E-business by G. Schneider - Chapter 7 (edition 9)


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E-business by G. Schneider - Chapter 7 (edition 9)

  1. 1. E- Business Ninth Edition Chapter 7Virtual Communities 1
  2. 2. Learning ObjectivesIn this chapter, you will learn about:• Social networking and online business activities• Using mobile devices to do business online• Online auctions and auction-related businessesE- Business, Ninth Edition 2
  3. 3. From Virtual Communities to Social Networks• Online Web communities – Not limited by geography – Individuals and companies with common interests • Meet online and discuss issues, share information, generate ideas, and develop valuable relationships• Companies make money by serving as relationship facilitators – Combine Internet’s transaction cost-reduction potential with a communication facilitator roleE- Business, Ninth Edition 3
  4. 4. Virtual Communities• Virtual community (Web community, online community) – Gathering place for people and businesses • No physical existence• Early virtual communities – Bulletin board systems (BBSs) • Revenue source: monthly fees and selling advertising – Usenet newsgroups • Message posting areas on usenetsE- Business, Ninth Edition 4
  5. 5. Virtual Communities (cont’d.)• Current forms – Web chat rooms – Sites devoted to specific topics or general exchange of information, photos, videos – People connect and discuss common issues, interests – Considerable social interaction – Relationship-forming activities • Similar to physical communitiesE- Business, Ninth Edition 5
  6. 6. Early Web Communities• 1985: WELL (“whole earth ‘lectronic link”) – Monthly fee to participate in forums and conferences – 1999 bought by Salon.com• 1995: Beverly Hills Internet virtual community site – Offered webcams, free Web site space – Grew into GeoCities • Revenue source: advertising, pop-up pages • 1999: purchased by Yahoo! ($5 billion) • Closed in 2009E- Business, Ninth Edition 6
  7. 7. Early Web Communities (cont’d.)• 1995: Tripod virtual community – Offered free Web page space, chat rooms, news, weather updates, health information pages – Revenue source: sold advertising• 1995: Theglobe.com Cornell University class project – Included bulletin boards, chat rooms, discussion areas, personal ads • Added more features – Revenue source: sold advertising• Most early Web community businesses closedE- Business, Ninth Edition 7
  8. 8. Social Networking in the Second Wave of Online Communities• As the Internet and Web grew: – Experience of sharing new online communication faded – New phenomenon in online communication began • Multiple common bonds joined people with all types of common interests• Social networking sites – Allow individuals to create and publish a profile, create a list of other users with whom they share a connection (or connections), control that list, and monitor similar lists made by other usersE- Business, Ninth Edition 8
  9. 9. Social Networking in the Second Wave of Online Communities (cont’d.)• Social networking sites – Six Degrees (1997) – Friendster (2002) • Had features found in today’s social networking sites – LinkedIn: devoted to business connections – Tribe.net – YouTube: popularized video inclusion – MySpace: popular with younger Web users – Twitter • Users can send short messages to other users who sign up to follow their messages (tweets)E- Business, Ninth Edition 9
  10. 10. Social Networking in the Second Wave of Online Communities (cont’d.)• Basic idea behind social networking – People invited to join by existing members – Site provides directory • New members work through friends established in the communityE- Business, Ninth Edition 10
  11. 11. FIGURE 7-1 Social networking Web sitesE- Business, Ninth Edition 11
  12. 12. Social Networking in the Second Wave of Online Communities (cont’d.)• Web logs (Blogs) – Web sites containing individual commentary on current events or specific issues – Form of social networking site • Encourages interaction among people • Visitors add comments• Early blogs focused on technology topics• 2004: blogs used as political networking tool• 2008: all major candidates using blogs – Communicating messages, organizing volunteers, raising money, meetupsE- Business, Ninth Edition 12
  13. 13. Social Networking in the Second Wave of Online Communities (cont’d.)• Retailers embracing blogs to engage site visitors – Bluefly.com online discount apparel retailer • Flypaper blog – Ice.com online jeweler • Blogs may encourage potential customers to visit online store• Business uses – CNN • Blog information included in television newscastsE- Business, Ninth Edition 13
  14. 14. Social Networking in the Second Wave of Online Communities (cont’d.)• Business uses (cont’d.) – Newspapers • Inviting information and opinion contributions • Targeting 18- to 35-year-old generation – Participatory journalism • Trend toward having readers help write the online newspaper• Blogs can become businesses in themselves – Must generate financial support (fees, advertising)E- Business, Ninth Edition 14
