e - Commerce

Session - 7

What’s in the store Today?
• E-commerce Software

• Legal & Ethical Issues

E- Commerce Software

. commercial site. Web servers • The components of a web server are: – Hardware – Software • When determining what sort of server hardware and software to use you have to consider: – Size of the site – Purpose of the site – Traffic on the site • A small. noncommercial Web site will require less resources than a large.

The role of a web server • Facilitates business – Business to business transactions – Business to customer transactions • Hosts company applications • Part of the communications infrastructure .

Hosting considerations Will the site be hosted in-house or by a provider? Factors to consider: • The bandwidth and availability needed for the expected size. can the provider still handle it? • Personnel requirements or restraints • Budget and cost effectiveness of the solution • Target audience: Business-to-customer (B2C) or business-to-business (B2B) . traffic. and sales of the site • Scalability: If the Web site needs to grow or has a sudden increase in traffic.

Services provided • Access to hardware. software. personnel • Domain name. IP address • Disk storage • Template pages to use for designing the site • E-mail service • Use of FTP to upload and download information • Shopping cart software • Multimedia extensions (sound. movies) • Secure credit card processing . animation.

• Middle-tier: Ranges in price from $1K to $5K+. and can take from one day to several days to set up. Typically hosted by an ISP. Levels of packages Three levels of e-commerce packages: • Basic: Requires a few hundred dollars in fees and less than an hour to set up. • Enterprise-class: For large companies with high traffic and transaction volumes. Hardware and in-house specialists needed. Requires hardware purchase and some skills. Can connect with a database server. .

Basic packages Basic packages are free or low-cost e-commerce software supplied by a Web host for building sites to be placed on the Web host’s system. • Fundamental services • Banner advertising exchanges • Full-service mall-style hosting .

. database connectivity. computer expertise required of the merchant. software customization tools. software portability. Midrange packages Distinction from basic e-commerce packages: • The merchant has explicit control over – Merchandising choices – Site layout – Internal architecture – Remote and local management options • Other differences include price. capability.

an SMTP system. a Web front-end. accounting. and a database server. a DNS server. • Requires one or more dedicated computers. an HTTP server. firewall(s). . such as database. Enterprise solutions Distinguishing features: • Price ($25.$1 million) • Extensive support for B2B e-commerce • Interacts with a variety of back office systems. and ERP.000 . an FTP server.

operating system. Web platform choices • Hardware. • Whatever your choice you must ensure that the server hardware is scalable. meaning that it can be upgraded or a new server added as necessary. and application server software must be considered together since each affects the other. • Other needs. . such as a database server. Database products have large processing needs. should be handled by separate hardware.

• The mix and type of Web pages – Static pages – Dynamic pages: Shaped in response to users. . – Response time: The amount of time a server requires to process one request. Factors in performance • Hardware and operating system choice • Speed of connection to the Internet • User capacity – Throughput: The number of HTTP requests that can be processed in a given time period.

• Three of the most popular Web server programs: – Apache HTTP Server – Microsoft Internet Information Server – Netscape Enterprise Server . • The market is divided into intranet servers and public Web servers. Web server software • There is no best package for all cases.

it is now available for many operating systems. • Can be used for intranets and public Web sites. • . • The software is available free of charge and is quite efficient. • Originally written for Unix. Apache HTTP Server • Developed by Rob McCool while at UI in the NCSA in 1994.

• . • Can be used for intranets and public Web sites. Microsoft IIS • Microsoft’s Internet Information Server comes bundled with Microsoft’s Windows NT/2000. • It is suitable for everything from small sites to large enterprise-class sites with high volumes.

Web server tools Other Web server tools include: • Web portals • Search engines • Push technologies • Intelligent agents .

Ethical & Legal Issues in E.Commerce .

cookies) Ethical Issues • Disintermediation – Value-added services that require expertise – Job loss . Ethical and Legal Issues • Ethical Issues • Privacy – Stored and transferred personal information – Tracking (i.e.

How is private information collected? • Reading your newsgroup postings • Finding you in an Internet Directory • Making your browser collect information about you • Recording what your browser says about you • Reading your email » From Rainone. 1998) • Most common methods are cookies and site registration . et al.

