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What’s in IT for Me? Internet and communication technologies have revolutionized the way business operates, improving upon tradi- tional methods and even introducing new opportunities and ventures that were simply not possible before. More than just giving organizations another means of conducting transactions, online business provides the ability to develop and maintain customer relationships, supplier relationships, and even employee relationships between and within enterprises.

As future managers and organizational knowledge workers, you need to understand the benefits ebusiness can offer an organization and your career, the challenges that accompany Web technologies and their impact on organizational communication and collaboration. You need to be aware of the strategies organizations can use to deploy ebusiness and the methods of measuring ebusiness success. This chapter will give you this knowledge and help prepare you for success in tomorrow’s electronic global marketplace.

■ W e b 2 . 0 : A d v a n t a g e s o f B u s i n e s s 2 . 0

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W E B 1. 0 : E b u s i n e s s

Ebusiness: Electronic Business Value

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Social Media and Ashton Kutcher

Where celebrities go, fans follow. The truism applies as much in social media as in the real world, David Karp noticed after famous artists began using his blogging ser- vice Tumblr. As a result, encouraging celebrities to set up accounts on the site has become “absolutely part of our road map and our business plan,” Karp says. In fact, he recently hired a full-time employee to help high-profile users design and manage their blogs.

It’s no secret that well-recognized players in a host of fields—from acting to ath- letics, music to politics—are using social media sites to connect with fans and pro- mote their brands. Celebrities used to seek out promotion “in People magazine or Vogue,” says Robert Passikoff, president of Brand Keys, a researcher that tracks the value of celebrity brands. “It’s now become a necessity to have a Facebook page.”

But the benefits go both ways. Sites benefit greatly from the online cavalcade of stars. Oprah Winfrey’s recent debut on microblogging service Twitter sent visits to the site skyrocketing 43 percent over the previous week, according to analytics firm Hitwise. Facebook, Google’s YouTube, Ning, and other Web 2.0 destinations have also seen swarms of activity around the profile pages of their famous members. And like Tumblr, social sites are going out of their way to keep the celebrities happy and coming back.

Obama on MySpace, Facebook, and Twitter

The Obama administration created profile pages on MySpace, Facebook, and Twitter. To accommodate 1600 Pennsylvania Avenue, News Corp.’s MySpace agreed to build ad-free pages and equipped the profile to get automatic updates from the White House’s official blog. In some cases social networks give VIPs a heads-up on changes. Recently, Facebook worked with the handlers of select celebrity members, including CBS news anchor Katie Couric and French President Nicolas Sarkozy, to get feedback on the new design of the site before it was opened to the public. “We don’t have a formalized support program for public figures, but we do offer some support,” says Facebook spokeswoman Brandee Barker.

Some privileged members of Facebook have also been assigned “vanity URLs,” or short, simple, personalized Web addresses such as www.facebook.com/ KatieCouric . Elsewhere the perks of fame are offered up more casually. Twitter co- founder Biz Stone credits high-profile users like actor Ashton Kutcher and basket- ball professional Shaquille O’Neal for bringing attention to the site of 140-character messages but says the company doesn’t reserve any “special resources” for them.

opening case study

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“Sometimes celebrities who love Twitter stop by and say hello,” Stone says. “It’s usually just a quiet tour and a lunchtime chat but it’s really fun for us.”

John Legend Taps Tumblr

In addition to their promotional value, social networking celebrities represent a potential revenue source for these young startups. Tumblr recently helped musician John Legend design a professional-looking blog that matches the look of his promo- tional site, created by Sony Music Entertainment. Tumblr’s Karp says he took that project on at no charge—in part to bring in Legend’s fans but also to explore whether it makes sense to offer similar services at a cost. “For people who want the reach on our network, who want to be able to take advantage of our platform, at some point this does turn into a premium service,” he says.

Ning already collects monthly fees from some of its users, many of whom are celebrities. The site is free for anyone who wants to build their own social network but charges as much as $55 a month to users who prefer to keep their pages clear of ads or who want to collect revenue generated by ads on their pages. Although the service is not exclusive to stars, many of the most successful networks on Ning draw on the fame of their operators, including hip-hop artists 50 Cent and Q-Tip, rock band Good Charlotte, and Ultimate Fighting Championship titleholder BJ Penn. “The next generation of celebrities and social networks is in much richer and deeper collabo- rations [with fans] than what you see today on the more general social networks out there,” says Ning CEO Gina Bianchini.