  15. 15. Social Networking in the Second Wave of Online Communities (cont’d.)• Social networking Web sites for shoppers – Social shopping • Practice of bringing buyers and sellers together in a social network to facilitate retail sales – Example: craigslist • Operated by not-for-profit foundation • All postings free (except help wanted ads) – Example: Etsy Web site • Marketplace for selling handmade items • We Love Etsy: Etsy buyers, sellers share informationE- Business, Ninth Edition 15
  16. 16. Social Networking in the Second Wave of Online Communities (cont’d.)• Social networking Web sites for shoppers (cont’d.) – Social networking sites form communities based on connections among people – Idea-based virtual communities • Communities based on connections between ideas – Idea-based networking • Participating in idea-based virtual communities • Examples: del.icio.us site, 43 Things siteE- Business, Ninth Edition 16
  17. 17. Social Networking in the Second Wave of Online Communities (cont’d.)• Virtual learning networks – Distance learning platforms for student-instructor interaction (Blackboard) – Tools include: • Bulletin boards, chat rooms, drawing boards – Moodle and uPortal • Open-source software projects devoted to virtual learning community development – Open-source software • Developed by a programmer community • Software available for download at no costE- Business, Ninth Edition 17
  18. 18. Social Networking in the Second Wave of Online Communities (cont’d.)• Web portals – Combine portal and social networking features – Typical portal offerings • Search engines, directories, free e-mail, news stories, weather reports – Social networking elements • Games and chat rooms • Allow site visitors to interact with each other – Examples: • Yahoo!, AOL, MSNE- Business, Ninth Edition 18
  19. 19. Revenue Models for Social Networking Sites• By late 1990s: – Revenue created by selling advertising • Used by virtual communities, search engine sites, Web directories• 1998 – Purchases and mergers occurred – New sites still used advertising-only revenue- generation model • Included features offered by virtual community sites, search engine sites, Web directories, other information- providing and entertainment sites – Goal: be every Web surfer’s doorway to the WebE- Business, Ninth Edition 19
  20. 20. Revenue Models for Social Networking Sites (cont’d.)• Advertising-supported social networking sites – Smaller sites with specialized appeal • Can draw enough visitors to generate significant advertising revenue • Example: I Can Has Cheezburger site – Recall from Chapter 3: • Sites with higher number of visitors can charge more • Stickiness: important element in site’s attractiveness – Rough measure of stickiness • Time user spends at the siteE- Business, Ninth Edition 20
  21. 21. FIGURE 7-2 Popularity and stickiness of leading Web sitesE- Business, Ninth Edition 21
  22. 22. Revenue Models for Social Networking Sites (cont’d.)• Advertising-supported social networking sites (cont’d.) – Social networking sites • Members provide demographic information • Potential for targeted marketing: very high – High visitor counts • Can yield high advertising rates – Second-wave advertising fees • Based less on up-front site sponsorship payments • Based more on revenue generation from continuing relationships with people who use the social networking sitesE- Business, Ninth Edition 22
  23. 23. Revenue Models for Social Networking Sites (cont’d.)• Mixed-revenue and fee-for-service social networking sites – Most social networking sites use advertising – Some charge a fee for some services • Examples: Yahoo! All-Star Games package, Yahoo! premium e-mail service – Monetizing • Converting site visitors into fee-paying subscribers or purchasers of services • Concern: visitor backlash – More examples: The Motley Fool and TheStreet.comE- Business, Ninth Edition 23
  24. 24. Revenue Models for Social Networking Sites (cont’d.)• Fee-based social networking – Google Answers site • Early attempt to monetize social networking • Questions answered for a fee • Google operated service from 2002 to 2006 – Similar free services • Yahoo! Answers, Amazon (Askville) – Uclue (paid researchers earn 75 percent of total fee) • Advocates claim better quality – Fee-based Web sites can generate revenue by providing virtual community interactionE- Business, Ninth Edition 24
  25. 25. Revenue Models for Social Networking Sites (cont’d.)• Microlending sites – Function as clearinghouses for microlending activity – Microlending • Practice of lending very small amounts of money • Lend to people starting or operating small businesses (especially in developing countries) – Microlending key element • Working within social network of borrowers • Provide support, element of pressure to repay – Examples: Kiva and MicroPlaceE- Business, Ninth Edition 25
