CONTENTS

1. E-COMMERCE : CONVERGENCE OFTECHNOLOGIES................................................1

1.1 Electronics Commerce (e-Commerce or EC)...........................................................1
1.2 Definition of Electronic Commerce..........................................................................2
1.3 Commerce and Virtual Enterprises..........................................................................2
1.4 Electronics............................................................................................................. 3
1.5 Electronic Communication.......................................................................................3
1.6 The Convergence of Computing with Communications ..........................................4
1.7 Technology Convergence and Global Commerce....................................................6
1.8 Advantages of Electronic Commerce......................................................................7
1.9 Applications of Electronic Commerce......................................................................7
1.10 The Technologies of Electronic Commerce...............................................................7
1.11 Digitization of the Network......................................................................................8
1.12 The Information Industry and e-Commerce...............................................................8
1.13 The Form-Based Information Industries of the Past.................................................9
1.14 The Global Information Infrastructure (G11): Internet.............................................11
1.15 Internet Technology............................................................................................... 11
1.16 Components of Internet Technology........................................................................13
1.16.1 The Internet Network..............................................................................13
1.16.2 VVWW- World Wide Web...........................................................................14
1.16.3 Electronic Mail .................................................................................... 14
1.16.4 FTP......................................................................................................... 14
1.16.5 Internet Relay Chat (IRC).......................................................................15
1.16.6 Web Chat................................................................................................ 15
1.16.7 News Groups........................................................................................... 15
1.16.8 Usenet.................................................................................................. 15
1.16.9 Telnet.................................................................................................... 15
1.17 Principles Of Founding Internet Based e-commerce................................................16
1.17.1 Pervasive Internet Access and Mobile Internet ................................... 17
1.18 Intranets ................................................................................................................ 17
1.19 The Technologies of Electronic Commerce...............................................................17
1.19.1 Electronic Data Interchange (EDI)........................................................ 17
1.19.2 Bar Codes................................................................................................ 18
1.19.3 Electronic Mail ......................................................................................18
1.19.4 Internet Market......................................................................................18
1.19.5 Product Data Exchange..........................................................................18
1.19.6 Electronic Forms.....................................................................................18
1.20 Differences Between Electronic and Other Forms of Commerce............................19
1.21 Determining Technological Feasibility ................................................................. 19
 1.22 Ecommerce Marketing........................................................................................... 20
1.22.1 Be a Resource, Not a Store.................................................................. 20
1.22.2 Your Current Customers........................................................................ 20
1.22.3 Search Engines and Directories............................................................. 21
1.22.4 Discussion Forums, Chat and Newsgroups .......................................... 21
1.22.5 Direct Opt-In E-mail............................................................................... 21
1.22.6 Banner Advertising................................................................................ 21
1.22.7 Internet News Releases......................................................................... 22
1.22.8 Co-Branding Site Content & Features.................................................... 23
1.22.9 Affiliate Programs.................................................................................. 23
1.22.10 Reciprocal Links.................................................................................... 23
1.23 Breakthroughs in Computing Technology.............................................................. 23
1.24 Breakthroughs in Communications Technology..................................................... 25
1.25 The Sociology of Convergence.............................................................................. 25
1.26 The Impact of Convergence.................................................................................. 26
1.27 A Paradigm Shift: The New Information Industry................................................... 27
1.28 The Future of Electronic Commerce..................................................................... 28
1.29 Methods of E-commerce........................................................................................ 29

2. ELECTRONICS AND COMMUNICATIONS.................................................................... 35

2.1 Electronics............................................................................................................ 35
2.2 Electronic Components.......................................................................................... 35
2.3 Computers : The Information Processor................................................................ 38
2.4 Types of Computers: Digital and Analog............................................................... 42
2.5 Range of Computer Ability.................................................................................... 42
2.6 Uses of Computers................................................................................................ 43
2.7 Digital Technology.................................................................................................. 43
2.8 Processing Digital Information.............................................................................. 44
2.9 Digital Logic........................................................................................................... 44
2.10 Communications................................................................................................... 45
2.11 Data Communications ......................................................................................... 49
2.12 DataTransmission ............................................................................................... 50
2.13 Types of Signals in Communication...................................................................... 51
2.14 Characteristics of Electrical Waves....................................................................... 52
2.15 Data Transmission Quality Factors........................................................................ 54
2.16 Transmission Degradation..................................................................................... 56
2.17 Wireless Communication...................................................................................... 57
2.18 Principles of Wireless Communications................................................................. 57
2.19 Modes of Wireless Communication ................................................................ 58
2.20 Networks ............................................................................................................. 59
2.21 Future Developments in Computing ................................................................. 60
2.22 Mobile Processors................................................................................................ 61
3. INFORMATION TECHNOLOGY..................................................................................... 63
3.1 Fundamentals of Information Systems............................................................... 63
3.2 The Relationship Between Information and Knowledge....................................... 66
3.3 Information Age .............................................................................................. 66
3.4 What are Information Systems.......................................................................... 67
II
 3.5 Who Processes information? .................................................................................67
3.6 Information Industry.................................................................................................68
3.7 Transformation to Digital Technology.......................................................................68
3.8 The Inefficient Information Industry.........................................................................69
3.9 Information Functions ........................................................................................... 70
3.10 The Functionally Based Companies of the Future...................................................72
3.11 The Information Transport Industry..........................................................................73
3.12 Where Today's Computing Industry Will Be ............................................................74
3.13 Future of Information Presentation...........................................................................74
3.14 Electronic Publishing............................................................................................... 77

4. GLOBAL INTERNET.................................................................................................79
4.1 World Wide Web :The Simplified Access to the Internet .......................................79
4.2 History of Web Growth............................................................................................. 80
4.3 Working of Internet Web......................................................................................... 81
4.4 Web Browsers....................................................................................................... 84
4.5 Surfing the Net....................................................................................................... 86
4.6 Searching the Web................................................................................................. 86
4.7 Search Engine........................................................................................................ 87
4.8 Categories of Search Engines.................................................................................87
4.8.1 Web Crawlers ......................................................................................... 88
4.8.2 Subject Directories .................................................................................88
4.8.3 Indexes................................................................................................... 88
4.8.4 General Search......................................................................................94
4.8.5 Example of Multiple Serching: Cable Cars to the Stars...........................95
4.9 Searching Criterion ................................................................................................. 95
4.10 Advanced Search Techniques.................................................................................96
4.10.1 Phrase Searching...................................................................................96
4.10.2 Boolean Searching....................................................................................97
4.10.3 Capital Sensitivity ...................................................................................99
4.10.4 Phrase Searching....................................................................................100
4.10.5 Truncation............................................................................................ 100
4.10.6 Date Capability.................................................................................... 100
4.10.7 Restricting Searches to Specific Parts of the Document........................100
4.10.8 Restricting Searches to Specific Areas of the Web................................100
4.10.9 Restricting Searches to Specific Media..................................................100
4.10.10 Metasearches .......................................................................................101
4.11 Searching Tips.................................................................................................... 101
4.12 Downloading.......................................................................................................... 102
4.13 Hypertext Transfer Protocol (HTTP).......................................................................103
4.14 The World Wide Web & Hypertext....................................................................... 104
4.15 What is a Url?...................................................................................................... 104
4.15.1 URL Syntax..........................................................................................105
4.16 WEB Servers......................................................................................................... 106
4.16.1 A Typical Transaction between Web Servers and Clients. ................... 106
4.16.2 The Main Webserver: httpd (The http daemon).......................................107
4.16.3 Server Hardware ..................................................................................107
4.16.4 Server Software .....................................................................................108
 4.17 Web Gu ................................................................................................................ 111
4.18 Portal and Portal Space......................................................................................... 111
4.19 Web Browsers ...................................................................................................... 112
4.20 Working of Browser............................................................................................... 113
4.20.1 Microsoft Internet Explorer version 5.0..................................................113
4.21 Working with Internet Explorer............................................................................ 115
4.21.1 Basic Setup .........................................................................................115
4.21.2 Safety in Browsing the Web...................................................................115
4.21.3 Learning how to Browse the Web Faster and Easier..............................115
4.22 Using Your Web Browser .....................................................................................115
4.23 Internet Explorer Web browser..............................................................................117
4.23.1 What to do if a Web page isn't working............................................... 118
4.232 Setting up an Internet connection using Internet Connection Wizard ... 118
4.23.3 Finding the Information You Want............................................................119
4.23.4 Browser Tips .......................................................................................... 119
4.23.5 The Cache and Toolbar ..........................................................................124
4.23.6 Sharing Bookmarks and Favorites .........................................................124
4.23.7 To Enter Web Information more Easily....................................................125
4.23.8 Making Pages Available for Offline Viewing............................................125
4.24 Netscape (Netscape Communications or Netscape Navigator).............................127
4.25 Navigating the World Wide Web with Netscape Communicator.......................... 128
4.25.1 Anatomy of Netscape..............................................................................128
4.25.2 The Toolbars............................................................................................ 129
426 The Access Indicator............................................................................................. 131
4.26.1 Some Browser Tricks.............................................................................131
4.26.2 Who Controls the Internet? ....................................................................133
4.26.3 Who Created the Internet?......................................................................133
4.26.4 Pure-Play Web Application Server..........................................................134
4.26.5 Develop-and-Deploy Servers.................................................................134
4.26.6 Application Servers from Client/Server Vendors....................................135
4.27 Browsing vs. Building ......................................................................................... 136
4.28 ISP Web hosting................................................................................................... 137

