A Virtu Design Institute Fashion Marketing lecture on The Growth of eBusiness in an international context

1. Lecture 5 - The Growth of eBusiness
by Ron Newman
VDIS10047 Fashion Marketing

2. The Growth of eBusiness
VDIS10047 Fashion Marketing
The growth of companies such as Yahoo, Google, Apple,
Facebook, Youtube and Twitter signify a profound
change in our lives and I recall well the installation of my
first business IT network in 1987 (well ahead of the game
it seemed to us) and in our company we were
transferring files and sending “email”.
The conduct of all life and business has changed
profoundly in the new context of the maturing internet.

3. Electronic commerce, commonly known as E-commerce or
eCommerce, is trading in products or services conducted via
computer networks ie: the Internet. Electronic commerce
draws on technologies such as mobile commerce, electronic
funds transfer, supply chain management, Internet marketing,
online transactions processing, electronic data interchange
(EDI), inventory management systems, and automated data
collection systems.
The Growth of eBusiness
VDIS10047 Fashion Marketing

4. Modern electronic commerce typically uses the World Wide
Web (WWW) at least at one point in the transaction's life-
cycle, although it may encompass a wider range of
technologies such as e-mail, mobile devices, social media,
and telephones as well.
Electronic commerce is generally considered to be the sales
aspect of e-business. It also consists of the exchange of data
to facilitate the financing and payment aspects of business
transactions.
The Growth of eBusiness
VDIS10047 Fashion Marketing

5. This is an effective and efficient way of communicating within
an organization and one of the most effective and useful
ways of conducting business. It is a Market Entry Strategy
where the company may or may not have a physical
presence.
E-commerce today can be divided into 7 key subsections
of activity:
- Etail or "virtual storefronts" on websites with online catalogs,
sometimes gathered into a "virtual mall"
- Buying or selling on websites and/or online marketplaces
The Growth of eBusiness
VDIS10047 Fashion Marketing

6. E-commerce today can be divided into 7 key subsections
of activity:
- The gathering and use of demographic data through web
contacts and social media
- Electronic data interchange, the business-to-business
exchange of data
- E-mail and its use as media for reaching prospective and
established customers (for example, with newsletters)
- Business to Business buying and selling
- The security of business transactions
The Growth of eBusiness
VDIS10047 Fashion Marketing

7. The history of the Internet is only short, just 56 years from its very inception and as its development
hastens we are adjusting all human activity:
1958 - President Eisenhower requests funds to create ARPA. App in Air Force appropriations bill.
1961 - Len Kleinrock, Professor of Computer Science at UCLA, writes first paper on packet
switching, "Information Flow in Large Communications Nets." Paper published in RLE Quarterly
Progress Report.
1962 - J.C.R. Licklider & W. Clark write first paper on Internet Concept, "On-Line Man Computer
Communications.” and Len Kleinrock writes Communication Nets, which describes design for
packet switching network; used for ARPAnet
1964 - Paul Baran writes, "On Distributed Communications Networks," first paper on using
message blocks to send info across a decentralized networktopology (Nodes and Links)
Oct. 1965 - First Network Experiment: Directed by Larry Roberts at MIT Lincoln Lab, two
computers talked to each other using packet-switching technology.
Dec. 1966 - ARPA project begins. Larry Roberts is chief scientist.
Dec. 1968 - ARPANet contract given to Bolt, Beranek & Newman (BBN) in Cambridge, Mass.
Sept. 1, 1969 – 1st ARPANet node installed at UCLA Network Measurement Center. Kleinrock
hooked up the Interface Message Processor to a Sigma 7 Computer.
Oct. 1, 1969 – 2nd node installed at Stanford Research Institute; connected to a SDS 940 computer.
The first ARPANet message sent: "lo." Trying to spell log-in, but the system crashed!
Nov. 1, 1969 to March 1970 - 3rd to 5th nodes installed at University of California, Santa Barbara.
Connected to an IBM, University of Utah and Cambridge, Mass.
The Growth of eBusiness
VDIS10047 Fashion Marketing

