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Table of Content 1.0 E-commerce: Foundation 1.1 Definitions and content of EC field 1.2 Advantages and Limitations 1.3 The Driving Forces of EC 1.4 Impact of EC 1.5 EC Strategy Launching a Business on the Internet 2.1 Internet Architecture: The Life Cycle Approach 2.2 Overview of the different phases 2.2.1 The Network: Information Transfer 2.3 Hosting a web site Success & Failure of E commerce ventures 3.1 Things that can go wrong 3.2 Site visibility 3.3 Evaluation of web sites and usability testing 3.4 Web site content and traffic management 3.5 Web site Optimization E-Tailing (Retailing in EC - B2C) 4.1 Overview of Market 4.2 Business Models of Electronic Marketing 4.3 Online Customer Service 4.4 Global versus Regional Marketing 4.5 Internet Shopping

2.0

3.0

4.0

5.0

E-Business Models, E- Marketing & E-Advertising 5.1 E-business 5.2 Various Business Models 5.3 Characteristics 5.4 Models of B2B EC 5.5 E-advertising 5.6 E-marketing

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6.0 Module VI: Electronic Payment Systems 6.1 Services and Cash flow 6.2 Electronic Payment Media 6.3 Payment System Models 6.4 Cyber Banking Module VII: E-Security 7.1 The Risks in Cyberspace 7.2 Protection and Recovery 7.3 Encryption Module VIII: Legal and Ethical Issues 8.1 The Major Threats 8.2 Taxation Issues 8.3 Legal Disputes 8.4 Indian IT Act and Right to Information Act 8.5 Cyber Laws: A Global Perspective Module IX: M-Commerce & Global EC 9.1 M-commerce in Indian and global perspective 9.2 Market Place versus Market space 9.3 Virtual Communities 9.4 Global EC Module X: The Future 10.1 Beyond e commerce 10.2 Implications of emerging technologies 10.3 Future of EC

7.0

8.0

9.0

10.0

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1.0 E-commerce Foundation 1.1 Definitions and content of EC field 1.2 Advantages and Limitations 1.3 The Driving Forces of EC 1.4 Impact of EC 1.5 EC Strategy Two thousand years ago, Roman roads brought trade and commerce to Europe in an unprecedented manner. A thousand years ago, the spice routes linked the cultures of East and West. At the dawn of the second millennium, the Internet, the worlds largest computer network, the network of networks, is making fundamental changes to the lives of everyone on the planet-changing forever the way business is conducted. Internet has become an important medium for doing global business based on the state of the art technology. Global business was conducted in a new way: electronically, using networks and the Internet. The availability of Internet has led to the development of E-Commerce (Electronic commerce), in which business transactions take place via telecommunication networks. E-Commerce has two major aspects: economical and technological. The stress of this course will show you how to get started in the complex and exciting world of Electronic Commerce. New standards and new facilities are constantly emerging and their proper understanding is essential for the success of an operation and especially for those who are assigned a duty to select, establish, and maintain the necessary infrastructure. The history of E-commerce is a history of how Information Technology has transformed business processes. Some authors will track back the history of E-commerce to the invention of the telephone at the end of last century. The Internet was conceived in 1969, when the Advanced Research Projects Agency (a Department of Defense organization) funded research of computer networking. The Internet could end up like EDI (Electronic Data Interchange) without the emergence of the World Wide Web in 1990s. EDI (Electronic Data Interchange) is widely viewed as the beginning of E-commerce if we consider E-Commerce as the networking of business communities and digitalization of business information. EDI, which expanded from financial transactions to other transaction processing and enlarged the participating companies from financial institutions to manufacturers, retailers, services, and so on. Many other applications followed, ranging from stock trading to travel reservation systems. Such systems were described as telecommunication applications and their strategic value was widely recognized. With the

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commercialization of the Internet in the early 1990s and its rapid growth to millions of potential customers, the term electronic commerce was coined, and EC applications expanded rapidly. One reason for the rapid expansion of the technology was the development of networks, protocols, software, and specifications. The other reason was the increase in competition and other business pressures. From 1995 to 1999 we have witnessed many innovative applications ranging from advertisement to auctions and virtual reality experiences. Almost every medium- and large-sized organization in the United States already has a Web site many are very extensive; for example, in 1999 General Motors Corporation offered 18,000 pages of information that included 98,000 links to its products, services, and dealers. Electronic commerce (EC, or e-commerce) describes the process of buying, selling, transferring, or exchanging products, services, and/or information via computer networks, including the Internet. Some people view the term commerce as describing only transactions conducted between business partners. When this dentition of commerce is used, some people nd the term electronic commerce to be fairly narrow. Thus, many use the term e-business instead. E-business refers to a broader definition of EC, not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, conducting e-learning, and conducting electronic transactions within an organization. Others view e-business as the other than buying and selling activities on the Internet, such as collaboration and intrabusiness activities. In this book we use the broadest meaning of electronic commerce, which is basically equivalent to ebusiness. The two terms will be used interchangeably throughout the chapter and the remainder of the text. 1.1 Definitions and Content & EC field Electronic commerce is an emerging model of new selling and merchandising tools in which buyers are able to participate in all phases of a purchase decision, while stepping through those processes electronically rather than in a physical store or by phone (with a physical catalogue). The processes in electronic commerce include enabling a customer to access product information, select items to purchase, purchase items securely, and have the purchase settled financially. It is an emerging concept that describes the process of buying and selling or exchanging of products, services; and information via computer networks including the Internet.

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E-commerce is basically, doing business-as-usual, but across the Internet. You advertise your products or services on your Web site, as you would in any other media like newspapers, TV or brochures. Advertising on your Web site can be done in two ways. PURE VERSUS PARTIAL E-Commerce

Electronic commerce can take several forms depending on the degree of digitization (the transformation from physical to digital) involved. The degree of digitization can relate to: (1) the product (service) sold, (2) the process, or (3) the delivery agent (or intermediary). Choi et al. (1997) created a framework that explains the possible congurations of these three dimensions.

A product can be physical or digital, the process can be physical or digital, and the delivery agent can be physical or digital. In traditional commerce all three dimensions are physical, and in pure EC all dimensions are digital. All other combinations include a mix of digital and physical dimensions. If there is at least one digital dimension, we consider the situation electronic commerce but only partial EC. For example, buying a shirt at Wal-Mart Online, or a book from Amazon.com is partial EC, because the merchandise is physically delivered by FedEx. However, buying an e-book from Amazon.com or a software product from Buy.com is pure EC, because the product, its delivery, payment, and transfer agent are all done online.

The first is by use of a relatively simple Web site consisting of a few pages whereby you tell

potential customers who you are, what you do, where you are and how they can contact you ( easiest done by giving them your email address). The second way of enabling world-wide customers to buy from you is to provide them with an

On-Line Catalogue of your products which they can browse at their leisure without having to go to your place of business.

On-Line Catalogue: On-Line Catalogue is that catalogue where people access via the Internet. On-Line Catalogue is an integral part of website, enabling customers to... Browse through stock list, read about an item or service; Look at photographs of the products. Select which items they want to purchase

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And drop them into a shopping cart as they go along. When they have completed their shopping, they go to the Check-Out.

The next step is to request the order by filling in their details and method of payment on a form which is waiting for them at the Check-Out. The form is already partially completed with a breakdown of the items in their shopping cart, prices inclusive of tax, and shipping & handling charges, if any. If they choose to pay by credit card, the form includes a place for them to fill in their credit card number. And then, with one press of a button, they send the order to you. Electronic Commerce under different perspectives: Lets see how Electronic Commerce (EC) is defined under each perspective. 1.1.1. Communications Perspective EC is the delivery of information, products /services, or payments over the telephone lines, computer networks or any other electronic means. 1.1.2. Business Process Perspective EC is the application of technology toward the automation of business transactions and work flow. 1.1.3. Service Perspective EC is a tool that addresses the desire of firms, consumers, and management to cut service costs while improving the quality of goods and increasing the speed of service delivery. 1.1.4. Online Perspective EC provides the capability of buying and selling products and information on the internet and other online services.

EC ORGANIZATIONS. Pure physical organizations (corporations) are referred to as brick-and-mortar (or old-economy) organizations, whereas companies that are engaged only in EC are considered virtual (or pure-play) organizations. Click-and-mortar (or click-and-brick) organizations are those that conduct some e-commerce activities, yet their primary business is done in the physical world. Gradually, many brick-and-mortar companies are changing to click-and-mortar ones (e.g., Wal-Mart Online).

INTERNET VERSUS NON-INTERNET EC Most e-commerce is done over the Internet. But EC can also be conducted on private networks, such as value-added networks (VANs, networks that add communication services to existing common

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carriers), on local area networks (LANs), or even on a single computerized machine. For example, buying food from a vending machine and paying with a smart card or a cell phone can be viewed as EC activity Electronic Commerce (e-Commerce) is a general concept covering any form of business transaction or information exchange executed using Information and Communication Technologies (ICTs). ECommerce takes place between companies, between companies and their customers, or between companies and public administrations. Electronic Commerce includes electronic trading of goods, services and electronic material. E-Commerce systems include commercial transactions on the Internet but their scope is much wider than this; they can be classified by application type:

Electronic Markets: The principle function of an electronic market is to facilitate the search for the required product or service. Airline booking systems are an example of an electronic market.

Electronic Data Interchange (EDI): Electronic Data Interchange (EDI) is the electronic exchange of business documents in a standard, computer process able, universally accepted format between-trading partners. EDI is quite different from sending electronic mail, messages or sharing files through a network. In EDI, the computer application of both the sender and the receiver, referred to as Trading Partners (TPs) have to agree upon the format of the business document which is sent as a data file over electronic messaging services. The two key aspects of EDI that distinguish it from other forms of electronic communication, such as electronic mail, are: 1. The information transmitted is directly used by the recipient computer without the need for human intervention is rarely mentioned but often assumed that EDI refers to interchange between businesses. It involves two or more organization or parts of organization communicating business information with each other in a common agreed format.

2. The repeated keying of identical information in the traditional paper-based business. Communication creates a number of problems that can be significantly reduced through the usage of EDI. These problems include: Increased time Low accuracy

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High labour charges Increased uncertainty.

To take full advantage of EDIs benefits, a company must computerize its basic business applications. Trading partners are individual organization that agrees to exchange EDI transactions. EDI cannot be undertaken unilaterally but requires the cooperation and active participation of trading partners. Trading partners normally consists of an organizations principal suppliers and wholesale customers. Since large retail stores transact business with a large number of suppliers they were among the early supporters of EDI. In the manufacturing sector, EDI has enabled the concept of Just-In-Time inventory to be implemented. JIT reduces inventory and operating capital requirements. EDI provides for the efficient transaction of recurrent trade exchanges between commercial organizations. EDI is widely used by, for example, large retail groups and vehicle assemblers when trading with their suppliers.

Internet Commerce The Internet (and similar network facilities) can be used for advertising goods and services and transacting one-off deals. Internet commerce has application for both businessto-business and business to consumer transactions.

1.1.5 Types of e-commerce

There are a number of different types of E-Commerce B2B - Business to Business B2C - Business to Consumer

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C2B - Consumer to Business B2E - Business to Employee C2C - Consumer to Consumer

B2B - Business to Business E-commerce has been in use for quite a few years and is more commonly known as EDI (electronic data interchange). In the past EDI was conducted on a direct link of some form between the two businesses where as today the most popular connection is the internet. The two businesses pass information electronically to each other. B2B e-commerce currently makes up about 94% of all ecommerce transactions. Typically in the B2B environment, E-Commerce can be used in the following processes: Procurement; order fulfillment; Managing trading-partner relationships.

B2C - Business to Consumer Business to Consumer e-commerce is relatively new. This is where the consumer accesses the system of the supplier. It is still a two way function but is usually done solely through the Internet. B2C can also relate to receiving information such as share prices, insurance quotes, on-line newspapers, or weather forecasts. The supplier may be an existing retail outlet such as a high street store; it has been this type of business that has been successful in using E-Commerce to deliver services to customers. These businesses may have been slow in gearing-up for E-Commerce compared to the innovative dot.com start ups, but they usually have a sound commercial structure as well as in-depth experience of running a business something which many dotcoms lacked, causing many to fail. Example: A home user wishes to purchase some good quality wine. The user accesses the Internet site http://www.craigs.com.au and follows the links to read a report on the recommended wines. After reading the tasting notes the user follows the links to place an order along with delivery and payment details directly into the merchants inventory system. The wine is then dispatched from the suppliers warehouse and in theory is delivered to the consumer without delay. C2B - Consumer to Business Consumer to Business is a growing arena where the consumer requests a specific service from the business. Example: Harry is planning a holiday in Darwin. He requires a flight in the first week of December and is only willing to pay Rs. 250. Harry places a submission with in a web based C2B

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facility. Dodgy Brothers Airways accesses the facility and sees Harrys submission. Due to it being a slow period, the airline offers Harry a return fare for Rs. 250.

B2E - Business to Employee Business to Employee e-commerce is growing in use. This form of E-commerce is more commonly known as an Intranet. An intranet is a web site developed to provide employees of an organisation with information. The intranet is usually access through the organisations network, it can and is often extended to an Entrant which uses the Internet but restricts uses by sign on and password.

C2C - Consumer to Consumer These sites are usually some form of an auction site. The consumer lists items for sale with a commercial auction site. Other consumers access the site and place bids on the items. The site then provides a connection between the seller and buyer to complete the transaction. The site provider usually charges a transaction cost. In reality this site should be call C2B2C. B2A is the least developed area of E-Commerce and it relates to the way that public sector organisations, at both a central and local level, are providing their services on-line. Also known as eGovernment, it has the potential to increase the domestic and business use of e-Commerce as traditional services are increasingly being delivered over the Internet. The UK government is committed to ensuring this country is at the forefront of e-Commerce and it is essential that eGovernment plays a significant part in achieving this objective.

1.1.6 Scope of E-Commerce Selling can be focussed to the global customer Pre-sales, subcontracts, supply Financing and insurance Commercial transactions: ordering, delivery, payment Product service and maintenance Co-operative product development Distributed co-operative working Use of public and private services Business-to-administrations (e.g. customs, etc) Transport and logistics Public procurement Automatic trading of digital goods

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Accounting Dispute resolution

EC Business Models Government-to-citizens (G2C) and to others: In this case the government provides services to its citizens via EC technologies. Governments can do business with other governments as well as with businesses (G2B). Mobile commerce (m-commerce): When e-commerce is done in a wireless environment, such as using cell phones to access the Internet, we call it m-commerce. Each of the above types of EC is executed in one or more business models, the method by which a company generates revenue to sustain itself. For example, in B2B one can sell from catalogs, or in auctions. The major business models of EC are summarized in Table 1.1. Table 1.1

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1.2 Advantages AND Limitations of E-COMMERCE Few innovations in human history encompass as many potential benefits as EC does. The global nature of the technology, low cost, opportunity to reach hundreds of millions of people (projected within 10 years), interactive nature, variety of possibilities, and resourcefulness and rapid growth of the supporting infrastructures (especially the Web) result in many potential benefits to organizations, individuals, and society. These benefits are just starting to materialize, but they will increase significantly as EC expands. The Benefits of EC The new markets could be accessed through the online and extending the service offerings to

customers globally. Internet shrinks the globe and broaden current geographical parameters to operate globally Marketing and promotional campaigns can be done globally at the reduced cost. Retaining the customer and the customer services could be improved drastically. Strengthen relationships with customers and suppliers ? Streamline business processes and administrative functions No added sales staff A catalogue which is quickly and easily updateable. This means that when prices or stocks are

changed, you dont have to have hundreds or thousands of obsolete catalogues lying around. You dont have to wait for the printer to deliver the catalogue before the new prices can come into effect. The facility to advertise daily, weekly or monthly specials and sales, or any special discounts -

and they can be changed within minutes, when and if necessary. You can also add a marketing message which highlights your strengths, such as the range and

quality of your products or services - or anything else you want to tell your customers. Electronic Commerce can increase sales and decrease costs. Advertising done well on the web can get even a small firms promotional message out to

potential customers in every country in the world. Businesses can use electronic commerce to identify new suppliers and business partners.

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Electronic Commerce increases the speed and accuracy with which businesses can exchange information, which reduces costs on both sides of transactions. E-Commerce provides buyers with a wider range of choices than traditional commerce because

buyers can consider many different products and services from a wider variety of sellers. Electronic payments of tax refunds, public retirement and welfare support cost less to issue and

arrive securely and quickly when transmitted over the Internet. Benefits to Organizations Electronic commerce expands the marketplace to national and international markets. With

minimal capital outlay, a company can easily and quickly locate more customers, the best suppliers, and the most suitable business partners worldwide. Electronic commerce decreases the cost of creating, processing, distributing, storing, and

retrieving paper-based information. For example, by introducing an electronic procurement system, companies can cut the purchasing administrative costs by as much as 85 percent. Ability for creating highly specialized businesses. For example, dog toys which can be purchased

only in pet shops or department and discount stores in the physical world, are sold now in a specialized www.dogtoys.com Electronic commerce allows reduced inventories and overhead by facilitating pull-type supply

chain management. In a pull-type system the process starts from customer orders and uses just-in-time manufacturing. Electronic commerce reduces the time between the outlay of capital and the receipt of products

and services. Electronic commerce initiates business processes reengineering projects. By changing processes,

productivity of salespeople, knowledge workers, and administrators can increase by 100 percent or more. Electronic commerce lowers telecommunications cost-the Internet is much cheaper than VANs.

Other benefits include improved image, improved customer service, newfound business partners, simplified processes, compressed cycle and delivery time, increased productivity, eliminating paper, expediting access to information, reduced transportation costs, and increased flexibility.

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Benefits to Consumers Electronic commerce enables customers to shop or do other transactions 24 hours a day, all year

round, from almost any location. Electronic commerce provides customers with more choices; they can select. Electronic

commerce frequently provides customers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons. In some cases, especially with digitized products, EC allows quick delivery. Customers can receive relevant and detailed information in seconds, rather than days or weeks. Electronic commerce makes it possible to participate in virtual auctions. Electronic commerce allows customers to interact with other customers in electronic communities

and exchange ideas as well as compare experiences. Electronic commerce facilitates competition, which results in substantial discounts.

Benefits to Society Electronic commerce enables more individuals to work at home and to do less travelling for

shopping, resulting in less traffic on the roads and lower air pollution. Electronic commerce allows some merchandise to be sold at lower prices, so less affluent people

can buy more and increase their standard of living. Electronic commerce enables people in Third World countries and rural areas to enjoy products

and services that otherwise are not available to them. Electronic commerce facilitates delivery of public services, such as health care, education, and

distribution of government social services at a reduced cost and/or improved quality. Health-care services, for example, can reach patients in rural areas. The Limitations of EC The limitations of EC can be grouped into technical and non-technical categories.

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Technical Limitations of EC There is a lack of system security, reliability, standards, and some communication protocols. Insufficient telecommunication bandwidth. The software development tools are still evolving and changing rapidly. It is difficult to integrate the Internet and EC software with some existing applications and

databases. Vendors may need special Web servers and other infrastructures, in addition to the network servers. Some EC software might not fit some hardware, or may be incompatible with some operating systems or other components. Non-technical Limitations Of the many non-technical limitations that slow the spread of EC, the following are the major ones. Cost and justification: The cost of developing EC in-house can be very high, and mistakes due to

lack of experience may result in delays. There are many opportunities for outsourcing, but where and how to do it is not a simple issue. Furthermore, to justify the system one must deal with some intangible benefits (such as improved customer service and the value of advertisement), which are difficult to quantify. Security and privacy: These issues are especially important in the B2C area, especially security

issues which are perceived to be more serious than they really are when appropriate encryption is used. Privacy measures are constantly improved. Yet, the customers perceive these issues as very important, and, the EC industry has a very long and difficult task of convincing customers that online transactions and privacy are, in fact, very secure. Lack of trust and user resistance: Customers do not trust an unknown faceless seller (sometimes

they do not trust even known ones), paperless transactions, and electronic money. So switching from physical to virtual stores may be difficult. Other limiting factor:. Lack of touch and feel online. Some customers like to touch items such as

clothes and like to know exactly what they are buying.

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Many legal issues are as yet unresolved, and government regulations and standards are not refined enough for many circumstances. Electronic commerce, as a discipline, is still evolving and changing rapidly. Many people are

looking for a stable area before they enter into it. There are not enough support services. For example, copyright clearance centres for EC

transactions do not exist, and high-quality evaluators, or qualified EC tax experts, are rare. In most applications there are not yet enough sellers and buyers for profitable EC operations. Electronic commerce could result in a breakdown of human relationships. Accessibility to the Internet is still expensive and/or inconvenient for many potential customers.

(With Web TV, cell telephone access, kiosks, and constant media attention, the critical mass will eventually develop.) Despite these limitations, rapid progress in EC is taking place. For example, the number of people in the United States who buy and sell stocks electronically increased from 300,000 at the beginning of 1996 to about 10 million in fall 1999. As experience accumulates and technology improves, the ratio of EC benefits to costs will increase, resulting in a greater rate of EC adoption. The potential benefits may not be convincing enough reasons to start EC activities Disadvantages of E-Commerce Some business processes such as perishable foods and high-cost, unique items such as custom-

designed jewelry might be impossible to inspect adequately from a remote location. Costs, which are a function of technology, can change dramatically even during short-lived

electronic commerce implementation projects because the technologies are changing so rapidly. Many firms have trouble recruiting and retaining employees with the technological, design and

business process skills needed to create an effective electronic commerce presence. Firms facing difficulty of integrating existing databases and transaction-processing software

designed for traditional commerce into the software that enables electronic commerce. Companies that offer software design and consulting services to tie existing systems into new

online business systems can be expensive.

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Consumers are fearful of sending their credit card numbers over the Internet and having online merchants. Consumers are simply resistant to change and are uncomfortable viewing merchandise on a computer screen rather than in person. 1.3 DRIVING FORCES OF E-COMMERCE E-Commerce is becoming popular, it is worthwhile to examine todays business environment so let us understand the pressures it creates on organizations and the responses used by organizations. Environmental factors that create Business Pressures: Market, economical, societal and technological factors are creating a highly competitive business environment in which consumers are the focal point. These factors change quickly, sometimes in an unpredictable manner and therefore companies need to react frequently not only in the traditional actions such as lowering cost and closing unprofitable facilities but also innovative activities such as customizing products, creating new products or providing superb customer service. Economic Forces One of the most evident benefits of e-commerce is economic efficiency resulting from the reduction in communications costs, low-cost technological infrastructure, speedier and more economic electronic transactions with suppliers, lower global information sharing and advertising costs, and cheaper customer service alternatives. Categories of Economic Forces Lower marketing costs: marketing on the Internet maybe cheaper and can reach a wider crowd

than the normal marketing medium. Lower sales costs: increase in the customer volume do not need an increase in staff as the sales

function is housed in the computer and has virtually unlimited accessibility Lower ordering processing cost: online ordering can be automated with checks to ensure that

orders are correct before accepting, thus reducing errors and the cost of correcting them. New sales opportunities: the website is accessible all the time and reaches the global audience

which is not possible with traditional storefront.

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Economic integration is either external or internal. External integration refers to the electronic networking of corporations, suppliers, customers/clients, and independent contractors into one community communicating in a virtual environment (with the Internet as medium). Internal integration, on the other hand, is the networking of the various departments within a corporation, and of business operations and processes. This allows critical business information to be stored in a digital form that can be retrieved instantly and transmitted electronically. Internal integration is best exemplified by corporate intranets. Among the companies with efficient corporate intranets are Procter and Gamble, IBM, Nestle and Intel. EG. SESAMi.NET: Linking Asian Markets through B2B Hubs SESAMi.NET is Asias largest B2B ehub, a virtual exchange integrating and connecting businesses (small, medium or large) to trading partners, e-marketplaces and internal enterprise systems for the purpose of sourcing out supplies, buying and selling goods and services online in real time. The e-hub serves as the centre for management of content and the processing of business transactions with support services such as financial clearance and information services. It is strategically and dynamically linked to the Global Trading Web (GTW), the worlds largest network of trading communities on the Internet. Because of this very important link, SESAMi reaches an extensive network of regional, vertical and industry-specific interoperable B2B e-markets across the globe. Market Forces Corporations are encouraged to use e-commerce in marketing and promotion to capture international markets, both big and small. The Internet is likewise used as a medium for enhanced customer service and support. It is a lot easier for companies to provide their target consumers with more detailed product and service information using the Internet. Strong competition between organizations, extremely low labor cost in some countries, frequent and significant changes in markets and increased power of consumers are the reasons to create market forces. Technology Forces The development of information and communications technology (ICT) is a key factor in the growth of ecommerce. For instance, technological advances in digitizing content, compression and the promotion of open systems technology have paved the way for the convergence of communication services into one single platform. This in turn has made communication more efficient, faster, easier, and more economical as the need to set up separate networks for telephone services, television broadcast, cable television, and

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Internet access is eliminated. From the standpoint of firms/ businesses and consumers, having only one information provider means lower communications costs. Moreover, the principle of universal access can be made more achievable with convergence. At present the high costs of installing landlines in sparsely populated rural areas is incentive to telecommunications companies to install telephones in these areas. Installing landlines in rural areas can become more attractive to the private sector if revenues from these landlines are not limited to local and long distance telephone charges, but also include cable TV and Internet charges. This development will ensure affordable access to information even by those in rural areas and will spare the government the trouble and cost of installing expensive landlines Societal and environmental forces To understand the role of E-commerce in todays organizations, it becomes necessary to review the factors that create societal and environmental forces. Changing nature of workforce Government deregulations Shrinking government subsidies Increased importance of ethical and legal issues Increased social responsibility of organizations Rapid political changes

1.4 Impact of EC A response can be a reaction to a pressure already in existence, or it can be an initiative that will defend an organization against future pressures. It can also be an activity that exploits an opportunity created by changing conditions. Organizations major responses are divided into five categories: strategic systems for competitive advantage, continuous improvement efforts, business process reengineering (BPR), business alliances and EC. These several responses can be interrelated and E-commerce can also facilitate the other categories. The four categories are described below. Strategic Systems

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Strategic systems provide organizations with strategic advantages, thus enabling them to increase their market share, better negotiate with their suppliers, or prevent competitors from entering into their territory. There is a variety of EC supported strategic systems. An example is FedExs overnight delivery system and the companys ability to track the status of every individual package anywhere in the system. Most of FedExs competitors have already mimicked the system. So FedEx moved the system to the Internet. However, the competitors quickly followed and now FedEx is introducing new activities. Continuous Improvement Efforts In order to improve the companys productivity and quality, many companies continuously conduct innovative programs. The efforts taken by companies for continuous improvement are Improved productivity Improved decision making Managing Information Change in management Customer service Innovation and Creativity.

For example, Dell Computer takes its orders electronically and improved moves them via Enterprise Resources Planning software (from SAP Corp.) into the just-in-time assembly operation. Intel is taking its products consumption in 11 of its largest customers, using its extranets, almost in real time, and determining production schedules and deliveries accordingly. Business Process Reengineering (BPR) Business Process Reengineering refers to a major innovation in the organizations structure and the way it conducts business. Information technology and especially EC play a major role in BPR. Electronic Commerce provides flexibility in manufacturing, permits faster delivery to customers and supports rapid and paperless transactions among suppliers, manufacturers and retailers. The major areas in which E-Commerce supports BPR are

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Reducing cycle time and time to market: Reducing the business process time (cycle time) is extremely important for increasing productivity and competitiveness. Similarly, reducing the time from the inception of an idea until its implementation time to marketis important because those who can be first on the market with a product, or who can provide customers with a service faster than competitors, enjoy a distinct competitive advantage. Empowerment of employees and collaborative work: Empowerment is related to the concept of

self-directed teams. Management delegates authority to teams who can execute the work faster and with fewer delays. Information Technology allows the decentralization of decision making and authority but simultaneously supports a centralized control. For example, the Internet and the intranets enable empowered employees to access data, information and knowledge they need for making quick decisions. Knowledge management: Employees can access organizational know-how via their companys

intranet. Some knowledge bases are open to the public for a fee over the Internet, generating income. Customer-focused approach: Companies are becoming increasingly customer oriented. This can

be done in part by changing manufacturing processes from mass production to mass customization. In mass production, a company produces a large quantity of identical items. In mass customization, items are produced in a large quantity but are customized to fit the desires of each customer. Electronic commerce is an ideal facilitator of mass customization. Business alliances Many companies realize that alliances with other companies, even competitors can be beneficial. There are several types of alliances, such as sharing resources, establishing permanent supplier-company relationships and creating joint research efforts. One of the most interesting types is the temporary joint venture, in which companies form a special organization for a specific, limited-time mission. THE SCOPE OF EC. The field of e-commerce is broad, and we use Figure 1.1 to describe it. As can be seen in the figure, there are many of EC applications (top of the figure),

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To execute these applications, companies need the right information, infrastructure, and support services. Figure 1.1 shows that the EC applications are supported by infrastructure and by five support areas (shown as supporting pillars): People: Sellers, buyers, intermediaries, information systems specialists and other employees, and any other participants. Public policy: Legal and other policy and regulating issues, such as privacy protection and taxation, that are determined by the government. Marketing and advertising: Like any other business, EC usually requires the support of marketing and advertising. This is especially important in B2C online transactions where the buyers and sellers usually do not know each other.

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Support services: Many services are needed to support EC. These range from payments to order delivery and content creation. Business partnerships: Joint ventures, e-marketplaces, and business partnerships of various sorts are common in EC. These occur frequently throughout the supply chain (i.e., the interactions between a company and its suppliers, customers, and other partners). The supporting infrastructure includes hardware, software, and networks, ranging from browsers to multimedia. All of these EC components require good management practices. This means that companies need to plan, organize, motivate, devise strategy, and reengineer processes as needed.

1.5 Ecommerce Strategy Build a business, not a website. EC philosophy is: Build a business, not a website. An Ecommerce website is a business first and foremost; the website is merely the commerce delivery channel. An effective ecommerce site begins by understanding and defining the business strategy, goals and metrics for the site, and then crafting a website that is tailored to meet those site objectives. Start with the 5 Ps: Proper Preparation Prevents Poor Performance You wouldnt build a house without an architect and a blueprint, and you shouldnt build a website without a digital equivalent. If you want your digital house to crumble, the surest way to ensure failure online and waste untold time and money is to skip proper planning and jump blindly into implementation. Avoid Weak or inconsistent branding Cart abandonment Bad User Experience and usability Poor navigation Slow performance Slow or limited site search Inability to make changes quickly Poor Performance with search engines Achieve real Economic Benefits for Your Business

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What will you gain through proper strategy and planning? A successful ecommerce business that delivers real economic value, including:

Attracting New Customers: By planning and implementing a search-engine friendly architecture from the start, your ecommerce site gains relevant and targeted traffic Increasing Sales: By streamlining the sales process and improving the shopping experience we increase the conversion rate and the average ticket price Increasing Customer Loyalty and Retention: An enhanced, usable, and pleasing ecommerce experience generates greater user satisfaction and trust which translates into returning customers Providing Superior Customer Service and Communications: Help your customers to communicate, engage and ultimately identify themselves with your business through ecommerce tools, user communities, online support, and by providing them with comprehensive and timely product information Reducing Operating Costs and Increasing Efficiency: Reduce your customer acquisition, customer service and fulfillment costs by leveraging the website for client communications and process automation Promoting Your Brand and Enhancing Your Brand Image: We ensure you display a consistent corporate identity online with a professional style guide. Moreover, our ecommerce Marketing solutions promote your products to the right audience, resulting in enhanced Brand Recognition and demand Preparing for Future Needs: With proper planning and a scalable architecture, your ecommerce site can accommodate additional requirements, features and functionality in the future

Measure your Success How will you know if your ecommerce site is successful at meeting your business needs? The key success metrics for ecommerce sites include: Traffic: The number of visitors that are coming to your site Stickiness: The amount of time users spend on the site and the number of pages they view Conversion: The percent of visitors who become customers and the size of the average sales ticket

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Customer Retention: The number of customers who return to your site and the frequency of their purchases

Implement our Holistic Methodology A thorough understanding of your business goals alone is not enough to ensure a flawless execution that delivers results. While it takes only one mediocre designer or developer to ruin a website, it takes a highly skilled and professionally managed team to produce a successful ecommerce site, including:

A Project Manager An Ecommerce Business Analyst (to conduct the research, plan strategy, find out what your competitors are doing that may be worth mimicking, and find the opportunities that those competitors are not taking advantage of) A Search Engine Optimization Specialist (to ensure search-engine friendliness is incorporated into the site architecture) An Information Architect A User-Experience Specialist An Art Director (to create the design style guide and give directions to the designers) A Developer (for site development and technical specifications) A Quality Assurance Specialist

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CASE STUDY E-COMMERCE PROVIDES DECISION SUPPORT TO HI-LIFE ORPORATION

THE PROBLEM Hi-Life Corporation owns and operates 720 convenience retail stores in Taiwan, where the company sells over 3,000 different products. A major problem is keeping a proper level of inventory of each product in each store. Overstocking is expensive due to storage costs and tying up money to buy and maintain the inventory. Under stocking reduces sales and could result in unhappy customers who may go to a competitor.

To calculate the appropriate level of inventory, it is necessary to know exactly how many units of each product are in stock at specific times. This is known as stock count. Periodic stock count is needed since the actual amount in stock frequently differs from the theoretical one (inventory _ previous inventory _ sales _ arrivals). The difference is due to shrinkage (e.g., theft, misplaced items, spoilage, etc.). Until 2002, stock count at Hi-Life was done manually. Using data collection sheets, where the products names were preprinted, employees counted the quantity of each product and recorded it on the data collection sheets. Then, the data were painstakingly keyed into each stores PC. The process took over 21 person hours, in each store, each week. This process was expensive and frequently was delayed, causing problems along the entire supply chain due to delays in count and errors. Suppliers, employees, and customers were unhappy.

THE SOLUTION The first phase of improvement was introduced in spring 2002. Management introduced a pocket PC (a handheld device) from Hewlett-Packard that runs on Microft Windows (Chinese version). The pocket PC, called Jornada, enables employees to enter the inventory tallies directly on the forms on the screen by hand, using Chinese characters for additional notes. Jornada has a synchronized cradle called Activesync. Once the pocket PC is placed in its cradle, inventory information can be relayed instantly to Hi-Lifes headquarters. In the second phase of improvement, in 2003, a compact bar code scanner was added on in the pocket PCs expansion slot. Employees now can scan the products bar codes and then enter the quantity found on the shelf. This new feature expedites data entry and minimizes errors in product identification. The up-to-the second information enables headquarters to compute appropriate inventory levels, shipment schedules, and purchasing strategies, using decision support system formulas, all in minutes. The stores use the Internet (with a secured VPN) to upload data to the intranet at headquarters.

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THE RESULTS The results have been astonishing. Inventory taking has been reduced to less than four hours per store. Errors are down by more than 90 percent, order placing is simple and quick, and administrative aperwork has been eliminated. Furthermore, quicker and more precise inventory counts have resulted in lower inventory levels and in shorter response times for changes in demand. Actually, the entire product-management process became more efficient, including purchasing, stocking, selling, shelf-price audit and price checks, re-ticketing, discontinuance, and customer inquiries. The employees like the new electronic commerce-based system too. It is very user friendly, both to learn and to operate, and the battery provides at least 24 hours of power, so charging can be done after hours. Finally, Hi-Lifes employees now have more time to plan, manage, and chat with customers. More important, faster and better decisions are enabled at headquarters, contributing to greater competitiveness and profitability for Hi-Life.

Sources: Compiled from hp.com/jornada jornada, and from microsoft.com/asia/mobile (May 2002).

LESSONS LEARNED FROM THIS CASE

The output of an information system is only as good as the inputted data. When data are inaccurate and/or delayed, the decisions that use the data are not the best, as in Hi-Lifes old system, which resulted in high inventories and low customer satisfaction. The solution described in this case was provided by an electronic-commerce system that expedited and improved the flow of information to the corporate headquarters. Electronic commerce (EC), which is the subject of this chapter, describes the process of buying, selling, transmitting, or exchanging products, services, and information via computerized networks, primarily by the Internet (see Turban et al., 2004). This case illustrates an intrabusiness application, involving employees, and it is referred to business-to employees (B2E) e-commerce. There are several other types of EC, and they all are the subject of this chapter. We also provide here an overview of the EC field and comment on its relationship to other information systems.

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2.0 Launching a Business on the Internet 2.1 2.2 2.3 2.4 Internet Architecture: The Life Cycle Approach Overview of the different phases The Network: Information Transfer Hosting a web site

2.1 Internet Architecture: The Life Cycle Approach

A worldwide system of interconnected computer networks. The origins of the Internet can be traced to the creation of ARPANET (Advanced Research Projects Agency Network) as a network of computers under the auspices of the U.S. Department of Defense in 1969. Today, the Internet connects millions of computers around the world in a nonhierarchical manner unprecedented in the history of communications. The Internet is a product of the convergence of media, computers, and telecommunications. It is not merely a technological development but the product of social and political processes, involving both the academic world and the government (the Department of Defense). From its origins in a nonindustrial, non- corporate environment and in a purely scientific culture, it has quickly diffused into the world of commerce. The Internet is a combination of several media technologies and an electronic version of newspapers, magazines, books, catalogs, bulletin boards, and much more. This versatility gives the Internet its power.
Technological features

The Internet 'Ls technological success depends on its principal communication tools, the Transmission Control Protocol (TCP) and the Internet Protocol (IP). They are referred to frequently as TCP/IP. A protocol is an agreed-upon set of conventions that defines the rules of communication. TCP breaks down and reassembles packets, whereas IP is responsible for ensuring that the packets are sent to the right destination. Data travels across the Internet through several levels of networks until it reaches its destination. E-mail messages arrive at the mail server (similar to the local post office) from a remote personal computer connected by a modem, or a node on a local-area network. From the server, the messages pass through a router, a special purpose computer ensuring that each message is sent to

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its correct destination. A message may pass through several networks to reach its destination. Each network has its own router that determines how best to move the message closer to its destination, taking into account the traffic on the network. A message passes from one network to the next, until it arrives at the destination network, from where it can be sent to the recipient, who has a mailbox on that network.

TCP/IP TCP/IP is a set of protocols developed to allow cooperating computers to share resources across the networks. The TCP/IP establishes the standards and rules by which messages are sent through the networks. The most important traditional TCP/IP services are file transfer, remote login, and mail transfer. The file transfer protocol (FTP) allows a user on any computer to get files from another computer, or to send files to another computer. Security is handled by requiring the user to specify a user name and password for the other computer. The network terminal protocol (TELNET) allows a user to log in on any other computer on the network. The user starts a remote session by specifying a computer to connect to. From that time until the end of the session, anything the user types is sent to the other computer. Mail transfer allows a user to send messages to users on other computers. Originally, people tended to use only one or two specific computers. They would maintain mail files on those machines. The computer mail system is simply a way for a user to add a message to another user's mail file. Other services have also become important: resource sharing, diskless workstations, computer conferencing, transaction processing, security, multimedia access, and directory services. TCP is responsible for breaking up the message into datagrams, reassembling the datagrams at the other end, resending anything that gets lost, and putting things back in the right order. IP is responsible for routing individual datagrams. The datagrams are individually identified by a unique sequence number to facilitate reassembly in the correct order. The whole process of transmission is done through the use of routers. Routing is the process by which two communication stations find and use the optimum path across any network of any complexity. Routers must support fragmentation, the ability to subdivide received information into smaller units where this is required to match the underlying network technology. Routers operate by

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recognizing that a particular network number relates to a specific area within the interconnected networks. They keep track of the numbers throughout the entire process.

Domain Name System The addressing system on the Internet generates IP addresses, which are usually indicated by numbers such as 128.201.86.290. Since such numbers are difficult to remember, a user-friendly system has been created known as the Domain Name System (DNS). This system provides the mnemonic equivalent of a numeric IP address and further ensures that every site on the Internet has a unique address. For example, an Internet address might appear as crito.uci.edu. If this address is accessed through a Web browser, it is referred to as a URL (Uniform Resource Locator), and the full URL will appear as http://www.crito.uci.edu. The Domain Name System divides the Internet into a series of component networks called domains that enable e-mail (and other files) to be sent across the entire Internet. Each site attached to the Internet belongs to one of the domains. Universities, for example, belong to the edu domain. Other domains are gov (government), com (commercial organizations), mil (military), net (network service providers), and org (nonprofit organizations).