5. GENERATING E-COMMERCE...................................................................149
5.1 Commerce.......................................................................................................... 149
5.2 Commerce in History.......................................................................................... 149
5.3 The Early Modern Period ....................................................................................149
5.4 The Effects of Industrialization on Commerce.....................................................150
5.5 The Period of the World Wars...............................................................................151
5.6 The Later 20th Century...................................................................................... 151
5.7 Free Trade........................................................................................................... 151
5.7.1 Early Trade Doctrine............................................................................ 152
5.7.2 Modern Trade Theory.............................................................................152
5.7.3 Arguments for Protection ....................................................................153
5.7.4 Recent Developments...........................................................................153
5.8 Foreign Trade...................................................................................................... 154
5.8.1 Emergence of Modern Foreign Trade.....................................................154
5.8.2 Advantages of Trade.............................................................................154
 5.8.3 Government Restrictions.......................................................................155
5.8.4 Tariffs.................................................................................................. 155
5.8.5 Nontariff Barriers to Trade......................................................................155
5.8.6 20th Century Trends...............................................................................156
5.8.7 Trade Negotiations.................................................................................156
5.8.8 Trading Communities and Customs.......................................................156
5.9 U.S. Trade............................................................................................................ 156
5.10 Business .............................................................................................................. 157
5.10.1 Types of Businesses..............................................................................157
5.11 Manufacturing...................................................................................................... 157
5.12 Merchandisers....................................................................................................... 158
5.13 Service Enterprises ...............................................................................................158
5.13.1 Forms of Business Ownership...............................................................158
5.13.2 Sole Proprietorship.............................................................................. 159
5.13.3 Partnership...........................................................................................159
5.13.4 Corporation.............................................................................................. 159
5.13.5 Joint Ventures and Syndicates................................................................160
5.13.6 Syndicates.............................................................................................. 160
5.13.7 Mercantilism........................................................................................ 160
5.13.8 Retailing ............................................................................................. 161
5.14 Retailing Strategy................................................................................................. 161
5.15 Kinds of Retailers ................................................................................................. 162
5.16 Department Stores................................................................................................. 163
5.16.1 History of Growth of Department Stores................................................163
5.16.2 Chain Stores .......................................................................................... 165
5.16.3 Suburban Branches.................................................................................165
5.16.4 Franchise..............................................................................................165
5.17 Business Operations ............................................................................................. 166
5.18 Business in a Free Market Economy......................................................................167
5.19 Business Activities : current Trends.......................................................................167
5.20 E-Business............................................................................................................ 168
5.20.1 Intra Business.......................................................................................168
5.20.2 Business-to-Business (BTB or B2B).......................................................168
5.20.3 Business-to-Consumer (BTC or B2C)......................................................168
5.20.4 Government/Public-Consumer................................................................169
5.21 Staying in E-Business........................................................................................... 169
5.22 The Internet and e-Business .................................................................................170
5.23 Electronic Commerce............................................................................................. 170
5.23.1 Who is Using......................................................................................... 170
5.23.2 Security Concerns...................................................................................171
5.23.3 How it Works........................................................................................... 171
5.23.4 The Future of Electronic Commerce.......................................................171
5.24 An Integrative View Of Electronic Commerce........................................................172
5.24.1 Implications..........................................................................................173
5.25 Levels of Web Presence......................................................................................... 173
5.26 Exactness of the Contents.....................................................................................174
5.27 E-com Web Presence Models................................................................................174
5.28 Basic Steps for Conduting Business on Line.........................................................175
V
 5.28.1 Domain Name Registration.................................................................. 176
5.28.2 Obtaining a Digital Certificate ...............................................................179
5.28.3 Finding a Provider of Online Transactions..............................................179
5.28.4 Web Hosting............................................................................................ 179
5.28.5 Server Hosting ..................................................................................... 180
5.28.6 Web Store Design...................................................................................180
5.28.7 Payment Solutions..................................................................................183
5.28.8 Shopping Cart Software..........................................................................184
5.28.9 Getting an Internet Merchant Bank Account..........................................184
5.28.10 Traffic Coverage.....................................................................................184
5.29 The Seven Deadly Sins of E-Commerce................................................................185
5.30 E-Commerce Software Example............................................................................186
5.30.1 Getting Started......................................................................................187
5.30.2 Adding Value........................................................................................... 187
5.30.3 Transactions.......................................................................................... 188
5.30.4 Don't Mess with Taxes ............................................................................188
5.30.5 Shaping Up and Shipping Out..................................................................189
5.30.6 Back to Ramforless.com..........................................................................190
530.7 Selecting E-commerce Package...............................................................190
5.30.8 Buy, Lease, or Build? ......................................................................... 191
5.30.9 Chart Your Course....................................................................................192
5.30.10 Ramforless.com: Buildin' It So They'll Come..........................................193
5.31 Cold Fusion The Basic Software for e-Comerce Applications.......................... 193
5.31.1 Building Your Customer Base................................................................194
5.31.2 Requirements Document.........................................................................194
5.31.3 Order and Transaction Processing...........................................................195
5.31.4 Attracting Customers...............................................................................195
5.31.5 Fulfillment and Customer Service............................................................195
5.31.6 Software and Hosting .............................................................................195
5.31.7 Use Those Log Files .............................................................................• 195
5.31.8 Cost-Effective Advertising.................................................................. 196
5.31.9 Keeping Track of Everything.....................................................................196
5.31.10 Staying in E-Business.............................................................................197
5.31.11 Play by the "Business Rules" Document................................................198
5.31.12 The Many Ways to Skin a Cat.................................................................198
5.32 Add Context-Sensitive Help to Your 1E Applications..............................................199
5.33 Prepare For Growth In E-Commerce Database Design..........................................202
5.33.1 Design a useful Web-Enabled Database.................................................202
5.33.2 Deploy Anytime......................................................................................... 203
5.33.3 Other Database Design Issues.................................................................203
5.33.4 Supply Chain Management......................................................................204
5.33.5 Security.................................................................................................... 204
5.33.6 Availability............................................................................................ 204
5.33.7 Volume Growth......................................................................................... 205
5.33.8 Usage Growth........................................................................................... 205
5.34 Guidelines for Universal Access.............................................................................206
5.34.1 Testing Your Web Site...............................................................................207
5.34.2 Web Accessibility Initiative (WAI) Guidelines for Universal
 Access to Web.....................................................................................208
5.34.3 Principles of Universal Design ..............................................................208
5.35 General Agreement on Tariffs and Trade (GATT).....................................................209
5.36 World Trade Organization (WTO).............................................................................210
5.37 Writing Softwares/Programs for Business Applications ........................................210
5.37.1 Traditional Business Applications...........................................................210
5.37.2 Intranet Business Applications .............................................................213
5.37.3 Top Tier: The Web Browser as a User Interface......................................213
5.37.4 Middle Tier: The Web Server and Business Logic..................................216
5.37.5 Bottom Tier: The Database Server.........................................................217
5.35.6 Internationalization and Platform Independence.....................................218

6................................................................E-COMMERCE : SALES AND MARKETING

..........................................................................................................................220
6.1 Competition.......................................................................................................... 220
6.2 Perfect Competition .............................................................................................. 220
6.3 Workable Competition............................................................................................ 220
6.4 Marketing,............................................................................................................ 221
6.5 Tailoring the Product.............................................................................................221
6.6 Pricing the Product............................................................................................... 221
6.7 Promoting the Product........................................................................................... 222
6.8 Distributing the Product.........................................................................................222
6.9 Services and Marketing......................................................................................... 223
6.10 Marketing Research................................................................................................224
6.11 Forces Affecting Modern Marketing.......................................................................224
6.12 Specialized Marketing Developments.....................................................................225
6.13 The Marketing Profession.......................................................................................225
6.14 Marketing and Consumers......................................................................................226
6.15 Global Markets: Definition and Characteristics ......................................................227
6.16 New Forms of Organizational Structure...................................................................229
6.17 Telemarketing.......................................................................................................... 230
6.18 e-Selling ........................................................................................................... 231
6.19 Ecommerce Marketing .......................................................................................... 232
6.20 Create your own Online Storefront..........................................................................234
6.21 e-Marketing : Web Business Model: Product Sales...............................................234
6.22 Designing Site For Online Store..............................................................................239
6.23 Keeping Track of Everything...................................................................................244
6.24 Cost-Effective Advertising .....................................................................................245
6.25 Auctions Based Selling........................................................................................... 246
6.26 Setting Up Shop in Cyberspace..............................................................................249
6.27 Selling on Line .................................................................................................... 251
6.28 Shopping Cart Software.......................................................................................... 253
6.29 Selling Products from a Web Site Storefront...........................................................265
6.30 Cyber Cash Cash Register......................................................................................268
6.32 Affiliate Marketing : Commision Junction's Solution...............................................270
7....................................................E-COMMERCE : VIRTUAL CORPORATIONS
..........................................................................................................................273
7.1 The Concept of Virtual Corporation........................................................................273
7.2 VAN Service Providers........................................................................................... 273
7.3 VANs and the Internet ........................................................................................... 274
VII
 7.4 Virtual Private Networks.......................................................................................275
7.5 Intranets and Virtual Private Networks (VPNs) ....................................................276
7.6 Benefits of ISP-Based Private Networks...............................................................276
7.7 Traditional WAN Network Architecture....................................................................277
7.8 Encryption-Based VPNs........................................................................................ 277
7.9 Private Networking Using Frame-Relay PVCs.......................................................278
7.10 Intranet .............................................................................................................. 279
7.11 Difference in Internet and Intranet.........................................................................280
7.12 Collaborative Multimedia Computing ....................................................................281
7.13 Corporate Portals................................................................................................... 283
7.14 Intranet and Portals................................................................................................284
7.15 Web Personalization.............................................................................................. 285
7.16 Dot Corns Path to Profitability ................................................................................286
7.17 Start an E-company................................................................................................. 287
7.18 Dot-corn Design Tips.............................................................................................. 289
7.19 Risks in Dot-Com..................................................................................................... 290
7.20 Dot-Corns: What Have We Learned?.......................................................................291

8. E-COMMERCE :WEB SITE AND E-ADVERTISEMENT..................................................298

8.1 Advertising ........................................................................................................ 298
8.1.1 Media.................................................................................................... 299
8.1.2 Direct Advertising...................................................................................299
8.1.3 Reaserch.............................................................................................. 300
8.1.4 Techniques of Persuasion......................................................................301
8.1.5 Structure of the industry........................................................................302
8.1.6 Economic and Social Effects.................................................................303
8.1.7 Regulation .......................................................................................... 303
8.2 History of Advertising Efforts...............................................................................304
8.3 Web Page : Building a site ..................................................................................305
8.4 About Creating a Web page..................................................................................307
8.4.1 Create a Web page...............................................................................308
8.4.2 Create a Web page or frames page with the Web Page Wizard.............308
8.5 Create a Web page based on a template.............................................................311
8.6 Save a Word document as a Web page or a frames page....................................311
8.7 Converting a Word document as a Web page or a frames page.........................312
8.8 How to get started -A 12-step program..............................................................312
8.9 Advertisement and the need of a Web site .........................................................312
8.10 Marketing and Promotion........................................................................................ 312
8.11 Advertising on Internet .......................................................................................313
8.12 Website Costs....................................................................................................... 317
8.13 Typical offer from some WEb site Design Firm :
The WebCommerce Back Office...........................................................................317
8.14 Direct Opt-In E-mail................................................................................................ 318
8.15 Banner Advertising ................................................................................................ 319
8.16 Advertisement for Real Estate : Second Highest Popular Web Craze...................320
8.17 Increasing circulation of ezine.............................................................................321
8.18 Web Site Maintenance............................................................................................322
8.19 The Seven Negative Aspects of E-Commerce.......................................................324
VIII
 8.20 Choosing a Webhosting Company.........................................................................326