8. July 1970 - Alohanet, first packet radio network, operational at University of Hawaii.
March 1972 - First basic e-mail programs written by Ray Tomlinson at BBN for ARPANET:
SNDMSG and READMAIL. "@" sign chosen for its "at" meaning.
March 1973 - First ARPANET international connections to University College of London (England)
and NORSAR (Norway).
1974 – Intel releases the 8080 processor and Vint Cerf and Bob Kahn publish "A Protocol for
Packet Network Interconnection," which details the design of TCP.
1976 - Apple Computer founded by Steve Jobs and Steve Wozniak, Queen Elizabeth II sends out
an e-mail and Vint Cerf joins ARPA as program manager.
1978 - TCP split into TCP and IP.
1979 - Bob Metcalfe and others found 3Com (Computer Communication Compatibility).
1980 - Tim Berners-Lee writes program called "Enquire Within," predecessor to World Wide Web.
1981 - IBM announces its first Personal Computer. Microsoft creates DOS.
1983 - Cisco Systems founded and in November 1983 Domain Name System (DNS) designed by
Jon Postel, Paul Mockapetris & Craig Partridge. .edu, .gov, .com, .mil, .org, .net, and .int created.
1984 - William Gibson writes "Neuromancer." Coins the term "cyberspace”, Apple Computer
introduces the Macintosh on January 24th.
1985 - Symbolic.com becomes the first registered domain.
1986 - 5000 hosts on ARPAnet/Internet.
The Growth of eBusiness
VDIS10047 Fashion Marketing

9. 1987 - 10,000 hosts on the Internet.
1988 - First Cisco router shipped, 25 million PCs sold in US.
1989 - 100,000 hosts on Internet, McAfee Associates founded; anti-virus software available for
free. Quantum becomes America Online.
1990 - ARPAnet ends. Tim Berners-Lee creates the World Wide Web.
1992 - "Surfing the Internet" is coined by Jean Armour Polly.
1993 - Mosaic Web browser developed, Marc Andreesen, University of Illinois, Champaign-Urbana,
InterNIC created, Web grows by 341,000 percent in a year.
April 1994 - Netscape Communications founded, Jeff Bezos writes the business plan for
Amazon.com, Java's first public demonstration and in December 1994 Microsoft licenses
technology from Spyglass to create Web browser for Windows 95.
May 23, 1995 - Sun Microsystems releases Java and in August 24, 1995 Windows 95 released.
1996 - Domain name tv.com sold to CNET for $15,000. Browser wars begin. Netscape and
Microsoft two biggest players.
1997 - business.com sold for $150,000.
January 1998 - Microsoft reaches a partial settlement with the Justice Department that allows
personal computer makers to remove or hide Internet software on new versions of Windows 95,
Netscape announces plans to give its browser away for free.
1998 - US Depart of Commerce outlines proposal to privatize DNS. ICANN created by Jon Postel to
oversee privatization.
The Growth of eBusiness
VDIS10047 Fashion Marketing

10. Year 1999 - AOL buys Netscape; Andreesen steps down as full-time employee, Browsers wars
declared over; Netscape and Microsoft share almost 100% of browser market, Microsoft declared
a monopoly by US District Judge Thomas Penfield Jackson, Shawn Fanning creates Napster,
opening possibilities of peer-to-peer file sharing, igniting a copyright war in the music industry.
Year 2000 - Fixed wireless, high-speed Internet technology is now seen as a viable alternative to
copper and fiber optic lines placed in the ground, The Dot-Com Bubble bursts. A majority of the
dot-coms ceased trading after burning through their venture capital, often without ever making a
net profit. January 10, 2000 AOL Merges with Time-Warner. AOL shareholders take 55% stake in
newly formed company and in February 2000 a large-scale denial of service attack is launched
against some major Web sites like Yahoo! and eBay, alerting Web sites to the need for tighter
security measures. 10,000,000 domain names have been registered and in September 2000 there
are 20,000,000 websites on the Internet, numbers doubling since February 2000.
July 2001 - A US federal judge rules that Napster must remain offline until it can prevent
copyrighted material from being shared by its users. The Code Red worm and Sircam virus
infiltrate thousands of web servers and email accounts, respectively, causing a spike in Internet
bandwidth usage and security breaches. In November 2001 the European Council adopts the first
treaty addressing criminal offenses committed over the Internet and the first uncompressed real-
time gigabit HDTV transmission across a wide-area IP network takes place on Internet2.
The Growth of eBusiness
VDIS10047 Fashion Marketing

