See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/233820093

E-Commerce Business Models: Part 1

Chapter · July 2010

DOI: 10.4018/978-1-61520-611-7.ch034

CITATION READS
1 16,515

1 author:

Khaled Ahmed Nagaty

The British University in Egypt
53 PUBLICATIONS   235 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Providing e-Passports and e-IDs with extra three security layers to prevent fraud View project

A novel approach to prevent fraud in ePassports and eIDs using biometrics Mapping View project

All content following this page was uploaded by Khaled Ahmed Nagaty on 28 May 2014.

The user has requested enhancement of the downloaded file.

 347

Chapter 34
E-Commerce Business Models:
Part 1
Khaled Ahmed Nagaty
The British University in Egypt

ABSTARCT
In this article the author explained the classes of e-commerce business models and their advantages
and disadvantages. He discussed the important issues and problems facing e-commerce web sites and
how to build a successful e-commerce Web site using techniques of security, privacy and authentication,
guidelines of maintenance, collecting user’s information for personalization, using multi-tier architecture
to achieve high performance and high availability.

INTRODUCTION developed from being a plain text websites to

Internet and computers have revolutionized the
electronic transactions which involve the transaction
of ownership or right to use products or services
online. E-commerce not only involves buying and
selling over the Internet but also collaborating with
business partners. It is not constrained by time
or physical location it can be conducted at any
time from any place which opened unlimited new
markets. A business model is a framework of how
an organization generates revenue. E-commerce
business models use the Internet to carry on their
activities and generate revenue. They have been
DOI: 10.4018/978-1-61520-611-7.ch034
interactive e-commerce hubs that use Internet and
mobile technologies to reach their current custom-
ers and attract the potential customers. Some ser-
vices and products can be delivered by the internet
while others do not. Services that can be delivered
through the internet include distance learning, fi-
nancial services, pension services, legal services,
news services, and advisory services, information
services such as information on travel flights, buses
and trains services.
However, services that cannot be delivered us-
ing the internet include police and law enforcement
treatment, fire brigade services, first aid, nursing,
physiotherapy, surgery operations, dental services,
hairdressing, house cleaning, waste disposal and

