnel,
business partners and customers throughout a trading community.
The trading community could be an industry, industry segment,
supply chain or supply chain segment.
E-learning
 Training or formal education that is provided online.
 E.g. A lots of distance learning program and virtual universities are
conducted online.
E-Government
 In e-government EC, a government agency buys or provides goods,
services, and information from or to businesses (G2B) or from or to
individual citizens (G2C). E.g. Citizens above 21 years old can check
their voter registration status and related particulars through the
Web. Governments can deals also with other governments (G2G).
TYPES OF EC ORGANIZATION
Brick-and-mortar (old economy) organizations: Purely physical
organizations, conduct all the business activities in the physical world.
Business off-line, selling physical products by means of physical agents

Virtual (pure-play) organizations: Companies that conduct their

business activities solely online. Spotify, Netflix and Steam

Click-and-mortar (click-and-brick) organizations:

Organizations that conduct some EC activities, usually as an additional
marketing channel.

(LECTURE 2 )Definition of the Internet

 The Internet is a public, global communication networks that
provides direct connectivity to anyone over a local area network
(LAN) via an Internet service provider (ISP) or directly via an ISP
 This public network is connected and routed over gateways.
 The ISPs are connected to the Internet backbone, because access to
the Internet is open to all, control and security are at a minimum
INTERNET SERVICE PROVIDER (ISP)
 Internet Service Provider (ISP) is the company that provides
Internet connections and services to individuals and organizations.
 Examples: TM: The National telecommunications company in
Malaysia, UNIFI – this is under TM Company. MAXIS, P1, TIME, YES,
DIGI, CELCOM.
INTERNET SERVICE PROVIDERS (ISPS)
 Provide lowest level of service to individuals, small businesses,
some institutions. Types of service:
Narrowband: "POTS"= Plain Old Telephone System
Broadband:
 Digital Subscriber Line
 Cable modem
 T1 and T3
 Wireless 4G network
Broadband is the transmission of wide bandwidth data over a high
speed internet connectionn. Broadband provides high speed internet
access via multiple types of technologies including fiber optics,
wireless, cable, DSL
Wireless Connections
The several wireless standards are in use today, including:
(i) Bluetooth
 It is used for short distance (up to 10 meters) and lower bandwidth
connection (up to 2.1 Mbps).
 Useful for tasks such as wireless synchronization of laptop
computers with desktop computers and wireless printing from
laptops, PDAs, or mobile phones.
Advantages:
 Consumes very little power, which is important consideration for
mobile devices.
 Can discover each other and exchange information automatically.
(ii) Wireless Ethernet (Wi-Fi)
It is the most common wireless connection technology for use on
LANs.
 A computer equipped with a Wi-Fi network card can communicate
through a wireless access point (WAP) connected to a LAN to
become a part of that LAN.
 Hot spots are the access points that open to the public. Some
organizations allow free access to their hot spots, others charge an
access fee.
 E.g. Starbucks offer hot spots.
(iii) Cellular Telephone Networks
 Although mobile phones were originally designed to handle voice
communications, they have always been able to transmit data.
Two-Tier architecture
 Involves only a client and server. All communication take place
between the client on the Internet and the target server at the
other end.
 E.g. the server determines the client is requesting the home page of
Google. Once the server locates the Google home page, it
constructs a proper HTTP message containing the Web page within
the message and sends the complete message back to client using
the client-supplied return address URL
Three-tier architecture
 Extends two-tier architecture
 Allows additional processing before server responds to client’s
request
The 3 tiers are: Client processes (tier 1), Web server (tier 2), and data
management software (tier 3)
Example of services supported by a database in a three-Tiered
 Client/Server architecture: Catalog with search, update and display
functions. Suppose that a user requests a display of your
company’s exotic fruit selections. The client request is formulated
into an HTTP message, sent over the Internet to the server, and
examined by the server. The server sends a request to the database
to search for, retrieve, and return all exotic fruit in the catalog.
Database info flows back to the server, and the server formats the
response into properly formed HTML and sends a message back to
the client over the Internet