9. E-COMMERCE : E-BANKING..................................................................................334
9.1 Banking .............................................................................................................. 334
9.2 Early Banking...................................................................................................... 334
9.3 Commercial Banking............................................................................................335
9.4 Commercial Banking Today...................................................................................336
9.5 Thrift Institutions................................................................................................... 337
9.6 European Banking ............................................................................................... 338
9.7 Banking in Britain.................................................................................................. 338
9.8 Banking in Developing Countries...........................................................................339
9.9 Role of Central Banking......................................................................................... 340
9.10 International Banking............................................................................................ 341
9.11 European Banking .............................................................................................. 342
9.12 American Banking Before World War - I..................................................................342
9.13 American Banking After World War - I.....................................................................343
9.14 Current Practices in Banking..................................................................................343
9.15 Finance ............................................................................................................... 343
9.16 Credit ..................................................................................................................... 344
9.17 Global Finance Profiles..........................................................................................347
9.18 Fortune e-50 : World's First 50 e-Commerce Companies......................................351
9.19 Types Of Electronic Payment Systems..................................................................353
9.20 Electronic Payment Technologies............................................................................354
921 Electronics Fund Transfer.....................................................................................355
9.22 Introduction to Electronic Payment Mechanisms....................................................356
9.23 Internet Bill Presentation and Payment (IBPP) ......................................................358
9.24 NSE Market Trading System..................................................................................363
9.25 Credit Card.............................................................................................................. 364
9.26 Accepting Credit Cards........................................................................................... 367
9.27 Wireless Credit Cards: How Soon and How Pervasive?.........................................369
9.28 Smart Card Overview.............................................................................................. 370
9.29 Introduction to Smart Cards in Wireless Communications ...................................371
9.30 Discover Offers Online 'Virtual Credit Card'..........................................................377
9.31 Smart Card............................................................................................................. 378
9.32 What is a Digital Signature? ...............................................................................381
9.33 Use your Debit Card with Caution...........................................................................384
9.34 Online Credit Card Transaction Processing ...........................................................389
9.35 Lenders Use Your Credit Score...............................................................................391
9.36 Loan Criteria Also Top Secret.................................................................................392
9.37 Impacts and Effects of Digital Money.....................................................................394
9.38 Cybercash Service : US Dollars Payments.............................................................404
9.39 Authorizenet Service : US Dollars Payments.........................................................404
9.40 Merchant Accounts................................................................................................405
9.41 Worldpay Multi-Currency Payments (with NatWest) for UK based Merchants.......408
9.42 I nternetSecu re Guarantees Your Merchant Status..................................................409
9.43 E-Gold Payments.................................................................................................... 410
9.44 e-Pay it Online's Online Bill Payment Portal.........................................................410
9.45 eComm PRO Shopping Cart..................................................................................410
IX
 9.46 PDG Software............................................................................................... 412
9.47 Wired-2-Shop................................................................................................ 412
9.48 QuickCommerce/E-Commerce Exchange: Merchant Account Program....... 413
9.49 IBM Net.Commerce: Taking the Lead........................................................... 413
9.50 Cash Register............................................................................................... 414
9.51 Stock Exchange............................................................................................ 414
9.52 International Exchanges................................................................................ 417
9.53 History of U.S. Stock Exchanges................................................................. 418
9.54 Regulation of Exchanges.............................................................................. 418
9.55 Direcent Developments................................................................................. 420
9.56 Investment Banking...................................................................................... 420
9.57 Underwriting .............................................................................................. 420
9.58 Other Services.............................................................................................. 421
9.59 OASIS :The Largest Web Commerce Arrangement..................................... 422
10. E-COMMERCE : ELECTRONIC SERVICES DELIVERY................................ 423
10.1 Electronic Services Delivery ....................................................................... 423
10.2 Purpose ....................................................................................................... 423
10.3 Definition ...................................................................................................... 424
10.4 Drivers ......................................................................................................... 424
10.5 Technologies for ESD.................................................................................... 424
10.6 Single-Organisation ESD............................................................................... 425
10.7 Business Models for Single-Organisation ESD............................................. 428
10.8 Issues in Single-Organisation ESD............................................................... 429
10.9 The Inadequacy of Single-Organisation ESD................................................ 430
10.10 Multi-Organisation ESD................................................................................. 431
10.11 Architecture for Multi-Organisation ESD....................................................... 432
10.12 Challenges in Multi-Organisation ESD........................................................... 432
10.13 Conclusions.................................................................................................. 433
11. E-COMMERCE : Wireless Technololgy to Enable Mobile e-Business............. 434
11.1 Mobile Commerce......................................................................................... 434
11.2 Challenges of e-commerce............................................................................ 434
11.3 Global Mobile e-Commerce........................................................................... 435
11.4 European M-Commerce Seen at Euro 38 Billion in 2004.............................. 436
11.5 Secure Mobile Commerce............................................................................. 436
11.6 Secured Payments through Mobile............................................................... 437
11.7 First Mobile Commerce Service.................................................................... 437
11.8 Wireless Business......................................................................................... 438
11.9 OEM Portal................................................................................................... 440
11.10 WAP Applications......................................................................................... 440
11.11 Platforms for WAP Applications.................................................................... 444
11.12 Mobile for Mobile Workforce.......................................................................... 445
11.13 Information Technology and Mobile WAP enabled Telephones....................... 445
11.14 Wireless Devices.......................................................................................... 446
11.15 Mobile Banking via WAP............................................................................... 450
11.16 Wireless Portal ............................................................................................ 450
11.17 Multi-party Communication........................................................................... 452

X
 12......................................................................E-COMMERCE : WEB PUBLISHING
....................................................................................................................................... 455
12.1 Electronic Publishing - Definition...........................................................................455
12.2 Electronic Publishing - A Business Process Model...............................................456
12.3 Electronic Publishing - Alternative Business Models.............................................457
12.4 Electronic Publishing - A Maturation Path Model...................................................457
12.5 Web Publishing...................................................................................................... 461
12.6 Document Interchange Standards.........................................................................463
12.7 Components of WEB Publishing............................................................................465
12.8 Document Management.........................................................................................465
12.9 Web Documents..................................................................................................... 465
12.10 Component Software.............................................................................................. 466
12.11 Why Web Publishing?............................................................................................ 466
12.12 Web Page Design Considerations..........................................................................466
12.13 Your Web Page's Layout......................................................................................... 472
12.14 Ingredients of Web Site Design..............................................................................474
12.15 Enhance Your Site Design for Better Business ....................................................482
12.16 Other Design Tips................................................................................................... 496
12.17 Design Principles................................................................................................... 498
12.18 Tips on Graphics Design.......................................................................................502.
12.19 Authoring: Tools for Creating and Changing Web Pages........................................503
12.20 Non-Standard New Standards................................................................................508
12.21 Style Sheets.......................................................................................................... 508
12.22 Microsoft Web Publishing Wizard Overview ..........................................................508
12.23 How to Publish and Publicise ............................................................................. 513
12.24 Where to host your Web Site ...............................................................................516
12.25 Web Site Location ................................................................................................ 517
12.26 Finding a Home for Your Site .............................................................................. 519
12.27 HTTP Server Requirement.....................................................................................522
12.28 Microsoft's WEB Server......................................................................................... 523
12.29 Server Internet Connection Speed..........................................................................524
12.30 Maintenance and Updating ...................................................................................525
12.31 Your Presence on Internet: Creating a Home Page................................................528
12.32 Web Com's Web Authoring Service.......................................................................531
12.33 Attracting Visiters .................................................................................................531

13.......................................................................MULTIMEDIA AND APPLICATIONS

........................................................................................................................................ 536
13.1 What is Multimedia?..............................................................................................536
13.2 Transition to Multimedia .......................................................................................537
13.3 General Multimedia Developments........................................................................537
13.4 Is Multimedia only a business Modesty? ...............................................................538
13.5 Uses of Multimedia................................................................................................ 539
13.6 Multimedia Content Control ..................................................................................539
13.7 Interactive Communications...................................................................................539
13.8 Multimedia Communications .................................................................................540
13.9 Interface Devices................................................................................................... 541
13.10 Development and Uses...........................................................................................542
13.11 Streaming Technology............................................................................................ 543
XI
14. ELECTRONIC COMMERCE AND SECURITY.......................................................... 547
14.1 Electronic Commerce and Security..................................................................... 547
14.2 Privacy ............................................................................................................... 547
14.3 Information Privacy............................................................................................. 549
14.4 A Common Misuse of the Term 'Privacy' ............................................................ 549
14.5 Data Surveillance................................................................................................. 550
14.6 Human Identification............................................................................................ 551
14.7 Authentication...................................................................................................... 552
14.8 Anonymity, Identification and Pseudonymity...................................................... 553
14.9 Message Transmission Security.......................................................................... 555
14.10 Cryptography....................................................................................................... 556
14.11 Internet Security
14.12 ..............................................................................................................................
Security System of Internet................................................................................ 561
14.13 Overview Of Internet Security ............................................................................ 561
14.14 Security for Internetwork Connections................................................................. 567
14.15 Using Secure I nternet,Sites for Transactions....................................................... 568
14.16 Protecting Your Identity over the Internet............................................................. 568
14.17 Internet Security : Other Aspects........................................................................ 570
14.18 Security Risks in eBusiness .............................................................................. 575
14.19 Security-Related Problems.................................................................................. 577
14.19.1 Security Incidents on the Internet........................................................ 577
14.20 Secure Electronic Transaction............................................................................. 578
14.21 Secure Electronic Transactions (SET)................................................................. 578
14.21.1 Who needs SET?................................................................................. 579
14.21.2 SET : Merits and Demerits.................................................................. 580
14.21.3 Adoption of SET by Information and e-commerce Industry................. 581
14.21.4 The Conduct of a Payment Transaction................................................ 583
14.21.5 Infrastructure for Digital Signatures..................................................... 583
14.21.6 Issues in Public Key Cryptography...................................................... 584
14.21.7 The Need For a Comprehensive Security Regime............................... 588
14.21.8 Secured Socket Layer......................................................................... 588.
14.21.1 The Need For a Comprehensive Security Regime.............................................. 588
14.21.2 Secured Socket Layer......................................................................... 588
14.22 Security Blanket for Credit Cards........................................................................ 589
14.23 Secured Credit Cards :.Mondex System............................................................. 590
14.24 Use your Debit Card with Caution........................................................................ 592
14.25 Transfering funds from your Customer Account to Merchant Account................ 592
14.25 Microsoft Wallet Security for Online Shopping.................................................... 594
14.26 Finding Trustworthy e-Commerce Companies ................................................... 595
14.27 Introduction to Firewalls .................................................................................... 596
14.28 Security of Gil........................................................................................... 600
15. EC AND LEGAL, SOCIAL AND OTHER ISSUES.................................................... 602
15.1 Consumer and Shape of the Market Place.......................................................... 602
15.1.1 Financial Issues................................................................................... 602
15.1.2 Electronic Payment Systems................................................................ 603
15.2 Legal Issues........................................................................................................ 604
15.3 Privacy .............................................................................................................. 608
XII
 15.4 Elegibility of Contents...........................................................................................611
15.5 Technical Standards for Global e-Commerce........................................................612
15.6 Copyright Issues.................................................................................................... 614
15.7 Legal Aspects of E-Commerce..............................................................................614
15.8 Intellectual Property.............................................................................................. 616
15.9 Copyright................................................................................................................ 618