  26. 26. Revenue Models for Social Networking Sites (cont’d.)• Internal virtual communities – Provide social interaction among organization’s employees – Run on organization’s intranet – Save money (less paper) – Provide easy access to employee information – Good for geographically dispersed employees – Adding wireless connectivity – Combine second-wave technology with first-wave business strategy • Wireless communications with internal Web portalsE- Business, Ninth Edition 26
  27. 27. Mobile Commerce• Short messaging service (SMS) – Allows mobile phone users to send short text messages to each other• 2008: United States developments allowing phones as Web browsers – High-speed mobile telephone networks grew dramatically – Manufacturers offered range of smart phones with Web browser, operating system, applicationsE- Business, Ninth Edition 27
  28. 28. Mobile Operating Systems and Applications• Japan and Southeast Asia mobile commerce – Much larger online business activity • Had high-capacity networks early on – Mobile wallets • Mobile phones functioning as credit cards – Japan’s NTT DoCoMo phones combined capabilities • Generate significant businessE- Business, Ninth Edition 28
  29. 29. Mobile Operating Systems and Applications (cont’d.)• United States mobile commerce capabilities began in 2008 – Smart phone and high-capacity network introductions• Mobile commerce smart phone examples – Apple iPhone, Palm Pre, several BlackBerry models • Use the Android operating system • Provide serious U.S. mobile commerce for the first timeE- Business, Ninth Edition 29
  30. 30. FIGURE 7-3 Smart phones come in a range of different stylesE- Business, Ninth Edition 30
  31. 31. Mobile Operating Systems and Applications (cont’d.)• Mobile commerce browser display options – Wireless Application Protocol (WAP) • Allows Web pages formatted in HTML to be displayed on devices with small screens – Display a normal Web page on the device • Made possible by increased screen resolution • Example: Apple iPhone – Design Web sites to match specific smart phones • Much more difficult to accomplishE- Business, Ninth Edition 31
  32. 32. Mobile Operating Systems and Applications (cont’d.)• Mobile commerce browser display options (cont’d.) – Apple, BlackBerry, Palm • Use proprietary operating systems – HTC, Motorola, Nokia • At one time created their own operating systems and software applications • Now use a standard operating system provided by a third party – Most common third-party operating systems • Android, Windows Mobile, SymbianE- Business, Ninth Edition 32
  33. 33. Mobile Operating Systems and Applications (cont’d.)• Common operating systems emergence – Occurred due to a change in the way software applications developed and sold• Old U.S. mobile phone company revenue strategy – Control application software• Apple turned old revenue strategy on its head – Apple Apps for iPhone online store • Independent developers create apps and sell them• BlackBerry and Palm followed Apple’s leadE- Business, Ninth Edition 33
  34. 34. The Future of Mobile Commerce• Companies wanting mobile user commerce – Review Web sites for compatibility • May create separate Web sites for mobile users• Mobile phones for online banking – In early stages in the United States• Physicians using smart phones• Phones’ global positioning satellite (GPS) service capabilities – Allow mobile business opportunitiesE- Business, Ninth Edition 34
  35. 35. Online Auctions• Business opportunity perfect for the Web• Auction site revenue sources – Charging both buyers and sellers to participate – Selling advertising • Targeted advertising opportunities available• Online auctions capitalize on Internet’s strength – Bring together geographically dispersed people sharing narrow interestsE- Business, Ninth Edition 35
  36. 36. Auction Basics• From Babylon to the Roman Empire to Buddhists• Common activity of 17th century England – Sotheby’s (1744), Christie’s (1766), colonial auctions• Auction: seller offering item for sale – Bids: price potential buyer willing to pay – Bidders: potential buyers – Private valuations: amounts buyer willing to pay – Auctioneer: manages auction process – Shill bidders: work for seller or auctioneer • May artificially inflate priceE- Business, Ninth Edition 36
  37. 37. Auction Basics (cont’d.)• English auctions – Bidders publicly announce successively higher bids • Item sold to highest bidder (at bidder’s price) – Also called ascending-price auction – Open auction (open-outcry auction) • Bids publicly announced – Minimum bid • Beginning price • If not met: item removed (not sold)E- Business, Ninth Edition 37