Many big names in business, including Dell CEO Michael Dell, use professional networking site LinkedIn more as a business tool than to amass legions of followers. Whatever their reasons for being on the site, LinkedIn uses the fact that executives from all of the 500 biggest companies are among its members to encourage other businesspeople to join the site, too.1

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Chapter 3 Ebusiness: Electronic Business Value 90

section 3.1 W E B 1. 0 : E B U S I N E S S

L E A R N I N G O U T C O M E S

3.1 Compare disruptive and sustaining technologies, and explain how the Internet and WWW caused

business disruption.

3.2 Describe Web 1.0 along with ebusiness and its associated advantages.

3.3. Compare the four categories of ebusiness models.

3.4. Describe the six ebusiness tools for connecting and communicating.

3.5 Identify the four challenges associated with ebusiness.

DISRUPTIVE TECHNOLOGIES AND WEB 1.0

Polaroid, founded in 1937, produced the first instant camera in the late 1940s. The Pola- roid camera, whose pictures developed themselves, was one of the most exciting techno- logical advances the photography industry had ever seen. The company eventually went public, becoming one of Wall Street’s most prominent enterprises, with its stock trading above $60 per share in 1997. In 2002, the stock dropped to 8 cents and the company declared bankruptcy.2

How could a company such as Polaroid, which had innovative technology and a captive customer base, go bankrupt? Perhaps company executives failed to use Por- ter’s Five Forces Model to analyze the threat of substitute products or services. If they had, would they have noticed the two threats—one-hour film processing and digital cameras—which eventually stole Polaroid’s market share? Would they have understood that their customers, people who want instant access to their pictures, would be the first to try these alternatives? Could the company have found a way to compete with one- hour film processing and the digital camera to save Polaroid?

Many organizations face the same dilemma as Polaroid—what’s best for the current business might not be what’s best for it in the long term. Some observers of our busi- ness environment have an ominous vision of the future—digital Darwinism. Digital Darwinism implies that organizations that cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction.

Disruptive versus Sustaining Technology

A disruptive technology is a new way of doing things that initially does not meet the needs of existing customers. Disruptive technologies tend to open new markets and destroy old ones. A sustaining technology, on the other hand, produces an improved product customers are eager to buy, such as a faster car or larger hard drive. Sustain- ing technologies tend to provide us with better, faster, and cheaper products in estab- lished markets. Incumbent companies most often lead sustaining technology to market, but they virtually never lead in markets opened by disruptive technologies. Figure 3.1 positions companies expecting future growth from new investments (disruptive tech- nology) and companies expecting future growth from existing investments (sustaining technology).3

Disruptive technologies typically enter the low end of the marketplace and eventu- ally evolve to displace high-end competitors and their reigning technologies. Sony is a perfect example. Sony started as a tiny company that built portable, battery-powered transistor radios. The sound quality was poor, but customers were willing to overlook that for the convenience of portability. With the experience and revenue stream from the portables, Sony improved its technology to produce cheap, low-end transistor amplifiers that were suitable for home use and invested those revenues in improving the technol- ogy further, which produced still-better radios.4

LO 3.1: Compare disruptive and

sustaining technologies, and explain

how the Internet and WWW caused

business disruption.

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The Innovator’s Dilemma, a book by Clayton M. Christensen, discusses how estab- lished companies can take advantage of disruptive technologies without hindering existing relationships with customers, partners, and stakeholders. Xerox, IBM, Sears, and DEC all listened to existing customers, invested aggressively in technology, had their competitive antennae up, and still lost their market-dominant positions. They may have placed too much emphasis on satisfying customers’ current needs, while neglecting new disruptive technology to meet customers’ future needs and thus losing market share. Figure 3.2 highlights several companies that launched new businesses by capitalizing on disruptive technologies.5

The Internet and World Wide Web—The Ultimate Business Disruptors

The Internet is a massive network that connects computers all over the world and allows them to communicate with one another. Computers connected via the Internet can send and receive information including text, graphics, voice, video, and software. Originally

F I G U R E 3.1

Disruptive and Sustaining Technologies

Source: Reprinted by permission of Harvard Business School Press. From The Innovator’s Dilemma, by Clayton Christensen. Boston, MA. Copyright © by the Harvard Business School Publishing Corporation; all rights reserved.