Benefits of Intranets:
Communication
 Intranets can serve as powerful tools for communication within an
organization, vertically and horizontally.
Cost-effective
 Save money and time to post employees’ handbooks, and company
policies, requisition forms regarding the workplace on an intranet,
rather than maintaining physical documents.
Sharing of corporate knowledge
 With intranet, the most recent version of business standards,
newsfeeds, and even training materials, can be shared among
employees.
Promote common corporate culture
 Every user is viewing the same information within the Intranet.
Enhance Collaboration
 With information easily accessible by all authorized users,
teamwork is enabled.
Extranet
(i)Public Network
 A public network extranet exists when an organization allows the
public to access its intranet from any public network, such as
Internet, or when 2 or more companies agree to link their intranets
using public network
 Public network does not provide 100% security protection
(firewall).
 To secure transaction between corporate companies, each
company must provide protection for outgoing info before that
info passed from each intranet onto the public network
(ii)Private Network
 It is a private, leased-line (always active) connection between two
companies that physically connects their intranets to one another
 Advantage: (Provide security) No party other than those node
which are legitimately attached to the private network can have
access to the connection
 Disadvantage: (Cost) Every pair of companies wanting a private
network requires a separate private (phone) line connecting them.
Increasing the number of private networks means the more costly
it is.
(iii) Virtual Private Network (VPN)
 An VPN extranet is a network that uses public networks & their
protocol to send sensitive data to partners customers, suppliers,
and employees by using system called “tunneling” or
“encapsulation”
 VPN provides security shells, with the most sensitive data under
the tightest control
 Most extranets are implemented either as LAN-to-LAN extranets
(older systems) or client/server extranets (popular today)
 VPN designed to save money, main purpose is to create a
competitive advantage with the alliance formed between
cooperating companies
 Unlike private networks using leased line, VPN establish short-term
logical connections in real time that are broken once the
communication session ends
LECTURE 3 TYPES OF WEB SITES
1) INFORMATIONAL WEBSITE
 An informational website provides information about the business
and its products and services. The major purpose is to have a
presence on the Web. Example: Wikipedia

2) INTERACTIVE WEBSITE
 An interactive website provides opportunities for the customers
and the business to interact, converse and present information (as
in information website).
 It may include an e-newsletter, search engine, video product demo,
wikis, blogs, feedback from customers, discussion forums and
value-added features.

3) ATTRACTORS
 Attractors are websites with features that do more than the
previously described sites do.
 Attractors include puzzles, competitions, and prize giveaways.
 They are designed so that visitors will like them so that they will
visit again, and recommend the site to their friends.
 For example, Ragú’s website does not sell Ragú products, but the
recipes and customer interaction provided attract visitors and
contributes to the brand recognition.
4) TRANSACTIONAL WEBSITE
 A transactional website sells products and services.
 These websites also include information and interactive features,
but they concentrate on selling mechanism features such as
shopping carts.

5) COLLABORATIVE WEBSITE
 A collaborative website is a site that allows business partners to
interact and collaborate.
 B2B exchanges may also provide collaboration capabilities.
 E.g. mindjet.com, partnersonline.com

6) SOCIAL-ORIENTED WEBSITE
 A social-oriented website is a site that provides users with online
tools for communication and sharing information on common
interests.
 It empowers consumers to utilize their time around the converged
media experience for social participation.
 Social-oriented websites like Facebook have emerged as one of the
most powerful marketing channels.

Dynamic page and static page

 Dynamic page is a Web page whose content is shaped by a program
in response to user’s request.
 Static page is an unchanging page retrieved from a file stored on a
web server.
 Dynamic pages allow a Web server to provide customized pages in
response to specific queries from visitors. These customized pages
are called dynamic content.
 For example if a web client inquires about the status of an existing
order by entering a unique customer’s number or order number
into a form. The Web server will search the customer’s information
and generate a dynamic web page based on the customer
information it found, thus fulfilling the client’s request.
Dynamics web page is created by using 2 approaches:
1. Server-side scripting:
Program running on the Web server creates a web pages before
sending them back to the requesting web clients as parts of response
message. Example: ASP, JSP, PHP (Hypertext Pre-processor).

2. Client-side scripting:
Software operates on the web client (browser) to change what is
displayed on the web page in response to a user’s actions.
In client-side scripting, changes are generated within the browser
using software such as JavaScript or adobe flash.