World Wide Web The World Wide Web (WWW) is based on technology called hypertext. The Web may be thought of as a very large subset of the Internet, consisting of hypertext and hypermedia documents. A hypertext document is a document that has a reference (or link) to another hypertext document, which may be on the same computer or in a different computer that may be located anywhere in the world. Hypermedia is a similar concept except that it provides links to graphic, sound, and video files in addition to text files. In order for the Web to work, every client must be able to display every document from any server. This is accomplished by imposing a set of standards known as a protocol to govern the way that data are transmitted across the Web. Thus data travel from client to server and back through a protocol known as the HyperText Transfer Protocol (http). In order to access the documents that are transmitted through this protocol, a special program known as a browser is required, which browses the Web. See also

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World Wide Web. Commerce on the Internet Commerce on the Internet is known by a few other names, such as e-business, Etailing (electronic retailing), and e-commerce. The strengths of e-business depend on the strengths of the Internet. Internet commerce is divided into two major segments, companies that have started their businesses on the Internet, and others that have existed previously and are now transitioning into the Internet world. Some products and services, such as books, compact disks (CDs), computer software, and airline tickets, seem to be particularly suited for online business. World Wide Web : A major service on the Internet. To understand exactly how the Web relates to the Internet, see Web vs. Internet. The World Wide Web is made up of "Web servers" that store and disseminate "Web pages," which are "rich" documents that contain text, graphics, animations and videos to anyone with an Internet connection. The heart of the Web technology is the hyperlink, which connects each document to each other by its "URL" address, whether locally or in another country. "Click here" caused the Web to explode in the mid-1990s, turning the Internet into the largest shopping mall and information source in the world. It also enabled the concept of a "global server" that provides a source for all applications and data.

The Browser Web pages are accessed by the user via a Web browser application such as Internet Explorer, Netscape, Safari, Opera and Firefox. The browser renders the pages on screen, executes embedded scripts and automatically invokes additional software as needed. For example, animations and special effects are provided by browser plug-ins, and audio and video are played by media player software that either comes with the operating system or from a third party.

HTML Is the Format A Web page is a text document embedded with HTML tags that define how the text is rendered on screen. Web pages can be created with any text editor or word processor. They are also created in HTML authoring programs that provide a graphical interface for designing the layout. Authoring programs generate the HTML tags behind the scenes, but the tags can be edited if required. Many applications export documents directly to HTML, thus basic Web pages can be

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created in numerous ways without HTML coding. The ease of page creation helped fuel the Web's growth. A collection of Web pages makes up a Web site. Very large organizations deploy their Web sites on in-house servers or on their own servers co-located in a third party facility that provides power and Internet access. Small to medium sites are generally hosted by Internet service providers (ISPs). Millions of people have developed their own mini Web sites as ISPs typically host a small number of personal Web pages at no extra cost to individual customers. The public Web spawned the private "intranet," an inhouse Web site for employees. Protected via a firewall that lets employees access the Internet, the firewall restricts uninvited users from coming in and viewing internal information.

There is no difference in intranet and Web architectures. It has only to do with who has access. HTTP Can Deliver Anything HTML pages are transmitted to the user via the HTTP protocol. A Web server stores HTML pages for a Web site, but it can also be a storehouse for any kind of file delivered to a client application via HTTP. For example, the Windows version of this Encyclopedia is available as an HTTP application. The text and images are hosted on The Computer Language Company's Web server and delivered to the Windows client in the user's PC. The Windows client is an HTTP-enabled version of the popular interface first introduced in 1996 for stand-alone PCs and client/server LANs.

Where It Came From - Where It's Going The World Wide Web was developed at the European Organization for Nuclear Research (CERN) in Geneva from a proposal by Tim Berners-Lee in 1989. It was created to share research information on nuclear physics. In 1991, the first command line browser was introduced. By the start of 1993, there were 50 Web servers, and the Voila X Window browser provided the first graphical capability. In that same year, CERN introduced its Macintosh browser, and the National Center for Supercomputing Applications (NCSA) in Chicago introduced the X Window version of Mosaic. Mosaic was developed by Marc Andreessen, who later became world famous as a principal at Netscape. By 1994, there were approximately 500 Web sites, and, by the start of 1995, nearly 10,000. By the turn of the century, there were more than 30 million registered domain names. Many believe the Web signified the real beginning of the information age. However, those people who still use

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analog dial-up modems consider it the "World Wide Wait." Everyone has some interest in the Web. ISPs, cable and telephone companies want to give you connectivity. Webmasters want more visitors. IT managers want more security. The publishing industry wants to preserve its copyrights. Hardware and software vendors want to make every product Web accessible. Nothing in the computer/communications field ever came onto the scene with such intensity. Even with the dot-com crash of 2000/2001, the future of the Web is going to be very exciting. Stay tuned! See Web 2.0, Internet, HTTP, HTML, World Wide Wait and Wild Wooly Web.

2.2 Overview of Different Phases :What is a Network? A network has been defined as any set of interlinking lines resembling a net, a network of roads || an interconnected system, a network of alliances.'' This definition suits our purpose well: a computer network is simply a system of interconnected computers. How they're connected is irrelevant, and as we'll soon see, there are a number of ways to do this. Components of a Network: The components given below are mainly used in Network Security. 1. Concentrator 2. Hub 3. Repeater 4. Bridges 5. Modem 6. Routers 7. Cables NETWORK INFRASTRUCTURE REQUIREMENTS The network infrastructure is the underlying foundation of the system. It forms the services that create the operating makeup of your network. In a Communications Services deployment, determining your network infrastructure from the project goals ensures that you will have an architecture that can scale and grow.

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The Existing Network We need to understand our existing network infrastructure to determine how well it can meet the needs of our deployment goals. By examining our existing infrastructure, we identify if we need to upgrade existing network components or purchase new network components. We should build up a complete map of the existing network by covering these areas: 1. Physical communication links, such as cable length, grade, and so forth 2. Communication links, such as analog, ISDN, VPN, T3, and so forth, and available bandwidth and latency between sites 3. Server information, including: Host names IP addresses Domain Name System (DNS) server for domain membership 4. Locations of devices on your network, including: Hubs Switches Modems Routers and bridges Proxy servers 5. Number of users at each site, including mobile users After completing this inventory, you need to review that information in conjunction with your project goals to determine what changes are required so that you can successfully deliver the deployment.

Network Infrastructure Components The following common network infrastructure components have a direct impact upon the success of your deployment: Routers and switches Firewalls Load balancers Storage Area Network (SAN) DNS

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Routers and Switches Routers connect networks of your infrastructure, enabling systems to communicate. You need to ensure that the routers have spare capacity after the deployment to cope with projected growth and usage. In a similar vein, switches connect systems within a network. Routers or switches running at capacity tend to induce escalating bottlenecks, which result in significantly longer times for clients to submit messages to servers on different networks. In such cases, the lack of foresight or expenditure to upgrade the router or switch could have a personnel productivity impact far greater than the cost.

Firewalls Firewalls sit between a router and application servers to provide access control. Firewalls were originally used to protect a trusted network (yours) from the untrusted network (the Internet). These days, it is becoming more common to protect application servers on their own (trusted, isolated) network from the untrusted networks (your network and the Internet). Router configurations add to the collective firewall capability by screening the data presented to the firewall. Router configurations can potentially block undesired services (such as NFS, NIS, and so forth) and use packet-level filtering to block traffic from untrusted hosts or networks. In addition, when installing a Sun server in an environment that is exposed to the Internet, or any untrusted network, reduce the Solaris software installation to the minimum number of packages necessary to support the applications to be hosted. Achieving minimization in services, libraries, and applications helps increase security by reducing the number of subsystems that must be maintained. The Solaris Security Toolkit provides a flexible and extensible mechanism to minimize, harden, and secure Solaris systems.

Load Balancers Use load balancers to distribute overall load on your Web or application servers, or to distribute demand according to the kind of task to be performed. If, for example, you have a variety of dedicated applications and hence different application servers, you might use load balancers according to the kind of application the user requests. If you have multiple data centers, you should consider geographic load balancing.

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Geographic load balancing distributes load according to demand, site capacity, and closest location to the user. If one center should go down, the geographic load balancer provides failover ability. For load balancers on Web farms, place the hardware load balancers in front of the servers and behind routers because they direct routed traffic to appropriate servers. Software load balancing solutions reside on the Web servers themselves. With software solutions, one of the servers typically acts a traffic scheduler. A load balancing solution is able to read headers and contents of incoming packets. This enables you to balance load by the kind of information within the packet, including the user and the type of request. A load balancing solution that reads packet headers enables you to identify privileged users and to direct requests to servers handling specific tasks.

Storage Area Networks (SANs) Understanding the data requirements of the storage system is necessary for a successful deployment. Increasingly, SANs are being deployed so that the storage is independent of the servers used in conjunction with it. Deploying SANs can represent a decrease in the time to recover from a non-functional server as the machine can be replaced without having to relocate the storage drives. Use these questions to evaluate if your deployment storage requirements would be best served through a SAN: Are reads or writes more prevalent? Do you need high I/O rate storage? Is striping the best option? Do you need high uptime? Is mirroring the best option? How is the data to be backed up? When is it going to be backed up?

Domain Name System (DNS) Servers which make heavy usage of DNS queries should be equipped with a local caching DNS server to reduce lookup latency as well as network traffic. When determining your requirements, consider allocating host names for functions such as mailstore, mail-relay-in, mail-relay-out, and so forth. You should consider this policy even if the host names all are currently hosted on one machine. With services configured in such a way, relocation of the services to alternate hardware significantly reduces the impacts of the change.

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Planning Your Network Infrastructure Layout In deriving your infrastructure topology, you need to consider the following topics: DMZ Intranet Internal network Proxies Firewall Configuration Mobile users Demilitarized Zone (DMZ)

These days, most company networks are configured for a DMZ. The DMZ separates the corporate network from the Internet. The DMZ is a tightly secured area into which you place servers providing Internet services and facilities (for example, web servers). These machines are hardened to withstand the attacks they might face. To limit exposure in case of a security breach from such attacks, these servers typically contain no information about the internal network. For example, the name server facilities only include the server and the routers to the Internet. Progressively, DMZ implementations have moved the segment behind the firewall as firewall security and facilities have increased in robustness. However, the DMZ still remains segmented from the internal networks. You should continue to locate all machines hosting Web servers, FTP servers, mail servers, and external DNS on a DMZ segment.

A simpler network design might only define separate DMZ segments for Internet services, VPN access, and remote access. However, security issues exist with VPN and remote access traffic. You need to separate appropriate connections of these types from the rest of the network. The firewall providing the DMZ segmentation should allow only inbound packets destined to the corresponding service ports and hosts offering the services within the DMZ.

Also, limit outbound initiated traffic to the Internet to those machines requiring access to the Internet to carry out the service they are providing (for example, DNS and mail). You might want to segment an inbound-only DMZ and an outbound-only DMZ, with respect to the type of

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connection requests. However, given the potential of a denial-of-service attack interrupting DNS or email, consider creating separate inbound and outbound servers to provide these services. Should an email-based Trojan horse or worm get out of control and overrun your outbound mail server, inbound email can still be received. Apply the same approach to DNS servers.

Intranet The DMZ provides a network segment for hosts that offer services to the Internet. This design protects your internal hosts, as they do not reside on the same segment as hosts that could be compromised by an external attack. Internally, you also have similar services to offer (Web, mail, file serving, internal DNS, and so on) that are meant solely for internal users. Just as the Internet services are segmented, so too, are the internal services. Separation of services in this manner also permits tighter controls to be placed on the router filtering. Just as you separate the Internet-facing services into the DMZ for security, your private internal services should reside in their own internal DMZ. In addition, just as multiple DMZs can be beneficialdepending on your services and your networks sizemultiple intranets might also be helpful. The firewall rules providing the segmentation should be configured similarly to the rules used for the DMZs firewall. Inbound traffic should come solely from machines relaying information from the DMZ (such as inbound email being passed to internal mail servers) and machines residing on the internal network.

Internal Network The segments that remain make up your internal network segments. These segments house users machines or departmental workstations. These machines request information from hosts residing on the intranet. Development, lab, and test network segments are also included in this list. Use a firewall between each internal network segment to filter traffic to provide additional security between departments. Identify the type of internal network traffic and services used on each of these segments to determine if an internal firewall would be beneficial. Machines on internal networks should not communicate directly with machines on the Internet. Preferably, these machines avoid direct communication with machines in the DMZ. Ultimately, the services they require should reside on hosts in the intranet. A host on the intranet can in turn communicate with a host in the DMZ to complete a service (such as outbound email or DNS).

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This indirect communication is acceptable. Proxies Only the machines directly communicating with machines on the Internet should reside in the DMZ. If users require Internet access, though, this creates a problem based on your previous topology decisions. In this situation, proxies become helpful. Place a proxy on an internal network segment, or, better yet, an intranet segment. A machine requiring access to the Internet can pass its request onto the proxy, which in turn makes the request on the machines behalf. This relay out to the Internet helps shield the machine from any potential danger it might encounter. Because the proxy communicates directly with machines on the Internet, it should reside in the DMZ. However, this conflicts with the desire to prevent internal machines from directly communicating with DMZ machines. To keep this communication indirect, use a double proxy system. A second proxy residing in the intranet passes connection requests of the internal machines to the proxy in the DMZ, which in turn makes the actual connection out on the Internet. Firewall Configuration In addition to the typical packet-filtering features, most firewalls provide features to prevent IP spoofing. Use IP-spoofing protection whenever possible. For instance, if there is only one entry point into your network from the Internet and a packet is received from the Internet with a source address of one of your internal machines, it was likely spoofed. Based on your networks topology, the only packets containing a source IP address from your internal machines should come from within the network itself, not from the Internet. By preventing IP spoofing, this possibility is eliminated, and the potential for bypassing IP address-based authorization and the other firewall filtering rules is reduced. Use the same IPspoofing protection on any internal firewall as well. Mobile Users When you have remote or mobile users, pay attention to how you will provide them access to the facilities. Will there be any facilities they cannot access? What kind of security policies do you need to address? Will you require SSL for authentication? Also, examine whether your mobile user population is stable or is expected to increase over time. What is Security? In the computer industry, refers to techniques for ensuring that data stored in a computer cannot be read or compromised by any individuals without authorization. Most security measures involve data encryption and passwords. Data encryption is the translation of data into a form that is unintelligible without a deciphering mechanism. A password is a secret word or phrase that gives a user access to a particular program or system.

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Network security : Consists of the provisions made in an underlying computer network infrastructure, policies adopted by the network administrator to protect the network and the network-accessible resources from unauthorized access and the effectiveness (or lack) of these measures combined together. What is a protocol? A protocol is a well-defined specification that allows computers to communicate across a network. In a way, protocols define the "grammar" that computers can use to "talk" to each other. What is IP? IP stands for "Internet Protocol". It can be thought of as the common language of computers on the Internet. There are a number of detailed descriptions of IP given elsewhere, so we won't cover it in detail in this document What is an IP address? IP addresses are analogous to telephone numbers when you want to call someone on the telephone, you must first know their telephone number. Similarly, when a computer on the Internet needs to send data to another computer, it must first know its IP address. IP addresses are typically shown as four numbers separated by decimal points, or dots. For example, 10.24.254.3 and 192.168.62.231 are IP addresses Transfer Control Protocol: TCP is a transport-layer protocol. It needs to sit on top of a network-layer protocol, and was designed to ride atop IP. (Just as IP was designed to carry, among other things, TCP packets.) Because TCP and IP were designed together and wherever you have one, you typically have the other, the entire suite of Internet protocols are known collectively as ``TCP/IP.'' TCP itself has a number of important features that we have covered in detail previously Types of Network: a. LAN(Local Area Network). b. WAN(Wide Area Network). c. MAN(Metropolitan Area Network).

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2.3 Hosting a Website The consumer first moves through the internet to the merchants web site. At the web site, the consumer is briefly given an introduction to the product or services the merchant offers. It is at this point that the consumer makes the decision to visit the web store by clicking on a link or button located on the web page (e.g., Buy Now, Shop Online, or an image of a shopping cart button are common entry points into a web store). After choosing to visit the web store, the consumer is typically connected to an online transaction server located somewhere else on the internet which runs software commonly referred to as a shopping cart application. The shopping cart application has been setup by the merchant to display all products and services offered, as well as calculate pricing, taxes, shipping charges, etc. From there, the consumer decides that he wants to purchase something, so he enters all pertinent credit card information and a sales order is produced. Depending on the ecommerce implementation, the sales order can now take two totally different paths for confirming to the consumer that the order is officially placed. Scenario 1 The consumers credit card information goes directly through a private gateway to a processing network, where the issuing and acquiring banks complete or deny the transaction. This generally takes place in no more than 5-7 seconds and the consumer is then informed that the order was received, the credit card was authorized, and that the product will ultimately be shipped. Scenario 2 The consumers entire order and credit card information is electronically submitted back to the merchants server (usually via email, FTP, or SSL connection) where the order can be reviewed first and then approved for credit card authorization through a processing network. The consumer then receives an email shortly afterwards, confirming the order being received, the credit card being authorized, and status on when the product will exactly be shipped. In both scenarios, the process is transparent to the consumer and appears virtually the same. However, the first scenario is a more simplistic method of setting up a shopping cart application and does not take into consideration any back office issues that may delay shipment (i.e., items out of stock, back orders, orders submitted after office hours or during holidays, etc.). ManageMores eCommerce Manager relies on the second scenario to handle all of its ecommerce orders. This second scenario keeps the consumer accurately informed throughout the

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entire ordering process. Let us assume an ecommerce implementation that uses the second scenario mentioned above. There are several basic steps you will need to accomplish before becoming Commerce enabled. 1. Getting a Merchant Bank Account 2. Web Hosting 3. Web Design Considerations 4. Registering a Domain Name 5. Obtaining a Digital Certificate

Getting a Merchant Bank Account In order to be able to accept credit cards, you must apply for an account with a credit card merchant account provider. This can be relatively easy or somewhat difficult, depending on which country you live in, and the type of business you are running. When choosing a merchant account provider, the following should also be noted: 1 In order for credit card authorization to be automatic from within ManageMore, you must

ensure that your merchant account provider has credit card processors that connect with IC Verify, PC Charge, or AuthorizeNet (i.e.Intellicharge Interface) software. These products are sold separately from ManageMore and eliminate the need for merchant terminal devices or separate time consuming steps to approve credit cards. 2 Your merchant account provider must allow you to handle non-swiped credit card

transactions. This refers to transactions where the customer is not present and only the credit card number and expiration date are being used for approving the charges.

When choosing a merchant account provider, you should do a little research on

the companys reputation, years in business, and company size. Constantly changing to a new merchant account provider when your old one goes out-of business can be costly and time consuming. 2 get approved. 3 Avoid merchant account providers that require 1 or 2 year contract terms. Since there are so many merchant account providers available, it doesnt make sense to lock your Avoid merchant account providers that ask for a non-refundable fee before you

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company into a commitment for any period of time. 4 Expect merchant account providers to have some form of a sign up fee after being

approved only. These fees can come in the form of an application fee, processing fee, software fee, etc. Typically expect to pay around $100 to $500 for getting an account setup to accept credit cards and sometimes electronic checks. 5 You should be able to find a merchant account provider that can offer you

discount credit cards rates ranging from 1.75% to 2.75% and no more than .25 cent per transaction. If not, contact Intellisoft regarding our merchant account provider affiliates and the free Intellicharge Interface just for signing up with them. 6 You will need a dedicated phone line or data line for processing credit cards and

electronic checks. Note: If your computer or local area network is already connected to the internet, a separate data line will not be necessary if you use the Intellicharge Interface for electronic payment.

Web Hosting Web hosting is a very important step in this process, as this is how you gain a presence on the internet in the first place. There are actually two scenarios that can be used for web hosting. Scenario1 involves setting up and maintaining your own web server, while Scenario 2 involves farming out all web hosting administration to an ISP. An Internet Service Provider (ISP) is a company that provides you with internet access and limited hard drive space on their web servers for hosting your web site. The following should be noted when searching for an Internet Service Provider: 1. Always try to find an ISP that can provide a local telephone number for you to connect to the internet.

1 2

Choose an ISP that is known for having few interruptions of service. Choose an ISP that is known for good technical support and has knowledgeable people

familiar with ecommerce sites. 3 4 Choose an ISP that consistently has fast connection speeds. As with any company you do business with, make sure the ISP is reputable.

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The online transaction providers that offer the actual web store itself can sometimes be hosted by your same ISP or may require a completely different provider, referred to as a Commerce Service Provider (CSP). Many small businesses tend to choose CSPs for creating a web store because it gives them the flexibility of choosing a provider that offers competitive pricing and the best shopping cart application for their needs. Online transaction providers will usually provide one shopping cart solution they feel is better than the many others that exist and differ by price, appearance, layout, functionality, and ease of use. The following should be noted when dealing with shopping cart applications: 1 Online transaction providers will either sell or rent you the use of an online shopping cart

application for your business. Be forewarned that purchasing an online shopping cart application is very expensive. Most businesses will rent these online web store programs rather than committing to such a steep investment. 2 Rental pricing for the use of shopping cart programs vary depending on number of

transactions generated a month, number of products listed on the shopping cart application, and the sophistication of the shopping cart application itself. 3 There are a lot of online transaction providers out there, and they all have varying packages. Deciding on a providers package that fits your needs is perhaps the most important aspect.

Web Design Considerations With little knowledge of HTML and a lot of patience, you can probably create your own corporate web site with the help of products like Microsoft FrontPage or DreamWeaver. However, when adding a web store to your web site, you may want to seek the help of professional web designers to make the look and feel of your web store consistent with the rest of your corporate web site. Most shopping cart applications, like SoftCart by Mercantec, allow its templates to be modified just for this purpose. In many cases, the same ISP or CSP you choose can provide web design and consultation.

Registering a Domain Name Domain names are the names for computers on the Internet that correspond to IP (Internet protocol) numbers to route information to addresses on the Internet network. Domain names

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serve as a convenient way of locating information and people on the Internet. In layman terms, will it be important to you, for customers to find your web site by typing 123.123.456.456 or by typing something simple to remember like www.mybiz.com? Registering a domain name is one of the most important decisions you can make for your online identity.Your domain name says who you are to your clients, your peers - the whole world. The basics for registering a domain name are: Contact a domain name registrar on the internet to register for a domain name. There are many to choose from, just do a web search on domain name registrar to get you started. 2. Select a unique domain name you would like others to use for finding your web site.

Obtaining a Digital Certificate A digital certificate, also known as a SSL Server Certificate, enables SSL (Secure Socket Layer encryption) on the web server. SSL protects communications so you can take credit card orders securely and ensure that hackers cannot eavesdrop on you. Any ecommerce company that provides you with an online web store will require you to have SSL before you can use their services. Thankfully, for most people obtaining a digital certificate is not a problem. For a minimal fee, one can usually use the certificate owned by the web hosting company where your page resides. If you are a larger company, however, you may want to get your own digital certificate. Architectural Framework of E Commerce A framework is intended to define and create tools that integrate the information found in todays closed systems and allows the development of e-commerce applications. It is important to understand that the aim of the architectural frame-work itself is not to build new database management systems, data repository, computer languages, software agent based transaction monitors, or communication protocols. Rather, the architecture should focus on synthesizing the diverse resources already in place in corporations to

facilitate the integration of data and software for better applications. The electronic commerce application architecture consists of six layers of functionality, or services: 1) applications; 2) brokerage services, data or transaction management; 3) interface, and; support layers 4) secure messaging, security and electronic document interchange; 5) middle ware and

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structured document interchange; and 6) network infrastructure and basic communications services. These layers co-operate to provide a seamless transition between todays computing resources and those of tomorrow by transparently integrating information access and exchange within the context of the chosen application. As seen in Fig., electronic commerce applications are based on several elegant technologies. But only when they are integrated do they provide uniquely powerful solutions. In the ensuing discussion of each of these layers, we will not elaborate on the various aspects of the network infrastructure that transports information. These were discussed extensively earlier and will not be addressed here. We begin our discussion with the application level services. Electronic Commerce Application Services The application services layer of e-commerce will be comprised of existing and future applications built on the innate architecture. Three distinct classes of electronic commerce application can be distinguished: customer to business, business-to-business, and intra organization Consumer-to-Business Transactions We call this category marketplace transaction. In a marketplace transaction, customers learn about products differently through electronic publishing, buy them differently using electronic cash and secure payment systems, and have them delivered differently. Also, how customers allocate their loyalty may also be different. In light of this, the organization itself has to adapt to a world where the traditional concepts of brand Differentiation no longer hold-where quality has a new meaning, where content may not be equated to product, Where distribution may not automatically mean physical Transport. In this new environment, brand equity can rapidly evaporate forcing firms to develop new ways of doing business Business-to Business Transactions We call this category market-link transaction. Here, businesses, governments, and other organizations depend on computer - to-computer communication as a fast, an economical, and a dependable way to conduct business transactions. Small companies are also beginning to see the benefits of adopting the same methods. Business-to-business transactions include the use of EDI and electronic mail for purchasing goods and services, buying information and consulting

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services, submitting requests for proposals, and receiving proposals. Examine this scenario. The current accounts payable process occurs through the exchange of paper documents. Each year the trading partners exchange millions of invoices, checks, purchase orders, financial reports, and other transactions. Most of the documents are in electronic form at their point of origin but are printed and key-entered at the point of receipt. The current manual process of printing, mailing is costly, time consuming, and error-prone.

Given this situation and faced with the need to reduce costs, small businesses are looking toward electronic commerce as a possible savior. Intra-organizational Transactions We call this category market-driven transactions. A company becomes market driven by dispersing throughout the firm information about its customers and competitors; by spreading strategic and tactical decision making so that all units can participate; and by continuously monitoring their customer commitment by making improved customer satisfaction an ongoing objective. To maintain the relationships that are critical to delivering superior customer value, management must pay close attention to service, both before and after sales. In essence, a market-driven business develops a comprehensive understanding of its customers business and how customers in the immediate and downstream markets perceive value. Three major components of market-driven transactions are customer orientation through product and service customization; cross-functional coordination through enterprise integration; and advertising, marketing, and customer service.

Information Brokerage and Management The information brokerage and management layer provides service integration through the notion of information brokerages, the development of which is necessitated by the increasing information resource fragmentation. We use the notion of information brokerage to represent an intermediary who provides service integration between customers and information providers, given some constraint such as a low price, fast service, or profit maximization for a client. Information brokers, for example, are rapidly becoming necessary in dealing with the voluminous amounts of information on the networks. As on-line databases migrate to consumer

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information utilities, consumers and information professionals will have to keep up with the knowledge, and owner-ship of all these systems. Most professionals have enough trouble keeping track of files of 1 interest on one or two database services. With all the complexity associated with large numbers of on-line databases and service bureaus, if it is impossible to expect humans to do the searching. It will have to be software programs-information brokers or software agents, to use the more popular term-that act on the searchers behalf. Information brokerage does more than just searching. It addresses the issue of adding value to the information that is retrieved. For instance, in foreign exchange trading, information is retrieved about the latest currency exchange rates in order to hedge currency holdings to minimize risk and maximize profit. In other words, the act of retrieving the information is the input to other transactions. With multiple transactions being the norm in the real world, service integration becomes critical. Taking the same foreign exchange example further, service integration allows one to link the hedging program (offered on a timesharing basis by a third party) with the search program (could be another vendor) that finds the currency rates from the cheapest on-line service to automatically send trades to the bank or financial services company. In effect, a personalized automated trading system can be created without having to go to any financial institution. This is just one example of how information brokerages can add value. Another aspect of the brokerage function is the support for data management and traditional transaction services. Brokerages may provide tools to accomplish more sophisticated, timedelayed updates or future compensating transactions. These tools include software agents, distributed query generator, the distributed transaction generator, and the declarative resource constraint base which describes a businesss rules and-environment information. At the heart of this layer lies the work-flow scripting environment built on a software agent model that coordinates work and data flow among support services. As pointed out earlier, software agents are used to implement information brokerages. Software agents are mobile programs that have been called healthy viruses, digital butlers/ and intelligent agents. Agents are encapsulations of users instruction that perform all kinds of tasks in electronic market places spread across networks. Information brokerages dispatch agents capable of information resource gathering, negotiating deals, and performing transactions. The agents are intelligent because they have contingency plans of action. They examine themselves

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and their environment and if necessary change from their original course of action to an alternative plan. For example, suppose you send an agent to an on-line store with a request to order a bouquet of roses for Rs. 25 or less. If the shop offers roses starting at Rs. 30, your agent can either choose a different bouquet or find a different store by consulting an online Yellow Pages directory, depending on prior instructions. Although the notion of software agents sounds very seductive, it will take a while to solve the problems of interregna communication, interoperable agents, and other headaches that come with distributed computing and net-working. To some critics, the prospect of a single-agent language like Telescript as a world standard is disturbing. They worry that agents sound a bit too much like computer viruses, which instead of running errands may run amok. Vendors such as General Magic go to great lengths to explain the precautions it has taken to make this impossible: the limits placed on the power of agents, the self-destruct mechanism built into their codes. Yet until electronic commerce services are up and running on a large scale, it is impossible to know how well software agents will work. Interface and Support Services The third layer, interface and support services will provide interfaces for electronic commerce applications such as interactive catalogs and will sup-port directory services-functions necessary for information search and access. These two concepts are very different. Interactive catalogs are the customized interface to consumer applications such as home shopping. An interactive catalog is an extension of the paper-based catalog and incorporates additional features such as sophisticated graphics and video to make the advertising more attractive. Directories, on the other hand, operate behind the scenes and attempt to organize the enormous amount of information and transactions generated to facilitate electronic commerce. Directory services databases make data from any server appear as a local file. A classic example of a directory is the telephone White Pages, which allows us to locate people and telephone numbers. In the case of electronic commerce, directories would play an important role in information management functions. For instance, take the case of buying an airline ticket with several stopovers with the caveat that the time between layovers be minimized. This search would require several queries to various online directories to-find empty seats on various airlines and then the avail-ability of seats would; be coordinated with the amount of time spent in the air-port terminals.

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The primary difference between the two is that unlike interactive catalogs, which deal with people, directory support services interact directly with soft-ware applications. For this reason, they need not have the multimedia glitter and jazz generally associated with interactive catalogs. From a computing perspective, we can expect that there will be no one common user interface that will glaze the surface of all electronic commerce applications, but graphics and object manipulation will definitely dominate. Tool developers users desires and functional requirements. and designers might incorporate

common tools for interface building, but the shape of catalogs or directories will depend on the

Secure Messaging and Structured Document Interchange Services The importance of the fourth layer, secured messaging, is clear. Everyone in business knows that electronic messaging is a critical business issue. Consider a familiar business scenario: You hand over an urgent fax Monday and find out Tuesday that its still sitting on your fax operators desk. What happened? The line was busy and he thought hed try again later. Or, the number was wrong, but he forgot to let you know. Or youre in London and you need to send a spreadsheet that details a marketing plan for a product introduction strategy to a co-worker in New York. This must be done today, not tomorrow when the courier service would deliver. There is a solution to these common and frustrating problems. Its called Integrated Messaging: a group of computer services that through the use of a network send, receive, and combine messages, faxes, and large data files. Some better-known examples are electronic mail, enhanced fax, and electronic data interchange. Broadly defined, messaging is the software that sits between the network infrastructure and the clients or electronic commerce applications, masking the peculiarities of the environment. Others define messaging as a frame-work for the total implementation of portable applications, divorcing you from the architectural primitives of your system. In general, messaging products are not applications that solve problems; they are more enablers of the applications that solve problems. Messaging services offer solutions for communicating non formatted (unstructured) data-letters, memos, and reports as weft as-formatted (structured) data such as purchase orders, shipping notices, and invoices. Unstructured messaging consists of fax, e-mail, and form-based systems like Lotus Notes. Structured documents messaging consist of the automated inter-change

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of standardized and approved messages between computer applications, via telecommunications lines. Examples of structured document messaging include EDI. Messaging is gaining momentum in electronic commerce and seems to have many advantages. It supports both synchronous (immediate) and asynchronous (delayed) message delivery and processing. With asynchronous messaging, when a message is sent, work continues (software doesnt wait for a response).This allows the transfer of messages through store-and-forward methods. Another advantage of messaging is that it is not associated with any particular communication protocol. No pre-processing is necessary, although there is an increasing need for programs to interpret the message. Messaging is well suited for both client server and peer-to-peer computing models. In distributed systems, the messages are treated as objects that pass between systems. Messaging is central to work-group computing that is changing the way businesses operate. The ability to access the right information at the right time across diverse work groups is a challenge. Today, with the messaging tools, people can communicate and work together more effectivelyno matter where they are located. When an employee sends an electronic mail form, the information travels along with the form. So one person can start the form, mail it to the next person, fill it in/ sign it, mail it to the next, and so on. This is known as message-enabled workflow solutions. The main disadvantages of messaging are the new types of applications it enables-which appear to be more complex, especially to traditional programmers and the jungle of standards it involves. Because of the lack of standards, there is often no interoperability between different messaging vendors leading to islands of messaging. Also, security, privacy, and confidentiality through data encryption and authentication techniques are important issues that need to be resolved for ensuring the legality of the message-based transactions themselves. Middleware Services Middleware is a relatively new concept that emerged only recently. Like so many other innovations, it came into being out of necessity. Users in the 1970s, when vendors, delivered homogeneous systems that worked, didnt have a need for middleware3&heR conditions changed-along with the hardware and the software the organizations couldnt cope: The tools were inadequate, the backlog was enormous, and the pressure was overwhelming. And, the users were dissatisfied. Something was needed to solve all the interface, translation, transformation, and interpretation problems that were driving application developers crazy. With the growth of

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networks, client-server technology, and all other forms of communicating between/among unlike platforms, the problems of getting all the pieces to work together grew from formidable to horrendous. As the cry for distributed computing spread, users demanded interaction between dissimilar systems, networks that permitted shared resources and applications that could be accessed by multiple software programs. In simple terms, middleware is the ultimate mediator between diverse software pro-grams that enables them talk to one another. Another reason for middleware is the computing shift from application centric to data centric. That is, remote data controls all of the applications in the network instead of applications controlling data. To achieve data-centric computing, middleware services focus on three elements: transparency, transaction security and management, and distributed object management and services.

Transparency Transparency implies that users should be unaware that they are accessing multiple systems. Transparency is essential for dealing with higher-level issues than physical media and interconnection that the underlying network infrastructure is in charge of. The ideal picture is one of a virtual network: a collection of workgroup, departmental, enterprise, and inter enterprise LANs that appears to the end user or client application to be a seamless and easily accessed whole. Transparency is accomplished using middleware that facilitates a distributed computing environment. This gives users and applications transparent access to data, computation, and other resources across collections of multi-vendor, heterogeneous systems. The strategic architectures of every major system vendor are now based on some form of middleware. The key to realizing the theoretical benefit of such architecture is transparency. Users need not spend their time trying to understand where something is. Nor should application developers have to code into their applications the exact locations of resources over the network. The goal is for the applications to send a request to the middleware layer, which then satisfies the request any way it can, using remote information.

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Transaction Security and Management Support for transaction processing (TP) is fundamental to success in the electronic commerce market. Security and management are essential to all layers in the electronic commerce model. At the transaction security level, two broad general categories of security services exist: authentication and authorization. Transaction integrity must be a given for businesses that cannot afford any loss or inconsistency in data. Some commercial sites have had gigantic centralized TP systems running for years. For electronic commerce, middleware provides the qualities expected in a standard TP sys-tem: the so-called ACID properties (atomicity, consistency, isolation, and durability). Distributed Object Management and Services Object orientation is proving fundamental to the proliferation of network-based applications for the following reasons: It is too hard to write a net-work-based application without either extensive developer retraining or a technology that camouflages the intricacies of the network. Objects are defined as the combination of data and instructions acting on the data. Objects are an evolution of the more traditional programming concept of functions and procedures. A natural instance of an object in electronic commerce is a document. A document carries data and often carries instructions about the actions to be performed on the data. Today, the term object is being used interchangeably with document resulting in a new form of computing called document oriented computing. Here, the trend is to move away from single data-type documents such as text, pictures, or video toward integrated documents known as com-pound document architectures. The best example of this approach is an active document. If you create a new document that is an integration of the spreadsheet, word processor, and presentation package, what youll see in the next generation of operating systems is that as you scroll through your document, the tool bar will automatically change from a spreadsheet too bar, to a word processing tool bar, to a presentation package tool bar. These applications will also be able to access and retrieve data from any file in the computing network. Last but not the least is the Network Infrastructure, which will be dealt in this unit later. E-Commerce Communities What it is that will drive e-commerce in the future? in a word, its community. We certainly have the technology to build great business-to-consumer and business-tobusiness ecommerce applications into our business models. And, yes, attributes such as viable application design, integration with business processes, and overall performance matter. A successful community strategy must embrace the idea of moving the one-onone communication that occurs offline into the virtual world of e-commerce. Such a strategy

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currently requires multiple technical approaches. However, we believe community solutions will soon become more integrated and far-reaching. The tools that form online communities include discussion or forum software, chat functions, instant messaging, two-way mailing lists, online collaboration tools, audio, video, and more. You may choose to invest slowly at first and increase your community commitment over time. Online conversation with business partners will also give net positive results. A private discussion area or secured online meetings can go a long way toward building stronger relationships between companies. This will also serve to potentially drive new business opportunities for both parties. Building community has to be at the heart of any successful ecommerce strategy.

3.0

Success & Failure of E commerce ventures 3.1 3.2 3.3 3.4 3.5 Things that can go wrong Site visibility Evaluation of web sites and usability testing Web site content and traffic management Web site Optimization

Its no secret that online purchasing has gone through the roof, and it continues to increase by the day. I haven't seen any recent numbers put to it but I am guessing as of the first of October that Christmas purchases online are way ahead of what the were a year prior. Add this price of gas thing to the mix and I bet you'll even more of an increase in online purchases. Those of you have chosen or are thinking of choosing to build an ecommerce store are definitely in the right place at the right time. You see, people are truly creatures of habit and once some new starts to purchase online is unlikely that it will change. I hear many speak of the huge competition that one faces online when it comes to creating an online store and to be honest it really is no different than any other business that's out there and i believe it is an even playing field for everyone. The only difference between you and the next guy is knowledge and education. As with anything in this life, know the right moves to make is everything. Proper Planning ahead of time and knowing your market will increase your chances of success with and ecommerce store. This is one thing that most ecommerce website owners do not completely understand. Most of them think that once they have set up their websites, they don't have to do anything anymore.

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They will just sit and wait for sales. This may have been true in the very beginning, but with the competition for eyes now, if you don't do anything, you won't get any sales. Ecommerce websites need think heavily on two factors that will change the course of things to come. First is planning and the second is marketing. Before setting up the website, there must be a thorough planning first. When planning, you must consider the target market, budget, design and other factors that will affect the overall performance of the website. Second is how are you going to market your site. After you have set up your website, you need to work on your marketing campaigns. Through marketing, you can bring the visibility your store needs to be successful and one of the ways to accomplish this is to clearly understand SEO for your pages and products. Another is understand your target market. Don't shoot like a shot gun. Narrowly focus your marketing efforts and your success will become much easier. There are several web marketing options which you can use. The choice of the web marketing options depends on the needs of your website.

3.0

Success & Failure of E commerce ventures

Key success factors in e-commerce Several factors have critical importance in the success of any e-commerce venture. They include: Providing value to customers. Vendors can achieve this by offering a product or product line that attracts potential customers at a competitive price. Providing service and performance. Offering a fast, user-friendly purchasing experience may go some way to achieving these goals. Providing an attractive site. The tasteful use of colour, graphics, animation, photographs, fonts, and white-space percentage may aid success. Providing an incentive to buy and to return. Sales promotions can involve coupons, special offers, and discounts. Cross-linked web sites, and advertising affiliate programs can also help. Providing personal attention. Personalized web sites, purchase suggestions, and personalized special offers may go some of the way to substituting for the face-to-face human interaction found at a traditional point of sale. Providing a sense of community. Chat rooms, discussion boards, soliciting customer input, loyalty schemes and affinity programs can help in this respect. Providing reliability and security. Parallel servers, fail-safe technology, information encryption, and firewalls can enhance this requirement.