E x

p e

c te

d R

e tu

rn s

o n

N

e w

I n

v e

s tm

e n

ts

Expected Returns on Existing Investments

100

80

60

40

20

10080604020

Dell

Johnson & Johnson

Procter & Gamble

Walmart

Phillips Petroleum General Motors

Sears Home Depot

Cisco

F I G U R E 3.2

Companies That Capitalized on Disruptive Technologies

Source: Reprinted by permission of Harvard Business School Press. From The Innovator’s Dilemma, by Clayton Christensen. Boston, MA. Copyright © by the Harvard Business School Publishing Corporation; all rights reserved.

Company Disruptive Technology

Apple iPod, iPhone, iPad

Charles Schwab Online brokerage

Hewlett-Packard Microprocessor-based computers, ink-jet printers

IBM Minicomputers; personal computers

Intel Low-end microprocessors

Intuit QuickBooks software; TurboTax software; Quicken software

Microsoft Internet-based computing; operating system software; SQL and Access database software

Oracle Database software

Quantum 3.5-inch disks

Sony Transistor-based consumer electronics

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the Internet was essentially an emergency military communications system oper- ated by the U.S. Department of Defense Advanced Research Project Agency (DARPA), which called the network ARPANET. No one foresaw the dramatic impact it would have on both business and personal communications. In time, all U.S. universities that had defense-related funding installed ARPANET computers, forming the first official Inter- net network. As users began to notice the value of electronic communications, the pur- pose of the network started shifting from a military pipeline to a communications tool for scientists.

Millions of corporate, educational, and research networks now connect billions of computer systems and users in more than 200 countries. Internet users are expected to top the 2 billion mark, about one-third of the world’s population.6

Although the Internet was an excellent communication tool for scientists and gov- ernment officials, it was technically challenging for everyday people to operate. This changed with the inventions of the World Wide Web and Web browsers. The World Wide Web (WWW) provides access to Internet information through documents includ- ing text, graphics, audio, and video files that use a special formatting language called HTML. Hypertext markup language (HTML) links documents, allowing users to move from one to another simply by clicking on a hot spot or link. Web browsers, such as Internet Explorer or Mozilla’s Firefox, allow users to access the WWW. Hypertext transport protocol (HTTP) is the Internet protocol Web browsers use to request and dis- play Web pages using universal resource locators. A universal resource locator (URL) is the address of a file or resource on the Web such as www.apple.com . A domain name identifies a URL address and in the previous example apple.com is the domain name.

Notice that the Internet and the World Wide Web are not synonymous. The WWW is just one part of the Internet, and its primary use is to correlate and disseminate informa- tion. The Internet includes the WWW and also other forms of communication systems such as email. Figure 3.3 lists the reasons for the massive growth of the WWW.7

Web 1.0: The Catalyst for Ebusiness

As people began learning about the WWW and the Internet, they understood that it enabled a company to communicate with anyone, anywhere, at anytime, creating a new way to participate in business. The competitive advantages for first movers would be enormous, thus spurring the beginning of the Web 1.0 Internet boom. Web 1.0 is a term to refer to the World Wide Web during its first few years of operation between 1991 and 2003. Ecommerce is the buying and selling of goods and services over the Internet. Ecommerce refers only to online transactions. Ebusiness includes ecommerce along with all activities related to internal and external business operations such as servicing customer accounts, collaborating with partners, and exchanging real-time information. During Web 1.0, entrepreneurs began creating the first forms of ebusiness.

Ebusiness opened up a new marketplace for any company willing to move its busi- ness operations online. A paradigm shift occurs when a new radical form of business enters the market that reshapes the way companies and organizations behave. Ebusi- ness created a paradigm shift, transforming entire industries and changing enterprise- wide business processes that fundamentally rewrote traditional business rules. Deciding not to make the shift to ebusiness proved fatal for many companies (see Figure 3.4 for an overview of industries revamped by the disruption of ebusiness.)8

F I G U R E 3.3

Reasons for Growth of the World Wide Web

The microcomputer revolution made it possible for an average person to own a computer.