Intelligent Agents
 Software that can perform routine tasks that require intelligence.
They usually gather and/or filter information on certain topic and
subsequently provide a list of results.
 Software (intelligent) agents can be used in EC to support tasks
such as comparing prices, interpreting information, monitoring
activities, and working as an assistant.
 In the world of e-commerce, intelligent agents known as shopping
bots are used by consumers to search for product and pricing
information on the
 Web. Each shopping bot operates differently, depending on the
business model used by its operator. In one scenario, shopping bots
direct users to retailers who, by subscribing for a fee, are part of a
closed system.
 Shopping.Yahoo and Shop@AOL are examples of this model. Open
systems are a more common arrangement and involve agents that
include the entire Web in their searches.
 Other software agents track ratings of buyer and seller reputations.
 E.g. eBay makes reputation reports available to its bidders and
sellers about each other.
 LiNa (personal career agent) at JobStreet.com who assists
jobseekers in finding jobs. LiNa actually does the searching for job
seeker - over 50,000 jobs monthly.
 ** ringgit plus
 Other examples: News bot, and chatter bot/chatbot.

Lecture 4
Electronic catalogs
 The presentation of product information in an electronic form; the
backbone of most e-selling sites.

3 Classification of electronic catalogs:

1. The dynamics of the information presentation – Static or dynamic.
 Static catalog: information is presented in text and static
pictures; content is not changing frequently.
 Dynamic catalog: information is presented in motion pictures or
animation, content can be real time or changing frequently, such
as with prices of stocks.
2. The degree of customization – standard or customized
3. Integration with business processes – highly or loosely integrated

Paper catalogs
Advantages:
 Easy to create without high technology.
 More portable than electronic.
Disadvantages
 Difficult to update product information.
 Only limited number of products can be displayed.
 Limited information - through photographs & textual
description.
 No possibility for advanced multimedia such as animation &
voice.
Online catalogs
Advantages
 Easy to update product information.
 Able to integrate with the purchasing process.
 Search & comparison capabilities.
 Able to provide timely, up-to-date product information.
 Provision for globally broad range of product information.
 Able to add-on multimedia.
 Long term cost savings.
 Easy to customize.
Disadvantages
 Difficult to develop catalogs, large fixed cost.
 There is a need for customer skill to deal with computers &
browsers.

CUSTOMIZED CATALOGS
  It is a catalog assembled specifically for a company, usually a
customer of the catalog owner.
 It also can be tailored to loyal individual shoppers or to a
segment of shoppers e.g. frequent buyers.
Two approaches to creating customized catalogs
 Let the customers identify the parts of interest to them from the
total catalog
 Let the system automatically identify customer characteristics
based on the customer’s transaction records
ELECTRONIC SHOPPING CART
 An order-processing technology that allows customers to
accumulate items they wish to buy while they continue to shop.
 It is similar to a shopping cart in the physical world.
The software program of an e-shopping cart allows customers to:
 select items
 review what has been selected
 Make changes
 Then, finalize the list.

Lecture 5
CIA security triad, is a point of reference used to evaluate the
information security of an organization.
 Confidentiality: is the assurance of data secrecy and privacy.
Namely, the data is disclosed only to authorized people.
 Integrity: is the assurance that data are accurate and that they
cannot be altered.
 Availability: is the assurance that access to any relevant data, web
site, or other EC services and their use is available in real time,
whenever and wherever needed reliably.
Two types of threats:
Nontechnical attacks. Some nontechnical methods:
 Social engineering
 Phishing
 Fraud / Scam
 Spam
Technical attacks
The major technical security attack methods (in descending order of
importance):
 Malware
 Unauthorized access
 Denial-of-service attacks
 Spam and Spyware
 Hijacking (Servers, Pages)
 Botnets