11. January 2003 - The SQL Slammer worm causes one of the largest and fastest spreading DDoS
attacks ever, taking only 10 minutes to spread worldwide. The Internet celebrates its 'unofficial'
20th birthday. September 2003 - The RIAA sues 261 individuals for allegedly distributing copyright
music files over peer-to-peer networks. December 2003 - The Research project "How much
information 2003" finds that Instant messaging generates five billion messages a day (750GB), or
274 Terabytes a year and that e-mail generates about 400,000 terabytes of new information each
year worldwide.
2005 . YouTube.com launches
2006 . There are an estimated 92 million Web sites online and in May 2006 a massive DDOS
assault on Blue Security, an anti-spam company, is redirected by Blue Security staff to their
Movable Type-hosted blog. The result is that the DDOS instead knocks out all access to over 1.8
million active blogs. In August 2006 AOL announces that they will give for free virtually every
service for which it charged a monthly fee, with income coming instead from advertising.
October. There arenow an estimated 92 million Web sites online (some stats say over 100 million)
and Google Inc. acquires YouTube for $1.65 billion in a stock-for-stock transaction.
January 2007 - Microsoft launches its various consumer versions of Microsoft Vista and in
February 2007 Apple surpasses one billion iTunes downloads. By March 2007 1.114 billion people
use the Internet according to Internet World Stats and by April 2007 search engine giant Google
surpasses Microsoft as "the most valuable global brand," and also is the most visited Web site.
The Growth of eBusiness
VDIS10047 Fashion Marketing

12. When one considers the growth of the internet it is no surprise that US E-
Commerce growth is now far outpacing overall retail sales. Cooper Smith notes in
an article, (April 2nd 2014) in the new E-Commerce Insider newsletter, (top news
and analysis on the e-commerce industry, produced by BI Intelligence) that:
“Online retail spending grew 14% in 2013, according to a
report released from comScore. For comparison, total
consumer retail spending in the U.S. grew by mere
single-digits. Although the majority of eCommerce
spending still occurs from computers while mobile
device’s share is growing significantly faster.”
The Growth of eBusiness
VDIS10047 Fashion Marketing

13. And over the last 10 years the devices we use from television to mobile phones,
from cameras to computers have changed dramatically (including the car)
integrating functionality and harmonising features of all network devices. Cooper
Smith further notes:
“Global e-commerce sales made via mobile devices are
expected to top $US638 billion in 2018, according to a
forecast from Goldman Sachs. For perspective, that was
roughly the entire size of the world’s e-commerce market
in 2013. Goldman predicts that tablets, not smartphones,
will be the primary drivers of mobile commerce growth.”
The Growth of eBusiness
VDIS10047 Fashion Marketing

14. A timeline for the development of e-commerce of course parallels the timeline of the
development of the internet. Below are some key milestones in eCommerce:
1971 or 1972: The ARPANET is used to arrange a cannabis sale between students at
the Stanford and MIT and it later described as "the seminal act of e-commerce" in
John Markoff’s book What the Dormouse Said.
1979: Michael Aldrich demonstrates the first online shopping system.
1981: Thomson Holidays UK is first business-to-business online shopping system to
be installed.
1982: Minitel was introduced nationwide in France by France Télécom and used for
online ordering.
1983: California State Assembly holds first hearing on "electronic commerce" in
Volcano, California. Testifying are CPUC, MCI Mail, Prodigy, CompuServe, Volcano
Telephone, and Pacific Telesis. (Not permitted to testify is Quantum Technology, later
to become AOL.)
The Growth of eBusiness
VDIS10047 Fashion Marketing