Advancements in networking hardware, software, and media made it possible for business computers to be connected to larger networks at a minimal cost.

Browser software such as Microsoft’s Internet Explorer and Netscape Navigator gave computer users an easy-to-use graphical interface to find, download, and display Web pages.

The speed, convenience, and low cost of email have made it an incredibly popular tool for business and personal communications.

Basic Web pages are easy to create and extremely flexible.

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F I G U R E 3.4

Ebusiness Disruption of Traditional Industries

BUSINESS DRIVEN ETHICS AND SECURITY

Did you know you can make a living naming things? Eli Altman has been nam- ing things since he was six years old and has named more than 400 companies and brands while working for A Hundred Monkeys, a branding consulting com- pany. Altman recently noticed an unfamiliar trend in the industry: nonsensical names such as Flickr, Socializr, Zoomr, Rowdii, Yuuguu, and Oooooc. Why are names like this becoming popular?

The reason is “domain squatting” or “cyber squatting,” the practice of buy- ing a domain to profit from a trademarked name. For example, if you wanted to start a business called Drink, chances are a domain squatter has already pur- chased drink.com and is just waiting for you to pay big bucks for the right to buy it. Domain squatting is illegal and outlawed under the 1999 Anticybersquatting Consumer Protection Act.9

Do you agree that domain squatting should be illegal? Why or why not? If you were starting a business and someone were squatting on your domain, what would you do?

Unethical Disruption

APPLY YOUR KNOWLEDGE

Industry Business Changes Due to Technology

Auto AutoTrader.com is the world’s largest used-car marketplace, listing millions of cars from both private owners and dealers. AutoTrader.com actually helps to increase used-car dealer’s busi- ness as it drives millions of qualified leads (potential used-car buyers) to participating automo- tive dealers and private sellers.

Publishing With the Internet, anyone can publish online content. Traditionally, publishers screened many authors and manuscripts and selected those that had the best chances of succeeding. Lulu.com turned this model around by providing self-publishing along with print-on-demand capabilities.

Education and Training Continuing medical education is costly, and just keeping up-to-date with advances often requires taking training courses and traveling to conferences. Now continuing education in many fields is moving online, and by 2016 over 50 percent of doctors will be building their skills through online learning. Companies such as Cisco save millions by moving training to the Internet.

Entertainment The music industry was hit hard by ebusiness, and online music traders such as iTunes average billions of annual downloads. Unable to compete with online music, the majority of record stores closed. The next big entertainment industry to feel the effects of ebusiness will be the multibillion- dollar movie business. Video rental stores are closing their doors as they fail to compete with online streaming and home rental delivery companies such as Netflix.

Financial Services Nearly every public efinance company makes money, with online mortgage service Lending Tree leading the pack. Processing online mortgage applications is over 50 percent cheaper for customers.

Retail Forrester Research predicts ebusiness retail sales will grow at a 10 percent annual growth rate through 2014. It forecasts U.S. online retail sales will be nearly $250 billion, up from $155 billion in 2009. Online retail sales were recently up 11 percent, compared to 2.5 percent for all retail sales.

Travel Travel site Expedia.com is now the biggest leisure-travel agency, with higher profit margins than even American Express. The majority of travel agencies closed as a direct result of ebusiness.

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Chapter 3 Ebusiness: Electronic Business Value 94

ADVANTAGES OF EBUSINESS

Both individuals and organizations have embraced ebusiness to enhance productiv- ity, maximize convenience, and improve communications. Companies today need to deploy a comprehensive ebusiness strategy, and business students need to understand its advantages, outlined in Figure 3.5. Let’s look at each.

Expanding Global Reach

Easy access to real-time information is a primary benefit of ebusiness. Information richness refers to the depth and breadth of details contained in a piece of textual, graphic, audio, or video information. Information reach measures the number of people a firm can communicate with all over the world. Buyers need information richness to make informed purchases, and sellers need information reach to properly market and differ- entiate themselves from the competition.

Ebusinesses operate 24 hours a day, 7 days a week. This availability directly reduces transaction costs, since consumers no longer have to spend a lot of time researching purchases or traveling great distances to make them. The faster delivery cycle for online sales helps strengthen customer relationships, improving customer satisfaction and ulti- mately sales.