NONTECHNICAL ATTACKS
 The very major method of non-technical attack is Social
Engineering.
 Social engineering refers to a collection of methods (including
technical methods) where criminals use human psychology to trick
people into revealing their confidential information for fraud and
other crimes.
 Social engineering preys on an individual’s desire to help, an
individual’s fear of getting into trouble, or the general trust among
individuals.
 The hacker may attempt to get access to the user’s computer in
order to install malicious software that will give them control over
the person’s computer.
3 Approaches should be used to combat social engineering in a
company:
Education and Training
 All staff needs to be educated about the risks associated with social
engineering techniques used by hackers, and ways and means to
combat these attacks.
Policies and Procedures
 Specific policies and procedures need to be developed for securing
confidential information, guiding employee behavior with respect
to confidential information, and taking the steps needed to
respond to and report any social engineering breaches.
Penetration Testing,
 The policies, procedures, and responses of individual staff need to
be tested on a regular basis by outside experts playing the role of a
hacker
NONTECHNICAL ATTACKS (CONT.) PHISHING, FINANCIAL FRAUD, AND
SPAM
PHISHING
 Phishing is fraudulent process of attempting to acquire confidential
information such as user names, passwords and credit card details
by masquerading as a trustworthy entity such as a bank, credit card
company using email.
 Phishing typically direct users to enter details at a fake web site
that looks and feel almost identical to the legitimate one.
 universal main-in-middle phishing kit - a tool used by phishers to
set up a URL that can interact in real time with the content of a
legitimate Web site, such as a bank or EC site, to intercept data
entered by customers at log-in or check out Web pages.
FRAUD ON THE INTERNET
 Is problem for online retailers and customers.
click fraud
 Type of fraud that occurs in pay-per-click advertising when a
person, automated system, or computer program simulates
individual clicks on banner or other online advertising methods
identity theft
 Fraud that involves stealing an identity of a person and then the
use of that identity by someone pretending to be someone else in
order to steal money or get other benefits.
e-mail spam
 also known as junk email or spam. It involves nearly identical
messages sent to numerous recipients by e-mail
search engine spam
 Pages created deliberately to trick the search engine into offering
inappropriate, redundant / poor quality search results
TECHNICAL ATTACKS
 An attack perpetrated (committed) using software and systems
knowledge or expertise.
 Insufficient use of anti-virus, firewalls and unencrypted
communication are the major reasons for technical vulnerabilities.
Some of the common technical attacks:
Distributed Denial of Service Attacks (DDoS)
 DOS - An attack on a Web site in which an attacker uses
specialized software to send a flood of data packets to the target
computer with the aim of overloading its resources
 With DDoS attack, the attackers gains illegal administrative
access to as many computers on the Internet as possible.
 Once an attacker has access to a large number of computers,
they load the specialized
 DDos software onto these computers. The software lays in wait,
listening for a command to begin the attack.
 When the command is given, the distributed network of
computers begins sending out requests to the target computer.
 The requests can be legitimate queries for information or can be
very specialized computer commands designed to overwhelm
specific computer resources.
Malicious Code: Viruses, Worms, and Trojan Horses
 Malicious code also referred to as malware
(a) Viruses
 It is a piece of code that inserts itself into a host, including the
operating systems, to propagate.
 It cannot run independently.
 It requires that its host program be run to activate it.
(b) Worms
 The major difference between a worm and a virus is that a worm
propagates between systems (usually through a network),
whereas a virus propagates locally.


(c) Trojan Horses
 A program that appears to have a useful function but that
contains a hidden function that presents a security risk.
 E.g. Girlfriend Trojan is a server program that arrives in the form
of a file that looks like an interesting game or program.
 When the unsuspecting user runs the program, the Trojan
program is installed.
 This Trojan horse enables the perpetrator to capture user IDs
and passwords, to display messages on the affected computer,
to delete and upload files, etc.
 Trojans spread only by user interaction.