Copyright © 2010, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

washing services, plumbing and hosing, ventilat-
ing and heating services, forensics, transportation,
freight and shipping services, building services,
wedding, childcare, security and warehousing.
Products that difficult to be delivered through the
internet include jewels and timepieces, footwear,
beauty care and cosmetics, furniture, frames of
eyeglasses. All these products need to be tried out
and assessed by the customers. In jewels ladies
want to try out different models of jewels to choose
a suitable one. In furniture it is hard to describe
the required design and colors through the Internet
and customers need to touch and try the furniture
before taking a decision. The same issue applied
for beauty care and cosmetics where ladies want
to compare between different colors on their faces
before taking a decision. However, an e-commerce
business will not work well unless there is a well
equipped infrastructure which includes computers
that can connect to the Internet Service Provider
(ISP) through dial-up lines or dedicated lines that
offer a high bit rates such as digital subscriber lines
(DSL). DSL is recommended if a user wants a faster
access to the internet. ISPs provide the Internet
access to customers at their homes, business and
institutions. Berners-Lee in 1989-1991 and his
associates developed the essential components of
a Web site which are: HTML, HTTP, a Web server
and a browser. The HyperText Markup Language
(HTML) which is a programming language can be
used to build Web pages on a Web server. Remote
client computers which are called Web clients
can access these Web pages using the HyperText
Transfer Protocol (HTTP) to be displayed using
Web browsers. Customers should easily interact
with their Web sites or they will be lost to com-
petitors and discouraging return visits to this Web
site which results in sales losses. Software tools
are required to achieve high levels of interactivity
with Web sites which may include:
• Common Gateway Interface (CGI): is a
standard protocol for communication be-
tween Web clients’ browsers and application
348
E-Commerce Business Models: Part 1
software running on a Web server that al-
lows the Web server to respond to requests
from Web clients. Each time a request is
received the CGI analyzes the request and
if it identifies a file stored on the server it
sends the file back to the user, and if it is
required to execute a command on an ap-
plication it runs the command and sends
the output back to the user.
• Active Server Pages (ASP): is a develop-
ment software tool which can be used to
create and run dynamic and interactive
Web server applications. When a client’s
browser requests ASP file from a Web
server it is processed on the server and the
output is in pure HTML code which is sent
to the client’s browser to display it in a for-
matted text. ASP is a Microsoft technology
that was designed to run on Windows op-
erating system that runs Microsoft Internet
Information Server (IIS). The active con-
tent is written with a scripting language.
• Java: is a programming language used
to build interactive contents on the client
computer thus saving considerable server
load. A Java program is called applet when
it runs from a Web page and called servlets
when it runs on server. A Java program is
first translated into Java intermediate lan-
guage (Bytecode) which is then executed on
an interpreter called Java Virtual Machine
(JVM). JVM interprets the intermediate
code to machine code. Any computer that
runs JVM is able to interpret the interme-
diate code which gives the Java language
the ability to run on any platform such as
Linux, Mac OS X or Windows.
• Java Server Pages (JSP): is a Java technol-
ogy that allows developers to create Web