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Providing a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers, and partners have a complete view, and the same view, of the customer. Owning the customers total experience. E-tailers foster this by treating any contacts with a customer as part of a total experience, an experience that becomes synonymous with the brand. Streamlining business processes, possibly through re-engineering and information technologies. Letting customers help themselves. Provision of a self-serve site, easy to use without assistance, can help in this respect. Helping customers do their job. E-tailers can provide such help through ample comparative information and good search facilities. Provision of component information and safety and health comments may assist e-tailers to define the customers' job. Constructing a sound business model. If this key success factor had appeared in textbooks in 2000, many of the dot.coms might not have gone bust. Engineering an electronic value chain in which one focuses on a "limited" number of core competencies. Operating on or near the cutting edge of technology and staying there as technology changes. Setting up an organization of sufficient alertness and agility to respond quickly to any changes in the environment. 3.1 THINGS THAT GO WRONG Even if these sixteen key factors are used to devise an exemplary e-commerce strategy, problems can still arise. Sources of such problems include: Failure to understand the customer, why they buy, and how they buy. Even a product with a sound value proposition can fail if producers and retailers do not understand customer habits, expectations, and motivations. E-commerce could potentially mitigate this potential problem with proactive and focused marketing research, just as traditional retailers may do. Failure to consider the competitive situation. One may have the capability to construct a viable book e-tailing business model, but lack the will to compete with Amazon.com. Inability to predict environmental reaction. What will competitors do? Will they introduce competitive brands or competitive web sites. Will they supplement their service offering? Will they try to sabotage a competitor's site? Will price wars break out? What will the government do? Research into competitors, industries and markets may mitigate some consequences here.

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Over-estimation of resource competence. Can staff, hardware, software, and processes handle the new strategy? Have e-tailers failed to develop new employee and management skills? These issues may call for thorough resource planning and employee training. Failure to coordinate. If reporting and control relationships do not suffice, one can move towards a flat, accountable, and flexible organizational structure, which may or may not aid coordination. Failure to obtain senior management commitment. This often results in a failure to obtain sufficient company resources to accomplish the task. It may help to get top management involved right from the start. Failure to obtain employee commitment. If planners do not explain the strategy well to employees, or fail to give employees the whole picture, then training and setting up incentives for workers to embrace the strategy may assist. Under-estimation of time requirements. Setting up an e-commerce venture could take considerable time and money, and failure to understand the timing and sequencing of tasks can lead to significant cost overruns. Critical path, critical chain, or PERT analysis may mitigate such failings. Failure to follow a plan. Poor follow-through after the initial planning, and insufficient tracking of progress against a plan can result in problems. One may mitigate such problems with benchmarking, milestones, variance tracking, penalties for negative variances, rewards for positive variances, and remedial realignments. Product suitability Certain products/services appear more suitable for online sales and others remain more suitable for offline sales. The most successful purely virtual companies deal with digital products, including information storage, retrieval, and modification, music, movies, education, communication, software, photography, and financial transactions. Examples of this type of company include: Schwab, Google, eBay, Paypal, Egghead, and Morpheus. Virtual marketers can sell some non-digital products/services successfully. Such products have a high value-to-weight ratio, and/or involve embarrassing purchases, and/or typically go to people in remote locations, and/or have shut-ins as their typical purchasers. Products such as spare parts, both for consumer items like washing machines and for industrial equipment like centrifugal pumps, also seem good candidates for selling online. Retailers often need to order spare parts specially, since they typically do not stock them at consumer outlets -- this means that e-commerce

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solutions in this area do not compete with retail stores, only with other ordering systems. A key element for success in this niche consists of providing customers with exact, reliable information about which part number their particular version of a product needs, for example by providing parts lists keyed by serial number. Purchases of pornography and of other sex-related products and services fulfill the requirements of both virtuality (or if non-virtual, generally high-value) and potential embarrassment; unsurprisingly, provision of such services has become the most profitable segment of e-commerce. Products unsuitable for e-commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings, and products where colour integrity appears important. Acceptance of e-commerce Consumers have accepted the e-commerce business model less readily than its proponents originally expected. Even in product categories suitable for e-commerce, electronic shopping has developed only slowly. Several reasons might account for the slow uptake, including: Concerns about security. Many people will not use credit cards over the Internet due to concerns about theft and fraud. Lack of instant gratification with most e-purchases (non-digital purchases). Much of a consumer's reward for purchasing a product lies in the instant gratification of using, and being seen to use the product. This reward does not exist when one's purchase does not arrive for days or weeks. The problem of access, particularly for poor families and poor countries. Low penetration rates of Internet access in some sectors greatly reduces the potential for e-commerce. The social aspect of shopping. Some people enjoy talking to sales staff, to other shoppers, or to their cohorts: this social reward does not exist in online shopping. 3.2 Site Visibility Commercial trading is increasing rapidly nowadays. Not only in the ground level, but people indulged in online business are also moving towards online trading business. One of the major reasons of such act is the profitable income. Just thing once, your website is globally visible and you are doing e-marketing for it. Single website and people from different countries are visiting your website in order to buy articles.

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Good business and huge profit isnt it! But how would it be possible to achieve? Is it so very easy to beat the online competition where millions of businesses are struggling hard to come up in the search engine result page? Ecommerce web services are undoubtedly the source to earn large income but at the same time it is equally tough to make it globally visitors. Is there anything you can really work on to increase the visibility of your ecommerce web services provider website? There are many factors that usually take part in order to increase the popularity of the website for example, keyword research; search engine optimization, blogging, website designing and website development are the few factors that can possibly enhance the visibility of the website. While you hire a professional company that provides ecommerce web services for the website designing and development, make sure that they offer you the right kind of services and that too it help you to upgrade your site's ranking in the search engine result page. Factors that can Enhance Site's Visibility: * Keyword Research: This is important aspect whenever you are planning an e-commerce web services for the website designing and development purpose. This includes the search process that is carried out in order to list down all the relevant keywords related to the website and deciding to target few keywords in order to rank the websites based on that to get more businesses. * Ecommerce Web Promotion (SEO): This is the most needed issue while doing anything online. Search engine optimization process helps in improves the ranking of the websites so that the websites can rank higher in the search engine result page. The good rank will help in gathering more visitors. Search engine is the place where websites are listed rank wise and based on that people select one. The selection is generally based on the ranking of the websites in the search engine result page and search engine is the place that brings quality visitors to the websites. * Blogging: Are you a blogger? If you do not have blog for the e-commerce web services provider website then you should quickly create the blog because the blog will help in universal recognition of your website. It is not

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necessary that you post regularly but it is important to blog whenever it is possible because blogging helps in making your site globally recognizable easily. * Ecommerce Website Designing: It is important to make the commercial trading website very attractive. Good designing helps in driving the viewer's attention easily towards the website. Thus design the website so that you can gather maximum visitors. * Ecommerce Website Development: Web development should be very appropriate. Your website should be composed of easy navigation process which will help in enhancing the user friendliness. Thus, it will help in gaining the popularity. These are few aspects on which you can surely work on in order to improve the e-commerce site's popularity. Thus, approach the best firm to get the best possible results. Context: The Primary Factor The User Context: The most important factor when evaluating Web sites is your search, your needs. What are you using the Web for? Entertainment? Academic work? Hobbies or avocational interests? Scholarly sources are traditionally very strongly text-based. Compare the appearance and the content of an academic journal with a popular magazine. The Web Context: Some of the visual distinctions that signal the nature of content in print sources hold true on the Web as well, although, because the Web encourages wider use of graphics, Web versions of printed works usually contain more graphics and more color than their print counterparts. Color graphics appeared on the New York Times Web site before they appeared in the printed New York Times, for instance. Compare the Web versions of Child Abuse and Neglect (Cornell only), Mississippi Review (free to the public), The New York Times, U. S. News, and the National Enquirer.

3.3 Evaluation of web sites and usability testing

Evaluation Criteria These six criteria deal with the content of Web sites rather than the graphics or site design. Apply these criteria when you research on the internet.

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1. AUTHORITY Authority reveals that the person, institution or agency responsible for a site has the qualifications and knowledge to do so. Evaluating a web site for authority: Authorship: It should be clear who developed the site. Contact information should be clearly provided: e-mail address, snail mail address, phone number, and fax number. Credentials: the author should state qualifications, credentials, or personal background that gives them authority to present information. Check to see if the site supported by an organization or a commercial body 2. PURPOSE The purpose of the information presented in the site should be clear. Some sites are meant to inform, persuade, state an opinion, entertain, or parody something or someone. Evaluating a web site for purpose: Does the content support the purpose of the site? Is the information geared to a specific audience (students, scholars, general reader)? Is the site organized and focused? Are the outside links appropriate for the site? Does the site evaluate the links? Check the domain of the site. The URL may indicate its purpose. 3. COVERAGE It is difficult to assess the extent of coverage since depth in a site, through the use of links, can be infinite. One author may claim comprehensive coverage of a topic while another may cover just one aspect of a topic. Evaluating a web site for coverage: Does the site claim to be selective or comprehensive? Are the topics explored in depth? Compare the value of the sites information compared to other similar sites. Do the links go to outside sites rather than its own? Does the site provide information with no relevant outside links?

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4. CURRENCY Currency of the site refers to: 1) how current the information presented is, and 2) how often the site is updated or maintained. It is important to know when a site was created, when it was last updated, and if all of the links are current. Evaluating a web site for currency involves finding the date information was: first written placed on the web last revised Then ask if: Links are up-to-date Links provided should be reliable. Dead links or references to sites that have moved are not useful. Information provided so trend related that its usefulness is limited to a certain time period? the site been under construction for some time?

5. OBJECTIVITY Objectivity of the site should be clear. Beware of sites that contain bias or do not admit its bias freely. Objective sites present information with a minimum of bias. Evaluating a web site for objectivity: Is the information presented with a particular bias? Does the information try to sway the audience? Does site advertising conflict with the content? Is the site trying to explain, inform, persuade, or sell something?

6. ACCURACY There are few standards to verify the accuracy of information on the web. It is the responsibility of the reader to assess the information presented. Evaluating a web site for accuracy: Reliability: Is the author affiliated with a known, respectable institution? References: do statistics and other factual information receive proper references as to their origin? Does the reading you have already done on the subject make the information seem accurate? Is the information comparable to other sites on the same topic?

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Does the text follow basic rules of grammar, spelling and composition? Is a bibliography or reference list included?

Usability Testing Usability testing is a technique used to evaluate a product by testing it on users. This can be seen as an irreplaceable usability practice, since it gives direct input on how real users use the system. This is in contrast with usability inspection methods where experts use different methods to evaluate a user interface without involving users. Usability testing focuses on measuring a human-made product's capacity to meet its intended purpose. Examples of products that commonly benefit from usability testing are foods, consumer products, web sites or web applications, computer interfaces, documents, and devices. Usability testing measures the usability, or ease of use, of a specific object or set of objects, whereas general human-computer interaction studies attempt to formulate universal principles. Goals of usability testing Usability testing is a black-box testing technique. The aim is to observe people using the product to discover errors and areas of improvement. Usability testing generally involves measuring how well test subjects respond in four areas: efficiency, accuracy, recall, and emotional response. The results of the first test can be treated as a baseline or control measurement; all subsequent tests can then be compared to the baseline to indicate improvement. Performance -- How much time, and how many steps, are required for people to complete basic tasks? (For example, find something to buy, create a new account, and order the item.) Accuracy -- How many mistakes did people make? (And were they fatal or recoverable with the right information?) Recall -- How much does the person remember afterwards or after periods of non-use? Emotional response -- How does the person feel about the tasks completed? Is the person confident, stressed? Would the user recommend this system to a friend?

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Methods Setting up a usability test involves carefully creating a scenario, or realistic situation, wherein the person performs a list of tasks using the product being tested while observers watch and take notes. Several other test instruments such as scripted instructions, paper prototypes, and pre- and post-test questionnaires are also used to gather feedback on the product being tested. For example, to test the attachment function of an e-mail program, a scenario would describe a situation where a person needs to send an e-mail attachment, and ask him or her to undertake this task. The aim is to observe how people function in a realistic manner, so that developers can see problem areas, and what people like. Techniques popularly used to gather data during a usability test include think aloud protocol and eye tracking. Hallway testing Hallway testing (or Hall Intercept Testing) is a general methodology of usability testing. Rather than using an in-house, trained group of testers, just five to six random people, indicative of a cross-section of end users, are brought in to test the product, or service. The name of the technique refers to the fact that the testers should be random people who pass by in the hallway. Remote testing Remote usability testing (also known as unmoderated or asynchronous usability testing) involves the use of a specially modified online survey, allowing the quantification of user testing studies by providing the ability to generate large sample sizes. Similar to an in-lab study, a remote usability test is task-based and the platforms allow you to capture clicks and task times. Hence, for many large companies this allows you to understand the WHY behind the visitors intents when visiting a website or mobile site. Additionally, this style of user testing also provides an opportunity to segment feedback by demographic, attitudinal and behavioural type. The tests are carried out in the users own environment (rather than labs) helping further simulate real-life scenario testing. This approach also provides a vehicle to easily solicit feedback from users in remote areas.

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Expert review Expert review is another general method of usability testing. As the name suggests, this method relies on bringing in experts with experience in the field (possibly from companies that specialize in usability testing) to evaluate the usability of a product. Automated expert review Similar to expert reviews, automated expert reviews provide usability testing but through the use of programs given rules for good design and heuristics. Though an automated review might not provide as much detail and insight as reviews from people, they can be finished more quickly and consistently. The idea of creating surrogate users for usability testing is an ambitious direction for the Artificial Intelligence community. Usability Testing Checklist Testing plays a critical role in the development of your web site and its long-term maintenance. While smaller web sitesespecially those with more limited budgetsmay not need to follow the formal testing procedures that are required for large-scale, commercial web sites, every site needs to be thoroughly tested to ensure that it's error-free, user-friendly, accessible, and standards compliant SSL is commonly used to encrypt online transactions and other sensitive data, as well as intranets and extranets. Verisign and Thawte are two popular companies that issue SSL certificates. Check that all pages requiring SSL access are accessible only via SSL. Test the security of restricted areas. Users might share or try to guess the URLs of content and downloads in protected areas of your site. Restricted content URLs might appear within publicly available referrer logs. People might even share usernames and passwords without authorization or permission. As such, it's critical

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that you anticipate the kinds of security breaches that might take place, and test methods for their prevention. Hack your Site: the Ultimate Security Test Download popular hacking tools to use in testing, to see if your protected areas can easily be comprised. Those managing larger-scale web sites might even consider outsourcing or hiring a hacking expert for testing purposes. Ensuring security and data integrityespecially in terms of your confidential data, including customer credit card informationis critical for promoting and maintaining trust among your site's visitors. Don't assume that your web site's security is always okay. Test regularly to make sure it remains secure. Test forms and form controls. Check to ensure that forms are submitted correctly, and that they're only submitted when the correct information is entered and required fields have been completed. Review form error messages to ensure that they are helpful and informative within the context of the form itself. Test online shopping facilities. If your web site includes a shopping cart or similar functionality, thoroughly test back-end operations to ensure that all transactions are secure, and everything runs smoothly.

Accessibility Testing

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If you plan to make your site accessible, and include accessibility testing in every phase of your project, chances are good that by the time your site is ready to launch, it will meet the W3C's WCAG Guidelines, as well as any other accessibility guidelines that it must address. Conducting a Preliminary Review The W3C recommends a two-phase process for testing a site's accessibility. First, developers should conduct a preliminary review of the site that includes testing a few pages to get an idea of the site's accessibility. Then, they should undertake a thorough, comprehensive review that includes an evaluation of every web page (or representative pages on larger web sites) with a variety of tools and users who have disabilities. (W3C, Evaluating Web Sites for Accessibility, W3C Web Accessibility Initiative (November 14, 2002).) The checklist below is a guide for conducting a preliminary accessibility review. Select a random sampling of pages to test. You should test every page of a small web site. For larger web sites, select a random sampling of pages that includes your homepage, at least one or two pages from each section, and especially important or popular pages, such as the contact page and the sitemap. Use a graphical browser to test sample pages. Use a voice or text-only browser to test sample pages. A text-only browser, such as the free Lynx text-only browser, can provide valuable insight into your web site's accessibility. Use two evaluation tools. Manually examine representative pages using the checkpoints from WCAG 1.0, your government accessibility guidelines, or other requirements. Summarize the results.

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If your results summary indicates a number of accessibility issues, you might wish to make sitewide changes before you conduct a comprehensive review. Conduct another preliminary test after you implement these changes. Conducting a Comprehensive Review A comprehensive review is much more thorough and detailed than a preliminary review. Here's a checklist that will help you ensure you don't miss a thing! Identify, determine, and document site-wide conformance requirements and levels. You may include WCAG 1.0 Level 1, local government requirements, and company guidelines in your documentation, for example. Test the site's accessibility conformance. Test every single page of smaller web sites. For larger web sites, test a representative sample that includes the homepage and all especially important or popular pages, pages from each section, pages for each different layout, and pages generated from databases. Use at least two different accessibility evaluation tools. Manually examine representative pages using the checkpoints from WCAG 1.0, your government accessibility guidelines, or other recommendations. Use a graphical browser to test sample pages. Use a text-only browser and a voice browser to test pages. Ensure that interface elements are operable with multiple input devices. For example, test all interface elements with a mouse, with keyboard only, and with adaptive technologies. If you use JavaScript to create navigation rollover effects, ensure that links work without JavaScript, provide HTML text links, or implement both.

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Proofread all content. Read over each page of the site to check that all the text is clear, simple, and appropriate for your web site's target audience, as well as those segments of the market that have cognitive or learning disabilities. Make sure that your text is clear, simple, and written for the Web, then boost its accessibility by allowing for those with disabilities. Conduct usability testing with a diversity of participants. If possible, conduct usability testing with people who have a variety of disabilities, technical expertise, and varying levels of familiarity with your web site. Use a variety of adaptive technologies, if possible. There's no better way to assess your site's accessibility than to have disabled users test the site. It should be noted, for example, that a sighted person will not use a screen reader, such as JAWS, in the same way as a blind person who uses the tool daily. Testing with a Graphical Browser You can do a fair amount of accessibility testing with your browser. Opera is especially conducive to accessibility testing, since the browser makes it quite simple to turn off images, animations, style sheets, JavaScript, frames, and so on. Ian Lloyd has written a great tutorial about using Opera for testing a site's accessibility. There are also helpful accessibility testing extensions, sidebar panels, and toolbars for other graphical browsers, including Mozilla, Firefox, and Internet Explorer. As well as visiting your favorite browser's web site, see Derek Featherstone's Testing Tools for Developing Accessible Web Sitesa helpful list of annotated browser links. View pages without images.

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As long as you've included the <alt> attribute for each image (for use by browsers that don't support images, or visitors who are browsing with images turned off), the browser will hide decorative images that have blank <alt> attributes. However, if you don't include <alt> attributes, browsers will not hide the images, and screen readers will read the word "Image," as indicated in Figure below . Viewing images with blank <alt> attributes in Opera 7 for Windows

View pages without style sheets. Check that your pages allow users to vary the font sizes displayed. View tabular data with tables disabled or in a browser that doesn't offer table support. This process will indicate how usable your tabular data might be for visitors using screen readers, text-only browsers such as Lynx, and older PDAs. View the web site with new technologies turned off. These "new technologies" include JavaScript, Java, sound capabilities, and plugins. Your page should remain functional and accessible when these technologies are unavailable. Testing with a Voice or Text-only Browser If you don't have handy access to a voice browser, you can use Lynx, a free text-only browser, or Delorie's online Lynx Viewer, for preliminary testing. For comprehensive testing, the W3C

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recommends testing with a text-only browser and a voice browser. (W3C, Evaluating Web Sites for Accessibility, Web Accessibility Initiative, W3C (November 14, 2002).) Check that web site navigation is available and works properly. If your web site uses imagesincluding image mapsfor navigation purposes, text hyperlinks should appear in their places (via <alt> attribute text, and possibly also in the <title> attribute text, if needed). If you use Flash or Java applets for navigation, your site should include alternative text navigation links to help ensure accessibility. Helping Everyone get Around Keep in mind that this approach also helps search engine bots to crawl and index your web site. For more on optimizing your web site for search engine crawlers, see Chapter 11, Web Site Optimization. Check all hyperlinks. Check that decorative images don't appear in text-only browsers and aren't read by voice browsers. As we discussed above, all decorative images, such as bullets and design-related images, should have blank <alt> attributes so that text-only browsers and voice browsers ignore them. Check that the information is presented in a way that's comprehensible when read serially. Lynx allows you to simulate serial access, so that you can make sure the information you've presented is understandable to users of voice and text-only browsers. (Joe Clark, Building Accessible Websites (Indianapolis: New Riders Publishing, 2003), 236.) Test form controls. Figure 14.3 depicts the testing of an accessibility-friendly form with Lynx 2.85.

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Figure 14.3. Testing a form in Lynx

If you find yourself short on money, time, or both, you might be tempted to consider skipping the usability testing phase. Rather than skipping this process altogether, it's far better to test on an abbreviated, informal scale. It's better to conduct a number of small, fast tests during development, rather than one big test at the endespecially if that final usability test is to be scheduled just before the site's launch. The main goal of usability testing is to make sure your final-version, live web site is userfriendly and works well for your visitors. Three main dimensions of usability testing are effectiveness (testing to see if the user can accomplish desired tasks), efficiency (testing to see how much effort is involved in accomplishing the desired tasks), and satisfaction (testing to see if the user has a satisfactory experience and will return). (Dey Alexander, Quick Wins with Usability Testing (presentation, Web Workshop Series at Monash University, Melbourne, 2002), slide 3.) Use the following checklist as a guide to determining and conducting your usability tests.

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List test objectives and concerns. Be specific, making note of tasks and areas of the web site that might be of concernfor instance, forms that might be difficult to complete or use, or the methods by which users are expected to find certain products. Be sure to specify these age groups and computer skill levels that you wish to test. To help determine your objectives and concerns, check with your clients, management, designers, developers, and others involved in the project. Choose test approaches. Numerous approaches have been developed to testing various aspects of sites' usability. In planning your usability tests, it's important that you research and consider the available approaches in light of the resources and time you have available. For example, you may choose to use personas or card sorting to help test your web site's information architectureone single, but critical aspect of your site's usability. By creating personas, you can document the steps typical visitors would take to accomplish particular objectives, then test those stepslooking specifically at the information architecture, navigation, and forms, for example, that that persona might use to achieve that goal. Card sorting can be a helpful way to understand how your web site visitors will likely understand and explore the information on your site. Conducting a Card Sorting Test To conduct a card sorting test, give users index cards on which are written the titles of pieces of content, features, or categories. Include brief descriptions on each card, but don't hint at any information structure or classification. If you plan to add more content to your web site in future phases, it can help to add those specific elements to the cards if you can. Be sure to brief your test users, explaining that there are no right or wrong answers. Ask them to read each card carefully and group them into piles that make sense to them. If the users aren't

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sure about a card, they can set it aside and come back to it whenever they wish. When they finish, ask them to label each pile. Compare the results with your web site's information architecture as one way to determine whether or not further tweaks or changes are required. Recruit users for testing based on your target market. Test users should represent your target audience profiles. For example, if your typical users aren't very technology-savvy, but you test with technology-savvy users, your test results won't uncover potential technology-related problems, such as confusion with drop-down menus or multiple browser windows. A test group of five users is considered large enough to provide information that will help improve your site's usability. Prepare an NDA (non-disclosure agreement) ready for users to sign prior to starting your tests. Determine testing location(s). Jakob Nielsen and other usability experts talk about conducting testing in usability labs. Indeed, labs can be helpful when you're testing a highly sensitive and secure web site, you have significant hardware components or specific hardware that must be used for testing, you anticipate long testing sessions (more than a couple of hours or so), and you have a project for which you'd like a team of observers to watch the tests. (Julia Houck-Whitaker, Remote Testing versus Lab Testing, Bolt | Peters, Inc., (February 3, 2005).) Alternatively, there can be advantages to "field" testingtesting the site in an office or home setting, using testers' own computers at these locations. This approach eliminates the costs of a usability lab while allowing you to observe how your web site will work for typical visitors. In addition, testers may be more comfortable and relaxed using their own computers. However, Jakob Nielsen reports that field studies tend to be expensive, and it can be challenging to get

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permission to conduct them at company locations. (Elizabeth Neal, Why You Don't Need a Usability Lab, SitePoint (October 8, 2004).) Consider also the possibility of conducting remote testing. For example, you could be at your office and use the telephone to verbally communicate instructions, obtain user feedback, and engage in discussion. Unless you have online video cameras set up strategically for testers' computers, though, you'll miss the important observation part of your testing. You'll need to encourage them to "think out loud," and remember to phrase your responses and questions to remain as neutral as possible. Remote testing can be quite effective for large web sites, those with ecommerce capabilities, web applications, and intranets. (Houck-Whitaker, Velda Bartek, and Deane Cheatham, Experience Remote Usability Testing, Part 1, IBM developerWorks (January 1, 2003).) Videotape your Tests Videotaping tests can be helpful, as the videos can facilitate later review, allowing you to see details that you may not have noticed during testing, and to show the tests to others on the project team. Time-stamping the videos will make it easier to reference key findings later. Top Testing References For more on testing approaches, see Janice Fraser's The Culture of Usability: How to Spend Less and Get More from Your Usability-Testing Program, and Lane Becker's 90% of All Usability Testing is Useless. Create a relaxed atmosphere for testers. Rather than making people think they're in a lab being assessed, decorate your test area as if it were a typical office setting or perhaps a living room. The SitePoint article, Why You Don't Need a Usability Lab, has more on this. Establish realistic tasks for users to perform and identify what, specifically, you will measure. For example, to test a web site that offered numerous articles categorized by topic, you could set tasks that require users to find specific articles or topics. From these tests you could collect data

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on the time the test subjects needed for each task, whether or not the navigation was helpful, whether the local search was used, and if the results were accurate and helpful. Provide simple, clear instructions only. For accurate test results, do not provide any hints. Allow users to perform their own tasks in addition to your pre-defined tasks. Users will often come up with tasks you haven't thought of, and by pursuing these tasks, can uncover important subtleties and problems with a site. (Carolyn Snyder, Paper Prototyping: The Fast and Easy Way to Design and Refine User Interfaces (Amsterdam: Morgan Kaufmann Publishers, 2003), 330.) Create a post-test questionnaire. Consider what, in particular, you'd like feedback on, and create a questionnaire that addresses those issues. Also, include areas for comments and suggestions. You may choose to make a questionnaire with a 15 ranking system (1 being poor and 5 being excellent), and that asks users to rate the following: their overall satisfaction with the web site their overall satisfaction with the design and layout the ease with which specific tasks were completed the ease with which specific information was found whether navigation labels, page titles, headings, and other terms were easy to understand and accurate whether icons and other images were helpful and easy to understand whether downloadable items downloaded quickly and satisfactorily whether password-protected areas were easy to log into and use whether errors occurred, and, if they did, whether appropriate and helpful error messages were encountered

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whether product information was sufficient, or there was too little or too much information the ease with which they completed ecommerce transactions whether or not the user would return to the web site whether or not the user would recommend the web site to others suggested improvements Using a ranking system with areas for comments gives you valuable data. You can analyze the ranked responses, and use the comments and explanations for further helpful insight. Analyze test results. You may decide that it is necessary to meet with your entire web site project team following each testing session to discuss what worked, what didn't, and what the possible solutions may be. Concentrate first on high-level functionality issues, such as global navigation, links, and page layout; then focus on specific areas and recommendations. (Kelly Goto and Emily Cotler, Web ReDesign 2.0: Workflow that Works (Indianapolis: New Riders / Berkeley: Peachpit Press, 2005), 230.) You may also wish to create a report on the results and recommendations to present to the designers and developers and, if applicable, to clients. 3.4 Web site Content Management Web content is the textual, visual or aural content that is encountered as part of the user experience on websites. It may include, among other things: text, images, sounds, videos and animations. In "Information Architecture for the World Wide Web" (second edition, page 219), Lou Rosenfeld and Peter Morville write, "We define content broadly as 'the stuff in your Web site.' This may include documents, data, applications, e-services, images, audio and video files, personal Web pages, archived e-mail messages, and more. And we include future stuff as well as present stuff."

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Beginnings of web content While the Internet began with a U.S. Government research project in the late 1950s, the web in its present form did not appear on the Internet until after Tim Berners-Lee and his colleagues at the European laboratory (CERN) proposed the concept of linking documents with hypertext. But it was not until Mosaic, the forerunner of the famous Netscape Navigator, appeared that the Internet become more than a file serving system. The use of hypertext, hyperlinks and a page-based model of sharing information, introduced with Mosaic and later Netscape, helped to define web content, and the formation of websites. Largely, today we categorize websites as being a particular type of website according to the content a website contains. Web content is dominated by the "page" concept. Having its beginnings in an academic settings, and in a setting dominated by type-written pages, the idea of the web was to link directly from one academic paper to another academic paper. This was a completely revolutionary idea in the late 1980s and early 1990s when the best a link could be made was to cite a reference in the midst of a type written paper and name that reference either at the bottom of the page or on the last page of the academic paper. When it was possible for any person to write and own a Mosaic page, the concept of a "home page" blurred the idea of a page.[1] It was possible for anyone to own a "Web page" or a "home page" which in many cases the website contained many physical pages in spite of being called "a page". People often cited their "home page" to provide credentials, links to anything that a person supported, or any other individual content a person wanted to publish.

Even though "the web" may be the resource we commonly use to "get to" particular locations online, many different protocol sare invoked to access embedded information. When we are given an address, such as http://www.youtube.com, we expect to see a range of web pages, but in each page we have embedded tools to watch "video clips".

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HTML web content Even though we may embed various protocols within web pages, the "web page" composed of "html" (or some variation) content is still the dominant way whereby we share content. And while there are many web pages with localized proprietary structure (most usually, business websites), many millions of websites abound that are structured according to a common core idea. Blogs are a type of website that contains mainly web pages authored in html (although the blogger may be totally unaware that the web pages are composed using html due to the blogging tool that may be in use). Millions of people use blogs online; a blog is now the new "home page", that is, a place where a persona can reveal personal information, and/or build a concept as to who this persona is. Even though a blog may be written for other purposes, such as promoting a business, the core of a blog is the fact that it is written by a "person" and that person reveals information from her/his perspective. Search engine sites are composed mainly of html content, but also has a typically structured approach to revealing information. A search engine results page (SERP) displays a heading, usually the name of the search engine, and then a list of websites and their addresses. What is being listed are the results from a query that may be defined as keywords. The results page lists webpages that are connected in some way with those keywords used in the query. Discussion boards are sites composed of "textual" content organized by html or some variation that can be viewed in a web browser. The driving mechanism of a discussion board is the fact that users are registered and once registered can write posts. Often a discussion board is made up of posts asking some type of question to which other users may provide answers to those questions. Ecommerce sites are largely composed of textual material and embedded with graphics displaying a picture of the item(s) for sale. However, there are extremely few sites that are composed page-by-page using some variant of HTML. Generally, webpages are composed as they are being served from a database to a customer using a web browser. However, the user sees

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the mainly text document arriving as a webpage to be viewed in a web browser. Ecommerce sites are usually organized by software we identify as a "shopping cart". A wider view of web content While there are many millions of pages that are predominantly composed of HTML, or some variation, in general we view data, applications, E-Services, images (graphics), audio and video files, personal web pages, archived e-mail messages, and many more forms of file and data systems as belonging to websites and web pages. While there are many hundreds of ways to deliver information on a website, there is a common body of knowledge of search engine optimization that needs to be read as an advisory of ways that anything but text should be delivered. Currently search engines are text based and are one of the common ways people using a browser locate sites of interest. Content is king Content can mean any creative work, such as text, graphics, images or video. "Content is King" is a current meme when organizing or building a website[3] (although Andrew Odlyzko in "Content is Not King" argues otherwise). Text content is particularly important for search engine placement. Without original text content, most search engines will be unable to match search terms to the content of a site. Content management Because websites are often complex, a term "content management" appeared in the late 1990s identifying a method or in some cases a tool to organize all the diverse elements to be contained on a website. Content management often means that within a business there is a range of people who have distinct roles to do with content management, such as content author, editor, publisher, and administrator. But it also means there may be a content management system whereby each of the different roles are organized whereby to provide their assistance in operating the system and organizing the information for a website.

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Even though a business may organize to collect, contain and represent that information online, content needs organization in such a manner to provide the reader (browser) with an overall "customer experience" that is easy to use, the site can be navigated with ease, and the website can fulfill the role assigned to it by the business, that is, to sell to customers, or to market products and services, or to inform customers. Geo targeting of web content Geo targeting of web content in internet marketing and geo marketing is the method of determining the geolocation (the physical location) of a website visitor with geolocation software and delivering different content to that visitor based on his or her location, such as country, region/state, city, metro code/zip code, organization, Internet Protocol (IP) address, ISP or other criteria. A typical example for different content by choice in geo targeting is the FedEx website at FedEx.com where users have the choice to select their country location first and are then presented with different site or article content depending on their selection. Automated different content With automated different content in internet marketing and geomarketing the delivery of different content based on the geographical geolocation and other personal information is automated. Building a Content Rich Website You can create a content-rich Website by following a few key points: Be disciplined Update your site regularly Know how to create content, or where to find it Discipline and Commitment

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To create your content-rich Website, you need tunnel vision and a laser sharp focus. In a word; self discipline. It's easy to waste hours, even days, clicking your way from one site to another. Don't let yourself be distracted: limit your online content explorations only to Websites and resources that are directly connected to your site's subject. Discipline also extends to content creation. Successful writers do not wait for inspiration before beginning their work. Instead, they develop a regular writing schedule, and they stick to it. Whether they feel like it or not, they sit down at a desk and write. You too must develop a schedule to add content to your Website, and follow it. Nike has the right idea - 'Just Do It'! Regular Updates to your Website Nothing is deader than an untended Website. Regularly updating or modifying your Website's content gives you an edge over the competition. People will keep returning to your site if they notice something new to see, learn from or enjoy each time. Creating Your Content You know best - or should - what your audience wants. It then becomes an easy task to decide about which types of content will best serve their needs and how to go about finding or creating it. Here are some suggestions: Editorials Feature articles News clips or stories Art galleries Aggregating the best content Reviews

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Announcements Interviews Interactive features - polls, feedback, discussion groups, forums, chat Editorials Editorials are the opinion of a perceived 'expert' in the field-- (either you or a guest contributor). And they make good content, because they invite reader response, either endorsing or opposing the writer. This can make for lively debate. Give your readers an avenue to make their views known - by including a bulletin board or guest book on your site. People will return back to your site, at least to read other responses to their comments. And you can use this feedback from your audience by incorporating it into a follow up article in the future! Full-length Feature Articles A feature article is the most common - and one of the best - forms of content. Depending on the nature of your site, the articles may be long or brief, formal or chatty, technical or entertaining. Here are some tips: Articles shouldn't be too long. While there aren't any rules, it is perhaps safe to keep feature articles below 1200 words. If they are longer, convert them into multi-part features. Articles should be relevant to the topic of your Website. They should educate, entertain or inform. Try and limit the message of each piece to one or two new ideas. Don't simply rehash an article you've read elsewhere. By publishing something that hasn't been already featured elsewhere, you enhance the value and credibility of your site. There are several ways to get original content.

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- Write your own features. This assumes you write reasonably well. If you can't, or don't have the time or inclination then getting someone to write articles for you has benefits to both you and the author. You could offer to: a.) Pay guest authors for their work or b.) Exchange articles with their Website in return. Your Website visitors benefit by providing them with another point of view. A fringe benefit is that you might hook some new regular visitors from your guest author's site! c.) Exclusivity. If someone else writes for you, make sure the same article won't be submitted to dozens of other Websites and newsletters. Publishing exclusive content benefits includes syndication opportunities in other publications, online and off, and reader loyalty. Reprints Reprint articles written by others, but you must always obtain permission. All work, from the moment it is written, is copyright and owned by the author, whether it is marked with a copyright symbol or not. Content is not free. You can, however, make reprints interesting and personalised by putting your own 'spin' on the content. Write an introduction to the subject, or comment on the author's opinions or conclusions. Take care to avoid 'editing' the original article without the author's permission. Avoid articles that have been reprinted many times before on other Websites and electronic publications. The News Desk Your Website can become a source of the latest developments and happenings in areas of interest by providing timely news on topics of interest to your readers. Create a separate section of your site to deal with industry news. Or you might devote an entire Website to news updates. There are many ways of presenting news:

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as a feature article As short news clips, with a link to the full story As news stories, where each item is explained at length Whichever way you choose to present the news, make sure to stamp it with your own personality. Make it interesting, personal, chatty, fun, unique, or all of these - with your style of writing, or by adding your point of view. As with feature articles, news clips should be Relevant Useful to your reader Timely. Remember, old news is no news! There are many resources out there to help you find news stories to feature. You could: Subscribe to eZines on your topic Sign up for news delivery services that send updates periodically by email Register to receive press releases on your topic Actively hunt for newsy items during your Web surfing Read newspapers, magazines and books on your subject Attend conferences, workshops or seminars and write about your impressions The Content Aggregator By making your Website the ultimate content resource on issues related to your topic, you would attract and retain a loyal audience. Your site will become a destination for anyone seeking information on your subject. As an expert on your topic, you can evaluate sites and other resources (eZines, directories, books, offline publications) for the best, and then list them along with your rating and opinions.

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The Art Gallery Text is not the only form of content. Sound, music, pictures, photographs, video clips - and soon maybe smell and dreams (!) - can be attractions on a Website. If you are a professional photographer, you could create a display of your snaps. If you are a music group, you might offer some of your creations for download. Amateur moviemakers can use the Internet as their low-cost global distribution channel. As broadband connectivity becomes more widely accessible, we might soon see the majority of Websites converting to such interactive and dynamic content models. The Reviewer Use your Website to recommend the *best* products and services to your visitors - books, websites, music, movies, artwork, web designers, restaurants, anything. You, the expert, tell them what is good and what isn't. Share something that will be of interest and benefit to them. If you read a great book, or surf into a wonderful Website, then tell your visitors about it. Reviews help build credibility and trust for your site. How to write a review? Here are some tips: Provide contact/ordering information for those who want to know more. Be relevant. Limit your reviews to the topic and subject of your site Be selective. Set high standards for the products you review. Be analytical. Tell your reader specifically what is good or bad about the thing you review, and why. Don't go overboard. Restrain your impulse to offer extremes of praise and criticism. Offer Recommendations. At the end, say what you think about it. Is it good? Or bad? Should your reader buy the product, visit the Website, order the service? Tell them.

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What should you review? Anything - as long as it is relevant to the topic of your site, and is likely to have interest for your reader. Here are some ideas: Books: There are bound to be many books on your topic. Review good ones, and even bad ones. If an author/publisher sends you a book to review, write about it. Websites: If you have a favourite Website, or run across one that is useful, entertaining or informative, review it. Your readers will love you for this - they might never have found it on their own! Products and services can also be grist for your mill. Just remember to stay within the guidelines - relevant and useful to your reader. Announcements Has your company done something new and innovative? Have you developed an improved version of your product? Are you privy to insider information in your industry? Do you follow the rumours and gossip in your field? Do you track swings and developments closely? If you do, announce them on your Website. People love to feel informed and up with the latest gossip and happenings. Interviews An interview with an expert in your field or a famous person makes exciting, valuable content. And it is easy to conduct an interview via email or over the telephone. Choose an expert or guest you think will be of interest to your readers. Learn more about your expert - special interests, experience, achievements, status in field, etc. This allows you to create pertinent questions.