Privacy: Some Guidelines • Four privacy principles for Web site administrators: – Use the data collected to provide improved customer service – Do not share customer data without people outside the company without their permission – Tell customers why you are collecting the data that you are collecting – Give the customers the right to delete any data you have collected about them .

Ethical Issues • E-commerce sites should adhere to some ethical standard otherwise the company may suffer: – Damaged reputation – Long term loss of trust – Loss of business • Advertising should include only true statements – Important facts should be included so not to mislead .

such as assault weapons and drugs • Although not legally obligated. Ethical Issues (I) • In 1999 eBay decided to ban all firearm sales – Since people were auctioning illegal items. eBay began to screen items being auctioned – To see if they were illegal or violated copyright laws .

Ethical Issues (II) • Several legislative proposal have been made with regard to Web site’s visitors privacy. some sites do not have posted privacy policies. companies are developing privacy practices with sufficient speed • Privacy advocate groups were outraged and called for legislation. • The future of privacy regulation in the US is therefore unclear . but none have been accepted • A report in 1999 stated that – Although.

the Trademark Conspiracy Prevent Act was signed in 1999 – It prevents trademark names from being registered as domain names by other people . Domain Names and Cybersquatting • Cybersquatting is the practice of registering a domain name (that is the same as a company’s trademark) so that you can later sell it to them at for large amounts of money • In the US.

www.g.com was not awarded to Sting (the singer) . Wine. three cybersquatters try to sell the URL barrydiller. Domain Names and Cybersquatting (I) • Parties found guilty of cybersquatting can be forced to pay up to $100.000 per trademark • E.g. e.sting.com for $10million – Barry Diller sued and won • Registering a generic name.g. e.com is different from registering a name in bad faith • A dispute may arise if the Trademark is a common term.

but as new high level domains are added it increases the difficulty of this . Name Changing • A similar concept is that of name changing where a person buys a name that is a variation of the company’s trademark – This increases the likelihood that the site will be visited in error • If it is true cybersquatting then the Anticybersquatting Consumer Protection Act can be enforced – Companies tend to register as many names as possible.

Name Stealing • This occurs when someone other than the domain’s name owner changes the ownership of the domain name – Ownership information maintained by a public registrar is changed in their database to reflect a different owner’s name and address – This can result in redirection of online customers or the posting of graffiti on the site and loss of business for a short period of time .

Intellectual Property • Intangible property rights • In E-Commerce – Copyrights – Patents – Trademarks • IP Rights are not absolute – Perishable – Legal exceptions to allow public use at a specific rate .

pull-down menus cannot be copyrighted • Confers owner exclusive right to – Copy the work – Distribute to the public • Expires after certain number of years after death of copyright holder – 28 years in the US – 50 years in UK • Generally. Copyrighting • Protects expression of idea – not the idea itself – Example . contents of websites are copyrighted .

Copyrights Protection • Digital Watermarks – Embedded invisible bits in the digital content – Cannot prevent copying but helps identify who is doing it • Validation codes • Activation or deactivation of software .

Patents • Grants holder exclusive rights on inventions for fixed time – 17 years in US – 20 years in UK • Innovation must be – Novel – Sufficiently inventive step (not trivial) – Capable of industrial application • Amazon sued Barnes and Noble for patent infringement (1-click ordering) • Priceline has patent on reverse-auction model – sued Expedia .

Trademarks • Graphical sign used by business to identify their goods and services – Type of IP – Must meet criteria of distinctive. original. and not deceptive – Domain names can be trademarked if they meet above criteria .

Spamming • Indiscriminate distribution of messages without permission of receiver • Spam comprised 30% of all AOL mail in 1998 – Now down to 10% with spam blockers • Some legislation out there – Unsolicited Commercial Electronic Mail Act • Requires all spam to start with word “advertisement” • Includes name and address of sender .

Five Principles of Privacy Protection • Notice/Awareness – Notice of collection practices prior to collecting information • Choice/consent – Consumers to be made aware of options and give consent • Access/participation – Must be able to access and challenge information • Integrity/Security – Must be assured data is secure • Enforcement/Redress – Government legislation or legal remedies .

Taxation • Online business may be subject to: – Income taxes • Based on net income (levied by the government) – Transaction taxes • Include sales tax. excise tax and custom duties are levied on products and services that a company sells . use tax.

European Value Added Tax • Value added tax (VAT) is used • It is collected by the seller • not on food stuff .