pages that contain dynamically generated
content. It can combine any document
types such as HTML or Extensible Markup
Language (XML) tags to encapsulate the
logic that generates the content for the
E-Commerce Business Models: Part 1
response page. In this way, JSP separates
Web presentation from Web content. JSP
pages are not restricted to a specific plat-
form or Web server. JSP is developed by
Sun and it is like an ASP page and has a lot
from ASP technology. The active content is
written in Java which allows writing com-
plex logic with complex error handling that
may not possible in ASP.
• JavaScript: it is unrelated to the Java pro-
gramming language despite its name. It is
the Netscape-developed object scripting
language that is used to control objects on
an HTML page and handle interactions
with Web browsers. It is a script language
used in millions of Web pages to create a
variety of special effects, add functionality
and to handle verification and validation of
input users’ forms. It detects the actions of
the user and reacts to them. You can run
client side JavaScript within ASP pages.
JavaScript can be used for more simple cli-
ent side such as filling forms while ASP is
used for more server sided validation, fetch
data, generating pages,…etc.
• ActiveX: is an object oriented programming
tool that is used to create a self-sufficient
program called ActiveX control which can
be automatically downloaded and execut-
ed by Web browser. Active X controls are
small applications written in common pro-
gramming languages like Visual Basic. If
the required control is not one of the stan-
dard controls in the Web browser a dialog
box prompts the user to download the cor-
rect control. For example, when you open a
Web page using Internet Explorer that con-
tains a video clips the pre-loaded ActiveX
control allows Windows Media files to be
played directly in the Web page without
the need to run the Window Media Player
separately. ActiveX has full access to cli-
ent’s resources such as printers, networks
and hard drives.
• VBScript: is programming language from
Microsoft which is a subset of its Visual
Basic programming language designed
for interpretation by Web browsers. It
is designed to compete with JavaScript.
VBScript can be used for server-side as
well as client-side while JavaScript is used
only for client-side. VBScript supports
only the Internet Explorer browser while
JavaScript supports all browsers. VBScript
is case insensitive while JavaScript is case
sensitive.
• PHP: is an HTML embedded scripting lan-
guage where much of its syntax is taken
from C, Java and Perl languages with some
unique features of PHP. This language al-
lows web developers to write dynamic web
pages quickly.
• ColdFusion: is a product of Macromedia,
it is a popular, sophisticated and integrat-
ed set of products for building interactive
Web applications. ColdFusion consists of
ColdFusion Studio to build a Web site and
ColdFusion Server to serve Web pages
to users. ColdFusion is based on the stan-
dard HTML in addition to the server-side
ColdFusion Markup Language (CFML).
CFML provides the capability of control-
ling the application behavior, the ability to
integrate multiple server technologies and
dynamically generate the content returned
to the Web browser. When a Web browser
requests a page in a ColdFusion applica-
tion it is automatically pre-processed by the
ColdFusion application server. The applica-
tion server reads the client’s data and exe-
cutes the application logic that is written in
CFML in the page, the server interacts with
database servers, file systems and mail serv-
ers and dynamically generates the HTML
Web page which is returned to the browser.
ColdFusion can be used when real time ap-
plication is required where live data can be
incorporated into dynamically Web pages.
349