  38. 38. Auction Basics (cont’d.)• English auctions (cont’d.) – Reserve price (reserve) • Seller’s minimum acceptable price • Not announced • If not exceeded: item withdrawn (not sold) – Yankee auction • Multiple item units offered for sale (bidders specify quantity) • Highest bidder allotted bid quantity • Remaining items allocated to next highest bidders until all items distributed • Bidders pay lowest successful bidder priceE- Business, Ninth Edition 38
  39. 39. Auction Basics (cont’d.)• English auctions (cont’d.) – Seller drawback • May not obtain maximum possible price – Buyer drawback • Winner’s curse psychological phenomenon – Bidder gets caught up in competitive bidding excitement – Bids more than their private valuationE- Business, Ninth Edition 39
  40. 40. Auction Basics (cont’d.)• Dutch auctions – Open auction • Bidding starts at a high price • Drops until bidder accepts price – Also called descending-price auctions – Seller offers number of similar items for sale – Common implementation • Use a clock (price drops with each tick) • Bidders stop clock and take items at the given price • If items remain: clock restartedE- Business, Ninth Edition 40
  41. 41. Auction Basics (cont’d.)• Dutch auctions (cont’d.) – Often better for the seller – Quickly move large numbers of commodity items – Successful examples: • Google initial public offering stock sale (2004) • LookSmart stock repurchaseE- Business, Ninth Edition 41
  42. 42. Auction Basics (cont’d.)• First-price sealed-bid auctions – Sealed-bid auctions • Bidders submit bids independently • Prohibited from sharing information – First-price sealed-bid auction • Highest bidder wins • If multiple items auctioned: next highest bidders awarded remaining items at their bid priceE- Business, Ninth Edition 42
  43. 43. Auction Basics (cont’d.)• Second-price sealed-bid auction – Same as first-price sealed-bid auction – Except highest bidder awarded item at second- highest bidder price – Commonly called Vickrey auctions• William Vickrey: 1996 Nobel Prize in Economics – Findings: • Yields higher seller returns • Encourages all bidders to bid private valuation amounts • Reduces tendency for bidder collusionE- Business, Ninth Edition 43
  44. 44. Auction Basics (cont’d.)• Open-outcry double auctions – Example: Chicago Board of Trade auctions of commodity futures and stock options – Buy and sell offers shouted by traders in trading pit • Each commodity, stock option traded in own pit • Quite frenzied• Double auctions (either sealed bid or open outcry) – Good for items of known quality traded in large quantities – No item inspection before biddingE- Business, Ninth Edition 44
  45. 45. Auction Basics (cont’d.)• Double auctions – Buyers, sellers submit combined price-quantity bids• Auctioneer – Matches sellers’ offers • Starts with lowest price and then goes up – To buyers’ offers • Starts with highest price and then goes down until all quantities offered are sold• Operation format – Sealed bid or open-outcry• Example: New York Stock ExchangeE- Business, Ninth Edition 45
  46. 46. Auction Basics (cont’d.)• Reverse (seller-bid) auction – Multiple sellers submit price bids • Auctioneer represents single buyer – Bids for given amount of specific item to purchase – Prices go down as bidding continues: • Until no seller willing to bid lower – Occasionally operated for consumers – Most involve businesses as buyers and sellersE- Business, Ninth Edition 46
  47. 47. FIGURE 7-4 Key characteristics of seven major auction typesE- Business, Ninth Edition 47
  48. 48. Online Auctions and Related Businesses• Online auction business: rapidly changing• Three auction Web site categories – General consumer auctions – Specialty consumer auctions – Business-to-business auctions• Varying opinions on categorizing consumer auctions – Business-to-consumer – Consumer-to-consumer – Consumer-to-businessE- Business, Ninth Edition 48
  49. 49. Online Auctions and Related Businesses (cont’d.)• General consumer auctions• eBay: registration required, seller fees, rating system – Seller’s risk: stolen credit cards; buyer fails to conclude transaction – Buyer’s risk: no item delivery; misrepresented item – Most common auction format: English auction • Seller may set reserve price • Bidders listed: bids not disclosed (until auction end) • Continually updated high bid amount displayed • Private auction option availableE- Business, Ninth Edition 49
  50. 50. Online Auctions and Related Businesses (cont’d.)• General consumer auctions (cont’d.) – Another eBay auction format: Dutch auction – Both formats require minimum bid increment • Amount by which one bid must exceed previous bid – Proxy bid • Bidder specifies maximum bid • May cause bidding to rise rapidly – eBay stores • Integrated into auction site • Sellers generate additional profitsE- Business, Ninth Edition 50
  51. 51. Online Auctions and Related Businesses (cont’d.)• eBay’s success due to unspecified audience – Also spends $1 billion each year to market and promote Web site• Major determinants of Web auction site success – Attracting enough buyers and sellers• Yahoo! Auction operation closed in 2007• Amazon.com with “Auctions Guarantee” – Offered buyer protection through escrow service – Closed in 2006• Overstock.com (still active)E- Business, Ninth Edition 51