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Decide upon a topic for the interview. Prepare a set of questions you'd like to ask. Then contact your guest with an interview request. Most people would be happy to participate in your interview. For those who seem hesitant, mentioning the exposure they would get from being on your Website is enough to get them to agree! Send a copy of your questions to the guest by email, make a phone call or even arrange a face-toface meeting. Once you have your copy, make editorial changes so that it reads well. This might mean re-arranging the questions so that there is a smooth flow of thoughts. And by intelligently interspersing additional queries and comments, you can make it appear as if the interview was carried out in person and make it more interesting to read! Ask additional questions, or for clarification when necessary. Finally, make sure to get your guest's approval for the final version of the interview. Then go ahead and publish it on your site. Discussion Lists While feedback is a one-to-one communication, a discussion group permits many-to-many interaction, since every email sent to the group is distributed to each member. Here's what you can do: - Create a discussion group using one of the free or pay-services. - Announce it on your Website and eZine and invite everyone to participate. Readers could debate controversial articles and news stories, discuss other issues related to your topic and share their views and opinions with other readers. The material generated in such lively debate could again be used as the seed to grow content for your site. Forums

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An electronic bulletin board is a Website where a visitor can read messages posted by others, and respond by writing another message on the board. This reply is also displayed for others to read, producing a growing list of discussions on related topics. After a reasonable period of time, the messages under a particular topic can be encapsulated into a feature article or other form of content on your site. Chat Rooms Real-time online chat is a fantastic interactive tool - but with unavoidable limitations. Chat events permit the creation of innovative pieces of content like - Interviews with participants, especially experts and celebrities - Discussions on featured topics and issues - Workshops and seminars for your visitors Transcripts of chat sessions - edited for continuity and flow of the conversation - make for exciting content. How do you get Content for your Website? There are four options: Create it yourself Invite contributions Hire content providers Syndicate or licence content from others Creating Your Own Content If you have a lot of experience in your speciality, and your writing skills are excellent, content creation will be a simple matter of sitting at your computer and banging away at the keys for a few minutes.

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If, however, you aren't wired that way, generating material for your site will feel like having a tooth pulled - without anaesthetic! But don't despair. There's something for everyone on the Net :-) Before you decide to create your own content, here are some things to think about: Do you have the expertise? Are you really an expert? Can you write valuable, reliable, interesting content regularly? Most of your readers won't know much about your topic - indeed that's why they visit your site in the first place! But there will be the occasional expert. You can't fool your readers with pretence. Don't even try to. Do you have the skills? Can you write well? You might understand General Relativity. But the way you write about it might confuse Einstein himself! Do you have the time? Writing original content of a high quality can be very time consuming. And because a good Website is never finished it is an ongoing thing, day after day, week after week. Can you do it? Inviting Contributions If writing your own content isn't for you, there are many people around who will be happy to write for your Website. They do it because it projects them as experts, and gives them exposure and access to your readers. Most often, all that these authors ask in return is a by-line - a short 3 to 5 line description of the author and his/her business at the end of the article. So if you don't want to (or cannot) create your own content, ask others to help. Include an announcement on your site that articles from other authors are welcome. Then wade through the submissions to choose the best to present to your audience. Hiring Content Providers

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This is the rich man's way out! Pay someone else to create content for you. Content providers come in different forms. Freelance authors are writers-on-contract, who will submit articles on a pay-per-word/article basis. Full time writers and content providers are employees who will provide professional-quality material for a regular salary. While this could turn out to be expensive, it might still be cheaper than trying to acquire the skills on your own. Syndicating or Licensing Content Syndication is an interesting model to get quality-content from experts at reasonable cost. Content created by an individual or company is displayed on other partner Websites or eZines, in return for a payment (flat fee or percentage of revenue generated) or sometimes even for just exposure on the partner's Website. Licensing content for a specified period, on payment of a licensing fee, is another option. You might consider syndicating or licensing content from: News services that provide brief updates and news flashes on a variety of topics Content aggregators who collate information on a topic from around the Web Magazines and Newspapers Content-rich niche portal sites Other Websites on your topic Some General Tips For Website Content Providing highly informative, entertaining and original content is only one part of the success formula. A Webmaster who imbues their site with a part of their own personality makes their publication unique--and sets it apart from the pack. If a Webmaster can successfully convey to the reader

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their values, ideals, ambitions and attitudes, your readers come to believe they know you, the Webmaster, personally; they identify with you, trust you, and respect you. Here are some ideas: It's ok to be opinionated or state your point of view Always give your reader top priority Stick by your values and ethics Be emotional, not rigidly logical If you love what you create on your site, it will show in your work. And your readers will feel it too. Writing for the Web Reading online, on a computer screen, differs in many ways from the way people read print publications. Most skim through an article rather than read it line after line. By breaking up content into small chunks, and by the generous use of white space between them, you can make your WebPages look neat, uncluttered, and readable. Some tips: Use shorter sentences Use 'catch' words and phrases Avoid long, difficult words with many syllables Get to the point right away Use sub-titles to set off paragraphs Spelling and Grammar Your reader will judge you on many factors. Spelling/grammar is an important one.

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Reasonable care to ensure correct spelling and grammar is essential if you are to establish a serious image. A few mistakes might (and will) slip through the cracks! Your readers will probably accept this. But if it happens very often, you lose credibility. Style A formal, impersonal, grammatical style would be ideal for some topics. But a chatty, friendly, write-as-you-talk style will be a perfect fit for others. There aren't any rules - use what works for you. Be Bold - Experiment Managing a Website can be an interesting voyage of self-discovery. Be adventurous. Try out new ideas. Imitate models you find interesting. Keep innovating. And monitor response to each change. Did your readers like it? If they did, keep it. If not, experiment again. Most sites grow by such trial-and-error methods. The winners are those who identify successful models and develop them, while ruthlessly eliminating any that fail. An open mind to ideas and suggestions, and a willingness to adapt to change, is perhaps the best skill you can develop as a Webmaster. Web Content Management System (WCMS) A Web Content Management System (WCMS) is a software system which provides website authoring, collaboration and administration tools designed to allow users with little knowledge of web programming languages or markup languages to create and manage the site's content with relative ease. A rich WCMS provides the foundation for collaboration, offering users the ability to manage documents and output for multiple author editing and participation.

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Capabilities A WCMS is a software system used to control a dynamic collection of Web material (HTML documents, images and other forms of media).[6] A CMS facilitates document control, auditing, editing, and timeline management. A WCMS typically has[7][8]: Automated templates Create standard output templates (usually HTML and XML) that can be automatically applied to new and existing content, allowing the appearance of all content to be changed from one central place. Scalable expansion Available in most modern WCMSs is the ability to expand a single implementation (one installation on one server) across multiple domains, depending on the server's settings. WCMS sites maybe able to create microsites/web portals within a main site as well. Easily editable content Once content is separated from the visual presentation of a site, it usually becomes much easier and quicker to edit and manipulate. Most WCMS software includes WYSIWYG editing tools allowing non-technical individuals to create and edit content. Scalable feature sets Most WCMS software includes plug-ins or modules that can be easily installed to extend an existing site's functionality. Web standards upgrades Active WCMS software usually receives regular updates that include new feature sets and keep the system up to current web standards.

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Workflow management Workflow is the process of creating cycles of sequential and parallel tasks that must be accomplished in the CMS. For example, one or many content creators can submit a story, but it is not published until the copy editor cleans it up and the editor-in-chief approves it. Collaboration CMS software may act as a Collaboration platform allowing content to be retrieved and worked on by one or many authorized users. Changes can be tracked and authorized for publication or or ignored reverting to old versions. Other advanced forms of collaboration allow multiple users to modify (or comment) a page at the same time in a collaboration session. Delegation Some CMS software allows for various user groups to have limited privileges over specific content on the website, spreading out the responsibility of content management.[9] Document management CMS software may provide a means of collaboratively managing the life cycle of a document from initial creation time, through revisions, publication, archive, and document destruction. Content virtualization CMS software may provide a means of allowing each user to work within a virtual copy of the entire Web site, document set, and/or code base. This enables changes to multiple interdependent resources to be viewed and/or executed in-context prior to submission. Content syndication CMS software often assists in content distribution by generating RSS and Atom data feeds to other systems. They may also e-mail users when updates are available as part of the workflow process.

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Multilingual Ability to display content in multiple languages. Versioning Like Document Management Systems CMS software may allow the process of versioning by which pages are checked in or out of the WCMS, allowing authorized editors to retrieve previous versions and to continue work from a selected point. Versioning is useful for content that changes over time and requires updating, but it may be necessary to go back to or reference a previous copy. Most systems use a database to store content, metadata, or artifacts that might be needed by the system. Content is frequently, but not universally, stored as XML, to facilitate, reuse, and enable flexible presentation options. A presentation layer displays the content to Web-site visitors based on a set of templates. The templates are sometimes XSLT files. Most systems use server side caching boosting performance. This works best when the WCMS is not changed often but visits happen on a regular basis Administration is typically done through browser-based interfaces, but some systems require the use of a fat client. Unlike Web-site builders, a WCMS allows non-technical users to make changes to a website with little training. A WCMS typically requires an experienced coder to set up and add features, but is primarily a Web-site maintenance tool for non-technical administrators. Types There are three major types of WCMS: offline processing, online processing, and hybrid systems. These terms describe the deployment pattern for the WCMS in terms of when presentation templates are applied to render Web pages from structured content.

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Online processing (called "frying" systems) These systems apply templates on-demand. HTML may be generated when a user visits the page, or pulled from a cache. Most open source WCMSs have the capability to support add-ons, which provide extended capabilities including forums, blog, wiki, web-stores, photo-galleries, contact-management, etc. These are often called modules, nodes, widgets, add-ons or extensions. Add-ons may be based on an open-source or paid license model. Different WCMSs have significantly different feature-sets and target audiences. Hybrid systems Some systems combine the offline and online approaches. Some systems write out executable code (e.g. JSP, ASP, PHP, ColdFusion, or Perl pages) rather than just static HTML, so that the CMS itself does not need to be deployed on every Web server. Other hybrids operate in either an online or offline mode. Advantages Low Cost Some CMSs are free like Drupal, Joomla, and WordPress. Others may be affordable based on size subscriptions Although subscriptions can be expensive, overall the cost of not having to hire full developers can lower the total costs. Plus software can be bought based on need for many CMSs. Easy Customization A universal layout is created, making pages have a similar theme and design without much code. Many CMS tools use a drag and drop AJAX system for their design modes. It makes it easy for beginner users to create custom front-ends.

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Easy to use Designed for non-technical people in mind Simplicity in design of the admin UI allows content managers and other users to update content without much training. WorkFlow management Being able to control how content is published, when it is published, and who publishes it. Some WCMS systems allow administrators to set up rules for the workflow management. Disadvantages Cost of implementation Larger scale implementations may require training, planning, and certifications. Certain CMSs may require hardware installations. Commitment to the software is required on bigger investments. Commitment to training, developing and upkeep are all costs that will incur for enterprise systems. Cost of maintenance Maintaining CMSs may require license updates, upgrades, and hardware maintenance. Storage Volume Volume of files may be large in HTML based systems. A site that contains many files leaves itself open to errors. For example a client updating the site may create errors[14]. Large amounts of files can cause issues with updating. Trying to find the right file may take time, and maybe hard to find. Latency issues Larger CMSs can experience latency if hardware infrastructure is not up-to-date. Also can cause latency issues if databases are not being utilized correctly. Large cache files can also be a problem. Caches have to be reloaded every time data is updated. Load balancing issues may cause issues with caching files. Refreshing caches often can cause issues with performance, and can defeat the purpose of caching in the first place.

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Web Site Traffic Management The ultimate goal in online marketing is to make sure that your web site gets the maximum amount of exposure it needs in order for it to be able to generate the thickest amount of website traffic possible and when website traffic is increased to its fullest capacity, it is but obvious that increase in sales will automatically follow since statistics dictate that the more visitors you have on your pocket, the more the chances you have in selling. This aspect in website traffic and online selling is similar to the marketing principle offline and that is the more people entering your store, the more sales you get and all you have to do is make sure that you are setup on the correct location (which is the same as hitting the right demographics target online and/or niche marketing) and creating the proper enticements so that the people outside would first notice that you have an existing store and that you are selling what they need (which can be likened to proper advertising and/or article marketing). All these aspects of making sure that website traffic flows freely and directly towards your website is called website traffic management and if you are able to do so, rest assured that you would be earning huge in no time at all. And all this website traffic management is hinged on the very first step that you have to take and that would be real search engine optimization the sole purpose of which is to make your web page reach the top of the ranking on the search engine pages. Being on the upper levels of the search engine page ranking helps more people see you're the link to your website and a preview line of what people can expect from your website. Notice that even if you rarely proceed to the second or third pages of the search engine results page when you use Google and the other search engines such as MSN Bing and Yahoo! Since you readily get what you are looking for on the first page of these search engines and that is the very reason why your site needs to be seen on the initial page of the search engines. Another positive way of doing website traffic management is by making sure that you have a good number of links and back links that redirect the traffic to your website. Not only does this type of website traffic management make your website popular, it also adds merit points to your link making it very popular with the search engines especially Google which uses the spider process to determine the popularity and relevance of a specific website to know how it will rank

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that web page and the spider system actually is very favorable on links and back links and considers having so much of these a sign that the account that you have deserves to place well in the search engine pages. 3.5 Website Optimization Website optimization is the process of specifically designing your webpages to rank high in the Search Engines. If you're serious about your business, optimizing your webpages is a must. Although many Search Engines are no longer using Meta tags to assist them in ranking a webpage, some still do, and it's worth the effort to include them. When designing your webpage, you must specifically design it to rank high in the Search Engines. This involves much more than just including META tags. Your Keywords, Title, Image Alt text, Text and overall design, all play an important role in determining how your website will rank. If your site doesn't rank in the top 10 or 20 results when doing a keyword search at the Search Engines, your target audience won't be able to find you. A significant amount of website traffic originates from the major Search Engines. Most Internet users will go to a Search Engine, type in a keyword phrase and look through the top 10 - 20 results. Most of the time, they'll find what they're looking for in the first 10 results. The percentage of click throughs is even smaller. Listing near the top and grabbing the attention of your target audience is the top priority. There are many components of your webpage that you should pay close attention to when preparing it for listing in a Search Engine. The first step towards improving your listing is selecting keyword phrases that best reflect your webpage.

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Keywords and Keyword Phrases A keyword is a word that best describes your webpage. For example, if your webpage is focusing on dogs, your best keyword will be "dogs." A keyword phrase is two or more words that best describe your webpage. If your webpage is focusing on grooming a dog, then your best keyword phrase will be "dog grooming." When preparing your webpages, you should concentrate on just a couple of keyword phrases (for each page) used in different variations. Avoid using general one-word keywords, as you definitely won't rank high in the Search Engines. For example, if your website focuses on "dog grooming" you wouldn't want to use the word "dog" as one of your keywords. Why? Because it's too general. Instead, you may want to use a keyword phrase such as "dog grooming tips" or "how to groom dogs". You have to put yourself in your potential visitors' shoes and imagine what words they will type into a Search Engine to find your site. Selecting the BEST keyword phrases is the MOST important step towards optimizing your pages for the Search Engines. Another great way to use keyword phrases is to use very unique words. For example, if you're selling computers, instead of using the word computers as a Keyword, use the specific brand name or model of the computer. This will drive highly targeted visitors to your website. Overture provides a wonderful tool that will enable you to type in a keyword, click on a button and receive a complete list of similar keyword phrases you can use. If you would like to view some live searches to help you determine what keywords Internet users are searching for, visit any of the following sites: Excite Search Voyeur Ask Jeeves Search.com Snoop

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Wordtracker MetaSpy (Caution - there are two live search options to choose from. One is filtered and the other one is not. The unfiltered searches may be offensive to some users. If this is the case, make sure you only view the filtered searches). META Tags META tags are HTML code that is placed between the <HEAD> and </HEAD> tags and instruct the browser. The META description tag will contain a description of your site. This description will be visible in some of the Search Engines when your site is returned in a search. Your description should focus on your site's main topic and not generalize. Make sure you include your most important keywords towards the beginning of your description. In addition, make sure your description describes your page in detail. You want your potential visitors to know exactly what you're offering. Your description should be less than 200 characters, including spaces. Example: <META name="DESCRIPTION" content="Dog grooming tips from top professional dog groomers"> The META Keywords tag will contain a listing of your keywords and keyword phrases that are relevant to your page and enable a Search Engine to find you. The most effective use of keywords is to concentrate on just a few Keyword phrases. Example: <META name="KEYWORDS" content="dog grooming, dog grooming tips, dog groomers, pet care, animal groomers"> You can find a variety of tools to assist you in creating an effective list of keywords at WordTracker Keywords.

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Note: A word of caution...only use keywords and phrases that are appropriate for your webpage. Just because a certain keyword is very popular, doesn't mean you should include it within your META tags. This is considered to be SPAM and could get your pages banned from the Search Engines. IMG ALT Tags An image Alt tag follows your graphic address or url in your HTML code. These words will be displayed in place of your graphics through an older browser or when your visitors have their graphics turned off. To fully optimize your graphics, insert a readable keyword phrase within the Alt tags of your graphics. Example: <IMG SRC="mainlogo.gif" WIDTH="300" HEIGHT="60" ALT="dog grooming tips" BORDER="0"> TITLE Tag Your Title should contain your most important keyword phrase. Place your "most" important keyword phrase first. Not just your most important phrase, but the keyword phrase that you think people will use when they do a search. Instead of capitalizing the first letter, type it in lowercase, as most people type in all lowercase letters when searching. This will assist you in ranking higher in the Search Engines for your targeted audience. Effective Title tags include only relevant keyword or keyword phrases. Avoid non-indexing filler words, such as a, an, the, welcome and home page. Heading Heading tags are used to separate topics and range from <H1> being very large and bold to <H6> which is very small and bold.

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Your page heading should contain your most important keyword phrase to assist you in ranking higher in the Search Engines. Not all Search Engines place relevance on heading tags. However, many do and it is well worth the effort. Text Optimizing your text is another important step in ranking higher in the Search Engines. Your webpage should contain plenty of text and should contain each of your keywords and keyword phrases used in different variations. If all of your keywords and keyword phrases you've listed within your META tags aren't found within your text, the Search Engines will simply ignore them. Your keywords and keyword phrases should appear within your text at least three times, but not more than seven. Tables If you'd like to set up your webpage using tables, try to place your Heading text above your Table code. If this isn't possible, make sure you include your keyword phrases within your top left Table cell to assist you in ranking higher in the Search Engines. Note: Always place your most important information above the fold of your webpage. This is the top portion of your webpage that is visible when your page is first loaded, without scrolling. This is the most important part of your entire page -- use it wisely. Basic Search Optimization Engine Guidelines Each Search Engine is different and has different guidelines in regard to how they rank a webpage. In addition, their guidelines change very frequently and it is literally impossible to keep up with them. Your best option is to optimize your website to the best of your ability, submit your pages to the Search Engines and forget it. (Resubmit your main pages any time you make any significant changes.) Your time can be better spent using other marketing techniques other than fighting the Search Engine wars. Here are some basic guidelines to assist you in optimizing your pages:

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Title Your Title should have a word count of between five and six with a keyword frequency of one and a keyword prominence of at least 60%. A Keyword that appears at the beginning of a specific area will have a prominence rating of 100%. A Keyword that appears in the middle of a specific area will have a prominence rating of 50%. A Keyword that appears at the end of a specified area will have a prominence rating of 0%. Keyword prominence plays a critical role in determining your site's ranking, not only in the Search Engines, but also in prominent directories such as Yahoo. Alt Your Alt tags should contain a word count of about one to thirty five and have a keyword frequency of one to two. Hyperlinks Your hyperlinks should contain a keyword frequency of between one and eight. Body Text Your body text should contain a keyword frequency of between one and six, a word count between three and four hundred and a keyword prominence of about 50%. Your webpage should contain a total frequency of between five and twenty. Take your time and optimize each of your webpages to the best of your ability. When you're satisfied with your pages, manually submit them to the major Search Engines and directories. If you would like to automatically submit your pages to a large variety of Search Engines and Directories, visit SelfPromotion.com. Search engine optimization (SEO) is the process of improving the visibility of a website or a web page in search engines via the "natural" or un-paid ("organic" or "algorithmic") search results.

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Other forms of search engine marketing (SEM) target paid listings. In general, the earlier (or higher on the page), and more frequently a site appears in the search results list, the more visitors it will receive from the search engine. SEO may target different kinds of search, including image search, local search, video search and industry-specific vertical search engines. This gives a website web presence. As an Internet marketing strategy, SEO considers how search engines work and what people search for. Optimizing a website may involve editing its content and HTML and associated coding to both increase its relevance to specific keywords and to remove barriers to the indexing activities of search engines. Promoting a site to increase the number of backlinks, or inbound links, is another SEO tactic. The acronym "SEO" can refer to "search engine optimizers," a term adopted by an industry of consultants who carry out optimization projects on behalf of clients, and by employees who perform SEO services in-house. Search engine optimizers may offer SEO as a stand-alone service or as a part of a broader marketing campaign. Because effective SEO may require changes to the HTML source code of a site and site content, SEO tactics may be incorporated into website development and design. The term "search engine friendly" may be used to describe website designs, menus, content management systems, images, videos, shopping carts, and other elements that have been optimized for the purpose of search engine exposure. Another class of techniques, known as black hat SEO or spamdexing, uses methods such as link farms, keyword stuffing and article spinning that degrade both the relevance of search results and the user-experience of search engines. Search engines look for sites that employ these techniques in order to remove them from their indices.

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4.0 E-Tailing (Retailing in EC - B2C) 4.1 4.2 4.3 4.4 4.5 Overview of Market Business Models of Electronic Marketing Online Customer Service Global versus Regional Marketing Internet Shopping

4.1 Overview of Market Retailing is expected to change with the rapid development of new online sales and distribution channels that literally can be used from anywhere, anytime-from work, school, a hotel, car, or airplane. These developments should impact retailing as much as the advent of strip malls, catalogue retailing, and TV-based home shopping. Almost every retailer is re-evaluating every aspect of its operation from customer service to advertising, merchandising to store design, and logistics to order fulfillment. Furthermore, reacting to the pressure of retailers, suppliers are assessing technology based solutions to drive down costs (labour, delivery, and production) and become more efficient producers of goods. Online channels such as online services and the Web are also impacting traditional retail business models. In the traditional model, the customer went to the store and located the product. In the online model, the retailer seeks out the customer. The success of catalog retailers demonstrates that a significant portion of consumers have embraced the reverse model: the retailer going to the consumer. However, retailers need to consider the following issues in developing a business model: Product/Content Issues: What kind of products are suited for online retailing? Software Interface Issues: What kind of features will constitute an effective interface? What features make it easy to find and select items for on-line purchase? Process Issues: What are the specific steps in the shopping process from a consumers perspective? What kind of processes should companies develop to fulfill orders efficiently?

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Before examining the implications of changing consumer behavior and online retailing in the existing retail business, let us step back for a moment and ask the question: Why should retailers consider the online environment as a way of doing business? The answer lies in understanding the market changes that affect retailing and that will continue to affect it in the future. E-Retailing E-retailing essentially consists of the sale of goods and services. Sometimes we refer to this as the sale of tangible and intangible goods, as shown in Figure below We can divide tangible goods into two categories: physical goods and digital goods. Examples of physical goods would be a book, a television set, a video recorder, a washing machine, etc. Examples of digital goods are software and music, which may be downloaded from the internet. The sale of intangible goods is sometimes called E-servicing. Examples of services that may be sold are information such as the most recent stock prices, the most recent foreign exchange rate, or education. Entertainment such as -games that would be played on the internet are also examples of eservices. So are the sales of services such as telecommunication services or banking services. The sale of tangible and intangible goods are all referred to as Customer oriented e-commerce or e-retailing, if they are sold directly to the consumer who is the end user. Here we discuss the sale of tangible goods.

Difference between Traditional retailing and E-retailing Traditional retailing Traditional retailing essentially involves selling to a final customer through a physical outlet or through direct physical communication. This normally involves a fairly extensive chain starting

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from a manufacturer to a wholesaler and then to the retailer who through a physical outlet has direct contact with the final customer. Examples of physical outlets that retailers currently use are: Malls generalized stores (e.g. department store) specialized stores franchise stores It is useful to reflect that even in traditional retailing we have moved away from just using a static physical outlet within which a customer can have direct contact with the retailer. Thus, more recent forms of traditional retailing include direct mailing telemarketing door-to-door sales vending machines Direct mailing to a customer normally involves sending a brochure or catalogue to a customer. The customer browses through this catalogue and then carries out mail ordering. In some respects, this notion of browsing through a catalogue is a forerunner of e-retailing. Direct mailing, telemarketing, door-to-door sales, or the use of vending machines includes other forms that have actually moved away from a physical fixed outlet and in a way are intermediate forms of the movement away from traditional physical retailing outlet to the virtual retailing we see on the internet. The internet has allowed a new kind of specialization to emerge. Instead of specializing just in a special product line, they allow specialization in particular classes of customers and sellers. Thus, we see lastminute.com, which allows last minute purchases of travel tickets, gift, and

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entertainment to be matched against last minute sellers of the same items. Here, we see specialization not in a product line but in a class of purchasers and a class of sellers. This kind of specialization would not have been possible before we had the internet. In addition to these specialized stores, we also get generalized e-stores where a store sells several product lines under a single management. Examples of these generalized stores include JC penny and Walmart. We also have the electronic counterpart of malls or e-malls. E-malls essentially provide a webhosting service for your individual store much in the way that mall provide a hosting service in the sense of a physical location for your store. Examples of these e-malls are Yahoo! Store, GEO Shops, and CNET stores: Benefits of E-Retailing To the customer Customers enjoy a number of benefits from e-retailing. The first of these is convenience. It is convenient for the customer as he does not have to move from shop to shop physically in order to examine goods. He is able to sit in front of a terminal and search the net and examine the information on goods. The second aspect of convenience he gets is in terms of time. Normally, the traditional shop has an opening time and a closing time and the customer can only visit the shop within these periods. On the net, the customer can choose at any time to visit a site to examine the goods that are available and actually carry out his purchasing at ones own convenient time. The third type of convenience that the customer gets is that he has access to a search engine, which will actually locate the products that he describes and also the site where they may be available, or perhaps even locate the sites where they may be available at the best price The second type of benefit to customers is better information. The Internet and the World Wide web are essentially communication media that allow retailers to put on quite extensive information related to their products, which is available to the customers. The third type of benefit that the customer gets is competitive pricing. This is due to two factors.

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The first is lowered costs to the retailer because he does not have to maintain a physical showroom, he does not have to hire several shop assistants, and these savings can be passed on to customers in the form of reduced prices. Secondly, competitive pricing pressure that arises from the fact that the customer is now able to look at prices at several sites. Therefore, the pressure is always there on the retailer to maintain a competitive price for his products. To the business There are a number of benefits of e-retailing to the business itself. The first of these is global reach. The retailer now is no longer restricted to customers who are able to reach the store physically. They can be from anywhere around the globe. The retailer must, of course, deliver the goods of a purchase to the customer. The second benefit is better customer service. The use of email and the use of electronic interchange of messages between the customer and the retailer allow better communication between the customer and the retailer. These allow one to easily inquiries and deal with complaints. These also allow a much more rapid response time than was possible in the days of faxes and postal mail. The third benefit is the lowered capital cost to the retailer. The retailer does not have to maintain showrooms; he can probably have lower inventories. Thus, while Amazon.com lists over a few million titles, it keeps an inventory of a few thousand best selling titles only. Therefore, the retailer has lower warehousing costs. He does not have to have many shop assistants who are physically answering questions and. Showing the customer goods. The fourth benefit to the retailer is mass customization. Based on requests by the customers, the retailer is now able to carry out mass customization with reduced time to market for the customized products. The next advantage is targeted marketing. The retailer is now able to pick on a specific targeted group of customers and direct marketing towards these customers. The

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retailer is also able to provide more value-added services in the way of better information, addon services to basic services, or add-on options to products that he is selling. The last advantage to the retailer consists of different new forms of specialized stores that he is now able to utilize. 4.2 BUSINESS MODELS of E-tailing There are several models for e-retailing and these include Specialized e-store Generalized e-store E-mall Direct selling by the manufacturer Supplementary distribution channel E-broker E-services Specialized e-stores The first class of model what we mention in e-retailing was the specialized e-store and here you can distinguish between two different kinds of specialization: the more traditional specialization along product lines and specialization by function. When you have specialization by product line, essentially you have a store that decides to pick one particular product line, say books, lowers, CDs, clothes, and sells only this particular product line. It may also choose to position itself in a particular part of the product line, e.g. clothes; it could choose to position itself at the very expensive end of the market selling brand names Gucci and Armani. Alternatively it could do more mass marketing by selling non brand names at a much lower price, or it could go into discount selling. So, you can have a specialization by product line, and then you could have specialization - positioning within that product line to cater for a particular part of the marker.

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In contrast to this, a new kind of specialization is emerging on the internet, as mentioned. earlier, namely specialization by function. A good example of this is lastminute.com In lastminute.com they sell gifts, travel tickets, and other items for last minute shoppers who want to purchase these items at a very short notice. Generally, when one purchases an item at a very short notice (e.g. travel), he often pays a premium, which is an extra amount for the convenience of booking the travel at the last minute. Now, this means that the air ticket is likely to cost much more than if he had purchased it some time before traveling and made use of different discounts or promotions. The producers of the web site lastminute.com realized that there are groups of customers who make these purchases at the last minute and feel some degree of angst at having to pay the premium for doing this shopping at the last minute. On the other hand, you will find that you may have sellers, e.g. airline companies, that have empty seats at the last minute which they are unable to fill. So, what lastminute.com does is bring together travelers who want to book at the last minute and an airline which has got spare capacity at the last minute, and allow the former to buy from the latter at the last minute. In this situation, the purchaser may get his airline ticket at a reduced price. So, there is a win-win situation for both the purchaser and the seller. This is a unique kind of specialization. It is very difficult to do this unless one utilizes the internet to carry out this kind of specialization. Generalized e-stores The next category of e-retailing models that we intend to look at is generalized e-stores. Generalized e-stores sell a large number of product lines rather than con-fining themselves to just one or a very few product lines. E-malls The next e-retailing model we consider is the e-mall. In an e-mall, cyberspace is rented out to cyber e-stores that wish to sell their goods. This store could be a specialized or generalized estore. So, several product lines can be present. in a single e-mall. However, unlike the generalized e-store which is under a single unified management, in an e-mall, each store is under its own management. E-mall management is responsible only for creating the cyber sites that can

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be rented and can support services and marketing of the mall. It, thus, provides a web hosting service. Several e-malls also provide software tools, which can be utilized by a prospective estore to create and maintain it. e-store The advantage for an e-store is that it is grouped together with other stores in a wellknown e-mall site and, therefore, is likely to pick up visitors to the mall. Direct selling by the manufacturer A number of manufacturers with well-known brand name products have chosen to use the internet to carry out direct selling via the internet. One. of the best known here is Ford, which utilizes the internet to achieve direct selling but uses its dealer network to facilitate distribution and delivery. The other well -known examples are Cisco systems and Dell computers. Note that this approach permits mass customization to meet customer preferences. This direct selling by the manufacturer has an important disintermediation effect leading to reduced costs to the end customer and increased profitability to the manufacturer. A note of caution is important here. By and large, this approach can be used by manufacturers of well-known brands of products because the customer already knows the pro-duct. Secondly, the manufacturer must have a thorough understanding of customer preferences, otherwise he has to rely on the customer knowledge of a retailer. Brokers or intermediaries This class of e-retailers is essentially an extension of the notion of a broker from the physical to the cyber world. A broker is an intermediary who may take an order from a customer and pass it on to a supplier may put a customer with specific requirements in touch with a supplier who can meet those requirements may provide a service to a customer, such as a comparison between goods, with respect to particular criteria such as price, quality, etc.

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Thus, brokers provide comparison shopping, order taking and fulfilment, and services to a customer. That is the reason why they are sometimes referred to as electronic intermediaries. There are several different models for electronic brokers and these include: Brokers that provide a registration service with directory, search facilities, e-payment facilities, and security-related facilities. Any business can register with such an ebroker (e.g. anewshop.com). Brokers that meet a certain requirement such as a fixed price (e.g.Priceline.com). Brokers that provide comparison shopping between products (e.g. mySimon.com or bestbooksbuy.com).The last model i.e. E-services is discussed in the next lecture. Features of E-Retailing 1. The provision of an on-line catalogue, which allows one to browse through different categories of goods. Thus, it is dynamic and linked with order process. 2. The provision of a search engine, which is a very important feature that does not exist in traditional retailing. 3. The provision of a shopping cart, which allows convenient goods selection. An ability to provide an automatic price update. 4. Personalization of store layouts, promotions, deals, and marketing. 5. The ability to distribute digital goods directly. Thus, these goods can be downloaded instantly. 6. An on-line customer salesperson, who can help customers to navigate through the site. 7. An order status checking facility, which is a useful feature before submission. 8. The use of Forums (collaborative purchasing circles) to create a customer community and thus increase stickiness.

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Changing Retail Industry Dynamics Important factors that affects the retailing industry dynamics are: Overbuilding and excess supply. Change in consumer demographics, which more premium placed on efficient use of time Changes in consumer behavior, with less focus on brand name and more on lowest prices. Technology improvements that provide greater convenience and more information than traditional retailing. Overbuilding and Excess Capacity With online retailing, constraints of time and space disappear. There is no bricks and mortar storefront to worry about, no critical locations. This new way of retailing can severely affect companies that have invested in expansion and adding capacity. It is important to understand the trouble traditional retailers will face if online retailing takes off. The 1980s was a period of overexpansion and turmoil for retailers. By the end of the decade, complaints about excessive retail space were being voiced. Profits were declining and control of operating expenses became a paramount management objective. Retailers reduced staff and minimized merchandising in order to enhance profits. Sales growth and market share development were given second priority behind profit enhancement. In the 1990s, companies are under pressure to grow and produce profit. An important measurement of profit gains is gross margin per square foot. For many retailers, these numbers is either growing slowly or declining, partially reflecting a less favorable product mix and more competition. Inadequate productivity, both per worker and per unit of space, is also reducing profit margins. Overbuilding also resulted in a growing shortage of lowcost, entry-level workers for the retail industry. The shortage of entry -level workers means that retailers are using under trained workers who are less able to empathize with shopper needs-leading to a perception that retailers in general and shopping centres in particular are unable or unwilling to provide quality service.

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Clearly, with crowded domestic markets and competition constantly grinding away at operating profit, new ways of retailing are being explored by forward-thinking companies such as WalMart. Demographic Changes Shopping patterns are beginning to change with the increase of time -strapped, two-career couples and the aging of America. Value and time management are the consumer concerns driving interest in online retailing. Recent retail data shows a decline in the amount of time Americans are spending in shopping malls. The suggested reasons vary: time constraints, safety concerns, and growing frustration with the lack of courteous service and insufficient product information. Understanding the implications of time constraints on consumer shopping behavior is important as they portend the trends to come. For instance, Americans have openly embraced shopping channels like QVC and Home Shopping Network and retailers like CUC International. 4.4.Online Customer Service Todays time-strapped shoppers have less time and want better values, fewer hassles, and more options. Today, a shopping trip requires a consumer to decide what he or she or the family needs, brave the traffic on the way to a store, hunt for parking, find and select items for purchase, take them to a checkout, wait in line, pay for the items, sometimes bag them, and carry them back home. It can be a hassle and a lot of work, so most working professionals have learned to dread shopping trips. As technology improves, it may not be long before driving to the store gives way to online shopping with home delivery as provided by Peapod. In contrast, there is a growing segment of the population for whom time constraints are less of a problem. The demographic outlook in the United States is for an increasing share of older shoppers (age 50 and above) who prefer shopping at stores rather than online. However, the product mix offered by many department stores and malls is increasingly out of touch with the aging population and does not reflect the shift in purchasing power. Also, with the aging of the population, there is evidence to indicate a shift in consumer interest away from material goods and toward experiences, such as travel and recreation.

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In addition, as people get older, they tend to become more frugal. Retailers will need to concentrate on value by offering new product mixes. By this we mean a product mix that includes not only merchandise but also bundles in entertainment and recreational shopping with movie theatres, restaurants, bookstores, libraries, and community meeting facilities. This sort of change is already occurring in bookstore design (such as Borders Bookstores and Barnes and Noble), which include a variety of facilities such as coffee shops. However, building shopping malls based on these new business models is a risky venture and requires huge investments. Consumer Behavior Consumer behavior is more volatile than ever before, and companies need new ways of responding to consumer needs and satisfying demand. According to one survey, the typical consumer spent only four hours a month in a shopping mall in 1990 versus ten hours in 1985, and sales per square foot dropped. Specialty retailing-power centres, discount malls, discount stores, and catalogue shopping-has become one solution for closely monitoring consumer trends and reacting to them quickly. All of these alter-natives have one thing in common: they provide consumers with a very large selection of producers priced with deep discounts. Consumers are no longer as influenced by brand names as they used to be. The emergence of the value shopper is changing retailing. Today, the shopper is less willing to pay the premium for the brand name and much more attentive to quality and value. The decline in gross margins is the first evidence of the impact of that change, reflecting lower initial mark-ups and more discriminating shoppers in that segment clearly, retailers that are focused on providing value-the best price, service, and selection-regardless of the brand name will be successful. The real differentiating characteristic for retailers will be in their ability to define what the broad or niche consumer segment is looking for, identifying characteristics of customers in each target segment, and learning how to bundle products and package brands so that they become the preferred choice for online customers

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Customer Relationship Management(CRM) Cross-selling and Up-selling This application has the capability to qualify prospects, track contact or the moments of truth and refer them to sales persons when appropriate. By implementing a cross-sell strategy, complete with the applications necessary to track customer contacts, triggers can be established to identify prospects for additional sales. For example, in a bank an event would be a large deposit, which would then trigger a sales person to call the customer and ask if she or he would be interested in investment options. Cross-sell and up-sell application may be used to schedule sales calls, keep detailed records of sales activities, and check on the status of the customer orders. Cross-selling and up-selling depend on identifying life-path needs. For instance, in the finance industry, banks are attempting to build lasting relationships with customers by matching their life-path needs to complementary products and services. As customers approach retirement, banks could recommend assets such as money markets, bonds and annuities. If customers with young children can be identified, then banks could cross-sell education savings plans or even loan consolidation plans. This includes pre-sale interaction such as advertising that either influences or provides potential customers with the necessary information to make a purchase decision. Marketing automation is critical, as organizations grow larger. This is because, it becomes more difficult to manage multiple simultaneous programs and track costs across multiple channels. Campaign management, a direct marketing process, allows companies to manage, integrate and leverage marketing programs by automating such tasks as managing responses, qualifying leads, and arranging logistical aspects of events. Another critical core competency is fulfilment. Marketing departments today are being deluged with requests for information via the Web and other channels. The goal of effective fulfilment is to provide a myriad of information to customers and prospects quickly, easily and efficiently. Whether it is product or service inquiries, direct mail responses, pricing or billing issues, or requests for literature, responding to requests in a timely manner is critical. This creates a need for fulfillment capabilities that can get

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product information, literature, collateral packages, or other correspondence into the hands of the customers and prospects when they are most receptive. Effective fulfilment is not trivial; it requires a sophisticated interface with campaign management, sales force automation, and posting systems. Customer Service and Support Customer support provides customer care and other services. The applications include support for service request management, account management, contact and activity management, customer surveys, return material authorizations, and detailed service agreements. These discrete applications work together to ensure that customer service representatives can quickly assign, create and manage service requests, as well as look up detailed information about customer service contracts, contacts and activities. Customer support capabilities are used to manage customers who are having problems with a product or service and to resolve those problems. Help-desk software automates the management and resolution of support calls and improves efficiency and effectiveness. These applications typically include capabilities to verify customer status (e.g., what level of support they are entitled to) track specific tasks needed to resolve problems across multiple workgroups, monitor service-level agreements, maintain permanent incident histories, and capture support costs for charge backs. Armed with this complete customer and product information, service professional can resolve customer issues efficiently and effectively. Field Service Operations There is nothing like the hands-on approach to in they with of the customers about the company your company. Field service is the hands on extension of external customer support, activated when a problem can be solved over the phone and requires sending a repair person to the customer site to perform maintenance or repair. Field service and dispatch applications have become mission critical tools that affect a companys ability to deliver effective customer service and contain costs. The field service application provides the organization with features for scheduling and dispatching repair personnel, managing inventory and logistics, and handling contracts and accounting.