• DreamWeaver: is a product of Macromedia
that allows you to create Web pages both
static and dynamic. It consists of an ap-
plication server and ColdFusion Markup
Languages (CFML). Most ColdFusion
developers write their ColdFusion pages
using DreamWeaver. DreamWeaver saves
time by automatic closing HTML and
CFML tags, auto-generate some CFML
code, providing auto-complete menus as
you type and color coding the text of your
code to improve readability.
BACKGROUND
E-commerce business model is important for com-
panies to survive in global economy. E-commerce
business model is a fertile ground for innovation
(Amit and Zott, 2000). When the Internet was
made available for the public in 1994, many ana-
lysts expected that e-commerce would be a major
economic sector in the near future. However, the
major progress for e-commerce occurred when
security protocols have sufficiently developed
and widely deployed which led to more secured
transactions over the Internet. A substantial
number of primitive e-commerce web sites have
been developed in late 20th century and the year
2000 and although many e-commerce web sites
were collapsed in the dot.com fall in 2000 and
2001, many companies started to develop web
sites with e-commerce capabilities. E-commerce
can be divided into four main classes: B2B, B2C,
C2B, and C2C.
• B2B (Business-to-Business)
B2B is the exchange of products, services,
or information between businesses rather than
between businesses and consumers. Businesses
exchange products, services and information with
other businesses rather than customers such as
manufacturers selling to distributors, wholesalers
350
E-Commerce Business Models: Part 1
selling to retailers or company providing services
to other companies. Pricing is often negotiable
to obtain lower prices on your supplies and with
minimum human intervention due to businesses
systems integration. B2B is now growing in an
exponential rate where companies of all sizes
are buying and selling products and services
over the Internet. Businesses can make real time
transactions with other businesses to improve
their efficiency and productivity. Analysts expect
the revenue of B2B will exceed the B2C revenue
in the near future despite early expectations for
B2C flourishing. An example of B2B e-commerce
model is e-procurement sites where a company
purchasing agents can buy from suppliers, ask for
offers or bidding to purchase at a desired price.
• B2C (Business-to-Customer)
B2C is the transactions that occur between
a businesses and customers. Businesses selling
products or provide services to customers or the
retailing part of e-commerce on the Internet. B2C
businesses had a major role in flourishing of e-
commerce where customers got large discount
on shopping and provided free online services.
Businesses got its products to the market faster
with minimum costs and they were adapting more
quickly to customers demand. Many spectators
argue that the B2C was once flourished and now
it is often seen unsuccessful, less frequently and
will not thrive again. However, despite of disap-
pointments some analysts predict that B2C will
flourish again and continue to grow but not just
easy and popular as initially expected. An example
of B2C e-commerce model is www.necx.com
which provides access to materials purchased in
bulk and resell them to customers.
• C2B (Customer-to-Business)
C2B e-commerce is rare in practice but in
theory it means a customer wants to sell a product
or a service to a business. Customers naming their
E-Commerce Business Models: Part 1
prices for various products or services. Companies
review the consumer’s requirements and bid on the
request. The customer reviews the bids and selects
the company they want. C2B enables customers to
pay for their bills online from any place with no
need to come to the store. Examples of this type
of e-commerce model www.fotolia.com where
photographers and designers offer their works
for selling to companies. Other examples of C2B
model are online advertising sites like Google
Adsense, online surveys like www.surveyscout.
com where individuals offer the service to reply
to the company’s survey and companies pay in-
dividuals for this service.
• C2C (Customer-to-Customer)
It is a person-to-person transactions which take
place every day since 1995. It facilitates transac-
tions between customers through a third party. A
good example of this e-commerce type is auctions
web sites like eBay where consumers can buy and
sell using online payment systems like PayPal to
send and receive money online with ease.
Major Advantages of E-Commerce
Business Models are
[Knowledge@Wharton, 2008]:
• Efficiency: e-business models increase
business efficiency in several ways. They
reduce search costs for online customers
and provide them with detailed informa-
tion along with their prices. They encour-
age customers to do business by increasing
transaction efficiency, security and speed.
Also, it allows reverse marketing where
buyers put their desired purchases for bid-
ding among sellers which is known as re-
verse auction. E-business models reduce
both inventory and distributions costs for
companies.
• Cross-selling: companies can increase their
value creation for their own products by
pushing new products to current customers
based on their past purchases, this increas-
es customer’s dependence on the company
and decreases the probability a customer
switches to competitors.
• Complementaries: a company can increase
its value creation by accompanying its
products with other products. Customers
will buy more of the complementary prod-
ucts regardless of their prices if they buy
more of the core products. Also, a compa-
ny can bundle its product by complemen-
tary products from other suppliers. Once
a selling occurs, an e-business model can
offer to the customer the complementary
products associated with the purchased
product.
• Customer lock-in: keeping the customer
dependent on the company a longer time
by making the customer engage with the
company in repeated transactions.
• Customer satisfaction: increasing the de-
gree to which online customers are accom-
modated by service offerings. It increases
the quality of service as well as the volume
of transactions while decreasing the vol-
ume of complaints.
• Speed: advances in communications allow
transactions to be done almost instanta-
neously. There is no need to wait weeks for
a money transaction or catalogue to arrive
by post.
• Availability: online services are available
any time of day or night and from any
place.
In general, e-commerce business models
provide tools to handle large information masses
with improved security, reliability, user friendly,
low costs, accessibility and customizability which
help flourishing e-commerce.
351