  52. 52. Online Auctions and Related Businesses (cont’d.)• Future challengers to eBay – Must overcome lock-in effect • New auction participants inclined to patronize established marketplaces – Example: Japanese general consumer auction • Yahoo! first to enter market – Now dominates (more than 90% market share) • eBay maintains low market share (less than 3%)E- Business, Ninth Edition 52
  53. 53. Online Auctions and Related Businesses (cont’d.)• Specialty consumer auctions – Identify special-interest market targets – Create specialized Web auction sites • No need to compete with eBay – Examples: • JustBeads.com, Cigarbid.com, WinebidE- Business, Ninth Edition 53
  54. 54. Online Auctions and Related Businesses (cont’d.)• Consumer reverse auctions• Reverse bid – Visitor describes desired items or services – Site routes visitor to participating merchants • Reply to visitor by e-mail • Offer item at particular price – Buyer accepts • Lowest offer • Offer best matching buyer’s criteria• All these types of sites now closedE- Business, Ninth Edition 54
  55. 55. Online Auctions and Related Businesses (cont’d.)• Consumer reverse auctions (cont’d.)• Priceline.com – Considered a seller-bid auction site – Visitor states desired airline ticket, car rental, hotel room price • If sufficiently high price: transaction completed – Many transactions come from inventory • Priceline operates more as a liquidation brokerE- Business, Ninth Edition 55
  56. 56. Online Auctions and Related Businesses (cont’d.)• Group shopping sites – Seller posts item with tentative price – Individual buyers enter bids • Agreement to buy one unit (no price provided) • Site negotiates with seller for lower price – Posted price decreases • As number of bids increases (only if number of bids increases) – Result: buyers force seller to reduce price • Similar to consumer reverse auctionE- Business, Ninth Edition 56
  57. 57. Online Auctions and Related Businesses (cont’d.)• Group shopping sites (cont’d.)• Well-suited product types – Branded products, well-established reputations • Produces buyer confidence of good bargain – High value-to-size ratio, non-perishable• Disadvantages – Difficulty attracting sellers’ interest – Well-suited companies • Find no advantage, fear sites cannibalize product sales, reluctant to offend current distributors• Group purchasing sites closedE- Business, Ninth Edition 57
  58. 58. Online Auctions and Related Businesses (cont’d.)• Business-to-business auctions – Evolved to meet specific existing need • Excess inventory disposal (manufacturing) – Two methods • Liquidation specialists: find buyers for unusable items • Liquidation broker: firm that finds buyers for items – Online auctions • Logical extension of these inventory liquidation activities to a new and more efficient channel (Internet)E- Business, Ninth Edition 58
  59. 59. Online Auctions and Related Businesses (cont’d.)• Business-to-business auctions (cont’d.) – Emerging business-to-business Web auction models • Large-company model: creates own auction site • Small-company model: uses third-party Web auction site instead of liquidation broker • Both are direct descendants of traditional methodsE- Business, Ninth Edition 59
  60. 60. Online Auctions and Related Businesses (cont’d.)• Business-to-business auctions (cont’d.) – Third emerging business-to-business Web auction model • New business entity enters market lacking efficiency and creates a site at which buyers and sellers who have not historically done business with each other can participate in auctions • Resembles consumer online auctions • Example: hospitals using online auctions to fill temporary employment openingsE- Business, Ninth Edition 60
  61. 61. Online Auctions and Related Businesses (cont’d.)• Business-to-business reverse auctions – Example: Owens Corning purchases – Examples: Agilent, Bechtel, Boeing, Raytheon, Sony – Potential disadvantage • Suppliers compete on price alone • Cut corners on quality or miss scheduled delivery dates – Potential advantage • Useful for nonstrategic commodity items with established quality standardsE- Business, Ninth Edition 61
  62. 62. Online Auctions and Related Businesses (cont’d.)• Business-to-business reverse auctions (cont’d.) – Companies opting out • Cisco, Cubic, IBM, Solar Turbines – If suppliers do not participate: • Impossible to conduct reverse auctions – If competition high among suppliers: • Reverse auctions provide efficient way to conduct, manage price biddingE- Business, Ninth Edition 62
  63. 63. FIGURE 7-5 Supply chain characteristics and reverse auctionsE- Business, Ninth Edition 63