16. SOFTWARE FOR E-COMMERCE.............................................................................623

16.1 Web Application Infrastructure ............................................................................623
16.2 The Need for Structure: Roles and Development Models......................................624
16.3 Server-side Application Building Blocks..............................................................627
16.4 Application Services Framework............................................................................631
16.5 The WebSphere Application Server Workbench ...................................................636
16.6 Interactivity Tools.................................................................................................. 639
16.7 Visual Basic Script : Overview ...........................................................................652
16.8 A Simple VBScript Page........................................................................................ 655
16.9 Other Ways to Attach Code to Events...................................................................656
16.10 Java ...................................................................................................................... 656
16.11 How Java Interacts................................................................................................ 657
16.12 History of Java Development................................................................................658
16.13 Java the Language of Networks.............................................................................658
16.14 Major Characteristics of Java................................................................................659
16.15 Microsoft Visual J++ 6.0........................................................................................663
16.16 Java Script............................................................................................................ 663
16.17 Intel's Just-In-Time (J IT) Compiler .......................................................................663
16.18 JAVA and Websites .............................................................................................. 665
16.19 Programming in JAVA...........................................................................................666
16.20 Command Line Arguments....................................................................................667
16.21 JAVA Capabilities .................................................................................................678
16.22 Java Tools.............................................................................................................. 678
16.23 JavaScript ........................................................................................................... 679
16.24 Push Technology.................................................................................................... 681
16.25 Push Technology and Various Products.................................................................688
16.26 Features of Different Push Technology Products .................................................689
16.26 How is content delivered? ....................................................................................689
16.27 Client Operating Systems.....................................................................................689
16.29 Push for Executive Communication .....................................................................691
Appendix...........................................................................................696-702

XIII
 E-COMMERCE CONVERGENCE OF TECHNOLOGIES /

Chop-it 1
e-COMMERCE
Convergence of Technologies

1.1 Electronics Commerce (e-Commerce or EC)

Simply defined EC is the activity of carrying out business activities through the Internet. This could
include, but not be limited to, examining product and merchandise descriptions and catalogs, ordering
and paying for products or merchandise, banking, filing applications and forms, Email communications
relating to business, advertising and promotion, research on subjects, and software distribution. e-
Commerce is being embraced and adopted by businesses, educational institutions, and governments
at a very high rate because it reduces the cost of conducting business in many ways.
While there is no one correct definition of e-commerce, it is generally described as a method of
buying and selling products and services through electronic means of communications. The main
methods of e-commerce remain as the Internet and the World Wide Web, but use of email, fax, and
telephone orders are also prevalent. e-commerce also encompasses all ranges of transactions:
business-to-business, business-to-consumer, and consumer-to-business.
Electronic commerce is an integrative concept, designed to draw together a wide range of business
support services, including inter-organisational e-mail; directories; trading supportsystems for
commodities, products, customised products and custom-built goods and services; ordering and
logistic support systems; settlement support systems; and management information and statistical
reporting systems.
EC is intended for people who need a sense of the boundaries and content of EC, or who need help
in explaining EC to others.
Some people use the more restrictive terms 'electronic trading' and 'electronic markets', and others
use broader terms such as 'electronic business'. Some people also restrict the scope of EC to
procurement; but it's more usefully conceived much more broadly, to include any kind of business-
related transaction conducted with the assistance of electronic tools. Yep, even the telephone and
fax.
A startup EC bookstore with the name "Amazon.com" makes waves with an enormously successful
Internet portal that raises $54 million. Proclamations are made about 9 billion online transactions,
totaling $50 billion by the year 2000.
So what is it? Electronic commerce, or e-commerce, refers to all transactions that take place
electronically; for the purposes of this article, it is defined as goods and services that are bought and
sold online.
Web sites that let customers make purchases online are the bread and butter of e-commerce.
Amazon.com, mentioned above, is a perfect example of successful electronic commerce. A customer
2 / ELECTRONIC COMMERCE

visiting Amazon.com can browse and purchase any of 2.5 million books. Such retail transactions are
expected to exceed $50 billion by the year 2000. In fact, it is estimated that 50% of all software safes
and 25% of all CD music sales will take place online by 2000.
By the term electronics in context of electronic Commerce, we always mean promotion of trade and
business by elcronics means of telecommunication , either wired or wireless type.
In this introduction itself it is made clear that the term in itself is misnomer. Actually when we refer to
Elecronics commerce we always mean digital portion of it. This shall be explained in detail in
subsequent paragraphs. Let us first see the some other definition of electronics and commerce.

1.2 Definition of Electronic Commerce

Electronic commerce is the application of communication and information sharing technologies among
trading partners to the pursuit of business objectives. In the real world of business four distinct types
of EC mingle and interact:
q Information access provides search and retrieve capability for public domain and
proprietary data archives. The most common example of this type of EC is information
services (e.g. Dialog, Nexus - Lexus, and ABI Informs) that maintain a data base and
charges for access. Another example would be a large manufacturer communicate
engineering change notices to suppliers via dial-up access to a centralized database.

q Interpersonal communication services provide methods for parties with mutual

interests to exchange information, "discuss" ideas, and improve their cooperation. Examples
include customer and supplier design groups jointly working out product specifications,
updated files being sent by a publisher to a printer, and a purchasing agent using electronic
mail to negotiate an expediting schedule with a supplier.

q Shopping services allow people to seek and purchase goods or services though
electronic networks. This form of EC for retail sales is what comes most readily to mind
when one hears the term "electronic commerce". But this genre of EC can be extended in
.many other directions. As examples, it can apply to the purchase of used industrial
equipment, commodities, or freight capacity.

q Virtual enterprises are business arrangements in which trading partners

separated by geography and expertise are able to engage in complex joint business
activities, as if they were a single enterprise. One example would be true supply chain
integration, where planing and forecast data are transmitted quickly and accurately
throughout a multi-tier supply chain. Another example would be non-competing
suppliers with a common customer using EC to allow that customer to do "one stop
shopping" with the assurance that a single phone call will bring the right materials to the
right location at the right time.

1.3 Commerce and Virtual Enterprises

In broader perspective Commerce means transport of commodities from place to place for exchange
purposes. The British economist Adam Smith wrote in The Wealth of Nations (1776) that "commerce
is the propensity to truck, barter, and exchange one thing for another is an intrinsic characteristic of
human nature. Smith also observed that the expansion of commerce is a critical component of the
process of modernization. In modern society, production is organized to take advantage of specialization
and division of labor. Without commerce it would be impossible to organize production in this manner.
In ancient times, transporting commodities over any significant distance was an expensive and risky
enterprise. Thus, commerce was restricted mainly to local markets, and the most commonly traded
 E-COMMERCE : CONVERGENCE OF TECHNOLOGIES / 3
articles were foodstuffs and clothing. Most people spent the bulk of their resources on food, and
what they neither grew nor gathered themselves they obtained through trade. The same was true of
clothing: Garments were either produced and handed down within the family or acquired through
trade. In addition to food, clothing, and shelter, the rich devoted their income to conspicuous attire,
jewelry, and works of art. As a result, an important trade in luxury items developed.
Virtual enterprises are business arrangements in which trading partners separated by geography and
expertise are able to engage in complex joint business activities, as if they were a single enterprise. One
example would be true supply chain integration, where planing and forecast data are transmitted quickly
and accurately throughout a multi-tier supply chain. Another example would be non-competing suppliers
with a common customer using EC to allow that customer to do "one stop shopping" with the assurance
that a single phone call will bring the right materials to the right location at the right time.

1.4 Electronics
Electronics is the field of engineering and applied physics dealing with the design and application of
devices, usually electronic circuits, the operation of which depends on the flow of electrons for the
generation, transmission, reception, and storage of information. The information can consist of voice
or music (audio signals) in a radio receiver, a picture on a television / monitor screen, or numbers and
other data forms in a computer.
Electronic circuits provide different functions to process this information, including amplification of
weak signals to a usable level; generation of radio waves; extraction of information, such as the
recovery of an audio signal from a radio wave (demodulation); control, such as the superimposition
of an audio signal onto radio waves (modulation); and logic operations, such as the electronic processes
taking place in computers.

1.5 Electronic Communication

Communication is at least as old as civilization, but electrical communication effectively started
with the telegraph in the early 19th century. The telegraph revolutionized long-distance communications
almost everywhere, reducing the time taken to communicate across a country from days to hours or
minutes, or from months to days between continents. The early telegraph was a very simple
device; it used a direct current cell to operate an electromagnet.
Morse code, a system of dots and dashes representing letters, was often used to send messages,
as the circuit only had two states: on, or off. When large distances had to be covered, signals were
relayed by human operators who would collect messages from one circuit and relay them onto
another. In this way, the first transatlantic telegraph signaled about seven words per minute. The
telegraph was essentially a digital apparatus; the first analog electrical communicator, the telephone,
was patented in 1876. While we can't be sure who really invented the telephone - Bell usually gets
the credit as he held the patent, but other inventors like Elisha Gray played a part - we do know that
the design owed a lot to telegraphic technology.

At the time of the invention of the telephone, most effort was directed towards the development of a
`multiple' telegraph: one that could signal more than one code at a time. Despite digital communication
getting a head start, voice telephony rapidly came to dominate the wide-area communications
arena. It is only the last few decades that have seen the development of wide-area networks exclusively
for data, and only in the last few years that this technology, in the form of ISDN , has become
available to home subscribers. Until very recently, if one wished to communicate between a home
computer and a remote site, one had no choice but to use a modem to convert the computer signals
into a form suitable for a voice communications medium.
41 ELECTRONIC COMMERCE

It was not long after the invention of the telephone that Hertz discovered that electromagnetic waves
could be generated and broadcast , and in 1896 Marconi patented the 'wireless telegraph,' a system
for sending telegraphic messages by radio waves. The first transatlantic wireless messages were
sent in 1902, and by i 907 Marconi had started a commercial wireless service between Ireland and
Canada. Although radio telegraphy was expensive and somewhat unreliable at first, the development
of the apparatus to allow short-wave transmission made the system much more practicable, and
cable and radio communications have developed in parallel ever since.
It is only in the last few years that there has been widespread use of communications networks that
mix radio and cable transmission: the cellular telephone network is an example of such a system.
When computers became commercially available in the 1960's, the mechanisms of electronic long-
distance communication were quite well developed. New switching techniques allowed telephone
networks to span the globe, and these could carry data at a speed quite fast enough for the computers
of the day. However, in the next twenty years it became apparent that some features of the public
telephone networks were not ideal for data communication. Apart from the obvious problem that they
were designed for analog communication, they used a technique called 'circuit switching which is
inefficient in the use of the cable's information carrying capacity <information carrying capacity.

In 1969, the US Advanced Research Projects Agency, part of the Department of Defense, funded
the first dedicated wide-area network of mainframe computers, a development that was eventually
to become the Internet. This system was not primarily intended to overcome the inherent limitations
of the public telephone networks, but to provide a robust network that would be able to continue to
operate in the event of large-scale war damage. However, it used the principle of packet switching ,
which made much better use of available cable capacity.
In the 1970s, the telephone service providers started to implement data packet switching networks
for commercial and academic use. The X.25 standard for packet switched networks was published
by the CCITT in 1976. This development is remarkable in another way: it is probably the first such
standard which thought of communication protocols forming layers'; this concept is now widespread.
At about the same time local-area networking techniques were being developed to augment the
point-to-point wiring normally used to connect computers in the same area. The Xerox Corporation
devized the ethernet protocol in 1975, variations of which are still widely used.