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Retention Management Effective Customer Relation must be based on differentiating customers based on account and transaction histories. Today, very few organizations are able to make these distinctions. The ability to effectively segment customers depends on the decision support technology, which most executives see as a powerful enabler of Customer Relation Management. Effective decision support depends on the ability to gather customer information at great levels of detail. Detailed knowledge about customers allows companies to treat all customers individually and, in many cases, disengage from customers are high maintenance, low-margin prospects. 4.4 Global vs Regional Marketing The internet is changing the balance of power between business and the customer. Before online shopping, companies could be reasonably certain that buying almost anything was not easy, so once a customer found a supplier they were comfortable with they tended to stick with them, at least until something went wrong. But with the advent of e-commerce, customers can check out the options anywhere, and then buy from anyone. Customers can use comparison sites or shopping agents, or bots as they are known, to search the web for a bundle of products and report back on which supplier is offering them the cheapest. As a general rule, whatever sells in print in a catalogue will also sell on the internet. There are several major advantages to developing an e-commerce sales strategy: Efficiency: Electronic purchase orders and sales orders are more economical to place, track and manage. Convenience: Buying and selling can go on 24 hours a day, 7 days a week, 365 days a year from any location. Speed: It takes far less time to complete the entire buy/sell process, thus speeding payment.

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Accuracy: Virtually eliminates processing errors. Buying and selling firms have the same views of the transactions, which make online commerce more precise. Global Reach: Gives businesses an instant global reach to find supplies anywhere in the world, in any time or currency zone. Low Cost Entry: Before the web, selling direct to consumers could be expensive. Setting up a retail outlet or printing a glossy catalogue could cost hundreds of thousands of pounds. On the web, you can sell direct to consumers worldwide for a hundred pounds a month. Up-to-date Status and Alerts: Generates instant pager, fax and e-mail notification to identify potential problems, enabling problem avoidance or swifter solutions. Also provides order histories. Critical success factors for internet marketing executives Marketers have always been in the business of anticipating and managing change, and technology has been their principle tool for managing it. The Internet presents an adaptive challenge for the marketing executive. Todays Internet marketing executive must have all the traditional skills of the offline marketing professional, but must place extra emphasis on some of them to account for the new economy. These critical new skills include customer advocacy and insight, integration, balanced thinking, and a willingness to accept risk and ambiguity. Customer Advocacy and Insight An insatiable curiosity for customers and marketplaces is a bare necessity for todays marketing professional. This innate curiosity fuels an individuals desire to transform mounds of customer data into meaningful and actionable insights, which in turn become a platform for advocacy. Because the Internet enables a much greater degree of interaction with customers, designing and promoting these interactions around customers needs and progressively gaining deeper insights are critical components of creating positive customer experience. A true customer advocate will be looking to provide demonstrable added value to each customer interaction to form the basis for a meaningful relationship. As both customer behaviors and enabling technologies simultaneously evolve, a deep understanding of customer needs should serve as the guidepost

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driving marketing decisions. Marketing professionals will need to strategically collect information from many disparate sources, create insightful customer mosaics, and effectively trans-late them into marketing strategies and tactics. Integration The Internet represents both a new channel and a new communications medium. The new-economy marketing professional needs to have an integrated or holistic view of the customer and the enterprise in order to create a uniquely advantaged strategic plan. In todays multi channel environment, a consistent message and experience must be maintained across customer touch points in order to create a consistent brand image. Beyond strategy, a marketing manager must fundamentally understand how to integrate these new tools into the overall marketing mix. Managers who are able to hone their marketing plan in a highly integrated fashion are more likely to capitalize on the synergies between marketing elements and thus drive greater effectiveness. Balanced Thinking An Internet marketing professional needs to be highly analytical and very creative. Culling specific customer insights from a veritable fire hose of data is critically important for new economy managers. It requires understanding the dynamic tension between one-tone marketing and mass marketing and being able to strike a strategic balance between them. It also requires determining the appropriate customer data requirements. Internet marketing professionals must also be technologically savvy. Understanding the strategic and tactical implications of the Internet, leveraging the rapid learning environment and accelerated decisionmaking process it creates, and then creatively applying the insights gleaned from analysis are critical success factors for all Internet marketing professionals. Passion and Entrepreneurial Spirit Although very hard to objectively assess, passion, or fire in the belly, is what will differentiate leaders from followers in the new economy. Trying to change the status quo is never easy and

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only people with conviction and passion will be heard over the din of the inevitable naysayer. Successful marketing managers use this passion to fuel their entrepreneurial instincts and vision, creating bleeding edge tools as they lead their teams to success. Willingness to Accept Risk and Ambiguity In the new economy, Internet marketing professionals need to retool them-selves and their companies to enter into a whole new era of customer-centric marketing. The Internet has enabled customers to have much more information and many more choices than ever before, thus shifting the balance of power toward the customer and creating the need for a whole new set of pull based marketing tools. Successful Internet professionals need to rely on a whole new set of marketing tools that work in an extraordinarily dynamic environment. Having the courage to try new things is the key to developing break-through Internet marketing. The risk and ambiguity of managing in such uncharted territory is tremendous, and the most successful Internet marketers will be willing to play at the edges. Todays online marketing professionals must have the basic skill set of the offline marketing professional. But they must also react more quickly and manage more information and channels in order to stay one step ahead of the competition. The skill set has not changed tremendously, but-the tools need to be applied with more vigor and sometimes with greater speed. Successful Internet marketers will build their business models and value propositions around a deep understanding of customer needs-not around the product. 4.5 Internet (Online ) Shopping Online shopping is the process whereby consumers directly buy goods or services from a seller in real-time, without an intermediary service, over the Internet. If an intermediary service is present the process is called electronic commerce. An online shop, eshop, e-store, internet shop, webshop, webstore, online store, or virtual store evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or in a shopping mall. The process is called Businessto-Consumer (B2C) online shopping. When a business buys from another business it is called Business-to-Business (B2B) online shopping. Both B2C and B2B online shopping are forms of e-commerce.E-Services

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The delivery of services via the internet to consumers or other businesses can be referred to by the generic term of e-services. There is a wide range of e-services currently offered through the internet and these include banking, loans, stock trading, jobs and career sites, travel, education, consultancy advice, insurance, real estate, broker services, on-linepublishing, and on-line delivery of media content such as videos, computer games, etc. This list is by no means exhaustive and it is growing all the time. In this lecture, we will give an overview of eservices. In order to bring some order to the discuss of these wide variety of e-services, we organize them into the following categories, namely 1. Web-enabling services, which were previously provided by humans in office agencies and/or their branches. The primary purpose here is that these services help to save time and effort for the user; bring convenience, and improve the quality of life. In many cases, it can result in a reduced cost for the consumer. E-services that fall into this category include Banking Stock trading Education In some cases, this may bring a new dimension to the original service, enhancing and altering it. E-education is an example of this. It may also bring into the catchments new groups of consumers of the service to whom it might not have been previously accessible. 2. Matchmaking services. These take a need from an individual or business customer and provide mechanisms (from providers) for matching that need. E-services that fall into this category include Jobs and employment sites Travel Insurance

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Loans including mortgage loans Real estate sales Brokers The advantage of this kind of matchmaking through the internet is that the ability to search electronically over a wider area to satisfy the customer need and to more precisely meet the customer need is greatly facilitated by both computerization and communication over the internet. 3. Information-selling on the web. This group essentially sells information content of one sort or another and includes ecommerce sites that provide on-line publishing such as web-based newspapers consultancy advice specialized financial or other information Entertainment services. These provide internet-based access to videos, movies, electronic games, or theme sites. This E-entertainment sector is expected to grow rapidly in the next few years, with a convergence of TV and internet-based technologies. 5. Specialized services such as auctions. Many different auction sites have appeared and these are discussed further in this lecture. It is not possible to discuss all the different eservices in this lecture and so we will briefly sample only a few examples for each category. Web-Enabled Services Web-enabled services include personal banking, stock trading, and education. E-banking Security First Network Bank (SFNB; www.sfnb.com/)was the first internet bank. It provides most of the banking services on the web. Therefore, you can do your banking with your fingers instead of your feet. Looking at e-banking, we can distinguish between twp distinct models: 1. Pure cyber banks 2. Traditional banks that provide e-banking to complement their retail banking SFNB. is a pure cyber bank, while the homepage of Bank of America (www.bankofamerica.com) illustrates the second model. While not all banks offer the full range of services on the internet, banks in both the mentioned groups offer a varied range of services including

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1. personal banking 2. commercial banking for both small businesses and large corporations 3. financial services 4. loan application services 5. international trade including settlement instruments, foreign exchange transactions, etc. There are significant advantages for both the individual or corporation as well as the bank in using e-banking. An individual doing personal banking on the internet can, amongst other things, pay bills, do account transfers, make queries on account balances, obtain statements, in some cases view images of checks, etc., and import transactions directly into home account management software. Furthermore, one can make such transactions 24 hours a day from any place with internet access around the world. In addition to these, a number of banks offer personal financial services including making personal loan applications on the internet. All these represent a large increase in convenience and time saving for the bank customer, saving him trips to the bank branch, queuing, etc. The advantages to the banking institutions themselves include 1. reduction in the number of retail banking branches, saving rentals or ownership of the related properties. 2. reduction in staffing because of the reduction in paper processing as well as face-to face bank teller contact. 3. bringing about increase in the time the bank hangs on to the money before making the required transfers, leading to increase in interest received by the banks. These advantages are so significant that some banks offer customers a number of incentives to -switch to internet banking, such as free checks, reduced fees, increased deposit rates, etc. E-stock trading and e-investing Several companies such as E-Trade (www.etrade.com). Datek.on-line, American Express Financial Services, etc. allow you to trade stocks, bonds, mutual funds, etc. on the internet. These companies offer you to trade at a very small cost compared to discount brokers or full-service brokers. This has resulted in these on-line trading companies grabbing an increasing market share. In response to this, discount brokers including Charles Schwab and full-service brokers have also moved to introduce internet trading of stocks. The steps involved essentially are the following:

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1. place a request to trade, say buy a stock 2. the system responds with current on the web site prices 3. the internet trader has to confirm this trade or cancel it Several companies allow one to create a simulated portfolio, which one watches over time without actually buying or selling the stocks in reality. An example of this can be found on the Smart Money site (www.smartmoney.com). The major advantages to the person doing the trading are 1. the reduced cost; 2. the convenience of being able to trade anywhere in the world with internet access, e.g. while travelling; and 3. access to a wide variety of information on a number of sites. In addition to actually allowing you to trade, these sites provide a considerable amount of information. The reduction in margins available to stockbrokers as a result of internet trading is beginning to have an effect on other more traditional forms of brokers. This has led to some traditional brokers also providing internet trading of stocks. E-education A number of e-universities are being spawned around the world. Again, three models can be seen: 1. Pure cyber universities, jonesinternationa.edu) such as Jones International University (http://www.

2. Traditional universities setting up new cyber vehicles for providing university education perhaps with other business partners. An example of this the Hong Kong CyberU .(www.hkcyberu.com.hk;) which was set by the Hong Kong Polytechnic University and Pacific Century CyberWorks. 3. Traditional universities offering courses themselves on the internet. There are a number of web-based technology tools for this purpose. An example is Web CT. A number of so called open universities that previously provided distance learning have moved into providing an internet-based version of their courses. These traditional universities have a number of advantages. They can now reach a client base that is outside their catchment. They also expect to

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be able to deliver these courses at a reduced cost; however, the jury is still out on this. Another advantage a traditional university has on the internet over a new pure cyber university is that it has an established brand name. There are a variety of issues that need to be explored carefully when preparing to deliver educational material on the internet and these include the following: 1. Does one use a distance learning model where the student uses a PULL model to acquire the material? 2. Does one use a traditional lecture model using video streaming? This is a PUSH model whereby a teacher pushes the materials to the students. The use of the internet for education opens up many possibilities, namely use of quizzes, tests to provide the student with instant feedback on his/her mastery of the materials, use of graphics and animation to explain concepts, particularly those that have a dynamic character to them. It is anticipated that the internet will not only lead to cyber universities of one kind or another but will also have a marked effect on teaching and learning in traditional universities. One among some of the innovations that are being explored is the joint teaching by two universities on different continents in order to enhance the learning experience. Matchmaking Services This has perhaps been the area in which there has been the greatest growth in eservices. Essentially, in most of these applications, the customer who could be an individual or business specifies his requirements in relation to the service. The e-commerce site then does a search over its own databases or over the internet using mobile agents, or over other databases or web sites to look for one or more matches to these requirements. The information is then returned to the e-service provider site to give the customer the required service. Travel Services Before the internet, one might have gone along to a travel agent in order to book ones travel requirements such as air tickets, train tickets, car hire, hotel, tours, etc. The travel agent would try his best to meet these requirements by providing information regarding schedules, pricing,

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promotions, as well as suggestions on changes to de itinerary. These bookings could be for individuals or corporations involving corporate rates, etc. A large number of e-commerce sites have appeared, which address this precise market segment. These include trip.com travelweb.com, and priceline.com. These web sites work in exactly the same way. When a customer provides requirements, these sites do a search of their own databases or send agents our _ explore other web sites and respond to the consumer. Amongst the requirement that the customer could specify is an acceptable price. A number of sites, such as priceline.com, require that provided the price specified is met, the customer cannot refuse the offer found. These ecommerce sites are beginning to grab an increasing part of the travel market. They are attractive to consumers because of the convenience, the ability to meet requirements such as specified prices, and in some cases like lastminute.com, a special customer need (i.e booking at the last minute). These travel sites often also have a lot of information on promotions, suggestions, etc., which are useful for customers. These ecommerce sites are having a strong disintermediation effect. Disintermediation refers to the removal of intermediaries such as travel agents from the process involved in the purchase of the service. A recent increasing trend has also seen the primary provider of a service such as an airline introducing internet based booking at reduced prices, further emphasizing the disintermediation effect. E-employment and e-jobs There are several different kinds of services provided here, namely 1. sites where you can get advice on developing your resumes and can post your resumes on the web 2. recruiters who use the web site to post available jobs, such as Hot jobs (www.hotjobs.com) or Jobdirect 3. employers who list available jobs on the web sites a. matchmaking facilities that search the internet for jobs for jobseekers based on a specification, such as www.monster.com

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b. matchmaking facilities to search the internet for resumes that best fit a job description given by a prospective employer use of agents to do the search These approaches of using the internet for e-employment or ejobs avoid many of the costs and difficulties associated with traditional approaches to advertising, such as high cost, limited duration, and minimal information. Electronic Commerce and Banking Banking is vital to a healthy economy. Banking as a business can be subdivided into five broad types: retail, domestic wholesale, international wholesale, investment, and trust. Of all these types, retail and investment banking are most affected by online technological innovations and are the ones that stand to profit most from electronic commerce. The role of electronic commerce in banking is multifaceted impacted by changes in technology, rapid deregulation of many parts of finance, the emergence of new banking institutions, and basic economic restructuring. Given these environmental changes, banks are reassessing their cost and profit structures. Many banks feel that in order to be profitable they need to reduce operating expenses and maintain strict cost control. This philosophy is evident in the many mergers and acquisitions occurring in the banking industry. The challenge behind bank restructuring lies in adequately operational zing the notion of cost control.

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5.0 E-Business Models, E- Marketing & E-Advertising 5.1 5.2 5.3 5.4 5.5 E-business Various Business Models Characteristics E-advertising E-marketing

5.1 E-business Is e-Commerce the Same as e-Business While some use e-commerce and e-business interchangeably, they are distinct concepts. In ecommerce, information and communications technology (ICT) is used in inter-business or interorganizational transactions (transactions between and among firms/ organizations) and in business-to-consumer transactions (transactions between firms/ organizations and individuals). In e-business, on the other hand, ICT is used to enhance ones business. It includes any process that a business organization (either a for-profit, governmental or non-profit entity) conducts over a computer-mediated network. A more comprehensive definition of e-business is: The transformation of an organizations processes to deliver additional customer value through the application of technologies, philosophies and computing paradigm of the new economy. Three primary processes are enhanced in e-business: Production processes, which include procurement, ordering and replenishment of stocks; processing of payments; electronic links with suppliers; and production control processes, among others; Customer-focused processes, which include promotional and marketing efforts, selling over the Internet, processing of customers purchase orders and payments, and customer support, among others; and Internal management processes, which include employee services, training, internal informationsharing, videoconferencing, and recruiting. Electronic applications enhance information flow between production and sales forces to improve sales force productivity. Workgroup communications and electronic publishing of internal business information are likewise made more efficient.

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The Internet economy pertains to all economic activities using electronic networks as a medium for commerce or those activities involved in both building the networks linked to the Internet and the purchase of application services such as the provision of enabling hardware and software and network equipment for Web-based/online retail and shopping malls (or e-malls). Electronic business, commonly referred to as "eBusiness" or "e-business", may be defined as the application of information and communication technologies (ICT) in support of all the activities of business. Commerce constitutes the exchange of products and services between businesses, groups and individuals and can be seen as one of the essential activities of any business. Electronic commerce focuses on the use of ICT to enable the external activities and relationships of the business with individuals, groups and other businesses.[1] Louis Gerstner, the former CEO of IBM, in his book, Who Says Elephants Can't Dance? attributes the term "e-Business" to IBM's marketing and Internet teams in 1996. Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers. In practice, e-business is more than just e-commerce. While e-business refers to more strategic focus with an emphasis on the functions that occur using electronic capabilities, e-commerce is a subset of an overall e-business strategy. E-commerce seeks to add revenue streams using the World Wide Web or the Internet to build and enhance relationships with clients and partners and to improve efficiency using the Empty Vessel strategy. Often, e-commerce involves the application of knowledge management systems. E-business involves business processes spanning the entire value chain: electronic purchasing and supply chain management, processing orders electronically, handling customer service, and cooperating with business partners. Special technical standards for e-business facilitate the exchange of data between companies. E-business software solutions allow the integration of intra and inter firm business processes. E-business can be conducted using the Web, the Internet, intranets, extranets, or some combination of these.

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Basically, electronic commerce (EC) is the process of buying, transferring, or exchanging products, services, and/or information via computer networks, including the internet. EC can also be benifited from many perspective including business process, service, learning, collaborative, community. EC is often confused with e-business. An ebusiness may also use the Internet to acquire wholesale products or supplies for in-house production. This facet of ebusiness is sometimes referred to as eprocurement, and may offer businesses the opportunity to cut their costs dramatically. Even many ebusinesses which operate without an electronic storefront now use eprocurement as a way to better track and manage their purchasing. In addition to buying and selling products, ebusiness may also handle other traditional business aspects. The use of electronic chat as a form of technical and customer support is an excellent example of this. An ebusiness which uses chat to supplement its traditional phone support finds a system which saves incredible amounts of time while providing opportunities unavailable through traditional support. By using virtual computer systems, for example, technical support operators can remotely access a customer's computer and assist them in correcting a problem. And with the download of a small program, all pertinent information about the hardware and software specifications for a user's computer may be relayed to the support operator directly, without having to walk a customer through personally collecting the data. Using email and private websites as a method for dispensing internal memos and white sheets is another use of the Internet by e-business. Rather than producing time-intensive and costly physical copies for each employee, a central server or email list can serve as an efficient method for distributing necessary information. In the past few years, virtually all businesses have become, to some degree or another, an ebusiness. The pervasiveness of Internet technology, readily available solutions, and the repeatedly demonstrated benefits of electronic technology have made e-business the obvious path. This trend continues with new technologies, such as Internet-enabled cell phones and PDAs, and the trend of e-business saturation will most likely continue for some time.

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5.2 Various Business Models Types of Business Models There are four main types of e-commerce business models: B2C B2B C2B C2C Business to consumer (B2C): Amazon is an example of one of the first and still one of the most successful B2C e-commerce companies. The B2C model sells goods or services to the consumer, generally using online catalog and shopping cart transaction systems. Services such as subscriptions to information sites or online data backup are also examples of B2C e-commerce. Business to business (B2B): Cisco is an example of one of the first B2B catalogs online. Other examples of B2B e-commerce are intranet services and Web meetings. Consumer to business (C2B): Elance is an example of C2B where the consumer posts a project and businesses answer with bid proposals. Another example of C2B are online loan brokers. Consumer to consumer (C2C): Craig's List and e-Bay are examples of C2C where consumers can post classified ads or offers to sell their property to other consumers. This is the fastest growing segment of e-commerce thanks to the advent of social networking. 5.3 Characteristics Sales of Products and Services There are five traditional revenue streams in e-commerce, and sales of products and services is the primary revenue stream and the cornerstone of all other online revenue streams. The sale of products and services is a major reason people visit a website. Information is another reason, and that is why many of the online stores have expanded their online offerings to include customer reviews and product news in addition to their product catalogs. This means people will visit the online catalogs that offer additional information rather than those that don't offer this product

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knowledge. It also increases the time the shoppers spend on a website and it increases the likelihood that they will refer items to their friends. These are all important to a successful ecommerce business model. Affiliate Programs Amazon is an excellent example of an online business that makes use of affiliate programs. Many other websites and blogs provide their visitors with suggested reading lists, and nearly all those reading lists link directly to Amazon's pages relating to the suggested books. Anyone wishing to purchase one of those books can do so using their normal Amazon customer account, but the referring site will be credited with a small commission for facilitating the transaction by recommending the book. Affiliate programs are credited with generating as much as 80 percent of transactions on some websites. This makes affiliate marketing an extremely important aspect of e-commerce. Sponsorships Many manufacturers provide extensive product information for use on websites that carry their products. This is a very successful form of advertising because it allows the manufacturer to construct a product image and soft sell the product's advantages. Online shoppers respond well to this type of advertising particularly when the manufacturer sponsors a section of information that features its products. Such sponsorship of sections of a website or its online catalog is a valuable advertising opportunity for the manufacturer and, therefore, an attractive form of advertising revenue for the website. Advertising There are many forms of advertising in e-commerce. Sponsorship is one form, but in addition to traditional banner ads there are other less obvious types of advertising such as links within content, text box advertising and several types of pop-ups, pop-unders and pop-overs. Revenue from advertising is significantly enhanced by the number of visitors to a website, the amount of time they spend on the site and how many pages they visit. That is one reason why a website should have a lot of information to attract visitors and keep them on the site.

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Demographic Data When a visitor interacts with a website, nearly everything that person does is tracked and recorded. While it is not considered good form to collect personally identifiable data on visitors, it is normal to identify visitors using a cookie that carries no personal identifying information. This tracking allows a website to serve up advertising that matches the visitor's browsing history. This kind of demographic and psychological data is very valuable to advertisers, and the collection of this data for use by advertisers represents a revenue stream that has become more of an enhancement to a website's revenue than an independent source of revenue, because privacy concerns generally require the online merchant to resist selling this information to third-party users. Mobile Though mobile e-commerce is considered a new and undeveloped territory, as technology improves and connectivity enables faster access to the Internet, mobile e-commerce will follow many of the aspects already key to e-commerce business models, and it will likely develop a few important qualities of its own. 5.4 Models of B2B Business Commerce B2B - Business to Business E-Commerce E-commerce has been in use for quit a few years and is more commonly known as EDI (electronic data interchange). In the past EDI was conducted on a direct link of some form between the two businesses where as today the most popular connection is the internet. The two businesses pass information electronically to each other. B2B e-commerce currently makes up about 94% of all e-commerce transactions. Typically in the B2B environment, E-Commerce can be used in the following processes: Procurement; order fulfilment;

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Managing trading-partner relationships. For many Welsh SMEs, B2B E-Commerce is synonymous with the vision of integrated supply chains. This might be the ultimate objective, but, in the short term, B2B E-Commerce could be used as a significant enabler in their move towards greater trading partner collaboration. E-Commerce technologies have allowed even the smallest businesses to improve the processes for interfacing with customers. They are now able to develop services for individual clients rather than provide a standard service. Pentwyn Splicers based in Pontypool manufacture pneumatic splicers for the UK and world textile market. They evaluated all aspects of their business process to determine where the greatest return could be obtained. Using the Web to sell more products was an initial consideration, but it was in the provision of customer service and support to their overseas distributors that the greatest benefits have been achieved. An alternative way of thinking of B2B eCommerce is to think of it as being used to: Attract, develop, retain, and cultivate relationships with customers; Streamline the supply chain, manufacturing, and procurement processes, and automate corporate processes to deliver the right products and services to customers quickly and costeffectively; Capture, analyze, and share, information about customers and company operations, in order to make better decisions. In business-to-business electronic commerce businesses use the Internet to integrate the valueadded chain, which can extend from the supplier of raw materials to the final consumer. Business for business dominates the total value of e-commerce activity, accounting for about 80 per cent at present. Because the-economic factors affecting the adoption of e-commerce between businesses are such different from those affecting business-to consumer ecommerce, business-tobusiness e-commerce is likely to maintain for enlarge is advantage for the foreseeable future: Electronic links between businesses are not new. They have existed for decades, in the form of electronic data interchange (EDI) supplied by value-added networks (VAN) operated over leased telephone lines. Large manufacturing firms are the main users of EDI. General Electric (GE),

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one of the largest EDI service suppliers, estimates that 80 per cent of suppliers are not connected to an EDI system but rely on from, telephone or mail. Drivers and inhibitors of business-to-business electronic commerce in business-to- business ecommerce, three factors are likely to lead to e-commerce a reduction in transaction costs and improvement of product quality/customer service a. a defensive reaction A competitors engaging in commerce; and b. Insistence by large businesses that all of their suppliers link into their ecommerce system as a condition of-doing business. The first factor, reduced transaction costs, drives the second and third and will be explored in greater detail in the next chapter. However, electronic commerce clearly reduces these costs and thus drives its adoption. It is expected that by 2001-02, many barriers, such as questions of security and reliability, which now limit the extension of Internet EDI to unknown firms, will have been overcome. As a result, there will be a significant increase in business-to-business e-commerce as it draws in smaller second- and third-tier suppliers. For example, the US Automotive Network exchange (ANX), developed by the Automotive Industry Action Group (AIAG), makes use of the Transport Control Protocol/Internet Protocol (TCP/IP) to link automotive suppliers to each other and to original equipment manufacturers (OEM) (e.g. GM, Ford and Chrysler). Dispensing with the multiple networks and protocols that now link first-tier suppliers to OEMs, the new system will provide a single common system that can be extended to include all suppliers. The largest impact of business to business e-commerce is likely to be on small and medium sized enterprises (SMEs), because many large business already have EDT systems in place. The accessibility of the Internet makes electronic commerce realistic possibility for SMEs and is likely to lead to its widespread diffusion. In addition to migrating existing activity to e-commerce, new business to-business products are being created which did not, or could not, exist before electronic commerce over the Internet made them economically viable. For example, spot markets that match buyers and sellers for a wide variety of goods ranging from electronic components to agricultural commodities to transportation futures have sprung up; they represent only the beginning of what is expected to be a wide number of new business-to-business opportunities. Another example is the extension of EDI-type links via the Internet. Parcel delivery, logistics and

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order fulfillment services, frequently by the same firm, are also experiencing growth as ecommerce increases. As businesses move to build-to-order processing and just-intime inventories, a premium is placed on timely, accurate inbound and outbound logistics. In addition, there is greater demand by final consumers for fast order fulfillment and the ability to track an order as it is being processed and delivered. Automated Ecommerce Transactions It is a term also used in electronic commerce and to describe automated processes between trading partners. The volume of B2B transactions is much higher than the volume of B2C transactions. One reason for this is that businesses have adopted electronic commerce technologies in greater numbers than consumers. Also, in a typical supply chain there will be many B2B transactions but only one B2C transaction, as the completed product is retailed to the end customer. An example of a B2B transaction is a chicken feed company selling its product to a chicken farm, which is another company. An example of a B2C transaction is a grocery store selling grain-fed chickens to a consumer. B2B can also describe marketing activities between businesses, not just the final transactions that result from marketing, though the term can be used to identify sales transactions between businesses (also referred to as institutional sales). For example, a company selling photocopiers would more likely be a B2B sales organization than a B2C sales organization. Business-to-business can also refer to all transactions made in an industry value chain before the finished product is sold to the end consumer. Characteristics of B2B EC Business to business electronic commerce implies that both the sellers and buyers are Business Corporation, while business to consumer electronic commerce implies that the buyers are individual consumers. Business-to business EC is expected to grow to $1,330.9 billion by 2003 and continue to be the major share of the EC market (Free-man 1998, Retter and Calyniuk 1998). The percentage of Internet based B2B EC compared to total B2B commerce

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will expand from.2 percent in 1997 to 2.1 percent in 2000 and 9.4 percent in2003. Computing electronics, utilities, shipping and warehousing, motor vehicles, petrochemicals, paper and office products, food, and agriculture are the leading items in B2B EC. Business-to-business EC covers a broad spectrum of applications that enable an enterprise or business to form electronic relationships with their distributors, resellers, suppliers, and other partners. As Handfield and Nichols (1999) suggest, B2B applications will offer enterprises access to the following sorts of information: Product specifications, prices, sales history Customer sales history and forecasts Supplier product line and lead times, sales terms and conditions Product process capacities, commitments, product plans Transportation carriers, lead times, costs Inventory inventory levels, carrying costs, locations Supply chain alliance key contacts, partner roles and responsibilities, schedules Competitor benchmarking, competitive product offerings, market share Sales and marketing point of seal (POS) , promotions Supply chain process and performance process descriptions, performance measures, quality, delivery time, customer satisfaction B2B Marketing Communications B2B marketing communications is how businesses promote their products and services to other businesses using tactics other than direct sales. The purpose of B2B marketing communications is to support the marketers sales effort and improve company profitability. B2B marketing is generally considered to be more complex than B2C marketing, often complicated by a longer sales cycle and multiple decision makers on the buyers side.

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B2B marketing communications tactics generally include advertising, public relations, direct mail, trade show support, sales collateral, branding, and interactive services such as website design and search engine optimization. The Business Marketing Association is the trade organization that serves B2B marketing professionals. It was founded in 1922 and offers certification programs, research services, conferences, industry awards and training programs. B2B Marketing Methodologies Positioning Statement An important first step in business to business marketing is the development of your positioning statement. This is a statement of what you do and how you do it differently and better than your competitors. Developing your messages The next step is to develop your messages. There is usually a primary message that conveys more strongly to your customers what you do and the benefit it offers to them, supported by a number of secondary messages, each of which may have a number of supporting arguments, facts and figures. Building a campaign plan Whatever form your B2B marketing campaign will take, build a comprehensive plan up front to target resources where you believe they will deliver the best return on investment, and make sure you have all the infrastructure in place to support each stage of the marketing process - and that doesnt just include developing the lead - make sure the entire organization is geared up to handle the inquiries appropriately. Briefing an agency A standard briefing document is usually a good idea for briefing an agency. As well as focusing the agency on whats important to you and your campaign, it serves as a checklist of all the important things to consider as part of your brief. Typical elements to an agency brief are: Your objectives, target market, target audience, product, campaign description, your product positioning, graphical considerations, corporate guidelines, and any other supporting material and distribution.

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Measuring results The real value in results measurement is in tying the marketing campaign back to business results. After all, youre not in the business of developing marketing campaigns for marketing sake. So always put metrics in place to measure your campaigns, and if at all possible, measure your impact upon your desired objectives, be it Cost Per Acquisition, Cost per Lead or tangible changes in customer perception. B2B standards UN/EDIFACT is one of the most well-known and established B2B standards. ANSI ASC X12 is a popular standard in North America. RosettaNet is an XML-based, emerging B2B standard in the high tech industry. An approach like UN/CEFACTs Modeling Methodology (UMM) might be used to capture the collaborative space of B2B business processes. Business TO Business Services Many companies provide services that are intended to facilitate B2B. Some of these services are provided by intermediaries, others by specialists. Here are some examples. CommerceNet CommerceNet (www.commerce.net) is a global non-profit membership organization that aims to meet the needs of companies doing EC. It targets promoting and supporting emerging communities of EC. CommerceNet established a forum for companies doing EC to meet and exchange their experiences, while introducing the latest technology to them to facilitate their business. It does contain information about members, which can be buyer or supplier companies. However, no specific product information is stored in its database. In fact, CommerceNet mainly acts as a services provider, not dealing with any of the individual transactions. CommerceNet also certifies Internet-enabled EDI products. Open Buying on the Internet

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The Open Buying on the Internet (OBI) Consortium (www.openbuy.org) is a non-profit organization dedicated to developing open standards for B2B Internet commerce. Membership in the consortium, an independent collaborative managed by CommerceNet, is open to buying and selling organizations, technology providers, financial institutions, and other interested parties on an annual fee basis. ConnectUS ConnectUS is an online service designed for use by companies paying with corporate purchasing cards. It is basically for fee database, operated by Thomas Publishing Co. and General Electric Information Systems, allowing companies to search for suppliers anywhere in the world. The service may cut up to 90 percent of the transaction cost for the average ($150) purchase. ConnectUS also aids companies in overcoming the shortfalls of purchasing card programs, which are difficult to audit, sometimes resulting in vendor overpayment. ConnectUS provides all the necessary information that supports card purchasing and facilities trades done EDI. The service is now as part of www.geis.com and www.thomasregister.com systems. 5.5 E-advertising Online advertising is a form of promotion that uses the Internet and World Wide Web for the expressed purpose of delivering marketing messages to attract customers. Examples of online advertising include contextual ads on search engine results pages, banner ads, Rich Media Ads, Social network advertising, interstitial ads, online classified advertising, advertising networks and e-mail marketing, including e-mail spam. Competitive advantage over traditional advertising One major benefit of online advertising is the immediate publishing of information and content that is not limited by geography or time. To that end, the emerging area of interactive advertising presents fresh challenges for advertisers who have hitherto adopted an interruptive strategy.

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Another benefit is the efficiency of advertiser's investment. Online advertising allows for the customization of advertisements, including content and posted websites. For example, AdWords, Yahoo! Search Marketing and Google AdSense enable ads to be shown on relevant web pages or alongside search results of related keywords. Revenue models The three most common ways in which online advertising is purchased are CPM, CPC, and CPA. CPM (Cost Per Mille), also called "Cost Per Thousand (CPT), is where advertisers pay for exposure of their message to a specific audience. "Per mille" means per thousand impressions, or loads of an advertisement. However, some impressions may not be counted, such as a reload or internal user action. CPV (Cost Per Visitor) is where advertisers pay for the delivery of a Targeted Visitor to the advertisers website. CPV (Cost Per View) is when an advertiser pays for each unique user view of an advertisement or website (usually used with pop-ups, pop-unders and interstitial ads). CPC (Cost Per Click) is also known as Pay per click (PPC). Advertisers pay each time a user clicks on their listing and is redirected to their website. They do not actually pay for the listing, but only when the listing is clicked on. This system allows advertising specialists to refine searches and gain information about their market. Under the Pay per click pricing system, advertisers pay for the right to be listed under a series of target rich words that direct relevant traffic to their website, and pay only when someone clicks on their listing which links directly to their website. CPC differs from CPV in that each click is paid for regardless of whether the user makes it to the target site. CPA (Cost Per Action) or (Cost Per Acquisition) advertising is performance based and is common in the affiliate marketing sector of the business. In this payment scheme, the publisher takes all the risk of running the ad, and the advertiser pays only for the amount of users who complete a transaction, such as a purchase or sign-up. This is the best type of rate to pay for

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banner advertisements and the worst type of rate to charge as it ignores any inefficiency in the sellers web site conversion funnel. Similarly, CPL (Cost Per Lead) advertising is identical to CPA advertising and is based on the user completing a form, registering for a newsletter or some other action that the merchant feels will lead to a sale. Also common, CPO (Cost Per Order) advertising is based on each time an order is transacted. CPE (Cost Per Engagement) is a form of Cost Per Action pricing first introduced in March 2008. Differing from cost-per-impression or cost-per-click models, a CPE model means advertising impressions are free and advertisers pay only when a user engages with their specific ad unit. Engagement is defined as a user interacting with an ad in any number of ways. Cost per conversion Describes the cost of acquiring a customer, typically calculated by dividing the total cost of an ad campaign by the number of conversions. The definition of "Conversion" varies depending on the situation: it is sometimes considered to be a lead, a sale, or a purchase. Privacy The use of online advertising has implications on the privacy and anonymity of users. If an advertising company has placed banners in two Web sites. Hosting the banner images on its servers and using third-party cookies, the advertising company is able to track the browsing of users across these two sites. Third-party cookies can be blocked by most browsers to increase privacy and reduce tracking by advertising and tracking companies without negatively affecting the user's Web experience. Many advertising operators have an opt-out option to behavioural advertising, with a generic cookie in the browser stopping behavioural advertising. Malware There is also a class of advertising methods which are considered unethical and may even be illegal. These include external applications which alter system settings (such as a browser's home

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page), spawn pop-ups, and insert advertisements into non-affiliated webpages. Such applications are usually labelled as spyware or adware. They may mask their questionable activities by performing a simple service, such as displaying the weather or providing a search bar. These programs are designed to dupe the user, acting effectively as Trojan horses. These applications are commonly designed so as to be difficult to remove or uninstall. The ever-increasing audience of online users, many of whom are not computer-savvy, frequently lack the knowledge and technical ability to protect themselves from these programs. Ethics Online advertising encompasses a range of types of advertising, some of which are deployed ethically and some are not. Some websites use large numbers of advertisements, including flashing banners that distract the user, and some have misleading images designed to look like error messages from the operating system, rather than advertisements. Websites that unethically use online advertising for revenue frequently do not monitor what advertisements on their website link to, allowing advertisements to lead to sites with malicious software or adult material. Website operators that ethically use online advertising typically use a small number of advertisements that are not intended to distract or irritate the user, and do not detract from the design and layout of their websites. Many website owners deal directly with companies that want to place ads, meaning that the website linked to by the advertisement is legitimate. The overuse of technologies like Adobe Flash in online advertising has led to some users disabling it in their browsers, or using browser plug-ins like Adblock or NoScript. Many sites use centralized advertising services whose advertisement may be blocked as a side effect of security and privacy measures, because the services require JavaScript and cross-site requests to function, while such features are often not necessary to use the sites and are a potential source of vulnerabilities. Some companies perform customer engagement studies in online marketing to insure consumer satisfaction, through the use of online compliance centers, building and deploying fraud

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detection tools, while inspecting websites and publishers to insure website pages offer the highest degree of information security and compliancy with Can Spam Requirements[4]. Types Though, as seen above, the large majority of online advertising has a cost that is brought about by usage or interaction of an ad, there are a few other methods of advertising online that only require a one time payment. The Million Dollar Homepage is a very successful example of this. Visitors were able to pay $1 per pixel of advertising space and their advert would remain on the homepage for as long as the website exists with no extra costs. Floating ad: An ad which moves across the user's screen or floats above the content. Expanding ad: An ad which changes size and which may alter the contents of the webpage. Polite ad: A method by which a large ad will be downloaded in smaller pieces to minimize the disruption of the content being viewed Wallpaper ad: An ad which changes the background of the page being viewed. Trick banner: A banner ad that looks like a dialog box with buttons. It simulates an error message or an alert. Pop-up: A new window which opens in front of the current one, displaying an advertisement, or entire webpage. Pop-under: Similar to a Pop-Up except that the window is loaded or sent behind the current window so that the user does not see it until they close one or more active windows. Video ad: similar to a banner ad, except that instead of a static or animated image, actual moving video clips are displayed. This is the kind of advertising most prominent in television, and many advertisers will use the same clips for both television and online advertising. Map ad: text or graphics linked from, and appearing in or over, a location on an electronic map such as on Google Maps. Mobile ad: an SMS text or multi-media message sent to a cell phone.