15. 1984: Gateshead SIS/Tescois first B2C online shopping system and Mrs Snowball, 72,
is the first online home shopper. In April 1984, Compuserve launches the Electronic
Mall in the USA and Canada. It is the first comprehensive electronic commerce
service and California becomes first US state to enact an Electronic Commerce Act
defining basic consumer rights online.
1992: Book Stacks Unlimited in Cleveland opens a commercial sales website
(www.books.com) selling books online with credit card processing. St. Martin's Press
publishes J.H. Snider and Terra Ziporyn's Future bookshop: How New Technologies
Will Change the Way We Shop and What We Buy. Terry Brownell launches a fully
graphical, iconic navigated Bulletin board system for online shopping using
RoboBoard/FX.
1993: Paget Press releases edition No. 3 of the first AppStore, The Electronic
AppWrapper
The Growth of eBusiness
VDIS10047 Fashion Marketing

16. 1995: The US National Science Foundation lifts its former strict prohibition of
commercial enterprise on the Internet. Thursday 27 April 1995, the purchase of a book
by Paul Stanfield, Product Manager for Compuserve UK, from W H Smith’s shop
within CompuServe's UK Shopping Centre is the UK's first national online shopping
service secure transaction. The shopping service at launch featured W H Smith,
Tesco, Virgin Megastores/Our Price, Great Universal Stores (GUS), Interflora, Dixons
Retail, Past Times, PC World retailer and Innovations. Jeff Bezos launches
Amazon.com and the first commercial-free 24-hour, internet-only radio stations, Radio
HK and NetRadio start broadcasting. Dell and Cisco begin to aggressively use
Internet for commercial transactions. eBay is founded by computer programmer
Pierre Omidyar as AuctionWeb.
1996: IndiaMART B2B marketplace established in India. ECPLaza B2B marketplace
established in Korea, Sellerdeck formerly Actinic, the UK's first PC/LAN e-commerce
platform established.
The Growth of eBusiness
VDIS10047 Fashion Marketing

17. 1998: Electronic postage stamps can be purchased & downloaded for printing from
Web.
1999: Alibaba Group is established in China. Business.com sold for US $7.5 million to
eCompanies, which was purchased in 1997 for US $149,000. The peer-to-peer file
sharing software Napster launches. ATG Stores launches to selling home decorative
items online.
2000: The dot-com share market collapse.
2001: Alibaba.com achieved profitability in December 2001.
2002: eBay acquires PayPal for $1.5 billion. Niche retail companies Wayfair and
NetShops are founded with the concept of selling products through several targeted
domains, rather than a central portal.
2003: Amazon.com posts first yearly profit.
2004: Dhgate.com China's first online b2b transaction platform, is established, forcing
other b2b sites to move away from the “yellow pages” model.
2007: Business.com acquired by R H Donnelley for $345 million.
The Growth of eBusiness
VDIS10047 Fashion Marketing

18. 2009: Zappos.com acquired by Amazon.com for $928 million. Retail Convergence,
operator of private sale website RueLaLa.com, acquired by GSI Commerce for $180
million, plus up to $170 million in earn-out payments based on performance.
2010: Groupon reportedly rejects a $6 billion offer from Google. Instead, the group
buying websites went ahead with an IPO on 4 November 2011. It was the largest IPO
since Google.
2011: Quidsi.com, parent company of Diapers.com, acquired by Amazon.com for $545
million in cash & debt. GSI Commerce, specializing in creating, developing and
running online shopping sites for bricks & mortar businesses, acquired by eBay for
$2.4 billion.
2012: US eCommerce and Online Retail sales projected to reach $226 billion, an
increase of 12 percent over 2011. US eCommerce and Online Retail holiday sales
reach $33.8 billion, up 13 percent.
2014: Overstock.com processes over $1 million in Bitcoin sales. India’s e-commerce
industry is estimated to have grown more than 30% from a year earlier to $12.6 billion.
The Growth of eBusiness
VDIS10047 Fashion Marketing

19. A mini task I suggest to understand this topic is to watch the movie Social
Network. The movie industry has been a good story teller showing us how
our eLife has grown and developed and in other movies such as the
Matrix and Her we see where our eLife may be taken. Managing Design in
the context of eBusiness will become a part of every designer’s future.
The Growth of eBusiness
VDIS10047 Fashion Marketing

20. Lecture 5 - The Growth of eBusiness
by Ron Newman
VDIS10047 Fashion Marketing