The local area technologies were based on the idea of local broadcasting. Modern developments in
data communications have mostly been concerned with increasing the speed, flexibility and
accessibility of networking techniques. It is reasonable to assume that about 20 million computers
are now members of the Internet., Modern technologies like frame relay are faster than earlier ones
because they are simpler, rather than more sophisticated. This reduced complexity has been made
possible by the improvement in quality of communications hardware. Another recent development is
the blurring of the traditional distinction between local area and wide area networks.

1.6 The Convergence of Computing with Communications

Electronic commerce implies the application of communication and information sharing technologies
among trading partners to the pursuit of business objectives. In the real world of business, four
distinct types of EC mingle and interact:
❑ Information access provides search and retrieve capability for public domain end proprietary
data archives. The most common example of this type of EC is information services (e.g.
Dialog, Nexus - Lexus, and AB1 Informs) that maintain a data base and charges for access.
Another example would be a large manufacturer communicate engineering change notices
to suppliers via dial-up access to a centralized database.
 E-COMMERCE : CONVERGENCE OF TECHNOLOGIES 15
q Interpersonal communication services provide methods for parties with mutual
interests to exchange information, "discuss" ideas, and improve their cooperation.
Examples include customer and supplier design groups jointly working out product
specifications, updated files being sent by a publisher to a printer, and a purchasing agent
using electronic mail to negotiate an expediting schedule with a supplier.

q Shopping services allow people to seek and purchase goods or services though
electronic networks. This form of EC for retail sales is what comes most readily to mind
when one hears the term "electronic commerce". But this genre of EC can be extended in
many other directions. As examples, it can apply to the purchase of used industrial
equipment, commodities, or freight capacity.
q Virtual enterprises are business arrangements in which trading partners
separated by geography and expertise are able to engage in complex joint business
activities, as if they were a single enterprise. One example would be true supply chain
integration, where planing and forecast data are transmitted quickly and accurately
throughout a multi-tier supply chain. Another example would be non-competing suppliers
with a common customer using EC to allow that customer to do "one stop shopping" with
the assurance that a single phone call will bring the right materials to the right location at
the right time.

Convergence is the coming together of networks, terminal devices and applications. convergence is
made possible by the fact that the networks, at least the telecommunicatinos networks, have largely
been digitized-CATV networks currently are undergoing that process. Additionally, digital
telecommunicatins networks are based on, supported by and managed by computer systems, Further,
access across those networks is provided by linking access to specialized applicatinos residing on
computer systems connected to and even embedded in the networks.
75 years after the invention of telephone, an experiment was made in USA to send written message
over a telephone through a digital computer in year 1940. Dr. George Stibitz used telegraph lines to
send data from Darmouth college to Bell Laboratories calculator in New York city.This started the era
of converging technologies that is still continued. Fig. 1.1 shows the overlapping view of the two
different technologies in fifth decade of twentieth century.

Distributed
data processing Acutornated
office

Fig. 1.1 : Converging Technologies.

A converged information industry operating within the context of an advanced information infrastructure
will be a huge boost for international business and trading resources. Several Washington think-
tanks estimate that it could spur more than $300 billion annually in new sales and increase worker
productivity by 20 to 40 percent.
61 ELECTRONIC COMMERCE

Already, an estimated two-thirds of all American jobs are information related, and that number will
increase as the shift from manufacturing to service industries continues. An information highway will
also entail new products and services_and hence new jobs. There should be societal benefits as
well. If properly managed, this highway would allow people to become better educated, healthier,
more productive, more informed, and, of course, better entertained.
The convergence of information industries will happen because the technological and business
imperatives are compelling. If one company does not see the possibilities, another will. What is not
set in stone is exactly who will build it, when it will happen, or what applications will prove the most
popular.
As the Chinese saying goes, "May you live in interesting times." In that regard, we are in for some
interesting times indeed; few periods in the history of any industry can compare with the next decade
or two of the information industry.

1.7 Technology Convergence and Global Commerce

The US economy activity namely the IT sector grew from around 6.1 percent in 1990 to 8.2 percent
in 1998, employing roughly 7.4 million workers (or 6.2 percent of the total employment). Most remarkably,
investments in IT (including computers, software, and communications equipment) now account for
45 percent of business investments in the US. Other countries such as Finland are emerging fast
with similar patterns thus demonstrating the power of digital convergence on economies.
Currently, computing telecommunications, media (TV and publishing) and the Internet exist as separate
mediums where business-to-business (BTB) or business-to-government (BOG) or people-to-people
(POP) interact and work independently and not through integrated mediums. Now the move is to get
TV to the desktop, radio to the desktop, and the Internet with full blown integration of media which
includes transactions. What will happen will be truly in my opinion a great period of growth of every
conceivable economy.
These mediums are about to collide and integrate and thus the ideas of the convergence will be real!
This will result in TVs integrated with interactive content, cable TV providers will integrate the Internet
and the boundaries that divide what we see today will be blurred to such as extent where you will ask.
Traditional media industries will see large scale integration and thus the transformation of products
and services, as we see them today. All of this is happening right now and the impact on economies

is going to be incredibly interesting and violent. So what are the implications with respect to economies?
Business-Industries who today work and depend directly or indirectly on these new age business will
see large scale cross integration and convergence which will impact the economics of the products,
delivery and services. Traditional media companies will buy or merge with online service providers,
companies that are analog will go digital, services will get customized and the customer will benefit
with cross integration of businesses and industries.
Traditional industries such as banking will be transformed into digital empires that spawn huge computing
power read convergence) where the customer will work with all media as a part of the service and
transactions will be truly global. Banks will, for example, become increasingly virtual resulting in the
decreased use of real estate. TimesBank is one such example in India. Thus will follow industries
from healthcare to education and oil and gas.
Customers are also getting increasingly virtual (already a phenomenon in India with the large scale
acceptance of cable TV), thereby placing new demands on business to reach, process, transact and
deliver products of all kinds in new models of business never seen before. The customer will benefit
and so will be economies of scale for companies.
 E-COMMERCE : CONVERGENCE OF TECHNOLOGIES /

1.8 Advantages of Electronic Commerce

Electronic commerce [e-commerce] is the use of telecommunications and data processing technology
to improve the quality of transactions between business partners. It has existed in some form since
the invention of the telegraph and early automated data processing equipment but its use has greatly
increased. E-commerce improves organizational efficiencies by leveraging data processing, database
storage, and data communications technologies. Existing network facilities can be utilized to achieve
great savings in labor costs and the reduction of paper storage and handling facilities. It has enabled
firms to be more effective in improving the quality of standard goods and services and to offer a
variety of new services. The global marketplace has become larger and wider than ever because of
the expansion of e-commerce activity.

1.9 Applications of Electronic Commerce

The growth of electronic commerce has been fueled by the availability of worldwide telecommunication
networks along with enhanced information delivery techniques utilizing the various multimedia
technologies.
Client-server architecture allows systems with different hardware and software platforms to interact
in an open system computing environment. Electronic commerce can be viewed from two business
application perspectives. One perspective on e-commerce in business is to look at those businesses
engaged in providing electronic commerce technology to help enable other businesses. Internet
Service Providers [ISP] and private commercial network providers help tie companies into wide area
networks [WAN] for use in e-commerce activity. They may offer additional features such as protocol
conversion and are they described as Value-Added Networks [VAN]. Other types of firms specialize
in helping organizations build electronic commercial sites. Software firms sell data encryption and
other types of security-related technologies, user interface programs and other types of software
used to implement e-commerce. Other firms specialize in consulting and designing e-commerce
applications such as World Wide web sites.
Another perspective on e-commerce is to examine the application uses to which a business uses
such technologies. Linkages between business partners may be tightened through improvements in
Just-In-Time [JIT] supply logistics overall improvement in supply chain management.
Consumer marketing and sales techniques like shopping kiosks and home shopping techniques
have removed barriers of distance and increased product awareness. Electronic publishing services,
financial news and remote banking services are now available over networks. Commercial databases
and library services provide general information resources.
On-line job placement services are numerous, and distance education and job training services can
assist in career development. A wide variety of recreational and entertainment services are currently
available and such services will expand dramatically in the near future.

1.10 The Technologies of Electronic Commerce

While many technologies can fit within the definition of "electronic commerce," the most important
are:
q Electronic data interchange (EDI)
q Bar codes
q El ec troni c ma i l
q Internet
8 / ELECTRONIC COMMERCE
q World Wide Web
q Produc t da ta ex cha nge
q Electronic forms

1.11 Digitization of the Network

With digitization, all of the media become translatable into each other-computer bits migrate merrily_and
they escape from their traditional means of transmission. If that's not revolution enough, with
digitization, the content becomes totally plastic-any message, sound, or image may be edited from
anything into anything else.
Historically, information was created, stored, manipulated, and transformed by its form. Textual
information existed mostly as hard copy or as metallic templates used by printers to make copies.
Audio information existed mostly as analog waveforms, captured on vinyl or magnetic tape. Still and
moving images were rendered in chemical form; later on, moving images shifted to analog form
through the development of videotape technology. Only computer-based information existed as precise
digital data.
The digital world is characterized internally by a monotonous sameness; regardless of what they
represent, constellations of zeroes and ones remain just that to the computer. As more and more
content is digitized, the computer virtualizes it and liberates it from most of the shackles of its
previous medium.
Over time, the computer industry has developed numerous technologies to store and manipulate
digital data. Digital information is essentially distortion-free, perfectly and infinitely replicable, instantly
transportable (given fiber, cable, and future communication bandwidths), highly translatable, inherently
editable, readily amenable to various forms of processing, and compatible with other forms of digital
information.

The network has been undergoing a process of digitization since the 1960's. Digital switching systems
and their complements, in total, an end-to-end network which delivers more bandwidth, bettererror
performance at lower power levels, and lower overall cost. Compression is relatively easily
accomplished,yielding highly efficient utilizatino of bandwidth, and access and datasecurity are easily
enhanced through the use of data encryption techniques. Such a network is also more controlable
and manageable on a centralized basis.

Digital networks also have the unique ability to treat all information streams as equals-all
information is carried as a digital bit stream.
The primary driver of convergence of different forms of information is technological change, primarily
the rapid diffusion of digital technology into an ever-wider array of information businesses. Beyond
digitization, dramatic changes in the computing and telecommunications industries (primarily in faster
microprocessors and increasing bandwidth) are also driving convergence. We examine each of these
in turn.