Major Disadvantages of
E-Commerce Business Models
• Feel and touch: websites allow customers
to browse products but do not allow touch-
ing them which prevents many customers
to make an accurate decision.
• Trust: customers are unwilling to accept
E-commerce due to privacy and security
concerns (Turban, 2004; Awad, 2003).
SUCCESSFUL E- COMMERCE
WEBSITES
Issues, Controversies, Problems
There are numerous studies reporting the fact that
e-commerce sites are failing in usability, ease of
use and general functionality (Tarafdar and Zhang,
2005; Aladwani and Palvia, 2002; Ranganathan
and Ganapathy, 2002; Yang et al., 2003; Long &
McMellon, 2004). Users often fail when they try to
purchase products on an e-commerce site (Nielsen
and Norman, 2000; Zona Research, 1999). It is not
just the customers’ failure but also the site fails
to sell. However, chiefly for reasons of growing
importance of online transactions in business-to-
consumer (B2C) and business-to-business (B2B),
e-business models need for development and sur-
vival cannot be ignored for organizations working
in complex operational environment coupled with
the dynamism of technological environment that
principally unbounded and constantly evolving.
Security is also an important issue on the Inter-
net where sensitive payment details such as a
credit card number may be intercepted or stolen
which leads to the loss of customers’ confidence
especially if this information is used in an illegal
transactions. Hackers may access customer files
and corrupting customers’ accounts. As customers
are unseen you are not sure of the identity of online
visitors which arises the problem of authentication.
Achieving high availability and performance are
important issues. Loss of availability may occur
352
E-Commerce Business Models: Part 1
due to hardware failure, computer viruses that
may corrupt data or applications operating on the
Web server or due to lack of maintenance which
makes the Web site unavailable. The failure to
achieve high availability and high performance
will cause the business to loose customers through
frustration. Also, problems of integration of new
versions of e-commerce software with existing
ones may also appear. Governments and busi-
nesses encourage e-Commerce but there is some
resistance by consumers due to concerns about
security and privacy. Currently, e-commerce busi-
ness models require a customer to provide more
personal information than it is required. Many
people are concerned that this information will
then be re-used for another purpose or sold to
direct marketers. Some analysts argue that despite
of the improvement in information encryption
there still a danger that credit card information
may be stolen and used in an illegal purchasing
on the Internet.
However, we argue that transmission of mes-
sages over the Internet was significantly improved
after using the Secure Socket Layer (SSL) protocol
which uses private and public key encryption and
digital certificates. It is the customer’s responsibil-
ity to be careful not to disclose his card informa-
tion to anybody or leaving his card in unsecured
places. Other important issues for e-commerce
Web site is the loss of privacy which means loss
of individual privacy when using the Internet.
Solutions and Recommendations
Website Security
Organizations conducting business online have
many web applications in the form of shopping
carts, submission forms, login pages, dynamic
content and customized application. In the B2C
model Web applications allow Web client’s to ac-
cess the Web server to retrieve, submit or update
data. These data may be sensitive such as user’s
credit card data, user’s social number, user’s bank
E-Commerce Business Models: Part 1
account details or even user’s medical record.
To maintain high availability on the cyberspace
the business web site should be available 24 x 7
which invites hackers to launch attacks on the
backend corporate database. In case of a hacker
gained access to the organization’s sensitive data
and got use of it then the organization’s business
will be in a serious trouble. The business will lose
clients’ and stakeholders’ trust and eventually may
be closed down. Business Web sites receive and
send sensitive information to their clients and it
is important to guarantee information integrity
which means that this information has not been
changed during its transmission.
E-commerce Web sites use the Secure Socket
Layer (SSL) protocol to protect their sensitive
information. This technology makes it easier and
safer for online customers to trust Web sites in
three essential ways (VeriSign, 2008):
1. Enables encryption of sensitive information
during online transactions.
2. Each SSL Certificate contains unique, au-
thenticated information about the certificate
owner.
3. A Certificate Authority verifies the identity
of the certificate owner when it is issued.
The SSL protocol is well designed with respect
to preventing eavesdropping and avoiding suc-
cessful man in the middle attacks. However, it is
less concerned with the processes and procedures
that a person or organization must go through to
acquire a certificate.
Additional methods of Web security include
(Hoffer, et al., 2007):
1. Restrict the number of users accessing the
Web server as much as possible and limit
the number of users with administrative
rights.
2. Keep a minimum number of open ports on
the Web server.
3. Remove any unneeded programs that load
automatically when setting up the server,
they may provide a hacker with the access
desired.
Other essential elements of Web site security
are firewalls and protection against worms and
viruses. Fire walls protect the web Site’s servers
against hackers and the latest version of anti-
viruses protects data files from being corrupted
by worms or viruses.
Website Privacy
In the B2C models, companies collect informa-
tion about visiting clients such as user prefer-
ences, shopping cart contents to use it later in
marketing purposes or in running promotions.
An e-commerce Web site should keep products
placed in a shopping cart by customers otherwise
they will be deleted when these customers log
out. E-commerce Web sites use cookies to iden-
tify users and prepare customized Web pages for
them. A cookie is a piece of information that a
website server sends to a user’s browser when
he accesses that site. They can be placed on a
user’s machine to collect information about this
user without changing any configurations of the
user’s computer. When your browser receives the
information it saves it on your hard-disk unless
your browser doesn’t support cookies. Each time
you access this web site using this computer, the
information that was previously received is sent
back to the website server by your browser. Most
commonly used Web browsers support the use
of cookies. Cookies indicate to a website that a
customer had been previously there and tell what
parts of the website a customer had visited. It also
records customer’s habits and what he is interested
in. This information can be used to tailor adver-
tisements that suit customer’s interests. Cookies
can be prevented by allowing the computer to
delete them when a browser starts up or a browser
must notify the user or take permission whenever
353