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Superstitial: An animated adv on a Web page from Enliven Marketing Technologies. It uses video, 3D content or Flash to provide a TV-like advertisement. Used to be known as Unicast Transitional ads as they were originally made by Unicast Communications but the company was acquired by Viewpoint Corporation in 2004, which then changed its name to Enliven in 2008.[5] Interstitial ad: a full-page ad that appears before a user reaches their original destination. In addition, ads containing streaming video or streaming audio are becoming very popular with advertisers. E-mail advertising Legitimate Email advertising or E-mail marketing is often known as "opt-in e-mail advertising" to distinguish it from spam. Affiliate marketing Affiliate marketing is a form of online advertising where advertisers place campaigns with a potentially large number of small (and large) publishers, whom are only paid media fees when traffic to the advertiser is garnered, and usually upon a specific measurable campaign result (a form, a sale, a sign-up, etc.). Today, this is usually accomplished through contracting with an affiliate network. Affiliate marketing was an invention by CDNow.com in 1994 and was excelled by Amazon.com when it launched its Affiliate Program, called Associate Program in 1996. The online retailer used its program to generate low cost brand exposure and provided at the same time small websites a way to earn some supplemental income. Behavioral targeting In addition to contextual targeting, online advertising can be targeted based on a user's past clickstream. For example, if a user is known to have recently visited a number of automotive shopping / comparison sites based on clickstream analysis enabled by cookies stored on the user's computer, that user can then be served auto-related ads when they visit other, nonautomotive sites.

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Semantic advertising Semantic advertising applies semantic analysis techniques to web pages. The process is meant to accurately interpret and classify the meaning and/or main subject of the page and then populate it with targeted advertising spots. By closely linking content to advertising, it is assumed that the viewer will be more likely to show an interest (i.e., through engagement) in the advertised product or service. Ad server market structure Given below is a list of top ad server vendors in 2008 with figures in millions of viewers published in an Attributor survey. Since 2008 Google controls estimated 69% of the online advertising market. Vendor Google Ad viewers (millions) 1,118 1,079

DoubleClick (Google) Yahoo! 362 309

MSN (Microsoft) AOL 156 Adbrite Total 3,087 73

5.6 What is e-Marketing? e-Marketing is still quite a controversial subject to talk about, since no one succeeded to unify the various theories around it; however there is one thing upon which there is no doubt - that eMarketing first appeared under the form of various techniques deployed by pioneer companies selling their products via the internet in the early 90's.

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The frenzy around these new marketing techniques created by e-tailers and supported by the internet rapidly gave birth to a new dimension of what we knew as Marketing: the e-Marketing (electronic Marketing). There are many definitions to what e-Marketing is, the simplest and shortest one being formulated by Mark Sceats: e-Marketing is Marketing that uses the internet as manifestation media. A working definition is that coming from a group of CISCO specialists: e-Marketing is the sum of all activities a business conducts through the internet with the purpose of finding, attracting, winning and retaining customers. e-Marketing Strategy The e-Marketing Strategy is normally based and built upon the principles that govern the traditional, offline Marketing - the well-known 4 P's (Product - Price - Promotion - Positioning) that form the classic Marketing mix. Add the extra 3 P's (People - Processes - Proof) and you got the whole extended Marketing mix. Until here, there are no much aspects to differentiate e-Marketing from the traditional Marketing performed offline: the extended Marketing mix (4 + 3 P's) is built around the concept of "transactional" and its elements perform transactional functions defined by the exchange paradigm. What gives e-Marketing its uniqueness is a series of specific functions, relational functions, that can be synthesized in the 2P + 2C+ 3S formula: Personalization, Privacy, Customer Service, Community, Site, Security, Sales Promotion. These 7 functions of the e-Marketing stay at the base of any e-Marketing strategy and they have a moderating character, unlike the classic Marketing mix that comprises situational functions only. Moderating functions of e-Marketing have the quality of moderate, operate upon all situational functions of the mix (the classic 4 P's) and upon each other. 1. Personalization The fundamental concept of personalization as a part of the e-Marketing mix lies in the need of recognizing, identifying a certain customer in order to establish relations (establishing relations is a fundamental objective of Marketing). It is crucial to be able to identify our customers on

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individual level and gather all possible information about them, with the purpose of knowing our market and be able to develop customized, personalized products and services. For example, a cookie strategically placed on the website visitor's computer can let us know vital information concerning the access speed available: in consequence, if we know the visitor is using a slow connection (eg. dial-up) we will offer a low volume variation of our website, with reduced graphic content and no multimedia or flash applications. This will ease our customer's experience on our website and he will be prevented from leaving the website on the reason that it takes too long to load its pages. Personalization can be applied to any component of the Marketing mix; therefore, it is a moderating function. 2. Privacy Privacy is an element of the mix very much connected to the previous one - personalization. When we gather and store information about our customers and potential customers (therefore, when we perform the personalization part of the e- Marketing mix) a crucial issue arises: that of the way this information will be used, and by whom. A major task to do when implementing an e-Marketing strategy is that of creating and developing a policy upon access procedures to the collected information. This is a duty and a must for any conscious marketer to consider all aspects of privacy, as long as data are collected and stored, data about individual persons. Privacy is even more important when establishing the e-Marketing mix since there are many regulations and legal aspects to be considered regarding collection and usage of such information. 3. Customer Service Customer service is one of the necessary and required activities among the support functions needed in transactional situations.

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We will connect the apparition of the customer service processes to the inclusion of the "time" parameter in transactions. When switching from a situational perspective to a relational one, and e-Marketing is mostly based on a relational perspective, the marketer saw himself somehow forced into considering support and assistance on a non-temporal level, permanently, over time. For these reasons, we should consider the Customer Service function (in its fullest and largest definition) as an essential one within the e-Marketing mix. As we can easily figure out, the service (or assistance if you wish) can be performed upon any element from the classic 4 P's, hence its moderating character. 4. Community We can all agree that e-Marketing is conditioned by the existence of this impressive network that the internet is. The merely existence of such a network implies that individuals as well as groups will eventually interact. A group of entities that interact for a common purpose is what we call a "community" and we will soon see why it is of absolute importance to participate, to be part of a community The Metcalf law (named after Robert Metcalf) states that the value of a network is given by the number of its components, more exactly the value of a network equals the square of the number of components. We can apply this simple law to communities, since they are a network: we will then conclude that the value of a community rises with the number of its members. This is the power of communities; this is why we have to be a part of it. The customers / clients of a business can be seen as part of a community where they interact (either independent or influenced by the marketer) - therefore developing a community is a task to be performed by any business, even though it is not always seen as essential. Interactions among members of such a community can address any of the other functions of eMarketing, so it can be placed next to other moderating functions. 5. Site We have seen and agreed that e-Marketing interactions take place on a digital media - the internet. But such interactions and relations also need a proper location, to be available at any moment and from any place - a digital location for digital interactions.

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Such a location is what we call a "site", which is the most widespread name for it. It is now the time to mention that the "website" is merely a form of a "site" and should not be mistaken or seen as synonyms. The "site" can take other forms too, such as a Palm Pilot or any other handheld device, for example. This special location, accessible through all sort of digital technologies is moderating all other functions of the e-Marketing - it is then a moderating function. 6. Security The "security" function emerged as an essential function of e-Marketing once transactions began to be performed through internet channels. What we need to keep in mind as marketers are the following two issues on security: - security during transactions performed on our website, where we have to take all possible precautions that third parties will not be able to access any part of a developing transaction; - security of data collected and stored, about our customers and visitors. A honest marketer will have to consider these possible causes of further trouble and has to cooperate with the company's IT department in order to be able to formulate convincing (and true, honest!) messages towards the customers that their personal details are protected from unauthorized eyes. 7. Sales Promotion At least but not last, we have to consider sales promotions when we build an e- Marketing strategy. Sales promotions are widely used in traditional Marketing as well, we all know this, and it is an excellent efficient strategy to achieve immediate sales goals in terms of volume. This function counts on the marketer's ability to think creatively: a lot of work and inspiration is required in order to find new possibilities and new approaches for developing an efficient promotion plan. On the other hand, the marketer needs to continuously keep up with the latest internet technologies and applications so that he can fully exploit them.

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To conclude, we have seen that e-Marketing implies new dimensions to be considered aside of those inherited from the traditional Marketing. These dimensions revolve around the concept of relational functions and they are a must to be included in any e-Marketing strategy in order for it to be efficient and deliver results..

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6.0 Module VI: Electronic Payment Systems 6.1 6.2 6.3 6.4 Services and Cash flow Electronic Payment Media Payment System Models Cyber Banking

6.1 Electronic payment :Services and Cash flow Electronic payment is an integral part of electronic commerce. Broadly de-fined, electronic payment is a financial exchange that takes place online between buyers and sellers. The content of this exchange is usually some form of digital financial instrument (such as encrypted credit card numbers, electronic checks, or digital cash) that is backed by a bank or an intermediary, or by legal tender. Three factors are stimulating interest among financial institutions in electronic payments: decreasing technology costs, reduced operational and processing costs, and increasing online commerce. The desire to reduce costs is one major reason for the increase in electronic payments. Cash and checks are very expensive to process, and banks are seeking less costly alternatives. It is estimated that approximately 56 percent of consumer transactions in the United States are cash and 29 percent are check. Credits, debits, and other electronic transactions account for about 15 percent of all consumer transactions, and are expected to increase rapidly. Electronic transactions numbered 33 billion in 1993 and are expected to climb to 118 billion by the year 2000. For the same period, paper transactions are forecast to show very modest growth, from 117 billion in 1993 to 135 billion in the year Banks and retailers want to wean customers away from paper transactions because the processing overhead is both labor intensive and costly. The crucial issue in electronic commerce revolves around how consumers will pay businesses online for various products and services. Currently, consumers can view an endless variety of products and services

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offered by vendors on the Internet, but a consistent and secure payment capability does not exist. The solutions proposed to the online payment problem have been ad hoc at best. For instance, in one method marketed by CyberCash, users install client software packages, sometimes known as electronic wallets, on their browsers. This software then communicates with electronic cash registers that run on merchants Web servers. Each vendors client works with only that vendors own server software, a rather restrictive scenario. Currently, merchants face the unappealing option of either picking one standard and alienating consumers not subscribing to a standard or needing to support multiple standards, which entails extra time, effort, and money. Today, the proliferation of incompatible electronic payment schemes has stifled electronic commerce in much the same way the split between Beta and VHS standards stifled the video industrys growth in the 1970s. Banks faced similar problems in off-line commerce in the early nineteenth century. Many banks issued their own notes, and a recurrent problem was the tendency of some institutions to issue more notes than they had gold as backing. Further, getting one bank to honor anothers notes was a major problem. Innovations in payment methods involved the creation of new financial instruments that relied on backing from governments or central banks, and gradually came to be used as money. Banks are solving these problems all over again in an online environment. The goal of online commerce is to develop a small set of payment methods that are widely used by consumers and widely accepted by merchants and banks. 6.2 Electronic Payment Media Electronic payment systems are proliferating in banking, retail, health care, on-line markets, and even government-in fact, anywhere money needs to change hands. Organizations are motivated by the need to deliver products and services more cost effectively and to provide a higher quality of service to customers. Research into electronic payment systems for consumers can be traced back to the 1940s, and the first applications-credit cards appeared soon after. In the early 1970s, the emerging electronic payment technology was labelled electronic funds transfer (EFT).

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EFT is defined as any transfer of funds initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. EFT utilizes computer and telecommunication components both to supply and to transfer money or financial assets. Transfer is information based and intangible. Thus EFT stands in marked contrast to conventional money and payment modes that rely on physical delivery of cash or checks (or other paper orders to pay) by truck, train, or airplane. Work on EFT can be segmented into three broad categories: Banking and financial payments o Large-scale or wholesale payments (e.g., bank-to-bank transfer) o Small-scale or retail payments (e.g., automated teller machines and cash dispensers) o Home banking (e.g., bill payment) Retailing payments Credit cards (e.g., VISA or MasterCard) Private label credit/debit cards (e.g., J.C. Penney Card) Charge cards (e.g., American Express) On-line electronic commerce payments Token-based payment systems Electronic cash (e.g., DigiCash) Electronic checks (e.g., NetCheque) Smart cards or debit cards (e.g., Mondex Electronic Currency Card) Credit card-based payment systems Encrypted credit cards (e.g., World Wide Web form based encryption) Third-party authorization numbers (e.g., First Virtual) Designing Electronic Payment Systems Privacy. A user expects to trust in a secure system; just as the telephone is a safe and private medium free of wiretaps and hackers, electronic communication must merit equal trust.

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Security. A secure system verifies the identity of two-party transactions through user authentication and reserves flexibility to restrict information/services through access control. Tomorrows bank robbers will need no getaway cars just a computer terminal, the price of a telephone call, and a little ingenuity. Millions of dollars have been embezzled by computer fraud. No systems are yet fool-proof, although designers are concentrating closely on security. Intuitive interfaces. The payment interface must be as easy to use as a telephone. Generally speaking, users value convenience more than anything. Database integration. With home banking, for example, a customer wants to play with all his accounts. To date, separate accounts have been stored on separate databases. The challenge before banks is to tie these databases together and to allow customers access to any of them while keeping the data up-to-date and error free. Brokers. A network banker-someone to broker goods and services, settle conflicts, and facilitate financial transactions electronically-must be in place. One fundamental issue is how to price payment system service. For example, should subsidies be used to encourage users to shift from one form of payment to another, from cash to bank payments, from paper-based to e-cash. The problem with subsidies is the potential waste of resources, as money may be invested in systems that will not be used. Thus investment in systems not only might not be recovered but substantial ongoing operational subsidies will also be necessary. On the other hand, it must be recognized that without subsidies, it is difficult to price all services affordably. Standards. Without standards, the welding of different payment users into different networks and different systems is impossible. Standards enable interoperability, giving users the ability to buy and receive information, regardless of which bank is managing their money. None of these hurdles are insurmountable. Most will be jumped within the next few years. These technical problems, experts hope, will be solved as technology is improved and experience is gained. The biggest question concerns how customers will take to a paperless and (if not cashless) less-cash world.

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Secure Electronic Transaction (SET) Protocol SET protocol was initially designed by Visa and MasterCard in 1997 and has evolved since then. SET protocol meets the four security requirements for EC as SSL(Secure Socket Layer) does: authentication, encryption, integrity, and non repudiation. In addition, SET defines the message format, certificate format, and procedure of message exchange as depicted in. The role of payment gateway is to connect the Internet and proprietary networks of banks. Each participating entity needs its own certificate. To keep the consumers certificate in his or her personal computer or IC card, software called the electronic wallet, or digital wallet, is necessary. To connect the dig-ital wallet with various merchants, interoperability is a very important characteristic to meet. Electronic Wallet To achieve perfect security, the electronic wallet has to be downloaded into the buyers personal computer. Since the interoperability of the cardholders digital wallet with any merchants software is essential, a consortium of companies (Visa, MasterCard, JCB, and American Express) has established a company called SETCo (Secure Electronic Transaction LLC 1999). This company performs the interoperability test and issues a SET Mark as a confirmation of interoperability. IBM, Netscape, Microsoft, VeriSign, Tandem, and MetaLand provide such interoperable digital wallets. Storage of Certificates If the private key and corresponding public key in a certificate are physically stored in the customers personal computer, the customer can use the certificate only at the computer. However, if the certificate is stored in an IC card, the wallet can work if the IC card is inserted into a card reader attached to a computer. Therefore, storing the certificate in IC card seems to be the safest method.

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The International Center for Electronic Commerce (ICEC 1999) has developed a system named Smart-SET, which integrates SET protocol with an IC card that can store multiple certificates. Secure socket layer protocol for electronic payment even though SET is a perfect solution for secure electronic payments, a relatively simple version of SSL is currently widely adopted. This is because SET protocol is complex and certificates are not widely distributed in a stable manner. Theoretically, the SSL protocol may use a certificate but it does not include the concept of a payment gateway. Merchants need to receive both ordering information and credit card information because the capturing process initiated by the merchant. The SET protocol, on the other hand, hides the customers credit card information from merchants and also hides the order information from banks to protect privacy. This scheme is called dual signature. Until SET becomes popular, a simple version of SSL is a very viable alternative.

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What Features does SET Specify? The following objectives are addressed by SET specifications: Confidentiality of Information To facilitate and encourage financial transactions, it will be necessary for merchants and banks to assure consumers that their payment information is safe and accessible only by the intended recipient. Therefore, credit card account and payment information must be se-cured as it travels across the network, preventing interception of account numbers and expiration dates by unauthorized individuals. SET provides confidentiality by the use of message encryption. Integrity of Information SET ensures that message content is not altered during the transmission between originator and recipient. Payment information sent from consumers to merchants includes order information, personal data, and payment instructions. If any component is altered in transit, the transaction will not be processed accurately. In order to eliminate this potential source of fraud and/or error, SET provides the means to ensure that the contents of all order and payment messages received match the contents of messages sent. Information integrity is ensured by the use of digital signatures. Consumer Account Authentication Merchants need a way to verify that a consumer is a legitimate user of a valid account number. Digital signatures and digital certificates ensure consumer account authentication by providing a mechanism that links a consumer to a specific account number. SET designates a third party called a certificate authority to authenticate the sender and receiver. Merchant Authentication The SET specifications provide a way for consumers to confirm that a merchant has a relationship with a financial institution that allows that merchant to accept bank card payments. Merchant authentication is ensured by the use of digital signatures and merchant certificates.

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Interoperability The SET specifications must be applicable on a variety of hardware and software platforms, ands must not prefer one over another. Any consumer with compliant software must be able to communicate with any merchant software that also meets the defined standard Interoperability by the use of standard protocols and message formats. 6.3 Payment System Models ELECTRONIC FUNDS TRANSFER An electronic funds transfer (also known as EFT) is a system for transferring money from one bank to another without using paper money. Its use has become widespread with the arrival of personal computers, cheap networks, improved cryptography and the Internet. Since it is affected by financial fraud, the electronic funds transfer act was implemented. This federal law protects the consumer in case a problem arises at the moment of the transaction. The history electronic funds transfer originated from the common funds transfer of the past. Since the 19th century, and with the help of telegraphs, funds transfers were an usual thing in commercial transactions. Finally, it migrated itself to computers and became the electronic money transfers of today. One of the most common EFTs is Direct Deposit. It is used by employers for depositing their employees salary in a bank account. Other kind of EFT is the automatic charge to your check or savings account. For example, when you are paying a mortgage, the bank will discharge the monthly payment from a pre-accorded bank account. The benefit is that you wont have to go to the bank to do it. Its automatic. ATMs are also used for EFTs. Since an automatic teller machine is much cheaper than a group of bank tellers, it has helped to bring costs down and beneficiate the costumer. Points of sale (also known as POS) are also part of this group. Those little blue or dark blue machines in which you pass your card are doing an electronic fund transfer from your account to the retail account.

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Advantages of EFT: The main advantage of an electronic funds transfer is time. Since all the transaction is done automatically and electronically, the bank doesnt need to pay a person to do it, a person to drive the loans to the other bank, the cost of the transport, the cost of the maintenance of the transport, insurance and the gas of the transport. EFTs have revolutionized modern banking. Other benefit is immediate payment, which brings an up to date cash flow. You wont hear either about lost checks causes by the inefficiency of normal mail (nowadays known as snail mail for its velocity compared to emails) and up to date bookkeeping. Electronic Funds Transfers Initiated By Third Parties. You may authorize a third party to initiate electronic funds transfers between your account and the third partys account. These transfers to make or receive payment may be one-time occurrences or may recur as directed by you. These transfers may use the Automated Clearinghouse (ACH) or other payments network. Your authorization to the third party to make these transfers can occur in a number of ways. In some cases, your authorization can occur when the merchant posts a sign informing you of their policy. In all cases, the transaction will require you to provide the third party with your account number and bank information. This information can be found on your check as well as on a deposit or withdrawal slip. Thus, you should only provide your bank and account information (whether over the phone, the Internet, or via some other method) to trusted third parties whom you have authorized to initiate these electronic funds transfers. Examples of these transfers include, but are not limited to: Preauthorized credits. You may make arrangements for certain direct deposits to be accepted into your checking or savings account(s). Preauthorized payments. You may make arrangements to pay certain recurring bills from your checking account(s). Electronic check conversion. You may provide your check to a merchant or service provider who will scan the check for the encoded bank and account information. The merchant or service provider will then use this information to convert the transaction into an electronic funds

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transfer. This may occur at the point of purchase, or when you provide your check by other means such as by mail or drop box. Electronic returned check charge. Some merchants or service providers will initiate an electronic funds transfer to collect a charge in the event a check is returned for insufficient funds. Limitations on frequency of transfers section regarding limitations that apply to savings accounts. ATM Transfers types of transfers and dollar limitations You may access your account(s) by ATM using your MasterMoney card and personal identification number to: make deposits to checking account(s) with a check card get cash withdrawals from checking with a check card transfer funds from checking to money market account(s) with a check card get information about the account balance of your checking account(s) with a check card. Some of these services may not be available at all terminals. Currency Conversion. If you effect a transaction with your MasterMoney Card in a currency other than US Dollars. MasterCard International Incorporated will convert the charge into a US dollar amount. MasterCard International will use its currency conversion procedure, which is disclosed to institutions that issue MasterCard cards. Currently, the conversion rate used by MasterCard International to determine the transaction amount in US dollars for such transactions is generally either a government mandated rate or a wholesale rate determined by MasterCard International for the processing cycle in which the transaction is processed , increased by an adjustment factor established from time to time by MasterCard International. The currency conversion rate used by MasterCard International on the processing date may differ from the rate that would have been used on the purchase date or cardholder statement posting date.

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Advisory Against Illegal Use. You agree not to use your card(s) for illegal gambling or other illegal purpose. Display of a payment card logo by, for example an online merchant does not necessarily meant that transactions are lawful in all jurisdictions in which the cardholder may be located. Computer Transfer types of transfers You may access your account(s) by computer through the internet by logging onto our website at firststarbank.com and using your user identification number, your password, and a secure web browser, to: transfer funds from checking to checking transfer funds from checking to money market transfer funds from money market to checking transfer funds from money market to money market transfer funds from line of credit to checking transfer funds from line of credit to money market make payments from checking to third parties make payments from checking or money market to loan account(s) with us get information about: account balance of checking account(s) the account balance of money market account(s) the Limitations on frequency of transfers. In addition to those limitations on transfers elsewhere described, if any, the following limitations apply:

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Transfers from a money market account to another account or to third parties by preauthorized, automatic, telephone, or computer transfer are limited to six per month with no more than three by check, draft, or similar order to third parties. For security reasons, there are other limits on the number of transfers and dollar amount you can make by check card. FINANCIAL INSTITUTIONS LIABILITY Liability for failure to make transfers. If we do not complete a transfer to or from your account on time or in the correct amount according to our agreement with you, we will be liable for your losses or damages. However, there are some exceptions. We will not beliable, for instance (1) If, through no fault of ours, you do not have enough money in your account to make the transfer. (2) If you have an overdraft line and the transfer would go over the credit limit. (3) If the automated teller machine where you are making the transfer does not have enough cash. (4) If the terminal or system was not working properly and you knew about the breakdown when you started the transfer. (5) If circumstances beyond our control (such as fire or flood) prevent the transfer, despite reasonable precautions that we have taken. (6) There may be other exceptions stated in our agreement with you. CONFIDENTIALITY We will disclose information to third parties about your account or the transfers you make: (1) where it is necessary for completing transfers; or (2) in order to verify the existence and condition of your account for a third party, such as credit bureau or merchant; or

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(3) in order to comply with government agency or court orders; or (4) as explained in the separate Privacy Disclosure. CREDIT CARD BASED-ELECTRONIC PAYMENT SYSTEM What is credit card? A credit card is a system of payment named after the small plastic card issued to users of the system. A credit card is different from a debit card in that it does not remove money from the users account after every transaction. In the case of credit cards, the issuer lends money to the consumer (or the user) to be paid to the merchant. It is also different from a charge card (though this name is sometimes used by the public to describe credit cards), which requires the balance to be paid in full each month. Secured credit cards A secured credit card is a type of credit card secured by a deposit account owned by the cardholder. Typically, the cardholder must deposit between 100% and 200% of the total amount of credit desired. Thus if the cardholder puts down Rs. 1000, he or she will be given credit in the range of Rs. 500Rs. 1000. In some cases, credit card issuers will offer incentives even on their secured card portfolios. In these cases, the deposit required may be significantly less than the required credit limit, and can be as low as 10% of the desired credit limit. This deposit is held in a special savings account. Credit card issuers offer this as they have noticed that delinquencies were notably reduced when the customer perceives he has something to lose if he doesnt repay his balance. The cardholder of a secured credit card is still expected to make regular payments, as he or she would with a regular credit card, but should he or she default on a payment, the card issuer has the option of recovering the cost of the purchases paid to the merchants out of the deposit. The advantage of the secured card for an individual with negative or no credit history is that most companies report regularly to the major credit bureaus. This allows for building of positive credit history.

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Although the deposit is in the hands of the credit card issuer as security in the event of default by the consumer, the deposit will not be debited simply for missing one or two payments. Usually the deposit is only used as an offset when the account is closed, either at the request of the customer or due to severe delinquency (150 to 180 days). This means that an account which is less than 150 days delinquent will continue to accrue interest and fees, and could result in a balance which is much higher than the actual credit limit on the card. In these cases the total debt may far exceed the original deposit and the cardholder not only forfeits their deposit but is left with an additional debt. Most of these conditions are usually described in a cardholder agreement which the cardholder signs when their account is opened. Secured credit cards are an option to allow a person with a poor credit history or no credit history to have a credit card which might not otherwise be available. They are often offered as a means of rebuilding ones credit. Secured credit cards are available with both Visa and MasterCard logos on them. Fees and service charges for secured credit cards often exceed those charged for ordinary non-secured credit cards, however, for people in certain situations, (for example, after charging off on other credit cards, or people with a long history of delinquency on various forms of debt), secured cards can often be less expensive in total cost than unsecured credit cards, even including the security deposit.

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Advantages and Disadvantage of credit cards: Consumers use credit cards by presenting them for payment and then paying an aggregate bill once a month. Consumers pay either by flat fee or individual transaction charges for this service. Merchants get paid for the credit card drafts that they submit to the credit card company. Businesses get charged a transaction charge ranging from 1 percent to 3 percent for each draft submitted. Credit cards have advantages over checks in that the credit card company assumes a larger share of financial risk for both buyer and seller in a transaction. Buyers can sometimes dispute a charge retroactively and have the credit card company act on their behalf. Sellers are ensured that they will be paid for all their salesthey neednt worry about fraud.

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One disadvantage to credit cards is that their transactions are not anonymous, and credit card companies do in fact compile valuable data about spending habits. Record keeping with credit cards is one of the features consumers value most because of disputes and mistakes in billing. Disputes may arise because different services may have different policies. For example, an information provider might charge for partial delivery of a file (the user may have abandoned the session after reading part of the file), and a movie distributor might charge depending on how much of the video had been downloaded. The cause of interrupted delivery needs to be considered in resolving disputes (e.g., intentional customer action versus a problem in the network or providers equipment). In general, implementing payment policies will be simpler when payment is made by credit rather than with cash. The complexity of credit card processing takes place in the verification phase, a potential bottleneck. If there is a lapse in time between the charging and the delivery of goods or services (for example, when an airline ticket is purchased well in advance of the date of travel), the customer verification process is simple because it does not have to be done in real time. In fact, all the relaying and authorizations can occur after the customer-merchant transaction is completed, unless the authorization request is denied. If the customer wants a report (or even a digital airline ticket), which would be downloaded into a PC or other information appliance immediately at the time of purchase, however, many message relays and authorizations take place in real time while the customer waits. Such exchanges may require many sequence-specific operations such as staged encryption and decrying and exchanges of cryptographic keys. Encryption and transaction speed must be balanced, however, as research has show that on-line users get very impatient and typically wait for 20 seconds before pursuing other actions. Hence, on-line credit card users must find the process to be accessible, simple, and fast. Speed will have design and cost implications, as it is a function of network capabilities, computing power, available at every server, and the specific form of the transaction. The infrastructure supporting the exchange must be reliable. The user must feel confident that the supporting payment infrastructure will be available on demand and that the system will operate reasonably well regardless of component failures or system load conditions. The builders and providers of this

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infrastructure are aware of customer requirements and are in fierce competition to fulfill those needs. Debit card based-Electronic Payment System What is a debit card? A debit card (also known as a gift card) is a plastic card which provides an alternative payment method to cash when making purchases. Physically the card is an ISO 7810 card like a credit card; however, its functionality is more similar to writing a cheque as the funds are withdrawn directly from either the cardholders bank account (often referred to as a check card), or from the remaining balance on the card. Depending on the store or merchant, the customer may swipe or insert their card into the terminal, or they may hand it to the merchant who will do so. The transaction is authorized and processed and the customer verifies the transaction either by entering a PIN or, occasionally, by signing a sales receipt. In some countries the debit card is multipurpose, acting as the ATM card for withdrawing cash and as a check guarantee card. Merchants can also offer cashback/ cashout facilities to customers, where a customer can withdraw cash along with their purchase. The use of debit cards has become wide-spread in many countries and has overtaken the check, and in some instances cash transactions by volume. Like credit cards, debit cards are used widely for telephone and Internet purchases. Types of debit card A Finnish smart card. The 3 by 5 mm security chip embedded in the card is shown enlarged in the inset. The gold contact pads on the card enable electronic access to the chip. An example of the front of a typical debit card: 1. Issuing bank logo 2. EMV chip

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3. Hologram 4. Card number 5. Card brand logo 6. Expiry date 7. Cardholders name An example of the reverse side of a typical debit card: 1. Magnetic stripe 2. Signature strip 3. Card Security Code Although many debit cards are of the Visa or MasterCard brand, there are many other types of debit card, each accepted only within a particular country or region, for example Switch (now: Maestro) and Solo in the United Kingdom, Carte Bleue in France, Laser in Ireland, EC electronic cash (formerly Eurocheck) in Germany and EFTPOS cards in Australia and New Zealand. The need for cross-border compatibility and the advent of the euro recently led to many of these card networks (such as Switzerlands EC direkt, Austrias Bankomatkasse and Switch in the United Kingdom) being rebranded with the internationally recognised Maestro logo, which is part of the MasterCard brand. Some debit cards are dual branded with the logo of the (former) national card as well as Maestro (e.g. EC cards in Germany, Laser cards in Ireland, Switch and Solo in the UK, Pinpas cards in the Netherlands, Bancontact cards in Belgium, etc.). Debit card systems have become popular in video arcades, bowling centers and theme parks. The use of a debit card system allows operators to package their product more effectively while monitoring customer spending. An example of one of these systems is ECS by Embed International. Online and offline debit transactions Typical debit card transaction machine, branded to McDonalds.

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There are currently two ways that debit card transactions are processed: online debit (also known as PIN debit) and offline debit (also known as signature debit). In some countries including the United States and Australia, they are often referred to at point of sale as debit and credit respectively, even though in either case the users bank account is debited and no credit is involved. Online debit (PIN debit or debit) Online debit cards require electronic authorization of every transaction and the debits are reflected in the users account immediately. The transaction may be additionally secured with the personal identification number (PIN) authentication system and some online cards require such authentication for every transaction, essentially becoming enhanced automatic teller machine (ATM) cards. One difficulty in using online debit cards is the necessity of an electronic authorization device at the point of sale (POS) and sometimes also a separate PINpad to enter the PIN, although this is becoming commonplace for all card transactions in many countries. Overall, the online debit card is generally viewed as superior to the offline debit card because of its more secure authentication system and live status, which alleviates problems with processing lag on transactions that may have been forgotten or not authorized by the owner of the card. Banks in some countries, such as Canada and Brazil, only issue online debit cards. Offline debit (signature debit or credit) Offline debit cards have the logos of major credit cards (e.g. Visa or MasterCard) or major debit cards (e.g. Maestro in the United Kingdom and other countries, but not the United States) and are used at point of sale like a credit card. This type of debit card may be subject to a daily limit, as well as a maximum limit equal to the amount currently deposited in the current/checking account from which it draws funds. Offline debit cards in the United States and some other countries are not compatible with the PIN system, in which case they can be used with a forged signature, since users are rarely required to present identification. Transactions conducted with offline debit cards usually require 2-3 days to be reflected on users account balances.

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Advantages and Disadvantages Debit and check cards, as they have become widespread, have revealed numerous advantages and disadvantages to the consumer and retailer alike. Advantages are as follows: A consumer who is not credit worthy and may find it difficult or impossible to obtain a credit card can more easily obtain a debit card, allowing him/her to make plastic transactions. Use of a debit card is limited to the existing funds in the account to which it is linked, thereby preventing the consumer from racking up debt as a result of its use, or being charged interest, late fees, or fees exclusive to credit cards. For most transactions, a check card can be used to avoid check writing altogether. Check cards debit funds from the users account on the spot, thereby finalizing the transaction at the time of purchase, and bypassing the requirement to pay a credit card bill at a later date, or to write an insecure check containing the account holders personal information. Like credit cards, debit cards are accepted by merchants with less identification and scrutiny than personal checks, thereby making transactions quicker and less intrusive. Unlike personal checks, merchants generally do not believe that a payment via a debit card may be later dishonored. Unlike a credit card, which charges higher fees and interest rates when a cash advance is obtained, a debit card may be used to obtain cash from an ATM or a PIN-based transaction at no extra charge, other than a foreign ATM fee. The debit card has many disadvantages as opposed to cash or credit: Some banks are now charging over-limit fees or non-sufficient funds fees based upon preauthorizations, and even attempted but refused transactions by the merchant (some of which may not even be known by the client). Many merchants mistakenly believe that amounts owed can be taken from a customers account after a debit card (or number) has been presented, without agreement as to date, payee name, and dollar and cent amount, thus causing penalty fees for overdrafts, over-the-limit,

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amounts not available causing further rejections or overdrafts, and rejected transactions by some banks. Debit cards offer lower levels of security protection than credit cards. Theft of the users PIN using skimming devices can be accomplished much easier with a PIN input than with a signature-based credit transaction. When a transaction is made using a credit card, the banks money is being spent, and therefore, the bank has a vested interest in claiming its money where there is fraud or a dispute. The bank may fight to void the charges of a consumer who is dissatisfied with a purchase, or who has otherwise been treated unfairly by the merchant. But when a debit purchase is made, the consumer has spent his/her own money, and the bank has little if any motivation to collect the funds. For certain types of purchases, such as gasoline, lodging, or car rental, the bank may place a hold on funds much greater than the actual purchase for a fixed period of time. Until the hold is released, any other transactions presented to the account, including checks, may be dishonored, or may be paid at the expense of an overdraft fee if the account lacks any additional funds to pay those items. While debit cards bearing the logo of a major credit card are accepted for virtually all transactions where an equivalent credit card is taken, a major exception is at car rental facilities. Car rental agencies require an actual credit card to be used, or at the very least, will verify the creditworthiness of the renter using a debit card. These companies will deny a rental to anyone who does not fit the requirements, and such a credit check may actually hurt ones credit score. ELECTRONIC CHECKS E-Checks Electronic checks are designed to accommodate the many individuals and entities that might prefer to pay on credit or through some mechanism other than cash. Electronic checks are modelled on paper checks, except that they are initiated electronically, use digital signatures for

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signing and endorsing, and require the use of digital certificates to authenticate the payer, the payers bank, and bank account. The security/authentication aspects of digital checks are supported via digital signatures using public-key cryptography. Ideally, electronic checks will facilitate new online services by: allowing new payment flows (the payee can verify funds availability at the payers bank); enhancing security at each step of the transaction through automatic validation of the electronic signature by each party (payee and banks); and facilitating payment integration with widely used EDI-based electronic ordering and billing processes. Electronic checks are delivered either by direct transmission using telephone lines, or by public networks such as the Internet. Electronic check payments (deposits) are gathered by banks and cleared through existing banking channels, such as automated clearing houses (ACH) networks. E-checks: contain the same information as paper checks contain are based on the same rich legal framework as paper checks can be linked with unlimited information and exchanged directly between parties can be used in any and all remote transactions where paper checks are used today enhance the functions and features provided by bank checking accounts expand on the usefulness of paper checks by providing value-added information Benefits of Electronic Checks Electronic checks have the following advantages: Electronic checks work in the same way as traditional checks, thus simplifying customer education. By retaining the basic characteristics and flexibility of paper checks while enhancing the functionality, electronic checks can be easily understood and readily adopted. Electronic checks are well suited for clearing micro payments; the conventional cryptography of electronic checks makes them easier to process than systems based on public-key cryptography

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(like digital cash). The payee and the payees and payers banks can authenticate checks through the use of publickey certificates. Digital signatures can also be validated automatically. Electronic checks can serve corporate markets. Firms can use electronic checks to complete payments over the networks in a more cost-effective manner than present alternatives. Further, since the contents of a check can be attached to the trading partners remittance information, the electronic check will easily integrate with EDI applications, such as ac-counts receivable. Electronic checks create float, and the availability of float is an important requirement for commerce. The third-party accounting server can earn revenue by charging the buyer or seller a transaction fee or a flat rate fee, or it can act as a bank and provide deposit accounts and make money from the deposit account pool. Electronic check technology links public networks to the financial payments and bank clearing networks, leveraging the access of public net-works with the existing financial payments infrastructure. STORED VALUE CARDS AND E-CASH Smart Cards Smart cards, also called stored value cards, use magnetic stripe technology or integrated circuit chips to store customer-specific information, including electronic money. The cards can be used to purchase goods or services, store information, control access to accounts, and perform many other functions. Smart cards offer clear benefits to both merchants and consumers. They reduce cash-handling expenses and losses caused by fraud, expedite customer transactions at the checkout counter, and enhance consumer convenience and safety. In addition, many state and federal governments are considering stored value cards as an efficient option for dispersing government entitlements. Other private sector institutions market stored value products to transit riders, university students, telephone customers, vending customers, and retail customers. One successful use of stored value cards is by New Yorks Metropolitan Transportation Authority (MTA). The MTA is the largest transportation agency in the United States and, through its subsidiaries and affiliates, operates the New York City subway and public

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bus system, the Long Island Railroad and Metro-North commuter rail systems, and nine tolled intrastate bridges and tunnels. These facilities serve four million customers each workday. In 1994, the MTA began the operation of an automated fare-collection system based on a plastic card with a magnetic stripe. The MetroCard is either swiped through a card reader at subway stations or dipped into a fare box on buses where the fare is decremented. All 3,600 MTA buses became operational in 1996. The full complement of 467 subway stations is expected to be operational by mid-1997. By 1999, the MTA anticipates more than 1.2 billion electronic fare collection transactions a year on subway and bus lines. The management challenges created by smart card payment systems are formidable. Institutions such as the MTA have made a considerable investment in the stored value card processing network, and to get a good return on investment must identify new and innovative ways to achieve additional operating efficiencies and value. Smart Cards and Electronic Payment Systems The enormous potential of electronic tokens is currently stunted by the lack of a widely accepted and secure means of transferring money on-line. In spite of the many prototypes developed, we are a long way from a universal payment system because merchants and banks have to be signed up and a means has to be developed to transfer money. Such a system moreover must be robust and capable of handling a large number of transactions and will require extensive testing and usage to iron out all the bugs. In the meantime, thousands of would-be sellers of electronic commerce services have to pay one another and are actively looking for payment substitutes. One such substitute is the smart card. Smart cards have been in existence since the early 1980s and hold promise for secure transactions using existing infrastructure. Smart cards are credit and debit cards and other card products enhanced with microprocessors capable of holding more information than the traditional magnetic stripe. The chip, at its current state of development, can store significantly greater amounts of data, estimated to be 80 times more than a magnetic stripe. Industry observers have predicted that, by the year 2000, one-half of all payment cards issued in the world will have embedded microprocessors rather than the simple magnetic stripe.

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The smart card technology is widely used in countries such as France, Germany, Japan, and Singapore to pay for public phone calls, transportation/ and shopper loyalty programs. The idea has taken longer to catch on in the United States, since a highly reliable and fairly inexpensive telecommunications system has favored the use of credit and debit cards. Smart cards are basically of two types: Relationship-based smart credit cards Electronic purses. Electronic purses, which replace money, are also known as debit cards and electronic money. Other Emerging Financial Instruments Several other electronic payment systems are currently being prototyped and tested. These include debit cards, electronic benefit transfer cards, and smart cards. Debit Cards at the Point of Sale (POS) The fastest growing number of electronic transactions today is debit card point-of- sale transactions. Such a transaction occurs when a customer uses a debit card to make a purchase from a merchant (supermarket, gas station, convenience store, or some other store that accepts such cards instead of using cash, check, or credit card). The transaction works much like a credit card transaction. For example, a customer gives an ATM card to the merchant for the purchase. The merchant swipes the card through a transaction terminal, which reads the information; the customer enters his personal identification number (PIN); and the terminal routes the transaction through the ATM network back to the customers bank for authorization against the customers demand deposit account. The funds, once approved, are transferred from the customers bank to the merchants bank. These transactions occur within the banking system, and safety of payment is assured. The third-party processors who provide services for merchants are also examined by the federal regulators for system integrity. Both the consumer and the merchant maintain bank accounts, and the funds are transmitted inter-bank within the payment system.