TECHNOLOGY SOLUTIONS
 Protecting Internet communications (encryption)
 Securing channels of communication (SSL, S-HTTP, VPNs)
 Protecting networks (firewalls)
 Protecting servers and clients
Encryption
 It is the process of transforming or scrambling (encrypting) data in
such a way that it is difficult, expensive, or time-consuming for an
unauthorized person to unscramble (decrypt) it.
 Purpose: Secure stored information and Secure information
transmission.
 The process of transforming plain text or data into cipher text that
cannot be read by anyone other than the sender and receiver
 All encryption has four basic parts: plaintext, ciphertext, an
encryption algorithm, and the key.
The two major classes of encryption systems are
Symmetric systems – with 1 secret key
 The same key is used to encrypt and decrypt the plaintext.
 The sender and receiver of the text must share the same key
without revealing it to anyone else – thus making it so called
private system.
Example:
 A person wanted to send a confidential text file to a friend, he or
she would encrypt the message with the a private key. When the
receiver received the file, it would decrypt it with the same
private key.
Asymmetric systems – with 2 keys: public & private keys
PUBLIC (ASYMMETRIC) KEY ENCRYPTION
 Uses a pair of matched key – a public key that is publicly
available to anyone and a private key that is known only to its
owner.
 If a message is encrypted with a public key, then the associated
private key is required to decrypt the message.
Example:
A person wanted to send a purchase order to a company and have the
contents remain private, he or she would encrypt the message with
the company’s public key. When the company received the order, it
would decrypt it with the associated private key.
Lecture 6
 E-payments: payments made online or electronically rather than
paper (cash, check/cheque, voucher, etc)
 Electronic payment methods are used to expedite payments online
and reduce payment processing costs.
 E-payments can be made direct using a credit or debit card or via a
secure global acquirer such as PayPal.
Crucial factors that influence the success of an e-payment
method/system:
 Anonymity – some buyers want their identities & purchase
patterns to remain anonymous.
 Ease of use – credit cards are used for B2C and b2B e-payment due
to ease of use.
 Transaction fees – When a credit card is used for payment, the
merchant pays processing fees. These fees make the use of credit
cards for small payments cost prohibitive for the seller. Thus, a
solution for amount of money is necessary.
 International support – EC is a worldwide phenomenon. An e-
payment method must be easily adapted to local legal
requirements and buying patterns before it can be widely adopted.
7 participants involved in processing card payment online:
 Customer – the individual possessing the card. (E.g.: you – the
buyer)

 Issuing bank – the issuer (usually a bank) of the credit card to

people and issues credit. (E.g.: Public Bank, MayBank, etc.)

 Merchant – the company that sells products or services. (E.g.: the

seller – Zalora, Airasia)

 Acquiring bank – the financial institution that offers a special

account called an Internet Merchant Account that enables payment
authorization and processing. (Merchant’s bank - e.g. CIMB, HLBB,
etc.)

 Card association – The financial institution providing card services

to banks (such as Visa, MasterCard, Amex, which formed to protect
and advertise the card brand, establish and enforce the rules for
use and acceptance of their members’ bankcards.)

 Payment processing service – The company that provides electronic

connections and transaction services among all the parties involved
in electronic payments. A.k.a. payment gateway provider.

 Processors – The data center that processes card transactions and

settle funds to merchants.
Smart Cards
 Smart card is an electronic card containing an embedded microchip
that enables predefined operations or the addition, deletion, or
manipulation of information on the card.
 A smart card look like plastic payment card but it is distinguished
by the presence of an embedded microchip. The embedded chip
can either be a microprocessor and a memory chip combined or
only a memory chip with non-programmable logic.
More secure than conventional credit cards
 Smart card with microprocessor chip, capable of storing not only
financial information, but other applications such as strong
authentication and digital signatures.
Popular in Europe, parts of Asia
 Public telephone calls, cable television programs
 Hong Kong
 Retail counters, restaurant cash registers have smart card readers
 Octopus: public transportation smart card can be reloaded at
transportation locations, 7-Eleven stores
Types of Smart Cards
1. Integrated circuit (IC) microprocessor cards
 The current generation of microprocessor cards has an 8-bit
processor, up to 32 KB of read-only memory, 512 bytes of random
access memory.
 Can store information, carry out local processing on the data
stored, and perform complex calculations. These cards take the
form of either "contact" cards (which require a card reader) or
"contactless" cards (which use radio frequency signals to operate).
 E.g. biometric passport

2. Integrated circuit (IC) memory cards (no processor)

 IC memory cards can hold up to 1 to 4 KB of data, but have no
processor on the card with which to manipulate that data.
 Depend on the card reader for the processing and suitable for uses
where the card performs a fixed operation.

3. Optical memory cards

 Optical memory cards can store up to 4MB of data.
 Once written, the data cannot be changed or removed.
 Ideal for keeping records (medical files)

Lecture 7
Define Business Model and Revenue Model
 A business model is a method of doing business by which a
company can generate revenue to sustain itself. In many cases, one
company may have several
Business models.
 A revenue model outlines how the organization, or the EC project,
will generate revenue.
 A company uses its revenue model to describe how it will generate
revenue and its business model to describe the process it will use
to do so.