a cookie is to be written to the computer’s hard
disk. Software products that can reject or manage
cookies such as Cookie Crusher, Cookie Cruncher
or Cookie Pal are now available.
Website Authentication
Authentication is the process of verifying the iden-
tity of the user as a pre-requisite to allowing him
to accesses system’s resources. With the growing
number of online customers e-commerce authen-
tication becomes more and more important issue
in e-commerce security. All e-commerce systems
should apply an authentication methodology to al-
low user’s access to sensitive data and preventing
malicious access. Passwords are the most common
methods to identify an e-commerce Web site visi-
tor. A visitor is able to log into the Website as long
as he supplied the correct password. The major
drawback of using this method is that a password
may be compromised by someone. Passwords
should not be shared by others or written down
where others may find them. They should not
be sent over networks without being encrypted
because they can be easily compromised if they
are intercepted.
Non-repudiation is an important issue in e-
commerce where a user should not be able to
repudiate having signed a contract or sent the
message. By using a digital signature a signer
cannot claim that he did not sign a message. Some
schemes of non-repudiation use time stamps with
the digital signature.
Website Personalization
Websites personalize services to their customers
according to their preferences, needs, interests,
tastes and wishes and organizes them to be in easy
reach. This brings the vendor and end customer
closer than ever before and improves access to
relevant products. A vendor can now personalize
product message for individual customers on mas-
sive scale (Mobasher, 2004). User’s information
354
E-Commerce Business Models: Part 1
is extracted form his profile provided when the
user logged into the Website. The Website retrieval
system can use this information to pursue one or
more of the goals posed by the user. The informa-
tion provided by the user is a list of attribute-value
pairs where each attribute is assigned a proper
value depending upon each user. Attributes can
be divided into (Abbattista et al., 2002):
1. Explicit where values are given by the
user.
2. Existing where values can be collected
from existing applications, such as register
systems (e.g., ADDRESS, JOB).
3. Implicit where values are collected from
the user behavior and history of his
navigation.
Personalization builds credibility especially
when it traces user’s behavior and selects new
stories according to customer’s preferences.
Ads can be personalized where a Web site gains
credibility when ads match the topic a customer
is reading about (Fogg, 2003).
Website Maintenance
Maintenance solutions prevent Website problems
such as broken links or navigational disconnects.
Maintenance includes operational tasks such as
installing the latest software patches, the latest
anti-virus software, performing frequent backups,
de-fragmenting the storage and system upgrading
to keep system performance at optimum and im-
prove its scalability to cope with business growth
(Turban, 2004; Awad, 2003). Regular backups may
be impractical for e-commerce Web sites as it is
must be always remain available so a cold backup
where a Web site server is totally shutdown is not
practical. A hot backup is used where a selected
part of the database which contains dynamic data
is shutdown for backup. Incremental backup for
the information that changed since the last backup
is suitable for e-commerce Web sites. It does not
E-Commerce Business Models: Part 1
Figure 1. Three tier architecture for e-commerce web site
take much time to complete and allow for long
time between full backups (Hoffer et al., 2007).
Differential backup is a cumulative backup of
all changes made since the last full backup. It is
useful for Web sites in their fast recovery from
failures as it requires only a full backup and the
latest differential backup to restore the site. The
disadvantage is that as more days elapsed since
the last full backup more data needs to be backed
up, especially if a significant proportion of the
data has been changed. The more frequent the
backups are the faster the Web site recovers when
a failure occurs. So, it is important to maintain a
good policy for backups.
Website Architecture
E-commerce Web sites using multi-tier architec-
ture are flexible, scalable, and responsive to the
expectations of clients. This is because the func-
tionality of the application is divided into logical
components that are associated with a tier. Each
component is a service that is built and maintained
independently of other services. Services commu-
nicate with each other using protocol that enables
a service to receive and send information from
and to other services (The Complete Reference,
2002). Figure 1 shows an example of multi-tier
architecture e-commerce Web site. The require-
ments for high availability which include:
1. A high mean time between failures for all
hardware components
2. Fast recovery from failures when they do
occur
3. Good administrative tools and policies for
system maintenance
4. Support for online administrative activities
where possible
To fulfill the requirements of high availability
and high performance hardware and software
components must be assembled in redundancy
whenever possible. Redundant equipment at ev-
ery level of the multi-tier architecture provides a
Web site some degree from failure and scalable
processing to handle traffic surges. As an example
redundancy of database servers enables one server
to take over requests for another server in case
of failure. Also, if an application server fails, the
load balancers can direct requests to other serv-
ers. Clustering software manages an automated
failover to clustered equipment when necessary.
Allowing fast recovery from logical errors such
as database corruptions is an important aspect of
maintaining high availability for e-commerce web
sites. The most frequently techniques that are used
are disk mirroring and stripping techniques. To be
able to switch to an existing copy of the database
it must be mirrored, that means two copies of
database are kept and simultaneously updated.
Redundant Array of Independent Disks (RAID)
system that implements mirroring is a technology
employs the simultaneous use of two or more
hard disks to achieve high levels of performance,
availability, and larger data volume sizes. Critical
data gains protection from disk failures if stored
in RAID or mirrored configurations. A disk fail-
ure can be quickly recovered from the mirrored
disk with no interruption in service to the user.
355