1.12 The InFormation Industry and e-Commerce

When broadly defined, worldwide revenues of information-centered businesses (including publishing,
entertainment, computing, consumer electronics, imaging, telecommunications, and a host of smaller
sectors) exceed one trillion dollars annually.
The information industry has been defined in many different ways. Traditionally, it has been viewed
as consisting of three elements: computing (dealing with information storage and processing), office
 E-COMMERCE CONVERGENCE OF TECHNOLOGIES / 9
technologies (dealing with task automation and information creation and display), and
telecommunications. We have recognized for many years now the implications of the gradual blurring
of technological lines between these three components, especially between computing and
telecommunications.
However, the traditional definition is unduly limited. Both the scope of the industry, as well as the
extent of its ultimate technological convergence, is far greater than previously suggested. To understand
that, we must first broaden the definition of the information industry.

roots

O
(A.LiF-S TEXT VOICE iFA DL
t)
t ItEATE.& C011if.et (1.:(INIVN 4
-

II
m
r
B
P TELIPe C
U .C
M
0 N
.----T- i
4.: (DiVICK.,`Pr
DISII.A11 0
T L
11=111111 ■ 1111iINNINIIIIIMIIIMMINIMINM

Figure 1.2 :The information Mega-industry

Figure 1.2 presents a broader view of the information industry. As depicted in the columns, information
exists in five basic forms: voice, text, images, audio/video, and data. Historically, each form of
information has been dominated at the retail level by one or Iwo industries, For example, imaging
consists of cameras, movies, industrial imaging, xerography, etc. Video information has primarily
been the domain of entertainment-related industries such as consumer electronics, broadcast and
cable television networks, and Hollywood studios. In addition, several important background or supplier
industries, including producers of components and machine tools, have existed to support each
form-based industry.

The horizontal dimension of the matrix captures what is done with information in each one of those
industries: it is created, displayed, stored, processed, or distributed. We first examine the vertical
columns: the forms of information.

1.13 The Form-Based Information Industries of the Past

Information industries have traditionally been defined in terms of the form of information for two
important reasons. First, the underlying technologies for handling each type of information have
been vastly different in the past, and each technology could not handle other forms of information.
Second, the government has actively constrained many information-based companies from entering
other types of information businesses.
❑ Text
The first information industry was based on text and originated with the invention of the printing press
in 1455 and movable type later in the fifteenth century. For text based information, the primary -

industry has been printing and publishing (newspapers, magazines, books, etc.),The primary functional
emphasis has been on content creation, with a secondary emphasis on collection and dissemination.
10 / ELECTRONIC COMMERCE

The principal technologies at the heart of the industry are the mechanical and electromechanical
ones of printing and publishing. In addition, several supplier industries (e.g., printing presses, type
foundries, and offset printing) support the publishing industry.
q Images

The next commercial information entity to emerge was based on the capture, storage, and printing of
stationary images. This industry traces its origins to 1839 when Louis Jacques Mand Daguerre
produced the first daguerreotype, a silver-coated copper plate on which he and his camera had
captured and fixed a faithful image from life.The primary industry for images has been photography.
Today, however, the imaging industry is large and diverse and includes camera manufacturers, copier
makers, filmmakers, industrial and medical filming (such as mammography), etc. Related industries
include xerography and mimeography. The functions most emphasized in this industry have been
information creation (via capture), storage, and display. The underlying technologies have historically
been chemical.

q Voice
The telephone industry, created in the 1870s, quickly became the dominant player for voice. The
industry includes phone companies and other service providers at the retail level and equipment
manufacturers, copper wire producers, and numerous others at the supplier level. The primary function
-

of the telephone industry has been voice distribution, though recent growth has come about via
image (fax) and data transport. The industry has also been involved in the information content
business (e.g., the Yellow Pages) and in the voice-display business via the manufacture of terminal
equipment such as telephone sets. The principal technological underpinnings of the industry have
been in the transmission and switching of electronic signals; however, the technology is moving
rapidly toward 100 percent software controlled digital switching.
- -

q AudioNideo
This category is comprised of audio information (music) as well as video information. The entertainment
industry has owned these forms of information from the outset. There are two aspects to what we
define here as the entertainment industry, and each, in the past, has emphasized a different function.
Hollywood, music studios, and television networks have predominantly concentrated on content
creation, although there are clearly storage, distribution (done by movie theaters, video, cable television
[CATV], or broadcast), and processing aspects to their business. The consumer electronics industry
has been based largely on information display. Although some were electrical, the technologies at
the heart of this industry have been largely analog, and recently there has been a move toward
digitization. Video based businesses have thus been the most pervasive across the function of a
-

category; they have excelled in content, display, and distribution (broadcast and cable networks).

q Data
Data represents the newest of all the form based information businesses, Here, the major industry
-

has been computing, which has its origins in the tabulating and calculating businesses. From mainframe
computers, the industry added minicomputers and then personal computers, workstations, and
supercomputers. For computing, the main emphasis has been on information storage and processing.
While it was mechanical and electromechanical in its early years, the technological base for this
information form was the first to become predominantly electronic and digital.
As described, the technologies underlying these form-dominated industries were inherently different
and formed a logical basis for their definition and separation. All of that is changing, however, as the
 E-COMMERCE : CONVERGENCE OF TECHNOLOGIES / 11
form of each information type becomes digitized. Once voice, text, images, audioNideo, and data
are translated into their binary equivalents, the rationale of a separate industry to support each
becomes unsupportable. In the process, the more recent of these industries (i.e., those on the right
side of the matrix in Figure 2.1 will enjoy significant technological leadership over the others and,
thus, may become stronger competitors or consolidators of the total information industry.

1.14 The Global InFormation InFrastructure (Gil): Internet

GII is still in the early stages of its development, is already transforming our world. Over the next
decade, advances on the GI I will affect almost every aspect of daily life — education, health care,
work and leisure activities. Disparate populations, once separated by distance and time, will experience
these changes as part of a global community.
No single force embodies our electronic transformation more than the evolving medium known as the
Internet. Once a tool reserved for scientific and academic exchange, the Internet has emerged as an
appliance of every day life, accessible from almost every point on the planet. Students across the
world are discovering vast treasure troves of data via the World Wide Web. Doctors are utilizing tele-
medicine to administer off-site diagnoses to patients in need. Citizens of many nations are finding
additional outlets for personal and political expression. The Internet is being used to reinvent
government and reshape our lives and our communities in the process.

As the Internet empowers citizens and democratizes societies, it is also changing classic business
and economic paradigms. New models of commercial interaction are developing as businesses and
consumers participate in the electronic marketplace and reap the resultant benefits. Entrepreneurs
are able to start new businesses more easily, with smaller up-front investment requirements, by
accessing the Internet's worldwide network of customers.

1.15 Internet Technology

The Internet has been described as "a loose collection of related networks' or as a "network of
networks." Both of these descriptions are accurate,in a sense,but both fall short of describing fully
what the Internet really is. That is perhaps because it is very hard to exactly describe the Internet; it
appears to be different things to different people.lnternet is called network of networks because there
are actually many different network systems redily accessible through the Internet. Each of these
networks has its own roots,and each collectively helps to define the scope and breadth of the
Internet.

Internet Connection
`J".. a--t,rphIn2 ■
1,1.j[K,
# 512 ,5;17-4FE,;Pr's

 •
••10
lt1
1111 .

bac:dad . 112 1Z i-Juo

25-5 syirm , hr

300- ri Din
512 domain , :

Fig. 1.3 : Internet : Networks of Various Types

121 ELECTRONIC COMMERCE

The Internet is a "network of networks," meaning that many different networks operated by a multitude
of organization are connected together collectively to form the Internet. The Internet lets you
communicate,share resources,and share data with people across the street or around the world. The
biggest advantage of the Internet is that it is a tool providing access to vast (worldwide) quantities of
information.
Internet is the largest most complete (and complex) learning tool in the world. Through the Internet
you can find knowledge resources that allow you to study virtually any discipline imaginable. Not
only that, but you can communicate quickly and effectively with others who are also interested in the
same discipline. Teachers,students,and other educators can share ideas instantly across vast
distances, as shown in Figure 1.3.

A variety of programs have been installed on the Internet to use these services, combine them, or
make them easier to use. These include Archie, Gopher, WAIS and the World Wide Web (WWW).
Individuals, companies, and institutions use the Internet in many ways. Businesses use the Internet
to provide access to complex databases, such as financial databases. Companies can carry out
commerce online, including advertising, selling, buying, distributing products, and providing after-
sales services. Businesses arid institutions can use the Internet for voice and video conferencing
and other forms of communication that allow people to telecommute, or work from a distance.
The use of electronic mail over the Internet has greatly speeded communication between companies,
among coworkers, and between other individuals. Media and entertainment companies use the Internet
to broadcast audio and video, including live radio and television programs; to offer online chat, in
which people carry on discussions using written text; and to offer online news and weather programs.
Scientists and scholars use the Internet to communicate with colleagues, to perform research, to
distribute lecture notes and course materials to students, and to publish papers and articles. Individuals
use the Internet for communication, entertainment, finding information, and to buy and sell goods
and services.

Internet technology is having a profound effect on the global trade in services. World trade involving
computer software, entertainment products (motion pictures, videos, games, sound recordings),
information services (databases, online newspapers), technical information, product licenses, financial
services, and professional services (businesses and technical consulting, accounting, architectural
design, legal advice, travel services, etc.) has grown rapidly in the past decade, now accounting for
well over $40 billion of U.S. exports alone.
An increasing share of these transactions occurs online. The GII has the potential to revolutionize
commerce in these and other areas by dramatically lowering transaction costs and facilitating new
types of commercial transactions.
The Internet will also revolutionize retail and direct marketing. Consumers will be able to shop in their
homes for a wide variety of products from manufacturers and retailers all over the world. They will be
able to view these products on their computers or televisions, access information about the products,
visualize the way the productS may fit together (constructing a room of furniture on their screen, for
example), and order and pay for their choice, all from their living rooms.
Commerce on the Internet could total tens of billions of dollars by the turn of the century. For this
potential to be realized fully, governments must adopt a non-regulatory, market-oriented approach to
electronic commerce, one that facilitates the emergence of a transparent and predictable legal
environment to support global business and commerce. Official decision makers must respect the
unique nature of the medium and recognize that widespread competition and increased consumer
choice should be the defining features of the new digital marketplace.
 E-COMMERCE : CONVERGENCE OF TECHNOLOGIES / 13
Many businesses and consumers are still wary of conducting extensive business over the Internet
because of the lack of a predictable legal environment governing transactions. This is particularly
true for international commercial activity where concerns about enforcement of contracts, liability,
intellectual property protection, privacy, security and other matters have caused businesses and
consumers to be cautious.

As use of the Internet expands, many companies and Internet users are concerned that some
governments will impose extensive regulations on the Internet and electronic commerce. Potential
areas of problematic regulation include taxes and duties, restrictions on the type of information
transmitted, control over standards development, licensing requirements and rate regulation of service
providers. Indeed, signs of these types of commerce-inhibiting actions already are appearing in
many nations. Preempting these harmful actions before they take root is a strong motivation for the
strategy outlined in this paper.