Major revenue models

1. Sales model: Companies generate revenue from selling
merchandise or services on their websites. E.g. An example is when
Godiva sells a product online.

2. Transaction Fees model: A company receives a commission based

on the volume of transactions made. E.g.. There is a fixed fee per
trade charged in online stock trades.

3. Subscription Fees model: Customers pay a fixed amount, usually

monthly, to get some type of service. E.g. Access fee for AOL.

4. Advertisement Fees model: Companies charge others for allowing

them to place a banner on their sites.

5. Affiliate Fees model: Companies receive commission for referring

customers to certain websites. E.g. A good program called “Amazon
Associates” is available at Amazon.com.

6. Licensing Fees model: Licensing fees can be assessed as an annual

fee or a per usage fee. For example: Microsoft received fees from
each workstation that uses Windows NT.

FIVE most common EC business models

Online direct marketing
 The most obvious EC model, selling products or services online,
from a manufacturer to a customer, or from retailers to consumers.
 Aims for eliminating intermediaries or physical stores and making
distribution more efficient.
Electronic tendering systems
 Large organizational buyers usually make large-volume/value
purchases through an online tendering (bidding) system, a.k.a.
reverse auction.
Electronic marketplaces and exchanges
 An online marketplace where buyers and sellers meet to exchange
goods, services, money, or information.
 E.g. stock and commodities exchanges
 Of special interest are vertical marketplaces that concentrate on
one industry. E.g. marketplaces specializing in chemicals, steels etc.
Viral marketing
 It is basically web-based word-of-mouth advertising where people
use e-mail and social networks to spread WOM advertising.
Group purchasing
 This is based on the concept of quantity discounts, “cheaper by the
dozen”. Internet allows individuals to get together, so they can gain
the large-quantity advantage.
 This model was not popular in B2C until 2010 when Groupon
introduced a modified model in which people are grouped around
special deals.
Applications of E-Commerce
1. Travel and Tourism Services
 Major travel-related Web sites are: expedia.com, orbitz.com,
travelocity.com, asiatravel.com,
 Virtual travel agencies offer almost all the services by conventional
travel agencies, e.g. providing general information, reserving and
purchasing travel accommodations and event tickets.
 Added value functions for virtual agencies, such as travel tips, e-
travel magazine, fare tracking, currency conversion, detailed
driving maps and directions, worldwide business & place locators,
weather, experts’ opinions, major international and travel news,
chat rooms and bulletin boards, restaurant reviews and etc
Special Online Travel Services
(i) Wireless services
 Check flight status, update frequent flyer miles, and book flights
through cell phones.
(ii) Direct marketing
 sell electronic tickets over the Internet
 Airlines are able to build customer profiles and target specific
customers with tailored offers
(iii) Alliances and consortia
 Airlines and other travel agencies are creating alliances to
INCREASE sales or DECREASE purchasing cost
 Consortia aggregate participants’ Internet-only fares

Benefits and Limitations of Online Travel Services

Benefits:
 Huge amount of free useful information.
 Accessible at any time from any place.
 Substantial discounts, can find lowest prices.
 Travel providers benefit by eliminating commissions and selling
otherwise-empty spaces.
Limitations:
 Amount of time and the difficulty of using virtual travel agencies
are significant for inexperienced Internet surfers.
 Complex trips are difficult to arrange because they require
complicated arrangement.

Employment Placement and Job Market

 The Internet offers a rich environment for job seekers and for
companies searching for hard-to-find employees

Parties use the internet job market:

 Job seekers (reply to employment ads or place their resumes to the
recruiting firm such as, jobdiret.com, jobstreet.com.my)
 Employers seeking employees (can conduct interviews and
administer tests through web)
 Job agencies (own web site to post available job description or
advertise their service in e-mail e.g. jobstreet.com)
 Government agencies and institutions (Advertise openings for
government position on their web site and other site such as
asiajobsearch.org)