  64. 64. Auction-Related Services• Entrepreneurs encouraged by eBay and other auction site growth• Provide various kinds of auction-related services – Escrow services – Auction directory and information services – Auction software for sellers and buyers – Auction consignment servicesE- Business, Ninth Edition 64
  65. 65. Auction-Related Services (cont’d.)• Auction escrow services – Buyers’ common concern: seller reliability • Buyers protect interests in high-value items – Independent party holds payment until: • Buyer receives item • Buyer satisfied item is as expected – May take delivery of item from seller • Perform buyer inspection (qualified to do so) – Charge fees • Percent of item’s cost; subject to minimum feeE- Business, Ninth Edition 65
  66. 66. Auction-Related Services (cont’d.)• Auction escrow services (cont’d.) – Examples: Escrow.com, eDeposit, Square Trade – May sell auction buyer’s insurance • Protect buyers from nondelivery and quality risks – Avoid escrow fraud • Determine if licensed, bonded (licensing agency) • Avoid offshore escrow companies entirely – Other buyer protections • Check seller’s rating • Use Web site listings of unreliable sellersE- Business, Ninth Edition 66
  67. 67. Auction-Related Services (cont’d.)• Auction directory and information services – Example: Auctionguide.com • Guidance for new auction participants • Helpful hints and tips for experienced participants • Directories of online auction sites – Example: AuctionBytes • Publishes e-mail newsletter • Online auction industry articlesE- Business, Ninth Edition 67
  68. 68. Auction-Related Services (cont’d.)• Auction directory and information services (cont’d.) – Example: PriceWatch • Advertiser-supported site • Advertisers post current selling prices • Computer hardware, software, electronics – Example: PriceSCAN • Similar price-monitoring service • Also includes books, movies, music, sporting goodsE- Business, Ninth Edition 68
  69. 69. Auction-Related Services (cont’d.)• Auction software – Target: sellers • Helps manage online auctions – Example: AuctionHawk and Vendio • Seller management software and services • Automate tasks • Create attractive page layouts • Manage hundreds of auctionsE- Business, Ninth Edition 69
  70. 70. Auction-Related Services (cont’d.)• Auction software (cont’d.) – Target: buyers • Helps manage online auctions – Sniping software • Observes auction progress until last second • As auction expires: places bid high enough to win (unless bid exceeds sniping software owner’s limit) • Snipe: act of placing winning bid at the last second • Almost always wins out over human bidderE- Business, Ninth Edition 70
  71. 71. Auction-Related Services (cont’d.)• Auction software (cont’d.) – Example: Cricket Sniping Software site • Created in 1997 by David Eccles – Companies offer sniping service • Sniping software runs on company Web site • Customer enters instructions on site • Company may offer subscriptions • Company may offer mixed-revenue model – Sniping software and services business information • AuctionBytes Web siteE- Business, Ninth Edition 71
  72. 72. FIGURE 7-6 AuctionBytes home pageE- Business, Ninth Edition 72
  73. 73. Auction-Related Services (cont’d.)• Auction consignment services – Target: people and small businesses • Want to use online auction • Do not have skills, time to become a seller – Auction consignment services • Take item and create online auction for that item • Handle transaction • Remit proceeds balance (after deducting fee) – Main auction consignment businesses • ePowerSellers, iSold It, USA AuctionDropE- Business, Ninth Edition 73
  74. 74. Auction-Related Services (cont’d.)• Auction consignment services (cont’d.) – Key to success • Convenient locations for customer drop off • Open own stores, franchise stores• Electronic commerce first wave – Online auction business made possible by the Web• Electronic commerce second wave – Online auction business created opportunities: • For even more entirely new types of businessE- Business, Ninth Edition 74
  75. 75. Summary• Companies using the Web for entirely new things – Creating social networks – Using mobile technologies to make sales and increase operational efficiency – Operating auction sites – Conducting related businesses• Businesses creating online communities to connect with customers and suppliers• Individuals using social networking sites – Personal and business-related interactions• Mobile commerce opportunities emergingE- Business, Ninth Edition 75
  76. 76. Summary (cont’d.)• Companies’ internal social networking sites – Facilitate employee communication• Online auctions used to sell goods to customers and buy from suppliers – Seven major auction types – Consumer online auction business dominated by eBay (United States) – Ancillary service businesses support auctions• B2B auctions and reverse auctions – New methods of inventory disposal, procurementE- Business, Ninth Edition 76
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