Governments can have a profound effect on the growth of commerce on the Internet. By their
actions, they can facilitate electronic trade or inhibit it. Knowing when to act and — at least as
important — when not to act, will be crucial to the development of electronic commerce. This report
articulates the Administration's vision for the emergence of the GI I as a vibrant global marketplace
by suggesting a set of principles, presenting a series of policies, and establishing a road map for
international discussions and agreements to facilitate the growth of commerce on the Internet.

1.16 Components of Internet Technology

1.15.1 The Internet Network

But the everyday network that most resembles the Internet is the street running right outside your
building. You've got an address on that street. And it, and the other streets in your neighborhood or
town, connect and eventually pour onto a wider street or highway. That highway connects to other
neighborhoods or towns. And these highways eventually dump into higher-speed freeways that connect
other main highways, And the freeways connect to airports and shipping ports that'in turn, cross the
waters to connect to the freeways, highways (even donkey trails), and neighborhoods on other
continents.
Think of each neighborhood or town as a network of streets. If you know the address you want, you
can find a route to some other building clear across the world. Picture, then, the "highway network"
as a network of networks. That's what the Internet is like.
Interestingly, you can thank the former Soviet Union for the Internet. The forerunner of today's
commercial Internet actually started in the '60s as a U.S. Defense department project. The desire
was to create a communications system that the Soviets couldn't easily bomb. Telephone networks
were vulnerable because they relied on central switching points. Nuke the switch, and you close
down large portions of the network.

The Rand Corporation came up with the decentralized network concept. Instead of a strict hub-and-
spoke phone-switch arrangement, you had a fish net arrangement. Communication lines crisscrossed
and intersected, and messages were switched–or "routed"–from point to point in many directions. If
part of the "net" was destroyed, the "Net" (initially called ARPANET) could route messages around
the disaster.
The Internet gradually widened to serve nonmilitary research, and finally, commercial use.The National
Science Foundation initially provided the high-speed "freeway" portions of the Internet, but now, as it
141 ELECTRONIC COMMERCE

has opened to commercial use, most of the main freeways are commercially owned. It's a complicated
ownership, but basically, big-time operators pay big bucks to telecommunications firms for a stretch
of the highway, and then charge the rest of us by the minute or by the mile_so to speak.

1.16.2 WWW - World Wide Web

The World Wide Web is a collection of documents written and encoded with the Hypertext Markup
Language (HTML). With the aid of a relatively small piece of software (called a "browser"), a user can
ask for these documents and display them on the users local computer, although the document can
be on a computer on a totally different network elsewhere in the world. HTML documents (or "pages,"
as they are called) can contain many different kinds of information such as text, pictures, video,
sound, and pointers which take users immediately to other web pages. Because Web pages are
continually available through the Internet, these pointers may call up pages from anywhere in the
world. It is this ability to jump from site to site that gave rise to the term "World Wide Web." Browsing
the Web (or "surfing the Net") can be a fascinating activity, especially to people new to the Internet.
The World Wide Web is by far the most heavily used application on the Internet.

The World Wide Web is the multimedia experience on the Internet. The WWW consists of pages
where you can find out just about anything you want, or don't want to know about. The best place to
start is to a search on one of the many search engines. Click on the Net Search button at the top of
you browser and follow the instructions, or use Yahoo! to browse the Web by category.
The World Wide Web is essentially a document delivery system running over the Internet network.
Connected to the IQternet, Web browsing software running on your computer can find and fetch
documents located on Internet Web servers anywhere in the world.
Making a web site requires knowledge of "HTML" (Hyper Text Markup Language), universal document
format of the World Wide Web apart from more than a dozen components and application programs
listed in Unit 19 of this book.
For a fee, many companies will "host" your Web site, maintaining it on Web server computers connected
to the Internet. Browsing the World Wide Web can snag you lots of information, more than you might
expect. Plus, with your own Web site, you can get folks' attention from virtually anywhere in the
world, 24 hours a day.
You don't have to know much about the "Web," or how it works, to browse fairly successfully. But if
you're planning to create a Web "site," you might find it less daunting if you understand what you're
dealing with.
With your own Web site, anyone with Web browser software and a connection to the Internet can find
the Web pages you publish. Your site can be an advertisement for you or your organization. It can be
an on-line newsletter, a catalog of goods or services, a customer support vehicle, or an employee or
sales management system for remote offices. Think of what you're doing via brochures, catalogs,
faxes, and forms, and chances are you can do a lot of it more efficiently over the Internet, and the
World Wide Web, in particular.

1.16.3 Electronic Hail

The Internet is now the world's largest electronic mail system. More than 250 million people are
directly connected to the Internet and can send and receive electronic mail. Through gateways to
other electronic mail systems, millions more can join in.
1.16.4 FTP
 E-COMMERCE : CONVERGENCE OF TECHNOLOGIES /is

FTP or File Transfer Protocol is protocol used to transfer files between computers on the Internet.
There are two types of FTP conections anonymous.non-anonymous. If you connect to an anonymous
FTP server then you would use anonymous as your login name and your e-mail address as a
password. Non-anonymous, you will need a private login name and password. There are also two
types of file transfers, ASCII and binary. ASCII is for text transfers only. Binary transfers are for
transfering angthing else. If in doubt, use binary(bin).

1.16.5 Internet Relay Chat (IRC)

Internet Relay Chat is whereto meet people on the net. There is a channel for just about anything!!
First a few words of warning: Do not give any information out about yourself over irc, and do not type
in anything some stranger asks you to. And please, if you have children, closely manlier their
activities on irc. (Now after all this, irc is a great place to visit. You meet people from all over the world
and can talk abOut any subject you want.)

IRC provides real-time communication with others on the Internet.

1.16.6 Web Chat

You can also make use of more traditional live chat conferencing or bulletin board systems (BBSs)
with real-time capabilities. (Note that during live chats, participants actually type messages to each
other.) This type of software can be used on the World Wide Web with your browser to conduct online
chat sessions with other users and can accommodate between 50 and 1,000 users simultaneously.
Some companieis can use this feature on their websites to facilitate communication with customers
or as an information-based value-added feature.

1.16.7 Mews Groups

News Groups are like an international bulletin board. Each group is a forum for a different subject,
where you can post questions and answers.There are many thousands of groups covering just about
any area of interest. You can use Internet Explorer or Netscape Navigator to view these groups.
Please note that any post that you make to a newsgroup will be sent all over the world to every news
server on the planet, so never post anything personal to a newsgroup. Also, there are many newsgroups
which may contain material that is not suitable for children. Because of the global nature of Internet,
there isn't a way to control the viewing of inappropriate material. The best way to prevent children
from viewing these groups is to be with them while they're surfing.

1.16.8 Usenet
Usenet is a collection of more than 5,000 newsgroups, or discussion groups,i on every conceivable
subject. For example, some newsgroups are self-help groups for victims of cancere or sexual
abuse, and others give the latest in gossip about show business personalities. Anyone can
contribute a message, called an article, to a Usenet newsgroup or post a reply, known as a follow-up
post, to an existing article. With the aid of a newsreader (a program designed to access Usenet
newsgroups), you can read an entire thread-all the replies to an interesting article.

The system is intended for exchange of information in an informal way. Anyone can post new messages
to the group and reply to other messages. News groups are arranged in a lose hierarchical order
covering about 5,000 subjects. About half of these are related to computing, the rest are for recreational
subjects, professional discussion and trivia. To use Usenet you need a news viewer and access to an
NNTP server. Most Internet service providers have such a server, as do most large academic institutions.
 16 / ELECTRONIC COMMERCE

1.16.9 Tolnet
Telnet is the service of the Internet that allows you to access remote computers outside your area.
Many computers on the Internet are set up to allow Telnet access. Some require login names and
passwords, but many do not have any restrictions. Through Telnet, you may access libraries, data -
bases and other public services all over the world. Hytelnet is a tool that helps you access the
various sites through Telnet. The World Wide Web lets you access sites through Telnet and use FTP
to retrieve documents you find.

1.17 Principles OF Founding Internet Based e-commerce

(1) The private sector should lead
Though government played a role in financing the initial development of the Internet, its expansion
has been driven primarily by the private sector. For electronic commerce to flourish, the private
sector must continue to lead. Innovation, expanded services, broader participation, and lower prices
will arise in a market-driven arena, not in an environment that operates as a regulated industry.
Accordingly, governments should encourage industry self-regulation wherever appropriate and support
the efforts of private sector organizations to develop mechanisms to facilitate the successful operation
of the Internet. Even where collective agreements or standards are necessary. private entities should,
where possible, take the lead in organizing them. Where government action or intergovernmental
agreements are necessary, on taxation for example, private sector participation should be a formal
part of the policy making process.
(2) Governments should avoid Undue Restrictions on Electronic
Commerce
Parties should be able to enter into legitimate agreements to buy and sell products and services
across the Internet with minimal government involvement or intervention. Unnecessary regulation of
commercial activities will distort development of the electronic marketplace by decreasing the supply
and raising the cost of products and services for consumers the world over. Business models must
evolve rapidly to keep pace with the break-neck speed of change in the technology; government
attempts to regulate are likely to be outmoded by the time they are finally enacted, especially to the
extent such regulations are technology-specific.
Accordingly, governments should refrain from imposing new and unnecessary regulations, bureaucratic
procedures, or taxes and tariffs on commercial activities that take place via the Internet.
(3) Where governmental involvement is needed, its aim should be to support
and enforce a predictable, minimalist, consistent and simple legal environment
for commerce.
In some areas, government agreements may prove necessary to facilitate electronic commerce and
protect consumers. In these cases, governments should establish a predictable and simple legal
environment based on a decentralized, contractual model of law rather than one based on top down -

regulation. This may involve states as well as national governments. Where government intervention.
is necessary to facilitate electronic commerce, its goal should be to ensure competition, protect
intellectual property and privacy, prevent fraud, foster transparency, support commercial transactions,
and facilitate dispute resolution.
(4) Governments should recognize the unique qualities of the Internet
The genius and explosive success of the Internet can be attributed in part to its decentralized nature
and to its tradition of bottom-up governance. These same characteristics pose significant logistical
and technological challenges to existing regulatory models, and governments should tailor their
policies accordingly.
Electronic commerce faces significant challenges where it intersects with existing regulatory schemes.
 E-COMMERCE : CONVERGENCE OF TECHNOLOGIES 117
We should not assume, for example, that the regulatory frameworks established over the past' sixty
years for telecommunications, radio and television fit the Internet. Regulation should be imposed
only as a necessary means to achieve an important goal on which there is a broad consensus.
Existing laws and regulations that may hinder electronic commerce should be reviewed and revised
or eliminated to reflect the needs of the new electronic age.
(5) Electronic Commerce over the Internet should be facilitated on a global basis
The Internet is emerging as a global marketplace. The legal framework supporting commercial
transactions on the Internet should be governed by consistent principles across state, national, and
international borders that lead to predictable results regardless of the jurisdiction in which a particular
buyer or seller resides.