Benefits and Limitations of Electronic Job Market

Benefits for Job Seekers
 Find information on a large number of jobs worldwide
 Communicate directly and quickly with potential employers
 Write and post resumes for large-volume distribution
 Search for available positions any time from any location.
 Assess their market value and determine appropriate salaries in
the marketplace
 Learn how to behave effectively in an interview
 Access social network groups dedicated to find e-job markets.
Benefits to Employers
 Advertise to a large numbers of job seekers.
 Save on advertisement and recruitment costs.
 Reduce application processing costs by using electronic
application forms.
 Provide greater equal opportunity for job seekers.
 Increased chance of finding highly skilled employees.
Limitations
 Many people do not use the Internet
 Security and privacy, posted resumes and employer-employee
communications are usually not encrypted.
 Create high turnover costs for employers by accelerating
employees’ movement to better jobs
 Finding candidates online is complicated due to the large
number of resumes available online

Intelligent Agents in the Electronic Job Market

 It may solve the problems by matching openings and jobs among
job seekers and employers.
Intelligent agents for Job Seekers:
 Free service that uses intelligent agents to search the Internet’s top
job sites and databases for job postings based on users’ profiles is
offered at careershop.com.
 Users create as many as 5 different profiles based on more than
100 different job categories, geographic regions, and key words.
 Users receive a daily e-mail containing job opportunities from over
a dozen top job sites around the Internet
Intelligent agents for Employers:
 Can help employers find resume that match specific job
description.
 E.g. Resumix.com, interpret a candidate’s resumes, determining
skills based on context and matching those skills to the position
criteria.
 Recruiters can search for a candidate or identify existing employees
for training programs, redeployment opportunities, or new
initiatives

Real Estate Online

  Studies have shown that 89% of all recent buyers used the
Internet at some point in their home search.
 Home buyers todays tend to use both real estate agents and the
Internet.
In real estate online, potential homebuyers can:
 View many properties online, at any time and from anywhere,
saving time for the buyer and the broker
 Sort and organize properties according to specific criteria and
preview the exterior and interior design of the properties,
shortening the search process
Real Estate Applications
 Craigslist.com: Free real estate services
 assist2sell.com: Advice to consumers on buying or selling a
home.
 realtor.com & land.net: National listing of properties for sale.
 bankrate.com & eloan.com: Information on current mortgage
rates.
 owners.com: Persons selling their homes privately without using
a real estate agent.

Lecture 8
E-grocer
 A grocer that takes orders online and provides deliveries on a daily
or other regular schedule or within a very short period of time
 Most e-grocers are click-and-mortar retailers operate in countries
where there have physical stores.
 Some offer free regular “unattended” weekly delivery, based on
monthly subscription model.
The potential e-grocery shoppers may be:
 Necessity users, new technologists, time-starved consumers or
busy consumers etc.
 E-groceries shopping/purchase is more sophisticated than most EC
shopping transactions as an average order may involve many items
from different food/product categories

Disintermediation & Reintermediation

  In traditional distribution channel, intermediation layers exist
between manufacturer and consumer
 The introduction of EC has resulted in the automation of many
tasks provided by intermediaries and threaten their existence
 Using the Internet (Online), manufacturer can sell directly to
customers and provide online support.
 Disintermediation- removal of intermediary that is responsible
for certain activities between trading partners in a supply chain.
 The concept is that of removing links from a trading chain,
“cutting out the middleman”, or putting the producer of goods
or services directly in touch with the customer.

 When an online vendor may have problems e.g. services or

delivery, the intermediaries may need new online assistance, fill
a new role, providing added value.

 This process is called Reintermediation - The process of whereby

intermediaries (either new ones or those that had been
disintermediated) take one new intermediary roles.

Disintermediation & Reintermediation

EC mediation issues:
i) Cybermediation
 It Is an electronic mediation that use of software (intelligent)
agents to facilitate intermediation & a new role for addition to
disintermediation
 E.g. intelligent agent can searching, new payment mechanism, new
market etc.
ii) Hypermediation
 The phenomenon of extensive use of new types of intermediation
to provide assistance in all phases of an EC venture
 For example: Amazon.com uses content providers, security
services, search engine, portals, ISP, software makers, escrow
service etc.
iii) Unbundling
 A concept whereby old economy process is broken into
specialized segment that can be delivered by specialized
intermediaries, that are better, faster and more efficient.

 For example: in the financial services industry, buying a stock

may be done in five separate segments: information gathering,
trade ordering, execution, settlement, and account keeping.