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Authentication is provided by the use of the digital signature or PIN numbers, just as it is at ATMs. Further, PINs are sent through the system in an encrypted form, and the PIN pads and terminals are tamper-proof. Dedicated lines are also often used for transmission, particularly by larger merchants. Debit Cards and Electronic Benefits Transfer Debit cards are being used extensively for electronic benefits transfer (EBT). Electronic benefits transfer uses debit cards for the electronic delivery of benefits to individuals who otherwise may not have bank accounts. In an EBT system, recipients access their benefits in the same way that consumers use debit cards to access their bank accounts electronically: the card is inserted into or swiped through a card reader and the cardholder must enter a PIN associated with that card. The benefit recipient can then access his or her benefits to make a purchase or obtain cash. For example, food stamp purchases are charged against the participants allotment, and other purchases or cash distributions are charged against the participants cash assistance program allotment. Benefits that can be delivered via EBT generally fall into three cate-gories: federally funded, but state administered benefits (such as food stamps, Aid to Families with Dependent Children programs); state-funded and state-administered benefits (such as general assistance, heating assistance, refugee assistance, and supplemental or emergency payments); and benefits that are both federally funded and federally administered (such as Social Security and Veterans benefits). Through EBT, existing networks and technologies can provide benefit recipients with online access to their funds at pas devices and ATMs. In an EBT process, no paper changes hands, except for the receipt printed for the purchaser by the pas device or the ATM. Recipients can access cash through any number of establishments, including grocers, drugstores, and financial institutions, as well as ATMs. Certain cash payments can also be facilitated by installing pas devices in housing authority and utility company offices to accept rent and bill payments. Electronic benefits transfer has several advantages over paper based, benefit distribution systems. First, EBT is less costly. Currently, many recipients of federal and state benefits must pay significant fees (three or more dollars) to

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cash their checks. EBT systems are designed to provide nocost or low-cost access methods. Second, EBT is more convenient than paper methods. EBT eliminates the need to carry food stamp coupons, stand in long lines to cash checks, or accept the entire benefit amount at one time. EBT programs also provide recipients with toll-free customer service lines and multilingual support to handle questions or problems. EBT is safer than cash or coupons, which can be lost or stolen. In EBT, benefits are stored electronically, and can be used only when needed and in the amounts required. Recipients control all ac-cess to their benefits through their cards and PINs. They can also deactivate lost or stolen cards immediately and request a replacement card by a toll free phone call. Third, EBT is convenient for retailers. It eliminates the time-consuming task of handling food stamp coupons, making grocery checkout procedures faster and easier. By eliminating checks and coupons, EBT reduces losses associated with theft, forgery, and fraud. Finally, EBT is convenient for the government. Its inherent audit and tracking advantages enhance investigations into suspicious conduct by retailers. EBT improves benefit program management by creating an audit trail and record of benefit usage, ensuring that programs are working properly and effectively. 6.5 Cyber Banking Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society. Features Online banking solutions have many features and capabilities in common, but traditionally also have some that are application specific. The common features fall broadly into several categories Transactional (e.g., performing a financial transaction such as an account to account transfer, paying a bill, wire transfer... and applications... apply for a loan, new account, etc.)

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Electronic bill presentment and payment - EBPP Funds transfer between a customer's own checking and savings accounts, or to another customer's account Investment purchase or sale Loan applications and transactions, such as repayments of enrollments Non-transactional (e.g., online statements, check links, cobrowsing, chat) Bank statements Financial Institution Administration Support of multiple users having varying levels of authority Transaction approval process Wire transfer Features commonly unique to Internet banking include Personal financial management support, such as importing data into personal accounting software. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions. History The precursor for the modern home online banking services were the distance banking services over electronic media from the early 1980s. The term online became popular in the late '80s and referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. Home banking can also refer to the use of a numeric keypad to send tones down a phone line with instructions to the bank. Online services started in New York in 1981 when four of the citys major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered home banking services[1] using the videotex system. Because of the

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commercial failure of videotex these banking services never became popular except in France where the use of videotex (Minitel) was subsidised by the telecom provider and the UK, where the Prestel system was used. The UK's first home online banking services[2] was set up by Bank of Scotland for customers of the Nottingham Building Society (NBS) in 1983[3]. The system used was based on the UK's Prestel system and used a computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and television set. The system (known as 'Homelink') allowed on-line viewing of statements, bank transfers and bill payments. In order to make bank transfers and bill payments, a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Homelink system. Typical recipients were gas, electricity and telephone companies and accounts with other banks. Details of payments to be made were input into the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving details of the payment was sent to the account holder. BACS was later used to transfer the payment directly. Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in October 1994. Today, many banks are internet only banks. Unlike their predecessors, these internet only banks do not maintain brick and mortar bank branches. Instead, they typically differentiate themselves by offering better interest rates and online banking features. Security Security token devices Protection through single password authentication, as is the case in most secure Internet shopping sites, is not considered secure enough for personal online banking applications in some countries. Basically there exist two different security methods for online banking. The PIN/TAN system where the PIN represents a password, used for the login and TANs representing one-time passwords to authenticate transactions. TANs can be distributed in different ways, the most popular one is to send a list of TANs to the online banking user by postal letter. The most secure way of using TANs is to generate them by need using a security

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token. These token generated TANs depend on the time and a unique secret, stored in the security token (this is called two-factor authentication or 2FA). Usually online banking with PIN/TAN is done via a web browser using SSL secured connections, so that there is no additional encryption needed. Another way to provide TANs to an online banking user, is to send the TAN of the current bank transaction to the user's (GSM) mobile phone via SMS. The SMS text usually quotes the transaction amount and details, the TAN is only valid for a short period of time. Especially in Germany and Austria, many banks have adapted this "SMS TAN" service as it is considered as very secure. Signature based online banking where all transactions are signed and encrypted digitally. The Keys for the signature generation and encryption can be stored on smartcards or any memory medium, depending on the concrete implementation. Attacks Most of the attacks on online banking used today are based on deceiving the user to steal login data and valid TANs. Two well known examples for those attacks are phishing and pharming. Cross-site scripting and keylogger/Trojan horses can also be used to steal login information. A method to attack signature based online banking methods is to manipulate the used software in a way, that correct transactions are shown on the screen and faked transactions are signed in the background. A recent FDIC Technology Incident Report, compiled from suspicious activity reports banks file quarterly, lists 536 cases of computer intrusion, with an average loss per incident of $30,000. That adds up to a nearly $16-million loss in the second quarter of 2007. Computer intrusions increased by 150 percent between the first quarter of 2007 and the second. In 80 percent of the cases, the source of the intrusion is unknown but it occurred during online banking, the report states The most recent kind of attack is the so-called Man in the Browser attack, where a Trojan horses permits a remote attacker to modify the destination account number and also the amount.

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Countermeasures There exist several countermeasures which try to avoid attacks. Digital certificates are used against phishing and pharming, the use of class-3 card readers is a measure to avoid manipulation of transactions by the software in signature based online banking variants. To protect their systems against Trojan horses, users should use virus scanners and be careful with downloaded software or e-mail attachments. In 2001 the FFIEC issued guidance for multifactor authentication (MFA) and then required to be in place by the end of 2006. Internet banking (or E-banking) means any user with a personal computer and a browser can get connected to his bank -s website to perform any of the virtual banking functions. In internet banking system the bank has a centralized database that is web-enabled. All the services that the bank has permitted on the internet are displayed in menu. Any service can be selected and further interaction is dictated by the nature of service. The traditional branch model of bank is now giving place to an alternative delivery channels with ATM network. Once the branch offices of bank are interconnected through terrestrial or satellite links, there would be no physical identity for any branch. It would a borderless entity permitting anytime, anywhere and anyhow banking.

The network which connects the various locations and gives connectivity to the central office within the organization is called intranet. These networks are limited to organizations for which they are set up. SWIFT is a live example of intranet application. Internet banking in india The Reserve Bank of India constituted a working group on Internet Banking. The group divided the internet banking products in India into 3 types based on the levels of access granted. They are: i) Information Only System: General purpose information like interest rates, branch location, bank products and their features, loan and deposit calculations are provided in the banks website. There exist facilities for downloading various types of application forms. The communication is

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normally done through e-mail. There is no interaction between the customer and bank's application system. No identification of the customer is done. In this system, there is no possibility of any unauthorized person getting into production systems of the bank through internet. ii) Electronic Information Transfer System: The system provides customer- specific information in the form of account balances, transaction details, and statement of accounts. The information is still largely of the 'read only' format. Identification and authentication of the customer is through password. The information is fetched from the bank's application system either in batch mode or off-line. The application systems cannot directly access through the internet. iii) Fully Electronic Transactional System: This system allows bi-directional capabilities.

Transactions can be submitted by the customer for online update. This system requires high degree of security and control. In this environment, web server and application systems are linked over secure infrastructure. It comprises technology covering computerization, networking and security, inter-bank payment gateway and legal infrastructure. Automated Teller Machine (ATM): ATM is designed to perform the most important function of bank. It is operated by plastic card with its special features. The plastic card is replacing cheque, personal attendance of the customer, banking hours restrictions and paper based verification. There are debit cards. ATMs used as spring board for Electronic Fund Transfer. ATM itself can provide information about customers account and also receive instructions from customers - ATM cardholders. An ATM is an Electronic Fund Transfer terminal capable of handling cash deposits, transfer between accounts, balance enquiries, cash withdrawals and pay bills. It may be on-line or 0ff-line. The on-line ATN enables the customer to avail banking facilities from anywhere. In off-line the facilities are confined to that particular ATM assigned. Any customer possessing ATM card issued by the Shared Payment Network System can go to any ATM linked to Shared Payment Networks and perform his transactions.

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Credit Cards/Debit Cards: The Credit Card holder is empowered to spend wherever and whenever he wants with his Credit Card within the limits fixed by his bank. Credit Card is a post paid card. Debit Card, on the other hand, is a prepaid card with some stored value. Every time a person uses this card, the Internet Banking house gets money transferred to its account from the bank of the buyer. The buyers account is debited with the exact amount of purchases. An individual has to open an account with the issuing bank which gives debit card with a Personal Identification Number (PIN). When he makes a purchase, he enters his PIN on shops PIN pad. When the card is slurped through the electronic terminal, it dials the acquiring bank system - either Master Card or VISA that validates the PIN and finds out from the issuing bank whether to accept or decline the transactions. The customer can never overspend because the system rejects any transaction which exceeds the balance in his account. The bank never faces a default because the amount spent is debited immediately from the customers account. Smart Card: Banks are adding chips to their current magnetic stripe cards to enhance security and offer new service, called Smart Cards. Smart Cards allow thousands of times of information storable on magnetic stripe cards. In addition, these cards are highly secure, more reliable and perform multiple functions. They hold a large amount of personal information, from medical and health history to personal banking and personal preferences. You can avail the following services through E-Banking. Bill payment service You can facilitate payment of electricity and telephone bills, mobile phone, credit card and insurance premium bills as each bank has tie-ups with various utility companies, service providers and insurance companies, across the country. To pay your bills, all you need to do is complete a simple one-time registration for each biller. You can also set up standing instructions online to pay your recurring bills, automatically. Generally, the bank does not charge customers for online bill payment.

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Fund transfer You can transfer any amount from one account to another of the same or any another bank. Customers can send money anywhere in India. Once you login to your account, you need to mention the payees's account number, his bank and the branch. The transfer will take place in a day or so, whereas in a traditional method, it takes about three working days. ICICI Bank says that online bill payment service and fund transfer facility have been their most popular online services. Credit card customers With Internet banking, customers can not only pay their credit card bills online but also get a loan on their cards. If you lose your credit card, you can report lost card online. Railway pass This is something that would interest all the aam janta. Indian Railways has tied up with ICICI bank and you can now make your railway pass for local trains online. The pass will be delivered to you at your doorstep. But the facility is limited to Mumbai, Thane, Nashik, Surat and Pune. Investing through Internet banking You can now open an FD online through funds transfer.Now investors with interlinked demat account and bank account can easily trade in the stock market and the amount will be automatically debited from their respective bank accounts and the shares will be credited in their demat account. Moreover, some banks even give you the facility to purchase mutual funds directly from the online banking system. Nowadays, most leading banks offer both online banking and demat account. However if you have your demat account with independent share brokers, then you need to sign a special form, which will link your two accounts.

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Recharging your prepaid phone Now just top-up your prepaid mobile cards by logging in to Internet banking. By just selecting your operator's name, entering your mobile number and the amount for recharge, your phone is again back in action within few minutes. Shopping With a range of all kind of products, you can shop online and the payment is also made conveniently through your account. You can also buy railway and air tickets through Internet banking. Advantage of Internet banking As per the Internet and Mobile Association of India's report on online banking 2006, "There are many advantages of online banking. It is convenient, it isn't bound by operational timings, there are no geographical barriers and the services can be offered at a miniscule cost." Through Internet banking, you can check your transactions at any time of the day, and as many times as you want to. Where in a traditional method, you get quarterly statements from the bank. If the fund transfer has to be made outstation, where the bank does not have a branch, the bank would demand outstation charges. Whereas with the help of online banking, it will be absolutely free for you. Security Precautions Customers should never share personal information like PIN numbers, passwords etc with anyone, including employees of the bank. It is important that documents that contain confidential information are safeguarded. PIN or password mailers should not be stored, the PIN and/or passwords should be changed immediately and memorised before destroying the mailers. Customers are advised not to provide sensitive account-related information over unsecured emails or over the phone. Take simple precautions like changing the ATM PIN and online login and transaction passwords on a regular basis. Also ensure that the logged in session is properly signed out.

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7.0 Module VII: E-Security 7.1 7.2 7.3 The Risks in Cyberspace Protection and Recovery Encryption

7.1 Risks of Cyber Space The Internet is a huge place that hosts several millions of people. As all the people are not honest, illegal activity is inevitable. Statistics show that only 10% of computer client is reported and only 2% of the reported client results in with convictions. There are two basic types of criminal activities: The person who tries to understand and learn the various systems and capabilities of any private network. In this case the person has no intentions to do any damage or to steal any resources but tries to observe the system functionality. For example teenagers who tries to enter into a network out of curiosity till they are caught or deducted. The persons who uses the Internet and the Web to benefit themselves by doing illegal activities such as, stealing softwares, information and causing damage to resources. This type of criminal activity raises the concern for network security. A large system like Internet has many holes and crevices in which a determined person can easily find the way to get into any private network. There are many terms used to signify the computer criminals. Type of Computer Criminals Hacker-is a person who has good knowledge about computers and tries to open the data packets and steal the information transmitted through the Internet. Cracker-is someone who specifically breaks into computer systems by bypassing or by guessing login passwords. These persons enter into the network as authenticated users and can cause any harm to the system. Phreaks-are persons who hack phone systems. These people specifically try to scam long distance phone-time for them to control phone switch capability or to hack company automated EBX systems to get free voice-mail accounts or to raid companies existing voice-mail messages.

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Phracker-is the combination of freak and cracker. A phracker breaks into phone systems and computer systems and specializes in total network destruction. Another major issue in the Internet security is misrepresentation and fraud. One of the reasons of misrepresentation is that on the net it is easy to appear as anyone or anything without the actual presence. For example, shops site displaying goods, which the dealer may not have them physically. But at the same time, creating a scam site is not as easy as it seems to be, because one must host pages somewhere, which makes the provider responsible for the content. For this reason, most Web site providers examines sites and have access to the information that is been provided. With the rapid growth in use of Internet, in future the number of fraud cases in which perpetrators create their own provider site will probably increase. This is possible specially, in case of offshore servers where laws are more favorable to the criminal and enforcement will be very difficult. For this reason, it is increasingly important for Web users to protect themselves. 7.2 Protection & Recovery: Security Schemes Digital Signature Data is electronically signed by applying the originators private key to the data. To increase the speed of the process, the private key is applied to a shorter form of the data, called a hash or message digest, rather than to the entire set of data. The resulting digital signature can be stored or transmitted along with the data. The signature can be verified by any party using the public key of the signer. This feature is very useful, for example, when distributing signed copies of virus-free .software. Any recipient can verify that the program re-mains virus-free. If the signature verifies properly, then the verifier has confidence that the data was not modified after 1:Jeing signed and that the owner of the public key was the signer. Digital signatures ensure authentication in the following way. In order to digitally sign a document, a user combines her private key and the document and performs a computation on the composite (key+docurnent) in order to generate a unique number called the digital signature. For example, when an electronic document, such as an order form with a credit card number, is run through the digital signature process, the output is a unique fingerprint of the document. This fingerprint is attached to the original message and further encrypted with the signers private key. If a user is communicating with her bank, she sends the result of the second encryption to her bank. The bank then decrypts the document using her public key, and checks to see if the enclosed message has been tampered with by a third party. To verify the signature, the bank performs a computation involving the original document, the purported digital

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signature, and the customers public key. If the results of the computation generate a matching fingerprint of the document, the digital signature is verified as genuine; otherwise, the signature may be fraudulent or the message altered. Digital signatures, variations of which are being explored by several companies, are the basis for secure commerce. A digital signature provides a way to associate the message with the sender, and is the cyberspace equivalent of signing for purchases. In this way, consumers can use credit card accounts over the Internet. Digital Certificates Authentication is further strengthened by the use of digital certificates. Before two parties, Bob and Alice, use public-key encryption to conduct business, each wants to be sure that the other party is authenticated. Before Bob accepts a message with Alices digital signature, he wants to be sure that the public key belongs to Alice and not to someone masquerading as Alice on an open network. One way to be sure that the public key belongs to Alice is to receive it over a secure channel directly from Alice. However, in most circumstances this solution is not practical. An alternative to the use of a secure channel is to use a trusted third party to authenticate that the public key belongs to Alice. Such a party is known as a certificate authority (CA). Once Alice has provided proof of her identity, the certificate authority creates a message containing Alices name and her public key. This message, known as a certificate, is digitally signed by the certificate authority. It contains owner identification information, as well as a copy of one of the owners public keys. To get the most benefit, the public key of the certificate authority should be known to as many people as possible. Thus by using one public key (that of a CA) as a trusted third- party means of establishing authentication, disparate parties can engage in electronic commerce with a high degree of trust. In many ways, digital certificates are the heart of secure electronic transactions. Through the use of a common third party, digital certificates provide an easy and convenient way to ensure that the participants in an electronic commerce transaction can trust each other. For example, in the credit card industry, Visa provides digital certificates to the card-issuing financial institution, and the institution then provides a digital certificate to the cardholder. A similar process takes place for the merchant. At the time of the transaction, each partys software validates both merchant and cardholder before any information is exchanged. The validation takes place by checking the digital certificates that were both issued by an authorized and trusted third party. In short, digital certificates ensure that two computers talking to each other may successfully conduct electronic commerce.

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Firewall A firewall is simply a program or hardware device that filters the information coming through the Internet connection into your private network or computer system. If an incoming packet of information is flagged by the filters, it is not allowed through. Lets say that you work at a company with 500 employees. The company will therefore have hundreds of computers that all have network cards connecting them together. In addition, the company will have one or more connections to the Internet through something like T1 or T3 lines. Without a firewall in place, all of those hundreds of computers are directly accessible to anyone on the Internet. A person who knows what he or she is doing can probe those computers, try to make FTP connections to them, try to make telnet connections to them and so on. If one employee makes a mistake and leaves a security hole, hackers can get to the machine and exploit the hole. With a firewall in place, the landscape is much different. A company will place a firewall at every connection to the Internet (for example, at every T1 line coming into the company). The firewall can implement security rules. For example, one of the security rules inside the company might be: Out of the 500 computers inside this company, only one of them is permitted to receive public FTP traffic. Allow FTP connections only to that one computer and prevent them on all others. A company can set up rules like this for FTP servers, Web servers, Telnet servers and so on. In addition, the company can control how employees connect to Web sites, whether files are allowed to leave the company over the network and so on. A firewall gives a company tremendous control over how people use the network. Firewalls use one or more of three methods to control traffic flowing in and out of the network: Packet filtering - Packets (small chunks of data) are analyzed against a set of filters. Packets that make it through the filters are sent to the requesting system and all others are discarded. Proxy service - Information from the Internet is retrieved by the firewall and then sent to the requesting system and vice versa. Stateful inspection - A newer method that doesnt examine the contents of each packet but instead compares certain key parts of the packet to a database of trusted information. Information travelling from inside the firewall to the outside is monitored for specific defining characteristics, then incoming information is compared to these characteristics. If the comparison yields a reasonable match, the information is allowed through. Otherwise it is discarded

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Creating a Secure System Its a known saying Prevention is the best medicine and this implies equally well to compute security. The first step is to keep the security of your data files such that only the right people can see them. This is especially crucial for any of the following types of data and files. User passwords Billing files System and user logs Credit card information Trusted remote system information Compiler Administration tools User passwords and usage logs should be kept secure to keep pirate from looking at those files to figure out how to gain further access to your system. Keeping your password files shadowed or hidden keeps pirates from remotely acquiring your file and then running password cracking programs on the file in their own time. Finally, be sure to protect administration tools as well as compiler. General users to your system should not have access to these tools because, if they fall into wrong hands, the tools can be used to create programs that aid the pirate in greasing security. Storing Secure Information The most insure part of the Internet is not the Net itself but the source and destination of users and computers on the net. As the user of the system, you should know the place and the method to store your data. When you are connected to the network your personal system is vulnerable. Because of the nature slip type connectivity and TCP/IP networks, someone else could be probing your system while you are working. Decrypted data residing on your hard disk may be available to outside for snooping. As server and browser security increases almost pirates will be driven to breaking into the system at the source or at the destination. This information of-course applies equally to the both the user and the storeowner. Storeowners must ensure that product information database is secure. Again store owners should ensure

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that they encrypt archived transactions, as well as transactions in the process of being fulfilled. If a business can afford only lesser security then the best you can do is keep permissions of files hidden from pirates. One of the best security measures that you can take for physically stored data is to have hardware password protection. Many commercial products provide this facility and often work well to keep the data secure. Another security measure is to delete the not required data or information. Simply deleting the information is not enough. Pirates can easily undelete previously deleted information. They can even unformatted a formatted disk after securely deleting file defrayment your drive using any popular disk utility. Such program ensures that the original structure of the disk is recognized leaving no recoverable data. The best solution is to use programs like the Defense Departments recommended secure delete program. Such programs are available in software archives throughout the Internet. Before marking the file as deleted, such programs first write repeating sequences of bits to each bit within the file. This ensures that magnetic particles are mixed several times so that traces of data are not readable. Another type of pirating is also done by using, the electromagnetic emissions that come from the monitors. In the early age of computing, programmers could debug programs by turning on a radio and placing it near the computer. The internal clock speed of the computer would oscillate like the radio stations. So they could hear the programming sequence running on the computer. The programmers soon learn how to interpret the different sound frequencies to determine what was happening in their program. A type of technology and research called TEMPEST is available that can reverse this electromagnetic radiation into a reasonable reproduction of the original information. The degree of security for computer connected Into Internet, depends upon the requirements and cost. Every one should take the basic measures of creating secure passwords, not leaving printouts laying around, and keeping hard Yare secure. One should encrypt sensitive data that sent over the Internet. The basic measures should be enough to cover the average security standards for the company. But monitor the system in, regular intervals. If security breaches are encounter, more sophisticated security measures should be implemented. Particularly, the companies are vulnerable those are involved in national security or those that have such companies as clients. 7.3 Encryption Encryption is a technique for hiding data. The encrypted data can be read only by those users for whom it is intended. Nowadays various encryption techniques are available.

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One of the available techniques commonly used for encryption is Public Key. In Public Key encryption system, RSA Data Security of Redwood City offers the most popular and commercially available algorithm. In a Public Key encryption system each user has two keys-public key and private key. The encryption and decryption algorithms are designed in a way so that only the private key can decrypt data that is encrypted by the public key. And the public key can decrypt data, encrypted by the private key. Therefore, one can broadcast the public key to all users. Computer encryption is based on the science of cryptography, which has been used throughout history. Before the digital age, the biggest users of cryptography were governments, particularly for military purposes. Most computer encryption systems belong in one of two categories. Broadly speaking, there are two types of encryption methods: Secret-key encryption Public-key encryption

key for both encryption by the transmitter and decryption by the receiver. Secret key encryption works in the following way: Anne wishes to send a purchase order (PO) to Bob in such a way that only Bob can read it. Anne encrypts the PO (the plaintext) with an encryption key and sends the encrypted PO (the cipher text) to Bob. Encryption scrambles the message, rendering it unreadable to anyone but the intended recipient. Bob decrypts the cipher text with the decryption key and reads the PO. Note that in secret-key encryption, the encryption key and decryption key are the same (see Fig.). The transmitter uses a cryptographic secret

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key to encrypt the message, and the recipient must use the same key to decipher or decrypt it. A widely adopted implementation of secret-key encryption is data encryption standard (DES). Although secret-key encryption is useful in many cases, it has significant limitations. All parties must know and trust each other completely, and have in their possession a protected copy of the key. If the transmitter and receiver are in separate sites, they must trust not being overheard during face-to-face meetings or over a public messaging system (a phone system, a postal service) when the secret key is being exchanged. Anyone who over-hears or intercepts the key in transit can later use that key to read all encrypted messages.

Since shared keys must be securely distributed to each communicating party, secret key encryption suffers from the problem of key distribution-generation, transmission, and storage of keys. Secure key distribution is cumbersome in large networks and does not scale well to a business environment where a company deals with thousands of online customers. Further, secret-key encryption is impractical for exchanging messages with a large group of previously unknown parties over a public network. For instance, in order for a merchant to conduct transactions securely with Internet subscribers, each consumer would need a distinct secret key as-signed by the merchant and transmitted over a separate secure channel such as a telephone, adding to the overall cost. Hence, given the difficulty of providing secure key management, it is hard to see secret-key encryption becoming a dominant player in electronic commerce. If secret encryption cannot ensure safe electronic commerce, what can? The solution to widespread open network security is a newer, more sophisticated form of encryption, first developed in the 1970s, known as public-key encryption. Public-Key Encryption

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Public-key encryption, also known as asymmetric encryption, uses two keys: one key to encrypt the message and a different key to decrypt the message. The two keys are mathematically related so that data encrypted with one key only be decrypted using the other. Unlike secret-key encryption, which uses a single key shared by two (or more) parties, public-key encryption uses a pair of keys for each party. One of the two keys is public and the other is private. The public key can be made known to other parties; the private key must be kept confidential and must be known only to its owner. Both keys, however, need to be protected against modification. The best known public-key encryption algorithm is RSA (named after its inventors Rivest, Shamir, and Adleman). In the RSA method, each participant creates two unique keys, a public key, which is published in a sort of public directory, and a private key, which is kept secret. The two keys work together; whatever data one of the keys locks, only the other can unlock. For example, if an individual wants to send a snoop-proof email message to a friend, she simply looks up his public key and uses that key to en-crypt her text. When the friend receives the e-mail, he uses his private key to convert the encrypted message on his computer screen back to the senders original message in clear text. Since only the bona fide author of an encrypted message has knowledge of the private key, a successful decryption using the corresponding public key verifies the identity of the author and ensures message integrity. Even if a would-be criminal intercepts the message on its way to the intended recipient, that criminal has no way of deciphering the message without the private key. The computer handles the hard work of manipulating the large numbers used in the math of encrypting and decrypting messages. Table compares secret- and public key systems. Both types of systems offer advantages and disadvantages. Often, the two are combined to form a hybrid system to exploit the strengths of each method. To determine which type of encryption best meets its needs, an organization first has to identify its security requirements and operating environment. Public-key encryption is particularly useful when the parties wishing to communicate cannot rely on each other or do not share a common key. This is often the case in online commerce. Another prominent public key method being used in online commerce today is called Digital Signatures

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Digital Signature Digital signatures are used for sending authentication. This also means that the originator cannot falsely deny having signed the data. In addition, a digital signature enables the computer to notarize the message, ensuring the recipient that the message has not been forged transit. Let us consider the following scenario of a customer, interacting with a merchant, Online mart. When the customer orders something from Online mart, he uses Online marts public key to encrypt her confidential information. Online Mart then uses its private key to decrypt the message (only a private key can unlock a document deciphered with a public key); thus the customer knows that only Online Mart received that data. To ensure further security, the customer can enclose a digital signature, encrypted with her own private key, which Online Mart could decrypt with the customers public key and know that only the particular customer could have sent it. In the other direction Online mart would send confidential information to the customer using her public key, and only she can decrypt it using her private key. This shows how digital signature works in combination with public key encryption to ensure authentication and privacy.

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8.0 Module VIII: Legal and Ethical Issues 8.1 8.2 8.3 8.4 8.5 The Major Threats Taxation Issues Legal Disputes Indian IT Act and Right to Information Act Cyber Laws: A Global Perspective

LEGAL ASPECTS OF E- COMMERCE 8.1 Major Threat :Legal issues The world is used to conducting business and commerce on signed paper documents. Two millennia of commerce has been based on the written document with its value authorized by the signature of a duly authorized officer. The current legal practice has paper documents and signatures affixed thereon as its foundation. Electronic documents and messages, without the familiar signatures and marks, have changes the scene. However, trade still wants to be assured that the electronic world is safe. The EC system must, therefore, offer at least the same level of reliability as that which obtains in the paper world notwithstanding the significant difference between the concepts embodied in electronic messages and paper documents. It is well known that frauds do take place in the traditional paper based commercial transaction. Signatures can be forged, paper document can be tampered with, and even the most secure marks, impression, emblems and seals can be forging. But then these are known, and trade as well as the legal community knows how to deal with these problems. Companies set aside funds to take care of losses due to such frauds. For example, credit-cards companies do know that a very small percentage of transactions is fraudulent in nature. The world is comfortable with these problems, since they have been there for as long as we have been trading. The EC world, on the other hand, exposes us to issues, which were hitherto unknown, since they are directly the outcome of creating documents electronically, transmitting them over world wide computer communication networks. Trading partners exchange documents electronically. They need to convince themselves that such documents are authentic when received over networks, and that their authentication can be established in case of dispute. Transactions may be electronic, but the key

concept of admissibility of evidence and evidential value of electronic documents, which are central to the law, remain the same. There must be a way to prove that a message existed, that it was sent, was

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received, was not changed between the sending and receiving, and that it could not be read and interpreted by any third party intercepting or deliberately receiving it. The security of an electronic message, legal requirement, thus gets directly linked to the technical methods for security of computers and networks. From the legal angle, there is a further complication because the electronic message is independent of the actual medium used for storage transmission. The message can be stored on a floppy, a magnetic disk, or an optical disk. Likewise, it may be transmitted over a Local Area Network, a Wide Area Network, a private Value Added Network or the Internet. The physical medium could be coaxial cable, radio link, optical fiber or a satellite communication channel. The legal issues of EC have generated tremendous interest among technologists, traders and legal experts. Many of the early EDI experiments, and even production systems went into operation without any legal interchange agreement between trading partners, between VANs and their customers. No laws for EC existed; in fact they are still in the making. In India, too the Indian Customs EDI system (ICES) Project got off the ground in 1995 without any EC/EDI law in existence, or even a proper interchange agreement. EDI interchange Agreement It is a known fact that a certain discipline is required in the conduct of commerce in the paper world. Simple activities such as preparation of invoices, drawing up commercial contracts, signing, despatch, receipts etc. have to follow certain protocols agreed to by trading partners. These may be formal or in formal. In addition, acceptable rules of conduct are also necessary to achieve the kind of discipline required for smooth and effective trade and commerce. In the EDI world of electronic documents, this kind of discipline has been created through a set of rules that have developed in the form of interchange agreements within a number of user groups, national organization, and regions. At the international level, the UN has adopted the Model Interchange Agreement for the International Commercial Use of Electronic Data Interchange, which applies to the interchange of data and not to the underlying commercial contracts between the parties. It addresses the need for uniformity of agreement so that there are no barriers to international trade on account of different solutions for various problems being adopted by countries. The UN has recommended that the member countries should take into account the terms and provisions of the Model Interchange

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Agreement when framing their own laws on EC. An interchange agreement may be made between trading partners. It establishes the rules they will adopt for using EDII ED transaction. It establishes the rules they will adopt for using EDI/EC transactions. It details the individual roles and legal responsibilities of trading partners for transmitting, receiving, and storing electronic messages. The signing of an interchange agreement signifies that the parties intend to be bound by it, and that they desire to operate within a legal framework. This can help reduce legal uncertainty in the electronic environment. Many of the conventions and agreements relating to international trade do not anticipate the use of EDIIEC. Many national laws, as noted above, also introduce uncertainty regarding the legal validity of electronic document. There are still very few national and international judgments ruling on the validity of electronic documents, messages or signatures. It is precisely in this kind of a scenario where clear legal rules and principles are absent, that an interchange agreement provides trading partners with readily available solutions the EDI/ EC relationship between them. It provides a strong legal framework for ensuring that electronic documents will have a legal binding effect, subject to national laws and regulations. The issues, which were addressed by the working party, which prepared this model Interchange Agreement, are as follows: 1. Selection of EDI messages, standards and the methods of communication. 2. Responsibilities for ensuring that the equipment, software and services are operated and maintained effectively; 3. Procedures for making any systems changes which may impair the ability of the trading partners to communicate. . 4. Security procedures and services; 5. The points at which EDI messages have legal effect; 6. The roles and contracts of any third-party service providers; 7. Procedures for dealing with technical errors; 8. The need (if any) for confidentiality;

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9. Liabilities in the event of any delay or failure to meet agreed EDI communications requirement; 10. The laws governing the interchange of EDI messages and the arrangements of the parties. 11. Methods for resolving any possible disputes. involved in international trade. Trading partners can feel confident that it addresses the recognised legal issues arising from commercial use of EDI in international trade, and provides a strong legal and practical framework for considering and recording the necessary business decisions. 8.2 Taxation Issues Currently, under the Internet Taxation Freedom Act (ITFA), passed in 1988 there is a 3-year moratorium on federal and state taxation imposed on internet transactions. The moratorium began on October 21, 1998 and remains in effect until October 21, 2001. ITFAs purpose is to halt the rush by states to tax transactions occurring on the internet until Congress has had the opportunity to study the issue and make recommendations. Congress realized that the internet needed time to grow as a viable medium for commerce, without being subjected to taxing regimes imposed by the states. Congress noted that the internet was inherently susceptible to multiply and discriminatory taxation in ways that traditional commerce was not. Congress was concerned that because internet transactions involved a number of computers and routers, routing transactions throughout the country and even throughout the world, potentially dozens of jurisdictions could attempt to tax a single transaction. Thus, ITFA would protect internet business from being taxed in complicated and unexpected ways by remote jurisdictions. Discriminatory Taxes A discriminatory tax traditionally involved a tax that favored local commerce over interstate commerce, but the definition under ITFA has been broadened to include the coverage of the tax, its application or a differential tax rate. In other words, if an ecommerce transaction is subject to a tax that is any different from a tax imposed on similar property, goods or services through other means, then the tax is discriminatory. Example: If the purchase of a book over the internet is subject to a tax that is different from purchasing a book in a bookstore, the tax is discriminatory. The same would be true if the taxing authority charged

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a higher rate of tax for ecommerce purchases of books. However, it is permissible to charge a lower rate on an ecommerce transaction. It other works, a taxing jurisdiction may discriminate in favor of ecommerce. Ecommerce conducted by out-of-state vendors do not have an obligation to collect sales taxes if traditional remote sellers, such as mail-order and telephone solicitation vendors do not collect sales taxes. Sales tax cannot be levied on because the purchaser uses ecommerce to access the sellers computer to acquire property, goods or service. Also, states cannot use an agency nexus theory to claim that a purchasers ISP is an in-state agent for the seller. Example: If a purchaser in California uses his computer to connect with a booksellers computer located in Nevada, no state or political subdivision may levy a sales tax, even if the purchaser used a California ISP to connect to the internet. Example: If a Nevada-based seller hosts his website on a California computer and a California resident purchases a book, California cannot claim there is an agency nexus to tax the transaction. In addition, if a remote seller in one state, uses a computer in another state for internet access or online services, there is no agency relationship between the remote seller and the company providing the access or online services. Example: A New Hampshire company, with no physical presence in California, hosts its website with a California ISP, California cannot impose a sales tax on transactions because a California ISP was involved. If books, magazines, newspapers or forms of tangible information are not subject to sales tax, then downloads of that same information cannot be taxed. A tax obligation cannot be imposed on a different entity such as a credit card company, if the vendor selling the product, service or property would be the entity responsible to collect sales tax under conventional commerce. Multiple Taxes Multiple taxes on the same transaction or service either in the same taxing jurisdiction or tow or more taxing jurisdictions are prohibited. There is an exception if the tax is imposed by a state and a local subdivision, such as Californias sales tax and San Francisco Countys add-on sales tax for it Bay Area Rapid Transit. This could occur if a state taxed internet access services as telecommunications services

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and then taxed located telephone services as well. Unless a credit is given to eliminate any doubletaxation, such a tax would violate the prohibition against multiple taxation. Exceptions to ITFA transactions. Vendors who knowingly conduct ecommerce involving obscene or materials that are otherwise harmful to minors cannot rely on ITFA as a defense against taxation. However, the vendor can use ITFA as a defense if he uses credit card verification or procedures to insure he is dealing with persons over age 17. The exception does not apply to internet information and search services such as Yahoo, Lycos or Alta Vista or ISPs that host such websites or telecommunication companies that transmit information over the internet. Bundled software that includes protected ecommerce or internet applications are protected under ITFA, but only in proportion to the ecommerce or internet applications. Taxation of Ecommerce - The Significant Issues Nexus - The Foundation of State and Local Taxation The Interstate Commerce Clause of the U.S. Constitution prevents the states and their political subdivisions from imposing taxes that unduly burden interstate commerce. The key issue is whether the company that is being taxed as sufficient connection (nexus) with the taxing authority. Example: A company that operates in Nevada and does not sell products in California or to California residents cannot be taxed by California. Converse, both California and San Francisco have the right to tax a company physically located in San Francisco, such as a hotel, even though the guests might reside in another state. The problem comes when a business is not physically located in California, but sells to California residents. Under what circumstances may California levy a tax on sales to California residents? In Quill v North Dakota, 504 U.S. 298, 1992, the U.S. Supreme Court held that a remote seller could be required to collect sales taxes only if the seller had the requisite nexus with the buyers state. Quill corporation sold office furniture products through a catalogue. Although it was not physically present in North Dakota and did not have a sales agents in the state, the North Dakota Supreme Court held that by selling its product to North Dakota customers, Quill established an economic presence in North Dakota which created nexus for sales tax purposes.

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The U.S. Supreme Court held otherwise and ruled that a state could impose a requirement that a company collect and remit sales taxes, the company had to have substantial connections (a physical presence) with the state. Under the commerce clause, a mailorder company without a physical location, employees or sales agents in North Dakota could not be compelled to collect sales tax on its sales to North Dakota customers. It is the commerce clauses concept of nexus that prohibits most ecommerce transactions from being taxed. In general, the duty to collect a sales or use tax depends on where the sale is located and whether the buyer is a consumer or a business. Three general rules apply: 1. Retail sales by venders to in-state consumers are subject to sales tax on the purchase, but the vendor has the obligation of collect and remit the tax to the tax agency. 2. Out-of-state vendors making consumer sales are not required to collect and remit sales taxes, unless the vendor has sufficient nexus under the commerce clause with the purchasers state to require collection. 3. If the out-of-state vendor cannot be required to collect the tax, then the consumer is legally obligated to pay a self-assessed tax directly to the taxing agencies on the purchase. This is usually referred to as a use tax, instead of a sales tax, since the consumer is paying a tax for the use of the property. As a practical matter, this is virtually impossible to enforce, hence the emphasis on requiring out-of-state vendors to collect and remit the tax. The absence of nexus in the mail order cases is profoundly greater in the Ecommerce context. Not only do internet companies not have physical presence in the taxing jurisdiction, often then can be located outside the jurisdiction of the U.S. altogether. Even if a transaction can be theoretically taxed, in reality, Ecommerce transactions occur instantaneously and without identity of the sellers or buyers location. Because the sales tax is destination based, unless a state or locality can pinpoint the physical location of the seller and buyer, it is impossible to determine jurisdiction for sales tax purposes. Example: California wants to apply a sales tax to the sale of software to its residents. In order to California to levy the tax, it must determine that the purchase is a California resident and that the seller has sufficient nexus with California to be required to collect and remit the sales tax. Without ascertaining the location of the seller or buyer, California cannot determine whether the purchaser was a California resident and whether the seller had sufficient physical presence in California.