1.17.1 Pervasive Internet Access and Mobile Internet

In imagining the future of pervasive Internet access, including wireless, panelists and participants
listed major challenges as cultural/psychological concerns, complexity, network coverage and reliability
issues. Significant opportunities for accelerating the deployment of pervasive technology included
shrinkage and convergence of device sizes, proliferating and more sophisticated applications, SMS/
text messaging and improved displays. Panel members underscored the need to think beyond current
Internet approaches.
The mobile Internet is very different from the fixed-line Internet and cannot be thought of as an
extension.

1.18 Intranets
`Intranet' is a term used to describe the application of Internet technologies to serve the internal
needs of organisations and as is the greatest e-commerce facility to promote internal business to
business interests
Internet technologies offer several important advantages over conventional means for developing
internal systems. Important among these are:
q The use of a common, readily available and familiar access tool, the web-
browser
q The ease with which documents are handled and indexed
q The ease with which multiple media can be supported

1.19 The Technologies of Electronic Commerce

While many technologies can fit within the definition of "electronic commerce," the most important
are:
q Electronic data interchange (EDI)
q Bar codes
q Electronic mail
q Internet Market
q P ro d u ct d at a e xch a ng e
q Electronic forms

1.19.1 Electronic Data Interchange (EDI)

EDI is the computer-to-computer exchange of structured business information in a standard electronic
format. Information stored on one computer is translated by software programs into standard EDI
format for transmission to one or more trading partners. The trading partnerscomputers, in turn,
translate the information using software programs into a form they can understand.
181 ELECTRONIC COMMERCE

1.19.2 Bar Codes

Bar codes are used for automatic product identification by a computer. They are a rectangular pattern
of lines of varying widths and spaces. Specific characters (e.g. numbers 0-9) are assigned unique
patterns, thus creating a 'font" which computers can recognize based on light reflected from a laser.
The most obvious example of bar codes is on consumer products such as packaged foods. These
codes allow the products to be scanned at the check out counter. As the product is identified the
price is entered in the cash register, while internal systems such as inventory and accounting are
automatically updated.
The special value of a bar code is that objects can be identified at any point where a stationary or
hand held laser scanner can be employed. Thus the technology carries tremendous potential to
improve any process requiring tight control of material flow. Good examples would be shipping,
inventory management, and work flow in discrete parts manufacturing.

1.19.3 Electronic Mail

Messages composed by an individual and sent in digital form to other recipients via the Internet.
1.19.4 Internet Market
The Internet is a decentralized global network of millions of diverse computers and computer networks.
These networks can all "talk" to each other because they have agreed to use a common
communications protocol called TCP/IP. The Internet is a tool for communications between people
and businesses. The network is growing very, very fast and as more and more people are gaining
access to the Internet, it is becoming more and more useful.

1.19.5 Product Data Exchange

Product data refers to any data that is needed to describe a product. Sometimes that data is in
graphical form, as in the case of pictures, drawings and CAD files. In other cases the data may be
character based (numbers and letters), as in the case of specifications, bills of material, manufacturing
instructions, engineering change notices and test results.
Product data exchange differs from other types of business communications in two important ways.
First, because graphics are involved users must contend with large computer files and with problems
of compatibility between software applications. (The difficulty of exchanging CAD files from one
system to another is legendary.) Second, version control very quickly gets very complicated. Product
designs, even late in the development cycle, are subject to a great deal of change, and because
manufacturing processes are involved, even small product changes can have major consequences
for getting a product into production.

1.19.6 Electronic Forms

Electronic forms is a technology that combines the familiarity of paper forms with the power of
storing information in digital form. Imagine an ordinary paper form, a piece of paper with lines, boxes,
check-off lists, and places for signatures. To the user an electronic form is simply a digital analogue
of such a paper form, an image which looks like a form but which appears on a computer screen and
is filled out-via mouse and keyboard. Behind the screen, however, lie numerous functions that paper
and pencil cannot provide. Those extra functions come about because the data from electronic forms
are captured in digital form, thus allowing storage in data bases, automatic information routing, and
integration into other applications. As an example, a supplies form may filled out by the requester
and automatically sent to a supervisor for approval. Once approved, the actual order may be input
into an EDI translator, and go to the vendor by means of a structured X12 EDI transaction.
 E-COMMERCE : CONVERGENCE OF TECHNOLOGIES 119

1.20 Differences Between Electronic and Other Forms of Commerce

These methods of doing business differ from traditional commerce in the extent to which electronic
commerce combines information technology, telecommunications technology, and business process
to make it practical to do business in ways that could not otherwise be done. To illustrate, let's draw
on some examples. In each of these cases technology and business process must work together if
EC is to be successful.

1.21 Determining Technological Feasibility

As business needs are determined, it is necessary to establish the technological feasibility of various
EC plans which could meet those needs. The starting point should be a clear sense of what functions
each EC technology can provide to improve business functioning. We summarize these in Table 1.1.
Table 1.1 Most Powerful Functions of Various EC Technology
Technology Business Value
EDI Integration of incoming and outgoing structured data into other
applications (e.g., use of customer orders to schedule production) Lowers
cost when transaction volume is high Eases communication with many
different trading partners (customers, suppliers, vendors)
Bar Code Locate and identify material
Integrate location and identification information with other applications
and data bases (e.g., bar codes inserted at loading dock can be integrated
into an advance ship notice EDI transaction).
Electronic mail Free-text queries to individuals or groups Share
information via simple messages
Share complex information (via attachments)
Collaboration across distance (by making it easier to communicate and
share information)
World Wide Web Present information about company
Search for information from a large number of sources

Electronic commerce buy/sell products and services Collaboration, information sharing among
selected users within or without a company
Product Data Exchange Accurate product details transmitted to trading partners
Oversight of trading partners design work
Collaborative engineering across distance
Electronic Forms Managing processes when human oversight,
approvals, or information input needs to be combined with standard
elements of information (e.g., catalogue data)
Tracking progress in a process where many people are involved doing
different activities
Integrating human input data with automated data bases or applications
Electronic commerce (through integration with the WWW and internal
systems)
20 / ELECTRONIC COMMERCE

1.22 Ecommerce Marketing

This section will cover the basic methods of marketing on the internet. Quite simply, if you haven't
set aside money and time to market your e-business then it might as well not exist. Luckily for you,
marketing on the internet can be much more cost effective than marketing using traditional methods.
Many are even free and can be very effective given the right planning and execution.
Don't underestimate the effort that will be required in order to make your e-business successful.Your
online marketing plan should be no different than a "real-world" marketing plan.
Before you start looking for a provider, you should stop for a moment and consider what exactly you
need. How many transactions do you expect to be completing in a month? How many products do
you have to put on your web site? How complex does the software need to be? How much are you
willing to spend?
There are a lot of online transaction providers out there, and they all have varying packages. Deciding
on a provider's package that fits your needs is perhaps the most important aspect in creating an
eCommerce website.

The Directory page provides a good cross section of the companies out there. It is a good idea to go
through a few of them and compare their prices and services. For a quick breakdown of the most
popular packages these companies provide, visit the Summary section.
The methods reviewed are as follows:
q Be a resource, Not a store
q Your Current Customers
q Search Engines and Directories
q Discussion forums, Chat and Newsgroups
q Direct Opt-in Email
q Banner Advertising
q I nterne t Ne ws Re le as e s
q Co-Branding and Sponsorships
q Affiliate Programs
q Reciprocal Links

1.22.1 Be a Resource, Not a Store

The most successful web properties have one thing in common: They are resource. They don't just
sell a product or service. They interact with their vistors. They provide a forum for information exchange
and discussion. They answer questions. They ask questions. They build community! Before you go
any further take a look at your web site. Is it merely a storefront? Or, is it a community? Consider
how your planned design will serve your customers and keep them coming back.

1.22.2 Your Current Customers

Often businesses assume a seperation between their "electronic" customers and their "real live"
customers. In reality, statistics tell us that the Internet has become the primary source of research
and information especially when planning purchases. Let everyone know about your web site. Make
sure it's on all your correspondence and traditional advertisements. Tell your customers about your
move online in a effort to serve them better.
But it shouldn't end there. Keep in touch with your online clients as well. Keep an e-mail list of clients
and regularly inform them of updates and offers. Let them know that you value their business and
hope to keep them coming back. Develop an ongoing relationship with your online customers
 E-COMMERCE : CONVERGENCE OF TECHNOLOGIES / 21
1.22.3 Search Engines and Directories
When you go to find something on the internet where do you go? Chances are you go to one of a
dozen or so top search engines and directories for your information. These include sites such as
Yahoo.com, Go.com, Excite.com, Lycos.com or the browser linked sites such as Netscape.com or
MSN.com. As well, many of you probably use the directories provided by your ISP such as AOLcom.
Being listed on these sites is free and if done properly can generate a lot of traffic to your site.
Each of the search engines and directories operate differently and thus categorize individual web
sites differently. If you list your site on Yahoo! for instance, an actual person reviews the information
and places a description of your site in the appropriate category. On the other hand, a listing on
Excite involves a "spider", or indexing program visiting your site and cataloguing it based on the
frequency of keywords in the underlying code and content of your site. How you design your site is
of utmost importance! The relative frequency of key words and search terms on your site can make
or break your search engine listing under your industry category. Do some research. Find out what
search terms perspective customers would use to find you and incorporate those terms into your site
content. Make sure you get listed in the major search engines and any specialty engines that may be
available.

122.4 Discussion Forums, Chat and Newsgroups

The most important thing to remember here is: Be a user!
Use the internet as a source of information both within your industry and outside of your normal
realm. Get involved with discussion groups, chat and newsgroups in subject areas that interest you.
Let people know who you are and what you do while being an interesting contributor to internet based
discussions. Don't spam (the internet equivalent of unwanted junk mail) the discussions with unsolicited
advertisements, that will just serve to annoy perspective clients. Instead develop a relationship with
the users. They will see you as a "friend in the business". This is an often overlooked and very
powerful tool if used properly. It can also help you get a taste for "internet culture" and help you
become an active internet citizen. A greater understanding of what drives people on the internet will
ultimately help your business serve better and sell more.

1.22.5 Direct Opt-in E-mail

There are a number of companies who rent out lists of "opt-in" e-mail subscribers, or voluntary
subscribers to commercial newsletters and offers. This isn't unsolicited junk e-mail, or spam, but
friendly recipients expecting regular mailings. Renting these lists can cost anywhere from $0.10 to
$0.35 per name. Of course just because you send an e-mail, it doesn't mean it will be read. How you
write your headlines and the information you provide will play a large part in the success of a direct
e-mail campaign. Proven traditional methods can be applied to internet campaigns as well. The best
campaigns:
q Attract Attention
m Generate Interest
q Stimulate Desire
q Ask for Action
Effective campaigns incorporate all of these elements, in the order listed. Especially important is a
call to action. Your campaign will not be effective unless you ask for something!

1.22.6 Banner Advertising

Banner advertising is probably the most visible form of internet advertising, yet launching a successful