Figure 2. Data stripped on four disks as adapted from Hoffer et al., 2007
Another technique that can be used with RAID
is stripping. Stripping is a way of “slicing” data
and storing it across multiple devices to improve
access performance by distributing I/O among
many devices. Figure 2 shows data stripped on
four hard disks (Hoffer et al., 2007)
FUTURE RESEARCH DIRECTIONS
There are an increasing number of legitimate Web
sites being attacked throughout 2008 by being
compromised or used as a host to deliver malware
to their unsuspecting visitors. There are many Web
threats trends such as (Symantec, 2009):
1) Viral attacks are dynamically changing
making traditional antivirus solutions
ineffective.
2) Attacks targeting browser plug-ins instead
of only the browser itself.
3) Increasing number of users being infected
by misleading applications.
4) Using SQL injection to infect the main stream
Web sites.
5) Spam and spyware threats.
It is a vicious cycle after every security risk
solution a new security hole is discovered. This
makes the need for more intelligent security solu-
tions are critical.
In Website authentication using regular pass-
words is a weak protection mechanism which
356
E-Commerce Business Models: Part 1
means that a strong need for more effective
password mechanisms is required. Two factors
authentication require two types of identifica-
tion to access a Website online. A combination
of something you know such as passwords and
something you have such as fingerprints, iris and
face is some sort of two factor authentication. Also
using dynamic authentication may be a useful
addition as a part of a wider, integrated suite of
authentication services. GLS token device displays
a unique 6 digit number that changes every 60
seconds called a token code provides a more secure
way of accessing government online services. To
logon a user must provide his username, password
and token code (E-government, 2007).
Although cryptography industry developed en-
hanced algorithms to enhance privacy and protect
personal data developments in research, design
and technology around security are still needed
to reduce risks of privacy violation.
CONCLUSION
In this chapter we discussed the main classes of
e-commerce business models and their advantages
and disadvantages. We discussed the problems
and issues facing e-commerce Web sites such as
security, authentication, privacy, performance and
availability and their possible solutions. Finally,
we introduced some of the future research trends
in Web site security and authentication.
E-Commerce Business Models: Part 1
REFERENCES
Abbattista, F., Degemmis, M., Fanizzi, N., Lic-
chelli, O., Lops, P., Semeraro, G., & Zambetta, F.
(2002). Learning User Profiles for Content-Based
Filtering in e-Commerce. In Atti del Workshop
AI*IA su Apprendimento Automatico: Metodi e
Applicazioni, Siena, Settembre 6-11, 2002.
Aladwani, A. M., & Palvia, P. C. (2002). Devel-
oping and validating an instrument for measur-
ing user-perceived web quality. Information
& Management, 39(6), 467–476. doi:10.1016/
S0378-7206(01)00113-6
Amit, R., & Zott, C. (2000). Value Drivers of
E-commerce Business models. In The Wharton
Conference on Winners and Losers in the E-
Commerce Shakeout, October 20, 2000.
Awad, E. M. (2003). Electronic Commerce: from
vision to fulfillment. Upper Saddle River, NJ:
Prentice Hall.
E-government. (2007). Online Authentication
Trends 2007. Retrieved on March 17, 2009, from