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Note: If the goods or property purchased are tangible, such as an actual book, CD or a shirt, then the traditional notions applicable to mail order taxation could be applied since it could be ascertained where the goods were shipped and where they were delivered. Will Ecommerce Really Erode the Tax Base for States and Localities? Although state and local tax officials express grave concern that the Ecommerce will decimate the ability for states and localities to levy taxes on these transactions, this response might be overblown. Currently, states and localities cannot tax remote sellers anyway, unless they have sufficient nexus with the state. This means that mail order and telephone solicitation commerce by remote sellers is not subject to tax. Unless the Supreme Court drastically alters its reading of the Constitutionss commerce clause, or there is a constitutional amendment allowing taxation of remote sellers, Ecommerce merely continues the trend to avoid taxes by engaging in remote selling without a physical presence. Most services and intangible products are not currently subject to sales taxes anyway. In California, services, such as legal, accounting, and medical costs, are not subject to sales taxes. Neither are food or medicine. Therefore, Ecommerce involving intangible goods or services will not cause an erosion of the tax base. Even if a remote seller is not subject to sales tax rules, a states citizen is supposed to self-assess a use tax which is equal to the sales tax, but the states have been lax in enforcing this requirement. The answer to Ecommerce taxation in particular and remote selling in general, is to require a state or localitys resident to self-assess the tax that should have been collected by the remote seller. There is no prohibition against the use tax; the problem lies in enforcement. Therefore, although Ecommerce prevents states from forcing remote sellers from collecting and remitting sales tax, the ultimate tax liability is not affected since in-state consumers have the legal tax liability to self-assess and pay the tax anyway. Although Ecommerce in rapidly growing, as of 1988, it represents much less than 1% of total consumer spending. Remember that business-to-business sales are subject to use tax payments by in-state businesses, and approximately 80% of current Ecommerce is business-to-business.

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To the extent Ecommerce is merely a substitute for other remote seller transactions, Ecommerce does not affect the tax base since remote sales involving mail order or telephone solicitation are exempt from sales tax under the commerce clause. There is evidence that even if all Ecommerce was subject to sales taxes, the revenue generated to the states and localities would represent about one-tenth of one percent of all sales and use taxes collected. Also, sales and use taxes continue to grow, despite Ecommerce. The Future for Ecommerce Taxation The Commission on Electronic Commerce, created by the ITFA legislation, has not been able to make any headway in the taxation debate, but several members have voice support for Internet taxes, provided the tax is simple to calculate for businesses. This could mean a uniform tax rate agreed to by all the states, or technological advances that would allow businesses to calculate the sales tax simply and without a large investment in time and resources. Unfortunately, the current state and local tax systems, which number close to 7,500 throughout the U.S., are notoriously parochial minded when it comes to defending their jurisdiction. In Texas alone, there are more than 1,300 separate sales tax jurisdictions. These numbers could be significantly increased if states and local jurisdictions were allowed to tax Ecommerce. Small businesses would be buried in costly paperwork attempting to comply with all these rules. That is precisely why the commerce clause in the Constitution prohibits taxes and is an undue burden on interstate commerce. 8.3 Legal Disputes :Legal Issues for Internet Commerce Internet commerce raises legal issues through the provision of the following services: Online marketing Online retailing ordering of products and services Financial services such as banking and trading in securities. Exchange of electronic messages and documents

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EDI, electronic filing, remote employee access, electronic transactions. Trade and commerce over the Internet give rise to several legal issues . Copyright and the Internet Copyright developed in the printed world to protect the economic interests of creative writers. Copyright law protects only the expression of an idea and idea itself. In due course it protects the originality of artists and innovators too. In recent times, however, the subject matter of copyright has further expanded. For example, the Copyright Designs and Patent Act, 1988 in the UK, allows protection of the following subject matter: Original literary, dramatic, musical and artistic works; the typographical arrangement of published editions of literary, dramatic or musical works; sound recordings; broadcasts; cable programs These have been broadly classified into two groups as author works and media works by Hector L. Macqueen. The multimedia capability of websites enables all types of work to be published on the Internet in the sense that copies can be distributed to users/customers. The problems, however, is that unlike a paper copy, this copy can be readily duplicated and distributed further by the recipient. If the material is in the public domain there are no difficulties. But the copyright law applies to the downloaded matter, much the same way it applies to physical copies. Issues Related to Jurisdicary The Internet allows anyone to set up a Website anywhere in the world. Its location could, however, be interpreted to decide the jurisdiction of disputes especially in EC. A Website may accept orders from visitors to the site as part of an Internet store or a shopping mall. For example, amazon.com is a bookstore retailing books. A court law may rule that the location of the Website determines the jurisdiction for that business. This is based on accepted legal practice. Jurisdiction determines which laws would be acceptable. EC on the Internet will grow if the parties doing business know what rules will govern what rules govern their activities. Service Provider liability Many ISPs provide users access to shared websites, Usenet news, E-mail distribution list etc. These facilities can because by their users to upload unlawful, defamatory, copyright or trademarks infringing material. Unlawful material includes banned publications, hate propaganda, pornography and obscene

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material, without ISP having chance to review it. Liability for materials distributed in the Internet may be different for the Website operators, and the ISPs. AN ISP could be held liable for the bulletin boards, and for aiding and abetting the commission of an offence such as the distribution of photography. Similarly, third-party liability for defamation,-web sites, etc: Thus the concerns include libel and defamation, liability for infringement of third-party rights, liability for hosting of unlawful materials. Formation of an Enforceable Online Contract The growth of EC on the Internet depends to a large extent on the confidence of traders in forming legally enforceable contracts online. The key activities associated with the formation of an enforceable contract do take place on the Internet, viz. offer is communicated by the acceptor and acceptance is received by the offer or from the acceptor. An offer can be communicated orally or in writing; and in the EC environment through Email, Eform is valid, much the same way a fax message is. The offer or can display terms and conditions as a legal notice, on his website. Visitor to the site, who choose to proceed further, even after reading the notice may be constructed as accepting the conditions imposed by it. However, the timing of the acceptance offer determines when the contract is formed. In this case the E-mail of acceptance has to reach the offer or who may say that the contract will be legal only after its receipt (in his notice placed on the Website). Legal issues are manifold. Whether it is EDI over VANs, or EC over the Internet the primary concern of users is the existence, and enforceability of appropriate laws for EC. In case of dispute, electronic document must be acceptable as legal evidence in courts of law. While the problems of acceptance of and confidence in electronic transactions are there, they are not insurmountable. There is sufficient awareness in, and synergy of action among trade, legal and EC technology communities to make EC happen through appropriate developments in their respective areas. ETHICAL, SOCIAL, AND POLITICAL ISSUES IN ECOMMERCE Ethics, Social and Political issues Defining the rights of people to express their ideas and the property rights of copyright owners are just two of many ethical, social, and political issues raised by the rapid evolution of e-commerce.

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The ethical, social, and political issues raised in e-commerce, provide a framework for organizing the issues, and make recommendations for managers who are given the responsibility of operating ecommerce companies within commonly accepted standards of appropriateness. Understanding Ethical, Social, And Political Issues in E-Commerce Internet and its use in e-commerce have raised pervasive ethical, social and political issues on a scale unprecedented for computer technology. We live in an information society, where power and wealth increasingly depend on information and knowledge as central assets. Controversies over information are often in fact disagreements over power, wealth, influence, and other things thought to be valuable. Like other technologies such as steam, electricity, telephones, and television, the Internet and ecommerce can be used to achieve social progress, and for the most part, this has occurred. However, the same technologies can be used to commit crimes, despoil the environment, and threaten cherished social values. Before automobiles, there was very little interstate crime and very little federal jurisdiction over crime. Likewise with the Internet: Before the Internet, there was very little cyber crime. Many business firms and individuals are benefiting from the commercial development of the Internet, but this development also exacts a price from individuals, organizations, and societies. These costs and benefits must be carefully considered by those seeking to make ethical and socially responsible decisions in this new environment. The major ethical, social, and political issues that have developed around ecommerce over the past seven to eight years can be loosely categorized into four major dimensions: information rights, property rights, governance, and public safety and welfare. Some of the ethical, social, and political issues raised in each of these areas include the following: Information rights: What rights to their own personal information do individuals have in a public marketplace, or in their private homes, when Internet technology make information collection so pervasive and efficient? What rights do individuals have to access information about business firms and other organizations? Property rights: How can traditional intellectual property rights be enforced in an internet world where perfect copies of protected works can be made and easily distributed worldwide in seconds? Governance: Should the Internet and e-commerce be subject to public laws? And if so, what lawmaking bodies have jurisdiction - state, federal, and/or international?

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Public safety and welfare: What efforts should be undertaken to ensure equitable access to the Internet and ecommerce channels? Should governments be responsible for ensuring that schools and colleges have access to the Internet? Is certain online content and activities - such as pornography and gambling - a threat to public safety and welfare? Should mobile commerce be allowed from moving vehicles? To illustrate, imagine that at any given moment society and individuals are more or less in an ethical equilibrium brought about by a delicate balancing of individuals, social organizations, and political institutions. Individuals know what is expected of them, social organizations such as business firms know their limits, capabilities, and roles and political institutions provide a supportive framework of market regulation, banking and commercial law that provides sanctions against violators. Now, imagine we drop into the middle of this calm setting a powerful new technology such as the Internet and e-commerce. Suddenly individuals, business firms, and political institutions are confronted by new possibilities of behavior. For instance, individuals discover that they can download perfect digital copies of music tracks, something which, under the old technology of CDs, would have been impossible. This can be done, despite the fact that these music tracks still belong as a legal matter to the owners of the copyright - musicians and record label companies. The introduction of the Internet and e-commerce impacts individuals, societies, and political institutions. These impacts can be classified into four moral dimensions: property rights, information rights, governance, and public safety and welfare Then business firms discover that they can make a business out of aggregating these musical tracks - or creating a mechanism for sharing musical trackseven though they do not own them in the traditional sense. The record companies, courts, and Congress were not prepared at first to cope with the onslaught of online digital copying. Courts and legislative bodies will have to make new laws and reach new judgments about who owns digital copies of copyrighted works and under what conditions such works can be shared. It may take years to develop new understandings, laws, and acceptable behavior in just this one area of social impact. In the meantime, as an individual and a manager, you will have to decide what you and your firm should do in legal grey- areas, where there is conflict between ethical principles, but no c1ear-cutural guidelines. How can you make good decisions in this type of situation? Before reviewing the four moral dimensions of e-commerce in greater depth, we will briefly review some basic concepts of ethical reasoning that you can use as a guide to ethical decision making, and

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provide general reasoning principles about social political issues of the Internet that you will face in the future.

8.4 IT Act and Right to Information Act

Privacy and Information Rights The Internet and the Web provide an ideal environment for invading the personal privacy of millions of users on a scale unprecedented in history. Perhaps no other recent issue has raised as much widespread social and political concern as protecting the privacy of over 160 million Web users in the United States alone. The major ethical issues related to ecommerce and privacy includes the following: Under what conditions should we invade the privacy of others? research, or other means? The major social issues related to e-commerce and privacy concern the development of exception of privacy or privacy norms, as well as public attitudes. In what areas of should we as a society encourage people to think they are in private territory as opposed to public view? The major political issues related to ecommerce and privacy concern the development of statutes that govern the relations between record keepers and individuals.

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The Concept of Privacy Privacy is the moral right of individuals to be left alone, free from surveillance or interference from other individuals or organizations, including the state. Privacy is a girder supporting freedom: Without the privacy required to think, write, plan, and associate independently and without fear, social and political freedom is weakened, and perhaps destroyed. Information privacy is a subset of privacy. The right to information privacy includes both the claim that certain information should not be collected at all by governments or business firms, and the claim of individuals to control over personal of whatever information that is collected about them. Individual control over personal information is at the core of the privacy concept. Due process also plays an important role in defining privacy. The best statement of due process in record keeping is given by the Fair Information Practices doctrine developed in the early 1970s and extended to the online privacy debate in the late 1990s (described below). Legal Protections In the United States, Canada, and Germany, rights to privacy are explicitly granted in or can be derived from, founding documents such as constitutions, as well as in specific statutes. In England and the United States, there is also protection of privacy in the common law, a body of court decisions involving torts or personal injuries. For instance, in the United States, four privacy-related torts have been defined in court decisions involving claims of injury to individuals caused by other private parties intrusion on solitude, public disclosure of private facts, publicity placing a person in a false light, and appropriation of a persons name or likeness (mostly concerning celebrities) for a commercial purpose. In the United States, the claim to privacy against government intrusion is protected primarily by the First Amendment guarantees of freedom of speech and association and the Fourth:

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8.5 CYBER LAW, CONTRACTS AND WARRANTIES Cyber law Cyber law is a term used to describe the legal issues related to use of communications technology, particularly cyberspace, i.e. the Internet. It is less a distinct field of law in the way that property or contract are, as it is an intersection of many legal fields, including intellectual property, privacy, freedom of expression, and jurisdiction. In essence, cyber law is an attempt to apply laws designed for the physical world to human activity on the Internet. Jurisdiction and sovereignty Issues of jurisdiction and sovereignty have quickly come to the fore in the era of the Internet. The Internet does not tend to make geographical and jurisdictional boundaries clear, but Internet users remain in physical jurisdictions and are subject to laws independent of their presence on the Internet. As such, a single transaction may involve the laws of at least three jurisdictions: 1) the laws of the state/nation in which the user resides, 2) the laws of the state/nation that apply where the server

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hosting the transaction is located, and 3) the laws of the state/nation which apply to the person or business with whom the transaction takes place. So a user in one of the United States conducting a transaction with another user in Britain through a server in Canada could theoretically be subject to the laws of all three countries as they relate to the transaction at hand. Another major problem of cyber law lies in whether to treat the Internet as if it were physical space (and thus subject to a given jurisdictions laws) or to act as if the Internet is a world unto itself (and therefore free of such restraints). Those who favor the latter view often feel that government should leave the Internet community to self-regulate. John Perry Barlow, for example, has addressed the governments of the world and stated, Where there are real conflicts, where there are wrongs, we will identify them and address them by our means. We are forming our own Social Contract. This governance will arise according to the conditions of our world, not yours. Our world is different (Barlow, A Declaration of the Independence of Cyberspace). A more balanced alternative is the Declaration of Cyber secession: Human beings possess a mind, which they are absolutely free to inhabit with no legal constraints. Human civilization is developing its own (collective) mind. All we want is to be free to inhabit it with no legal constraints. Since you make sure we cannot harm you, you have no ethical right to intrude our lives. So stop intruding!. Other scholars argue for more of a compromise between the two notions, such as Lawrence Lessigs argument that The problem for law is to work out how the norms of the two communities are to apply given that the subject to whom they apply may be in both places at once (Lessig, Code 190).

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9.0 Module IX: M-Commerce & Global EC 9.1 9.2 9.3 9.4 M-commerce in Indian and global perspective Market Place versus Market space Virtual Communities Global EC

Mobile Commerce, also known as M-Commerce or mCommerce, is the ability to conduct commerce using a mobile device, such as a mobile phone, a Personal digital assistant PDA, a smartphone, or other emerging mobile equipment such as dashtop mobile devices. Mobile Commerce has been defined as follows: Advances in e-commerce have resulted in progress towards strategies, requirements and development of e-commerce application. Nearly all the e-commerce applications envisioned so far assume fixed or stationary users with wired infrastructure, such as a browser on PC connected to the internet using phone lines on LAN. Many people do not use a PC outside the office, but keep the mobile phone at their side all the times. Mobile commerce is perfect for this group. M-commerce allows one to reach the consumer directly, not his fax machine, his desk, his secretary or his mailbox, but ones consumer directly, regardless of where he is. M-commerce is the delivery of electronic commerce capabilities directly into the hands, anywhere, via wireless technology and putting a retail outlet in the customers hands anywhere. This can be done with just a mobile phone, a PDA connected to a mobile phone or even a portable PC connected to a mobile phone. M-commerce is also termed as wireless e-commerce. BACKGROUND AND MOTIVATION Electronic commerce has attracted significant attention in the last few years. Advances in ecommerce have resutled in significant progress towards strategies, requirements and development of ecommerce applications. Nearly all the applications envisioned and developed so far assume fixed or stationary users with wired infrastructure, such as browser on a PC connected to the Internet using phone lines or a Local Area Network. A new e-commerce application such as Wireless e-commerce or Mobile e-commerce will benefit one to reach the consumer directly, regardless of where he is. The emergence of M-commerce, a synonym for wireless e-commerce allows one to do the same function that can be done over the internet. This can be done by

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connecting a PDA to a mobile phone, or even a portable PC connected to a mobile phone. Mobile Commerce is perfect for the group who always keep a mobile phone by side all the times. A study from the wireless data and computing service, a division of strategy analytics, reports that the mobile commerce market may rise to $200 billion by 2004. The report predicts that transactions via wireless devices will generate about $14 billion a year.

We are aware that consensus within business and industry of future applications is still in its infancy. However, we are interested in examining those future applications and technologies that will form the next frontier of electronic commerce. To help future applications and to allow designers, developers and researchers to strategize and create mobile commerce applications, a four level integrated framework is proposed.

This framework has four levels: m-commerce applications, user infrastructure, middleware and network infrastructure which simplifies the design and development. By following this framework a single entity is not forced to do everything to build m-commerce systems, rather they can build on the functionalities provided by others. The framework also provides a developer and provider plane to address the different needs and roles of application developers, content providers and service providers.

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Content provider can build its service using applications from multiple application developers and also can aggregate content from other content providers and can supply the aggregated content to a network operator or service provider. Service providers can also act as content aggregators, but are unlikely to act as either an application or content provider due to their focus on the network and service aspects of m-commerce. Wireless carriers can play a very active and important role in the mobile commerce applications and services due to the fact that mobile user is going through their network to perform all mobile commerce transactions. Mobile user is likely to prefer a common bill for voice, data and mobile commerce services.

EMERGING MOBILE COMMERCE APPLICATIONS There are potentially an unlimited number of mobile applications, we attempt to identify several important classes of applications and provide examples within each class.

Mobile Financial Applications [MFA] Mobile financial applications are likely to be one of the most important components of mcommerce. They could involve a variety of applications such as mobile banking and brokerage service, mobile money transfer, and mobile payments as shown in the figure.

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One interesting mobile financial application is micro payment involving small purchases such as vending and other items. A mobile device can communicate with a vending machine using a local wireless network to purchase desired items. Micro-payments can be implemented in a variety of ways. One way is that the user could make a call to a certain number where per minute charges equal the cost of the vending item. This approach ha been used by SONERA, a finish wireless provider, in the famous Coke machine service. In effect it collects money from the users and credits it to the vending providers.

Mobile Advertising Mobile advertising is also a very important class of mobile commerce applications. Using demographic information collected by wireless service providers and information on the current location of mobile users, much targeted advertising can be done. The advertising messages sent to the user can be location-sensitive and can inform a user about various on-going specials (shops, malls and restaurants) in surrounding areas as shown in figure.

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This type of advertising can be performed using Short Messaging Service (SMS) or by using short paging messages to mobile users. The messages can be sent to all users located in a certain area, a user-specific message can be sent independent of the users current location. Since the services need the current location information of a user, a third party may be needed to provide location services. However this may require a sharing of revenues between the network service provider and location service provider. As more wireless bandwidth becomes available, content rich advertising involve audio, pictures and video clips can be produced for individual users with specific needs, interests, and inclinations. It is also possible that direct advertising to users may be performed without much control from the wireless service providers. Mobile Inventory Management (MIM) This class of application involves location tracking of goods, services and even people. The tracking of goods may help service providers in determining the time of delivery to customer, thus improving customer service and obtaining a competitive edge over other business. One very interesting application is rolling inventory-which may involve multiple trucks carrying a large amount of inventory while on move. Whenever a store needs certain goods/items, it can locate a truck (preferably in nearby area) and just-in-time delivery of goods can be performed. The rolling inventory and delivery application can

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reduce the amount of inventory space and cost for both vendors and stores and may reduce the time between when an order is placed and the goods are delivered (shown in figure).

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Location tracking of components can be broken into two components: indoor and outdoor. Indoor tracking can be performed by a chipset (TX/RX) And location information may be transmitted over a satellite or cellular/PCS system to the component supplier where such information is needed.

Product Location and Search (PLS) This class of application includes locating an item in a particular area or location. This is concerned with finding an item with certain specifications and whether it is available in a specified area or not. Potentially, there could be multiple places where such an item or items of similar attributes are located. Currently many people are going to several stores to find an item (certain brand/size of TV, VCR or an automobile) and compare prices and features. Using a mobile device and centralized/distributed database containing information on products, a user should be able to find the exact location of the store where a certain item is located. After that the user can buy online using a browser on his/her mobile devise. In the case of multiple stores/vendors carrying an item desired by a user, they could compete to get customer by real time manipulation of prices or by offering instant discounts. From the technological point of view, a mobile user can send a query message to a centralized location (shown in figure), which in turn can interface several different stores/dealers and decide if the item is available or not.

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Proactive Service Management This class of application is based on collecting pertinent information about current or near future user needs and providing services to users proactively. One such application may involve collecting information about the aging components of an automobile (shown in figure). This would help reduce anxiety levels of owners and improve the general conditions of automobiles on the road leading to the reduced number of traffic jams, accidents and even fatalities. From the technological point of view, automobiles can be equipped with smart sensors that keep track of how much wear and tear a car component has

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gone through. This information can then be transmitted using a radio/microwave/satellite system to a specified service center or other location. Some implications of such applications are privacy, security, reliability and cost of deployment.

9.2 Marketplace vs Market space

The Marketspace What is meant by the term marketspace? Some may have heard the term Marketspace starting as early as the late 1990s by those who let go of conventional marketing and understood a market not restricted geography and location. As has happened in the past, the world is still ongoing a dramatic disruptive change to how business transacts from the internet and its ability to connect almost anyone anywhere in real-time.

There are key differences, advantages, and even disadvantages to those who do not adapt to the new world of Marketspace business. Those who adapt remove themselves from statements like why would I show everyone my prices, our competition will see it, or we only sell our products locally with our direct sales model, have the most to gain as most often their competition will not adapt to this new way of strategic thinking.

Early Adapters of the Marketspace

The idea in market positioning has been, when the organization is first to market they have the best chance of winning the mind of the customer. This rule again has again fallen true with current brands like Dell, Amazon, and Napster. What is known of these brands, other than they are all market leaders in there respective category. Why? Not because any of them produced a better product, nor did they sell a product or service not offered by anyone else. Its that they found a new medium to execute the marketing strategy, the internet, and their competition ignored it. Over an over, several markets are being Amazoned due to the fact that they want to run the organization the way they did 10 or maybe 20 years ago, because that is how we do business. A lot of out of organizations in these markets believed in that same philosophy. For example, the book market: why would someone by a book on the internet, they cant even sample it or better yet; nobody would

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ever purchase an automobile on the internet, you cant even test drive it. Its safe to say when an organization or market lives in the pastlane they are next to be in the unemployment line. The Marketspace has opened the world up to a new information sharing market, where yes, the consumer is actually educated and knows what they want. Start listening, stop selling, and take advantage of this opportunity.

Three steps to get started in The Marketplace

Getting started in the Marketplace does not mean an organization instantly must list all their products online with the best possible e-commerce site, nor must they accept credit card payment for sales of widgets. What an organization must understand is the opportunity the internet brings to their business. If an organization, for example, manufactures large bottling machines, maybe having a web presence stating hey we're out here, and yes we do that, is enough, maybe its not. What an organization must first find out is if customers are looking for their products online, or related products in which they can advertise their products on anothers site. It is almost always true to find information about anything on the web, especially the most obscure businesses. If the business is unique, good, the site will take less effort in keyword research as it is less competitive.

Step 1: Get a Website or make the old site better

The web is constantly evolving; with this so should an organization's website. It can be said that customers used to judge an organizations health by the size or upkeep of their building. Now the same can be said about an organizations website (actually most customers never see an organizations building).

Below are couple basics for a good start to a website in the marketspace:

First: Keep it simple, and clearly explain what the organization does. There should be no question about what the company does. If there is, junk the site or get new content. If it is difficult to explain in under a few sentences what the organization does, the problem is deeper than just marketspace development.

Second: Remove all the excessive flash animation, buttons, music, and images from the existing website, or do not add these components to a new site. All this does is either A.) Frustrate the customer, B.) Ruin basic navigation on the site, C.) Remove chances for the site to be indexed by search engines,or D.) make the site load slower and anger the customer. These things do not mean that an organization cannot have a

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cool looking site, but unless the organization is in the Disco business dont make the site look like a Disco club.

Third: Get the best content. Content is the most important component to any website, it tells the customer what the organization does, and gives search engines a way to match web surfers searches to a site. When writing the content use clear statements with the same keywords that a customer may use to find the organization. This will help search relevance.

Forth: If there are graphics or images, make them relevant to the page and make sure to use tags to describe the pictures if they do not appear in a browser. ]Never place a picture of the organizations building on the site, unless of course it is an impressive building and the company is either in the construction or real-estate business. No exceptions to this. If all the organization has to offer is the building, there are problems. If the building means that much to the ego of the founders of the site again, the organizations has other problems that are not marketspace related. No building pictures! (Except for real-estate and construction) No other exceptions!

Step 2: Begin Positioning the Business in the Marketspace Any business owner, entrepreneur, or sales person must first ask themselves what products, services and topics are related to our business, what do our current customers visit on the web, and where do our prospective customers visit on the web, what are the core interests of our customers and prospects. Once this information has started compiling the organization can begin to relate to other products and services. Remember, relating to competing products or even anothers position in the marketplace is valid in the marketplace, and yes, it is valid in the marketspace. Realize people are looking for your products and services on the web and they need to find you before they can place that order. Hell, a placed advertisement under competitors brands and keywords web Pay-Per-Click advertising is cheap. Even if someone doesnt click them still see the organizations brand name and that helps with awareness. Get in the customers mind, and get their business.

Since information travels so quickly on the web it is important to find related products and sites where an organization can advertise because of the chance for click through, brand awareness, or a sale. Find out where customers and prospects might be visiting and get there before the competition. If the organization

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has partners, trade links between sites, get the most traffic possible, and become known.

Step 3: Keep Looking for Opportunity

The web is growing everyday, look into all options, ask the employees to ask new prospects where they found out about the organization. Get the employees in the organization to understand the importance of the business in the marketspace, listen to their suggestions, and execute a robust marketspace strategy. Overall, complement current marketing strategy, positioning, and communication by integrating with the marketspace.

9.3 Virtual Communities A virtual community is a social network of individuals who interact through specific media, potentially crossing geographical and political boundaries in order to pursue mutual interests or goals. One of the most pervasive types of virtual community include social networking services, which consist of various online communities.

The term virtual community is attributed to the book of the same title by Howard Rheingold, published in 1993. The book, which could be considered a social enquiry, putting the research in the social sciences, discussed his adventures on The WELL and onward into a range of computer-mediated communication and social groups, broadening it to information science. The technologies included Usenet, MUDs (MultiUser Dungeon) and their derivatives MUSHes and MOOs, Internet Relay Chat (IRC), chat rooms and electronic mailing lists; the World Wide Web as we know it today was not yet used by many people. Rheingold pointed out the potential benefits for personal psychological well-being, as well as for society at large, of belonging to such a group.

These virtual communities all encourage interaction, sometimes focusing around a particular interest, or sometimes just to communicate. Quality virtual communities do both. They allow users to interact over a shared passion, whether it be through message boards, chat rooms, social networking sites, or virtual worlds.

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9.4 Global EC In the early days, when the Internet was mainly a tool for government, military, and academic personnel, regulation was barely an issue, outside of the basic requirements for and restrictions on access. Once the World Wide Web came along and the Internet was opened to commercial activity, however, cyberspace became tied to the conflict-ridden world of national and international economic policies and regulations, to the chagrin of many interested parties, among them businesses, industry groups, legislators, governments, and issue advocates.

Regulating the Internet was a contentious issue, coming at a time when the trend throughout much of the world was toward deregulating markets. While many civil libertarians viewed the Internet as a distinctly new medium that should remain free of the hands of government, the reality, according to The Economist, was that "the Internet is neither as different nor as 'naturally' free as wired utopians claim." Along with the Internet's possibilities for democratization and the unleashing of creative and empowering forces came new opportunities for mischief, such as the invasion of privacy and theft, not to mention legal concerns relating to contracts, transactions, and trade. In these areas there were increasing calls for regulation to sort out the various considerations and, in a sense, free the Internet from ambiguity.

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10.0 Module X: The Future 10.1 10.2 10.3 Beyond e commerce Implications of emerging technologies Future of EC

ECommerce has revolutionized the 21st century in a way that few other technologies have. Over the past decade, the phenomenon of eCommerce has developed into a full-blown industry. Once used solely for business-to-business purposes, today nearly everyone has made at least one purchase using an eCommerce platform. ECommerce appeals to the population at large for several key reasons. It is the most convenient way to shop. It doesnt involve lines or long drives. ECommerce typically offers a larger selection than brick and mortar stores. ECommerce offers the ability to shop 24 hours a day Most eCommerce stores offer bigger discounts and savings on their products. Comparison-shopping is simple because of the vast selection. With all of the benefits offered to the typical consumer, it just makes sense that the business of eCommerce will continue to boom. Even more than benefiting the average consumer, eCommerce makes doing business easier and more economical for merchants and retailers. Advancements in technology have provided a fast, cheap way to sell and market products. Because of the mass appeal of the Internet and the enormous visibility, advertising and marketing has become an integral part of the ecommerce business model. ECommerce also offers less overhead, a wider marketing base, and eliminates the need for a physical storefront. Those with the brick and mortar storefront also have ecommerce sites; this is the greatest proof that ecommerce is here to stay it is just easier and much more efficient to find, compare and decide. The greater visibility ecommerce offers will mean that many businesses can expand far beyond their limits of a physical store, but it also means a market at risk of becoming saturated which is why internet marketing is one of the most essential aspects of the eCommerce business model.

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On the surface, the future of eCommerce looks bright. There are benefits for both the retailer and the consumer. In many ways, eCommerce is becoming a self-fulfilling prophecy: as more consumers are drawn to the internet for their shopping needs, more and more retailers begin doing business on the internet, which leads to more consumers. However, there are some major obstacles facing eCommerce in the future. One of the major issues that must be addressed is that of market saturation. In any given niche, there may be millions of similar sites, and only effective marketing can give one site a lead over another. There is also the inability of consumers to view a product in real life, or try it out. This can lead to high return ratios for businesses, and inflated costs for consumers. Finally, many consumers are growing disturbed by the large number of email, spam or other marketing material that they begin receiving after making a purchase. These issues may eventually lead to significant changes in the ecommerce model. However, have no doubt that technology and the market will respond to address these issues to further improve the shopping experience. Just consider a recent article we published on Augmented Reality and you will see that the inexorable march of technology continues to break down barriers. Can you imagine being able to try on for size online? Can you imagine how many items you can try on using Augmented Reality? Still other naysayers will argue that shopping in the real world is still a social necessity. All I can say is maybe to some extent. Just consider the social networks like Twitter and Facebook. The web is socializing. Search around and you will find numerous groups of folks exchanging their ideas on products and services. Experts predict a promising and glorious future of ecommerce in the 21st century. In the foreseeable future ecommerce will further confirm itself a major tool of sale. Successful ecommerce will become a notion absolutely inseparable from the web, because e-shopping is becoming more and more popular and natural. At the same time severe rivalry in the sphere of ecommerce services will intensify their development. Thus prevailing future trends of ecommerce will be the growth of Internet sales and evolution. Each year number of ecommerce deals grows enormously. Sales volumes of on-line stores are more than comparable with those of brick-and-mortar ones. And the tendency will continue, because a lot of people are imprisoned by work and household duties, while Internet saves a lot of time and gives opportunity to choose goods at the best prices. Present-day Internet sales boom is the foundation for magnificent ecommerce future.

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The quantity to quality tendency of ecommerce is also becoming more and more obvious, as the Internet has excluded geographical factor from the sale. So it doesnt matter any more whether your store is situated in New York or London or in a small town. To survive, merchants will have to adapt rapidly to the new conditions. To attract more customers e-store-owners will have not only to increase the number of available services, but to pay more attention to such elements like attractive design, user-friendliness, appealing goods presentation, they will have to opportunely employ modern technologies for their businesses to become parts of ecommerce future. Of course, those, who acquire e-stores earlier, get better chance for future success and prosperity, though an ecommerce site itself doesnt guarantee you anything. Only an appropriate ecommerce solution in combination with thorough emarketing and advertising can buy you business insurance. 10. 2 Emerging Trends & Technologies in E-commerce manage the growth of a company. Many stores are those that you walk in and buy products, but the changing life style is changing it all. Physical money is slowly being replaced by Electronic money. And this time its on a bigger scale Today, more and more business suppliers are finding that their clients are demanding they offer on-line stores. These clients are not home customers, but other businesses. Online store calls for a responsibility of managing the data and using it in sync with your existing accounting system. If you can meet this demand with a Web store that integrates with your accounting system, then youve just effectively enlisted your customers to pay you to do their own order entry and invoicing. Take these examples into consideration: A large company in California tells their supplier, If we cant place orders online, we will go elsewhere. The supplier adds e-commerce capabilities to their system, and not only keeps its largest customer, but relieves their accounting staff of time-consuming order entry processing. A medical supply company in the North West Territories provides its clients with an online store and cuts data entry costs by $100,000 per year. A Vancouver suppliers sales are up, but his inbound phone calls are down by 40 to 50 percent, reducing staff by one employee because his clients can now find, reprint, and check orders and invoices on-line.

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E-commerce has been around for some time so whats driving this new trend? According to Ipsos Insights, over 72% of all households in North America are now online and want more and better ways to utilize the internet. Public acceptance of on-line shopping has shown 22% growth in 2005. E-commerce is making an even bigger impact on the business-to-business world. IDC, a major supplier of market intelligence to the IT industry, has forecasted that global business-to-business transactions will exceed one trillion dollars in 2008. For this reason, smart businesses are looking to the Web to manage accounts receivable, increase customer service, and reduce the cost of data entry. So how has e-commerce technology changed to meet this new demand? In the early days of the Internet, many companies implemented standalone Web stores that were separate from their accounting system. This meant managing inventory in both locations and hand-keying orders received from their Web store. These Web stores gave customers the ability to place orders online at their convenience, but often the orders were error-ridden because the Web site was out of date or the order was incorrectly re-keyed. The online stores often caused more problems than they solvedand certainly did not show much of an ROI. In response, a new generation of Web stores has hit the market. These solutions are feature-rich, completely customizable, and are fully integrated to the accounting system. These solutions support both business-to-business and business-to-consumer sales. All pricing is managed from the inventory module using the appropriate price list for each client or client type. To change pricing on any item, you simply change it in the inventory module and the new price automatically flows to the Web store. The Web store also writes orders directly into the accounting system so there is no re-keying. And you reap the benefits because your customers do your data entry. In addition, these new Web stores offer many customer self-service options. Accounts receivable and order history is displayed on the Web. Customers can re-order past or existing orders with a single click of their mouse. They can use their credit cards to pay online, tooeither right during order entry or periodically by viewing all their open invoices. The future of ecommerce is bright. Most TV and other traditional media advertising are considered an intrusion. Ecommerce puts the control of when and how you will buy products and services into the hands of the buyer thats pretty powerful stuff all pointing favorably towards ecommerce. eCommerce is nothing new to talk about, however, what has changed, or should I say, evolved, is the way we shop. Yes, the Internet married commerce years back, but their union is finally shaping up.

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Though I have already expressed my thoughts over how social media is getting integrated in the fashion industry and the emergence of personal shopper aided by Internet, if we look at the whole shopping experience online, a few trends seem to be emerging. It was always about how smart is your website, but it is now also about a smart consumer. Basically, like in real life, the online shopping experience also revolves around words deals, bargains, groups, sales and innovations. Innovations Talking about innovations, the latest in news is the British apparel brand FCUK which partnered with YouTube to launch YouTique. Google video hosting in videos to connect with other YouTube videos, linking to an external place is the new thing. YouTique offers users to shop while a stylist talks about what to wear, when. As you click on clothes and accessories worn by each model, you are taken to FCUKs site for more information and purchasing options. Definitely, the limitation here is the fact that the user is still taken outside the video. However, Google TV might change this as well and who knows we might be shopping straight out of videos. Deals and Coupons now available Offline deals and coupons were always there and now have been taken online. Twitters model of offering special deals via its @earlybird account is an outcome of the same. However, even before @earlybird, there have been models like cheaptweet that would find all deals, sales and discounts from the twitter database to let visitors search and save these. 140proof took the same idea and rode on it by providing these deals to Twitter third party apps. Other websites which are known for finding the best deals are fatwallet, deals2buy, dealofday, woot and so on. And if deals do not interest you a lot or if you are a coupon person, you have websites like retailmenot, dealcatcher, upto75 which help you save a lot through coupons. The good thing is that most of these models let you use codes of coupons for online shopping and even print for an offline experience. Group Buying the latest fad Times might have changed but all we are doing is learning from the past. Most of us love shopping in groups, we love to take our friends advice, take them along to help us shop.

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Group buying as a model is similar and simple: Consumers get together to buy a deal and there are websites like SnapDeal, Grabbon, Mydala which offer discounts on products and services. Of course, the deals are as short as a few hours, but can also last longer. Personal Shopper the next big thing When it comes to shopping, another space to lookout for is personal shoppers. Everyone wants their wardrobes to be full of designer labels and their homes done in the latest concepts. Well, that is just what a personal shopper can provide for you. There are two ways to go about it You can find a personal stylist for your home like Personal Shopper or shoes/clothes like Fashion Bombay Or, you can subscribe to websites like Shop It To Me , My Perfect Sale which find the deals from various designers, discounts, in your size and deliver it in your inbox. Sales Now exclusive online Online sample sales are another trend that is doing rounds of internet. Websites like Ideeli, Gilt, Fashion&You not only offer sales but exclusivity as well. There are new sales to catch every day! These models basically work on the three principals of exclusive deals, limited pieces and more potential buyers than products. Of course, we cant forget websites like eBay and Amazon that have already marked their space and established themselves. With the vast world of goods becoming so easily accessible globally, it will be interesting to see how fast Tier 2 and Tier 3 cities in India would be reached out to, and converted into loyal, discounts alert shoppers! 10.4 Future of EC e-commerce has experienced phenomenal growth in the last five years both in terms of the number of participants and the variety and sophistication of features which e-tailers can use to promote their product. Continuing improvements in communications technology and access devices coupled with an ever richer array of software tools which designers can employ to convey their message across the 'net suggest the impact of e-commerce is set to increase unabated for the foreseeable future. The momentum acquired thus

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far is likely to inspire innovative solutions to remaining problems such as security issues and representational difficulties. As intelligent agents become more sophisticated and more widely deployed it would appear that profit through artificially high prices will cease to be feasible. Merchants of near-identical goods and services will need to provide some form of added value to their core purpose in order to differentiate themselves from their competitors and earn a share of the market. For those that can successfully achieve this the potential rewards are enormous. e-commerce promises to liberate business, consumers and workers alike but is set to impact widely on the existing economy forcing traditional businesses to adapt and creating numerous opportunities for new entrants.