http://www.e.govt.nz/services/authentication/
library/docs/authtrends-2007
Fogg, B. J. (2003). Persuasive Technology: Using
Computers to Change What We Think and Do.
San Francisco: Morgan Kaufmann.
Hoffer, J. A., Prescott, M. B., & McFadden, F. R.
(2007). Modern Database Management (8th Ed.).
Upper Saddle River, NJ: Prentice Hall.
Kambil, A., Ari Ginsberg, A., & Bloch, M. (1998).
Reinventing Value Propositions [Working Paper].
NYU Center for Research on Information Systems.
Knowledge@Wharton. (n.d.). Creating Value
through E-Commerce Business Models. Retrieved
December 25, 2008, from http://knowledge.whar-
ton.upenn.edu/article.cfm?articleid=254
Long, M., & McMellon, C. (2004). Exploring
the determinants of retail service quality on the
internet. Journal of Services Marketing, 18(1),
78–90. doi:10.1108/08876040410520726
Mobasher, B. (2004). Web Usage Mining and
Personalization. Retrieved on February 5, 2009,
from http://maya.cs.depaul.edu/~mobasher/pa-
pers/IC-Handbook-04.pdf
Nielsen, J., & Norman, D. A. (2000). Web-site
usability: usability on the web isn’t a luxury.
Retrieved March 28, 2000, from http://www.
informationweek.com/773/web.htm
Ranganathan, C., & Ganapathy, S. (2002). Key
dimensions of business-to-consumer web sites.
Information & Management, 39(6), 457–465.
doi:10.1016/S0378-7206(01)00112-4
Symantec. (2009). Internet Security Threats Re-
port. Retrieved on March 15, 2009, from http://
www.symantec.com
Tarafdar, M., & Zhang, J. (2007). Determinants of
reach and loyalty–a study of website performance
and implications for website design. Journal of
Computer Information Systems, 48(2), 16–24.
The Complete Reference. (2002). J2EE Multi-tier
Architecture. Retrieved on January 14, 2009, from
http://searchwebservices.techtarget.com/search-
WebServices/downloads/J2EE_TCRCH02.pdf
Turban, E., King, D., Lee, J., & Viehland, D.
(2004). Electronic Commerce: A Managerial
Perspective. Upper Saddle River, NJ: Pearson
Prentice Hall.
VeriSign. (2008). Secure Sockets Layer (SSL). How
It Works. Retrieved January 24, 2009, from http://
www.verisign.com/ssl/ssl-information-center/
how-ssl-security-works
357

Yang, Z., Peterson, R., & Cai, S. (2003).
Service quality dimensions of internet pur-
chasing: an exploratory analysis. Journal
of Services Marketing, 17(7), 685–698.
doi:10.1108/08876040310501241
Zona Research. (1999). Zona research’s online
shopping report. Retrieved April 4, 2000 from
http://www.zonaresearch.com/info/press/pre-
leases99.htm
KEY TERMS AND DEFINITIONS
E-Commerce: it is the process of buying and
selling products or services over the Internet.
Multi-Tier Architecture: is the architecture
of an application that has at least three layers
358
View publication stats
E-Commerce Business Models: Part 1
separated from each other. Each layer interacts
with only the layer directly above or below it,
and has specific functions to do.
Website Authentication: it is any process by
which a Website verifies that someone is who he
claims he is.
Website Maintenance: it is the process of
updating the elements of a Website.
Website Personalization: it is a process with
which an online user customizes a Website to its
preferences, wishes and interests.
Website Privacy: it is the process with which
a Website protects its information from being
disclosed to unauthorized online users.
Website Security: it is an application that
restricts access to certain areas within the user’s
website.