A firm’s website can be the focal point of a cost-effective communications and mar- keting strategy. Promoting products online allows the company to precisely target its customers whether they are local or around the globe. A physical location is restricted by size and limited to those customers who can get there, while an online store has a global marketplace with customers and information seekers already waiting in line.

Opening New Markets

Ebusiness is perfect for increasing niche-product sales. Mass customization is the abil- ity of an organization to tailor its products or services to the customers’ specifications. For example, customers can order M&M’s in special colors or with customized sayings such as “Marry Me.” Personalization occurs when a company knows enough about a customer’s likes and dislikes that it can fashion offers more likely to appeal to that per- son, say by tailoring its website to individuals or groups based on profile information, demographics, or prior transactions. Amazon uses personalization to create a unique portal for each of its customers.

Chris Anderson, editor-in-chief of Wired magazine, describes niche-market ebusi- ness strategies as capturing the long tail, referring to the tail of a typical sales curve. This strategy demonstrates how niche products can have viable and profitable business models when selling via ebusiness. In traditional sales models, a store is limited by shelf space when selecting products to sell. For this reason, store owners typically purchase products that will be wanted or needed by masses, and the store is stocked with broad products as there is not room on the shelf for niche products that only a few custom- ers might purchase. Ebusinesses such as Amazon and eBay eliminated the shelf-space dilemma and were able to offer infinite products.

LO 3.2: Describe Web 1.0 along

with ebusiness and its associated

advantages.

F I G U R E 3.5

Ebusiness Advantages

• Expanding global reach • Opening new markets • Reducing costs • Improving operations • Improving effectiveness

Ebusiness

Advantages

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Netflix offers an excellent example of the long tail. Let’s assume that an average Block- buster store maintains 3,000 movies in its inventory, whereas Netflix, without physical shelf limitations, can maintain 100,000 movies in its inventory. Looking at sales data, the majority of Blockbuster’s revenue comes from new releases that are rented daily, whereas older selections are rented only a few times a month and don’t repay the cost of keeping them in stock. Thus Blockbuster’s sales tail ends at title 3,000 (see Figure 3.6 ) However, Netflix, with no physical limitations, can extend its tail beyond 100,000 (and with streaming video perhaps 200,000). By extending its tail, Netflix increases sales, even if a title is rented only a few times.10

Intermediaries are agents, software, or businesses that provide a trading infrastruc- ture to bring buyers and sellers together. The introduction of ebusiness brought about disintermediation, which occurs when a business sells directly to the customer online and cuts out the intermediary (see Figure 3.7 ). This business strategy lets the company shorten the order process and add value with reduced costs or a more responsive and efficient service. The disintermediation of the travel agent occurred as people began to book their own vacations online, often at a cheaper rate. At Lulu.com anyone can pub- lish and sell print-on-demand books, online music, and custom calendars, making the publisher obsolete.11

F I G U R E 3.7

Business Value of Disintermediation

Manufacturer

IBM

Distributor Retailer Customer

Dell

Direct

Dell

Walmart

$1,200

$1,000

$800

The more intermediaries

that are cut from the

distribution chain, the

lower the product price.

When Dell decided to

sell its PCs through

Walmart many were

surprised, because

Dell’s direct-to-customer

sales model was the

competitive advantage

that had kept Dell the

market leader for years.

F I G U R E 3.6

The Long Tail

Source: Reprinted with permission of Chris Anderson.

Products

Long tail

Head

Po pu

la rit

y

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In reintermediation, steps are added to the value chain as new players find ways to add value to the business process. Levi Strauss originally thought it was a good business strategy to limit all online sales to its own website. A few years later, the company real- ized it could gain a far larger market share by allowing all retailers to sell its products directly to customers. As ebusiness matures it has become evident that to serve certain markets in volume, some reintermediation may be desirable. Cybermediation refers to the creation of new kinds of intermediaries that simply could not have existed before the advent of ebusiness, including comparison-shopping sites such as Kelkoo and bank account aggregation services such as Citibank.12

Reducing Costs

Operational benefits of ebusiness include business processes that require less time and human effort or can be eliminated. Compare the cost of sending out 100 direct mail- ings (paper, postage, labor) to the cost of a bulk email campaign. Think about the cost of renting a physical location and operating phone lines versus the cost of maintaining an online site. Switching to an ebusiness model can eliminate many traditional costs asso- ciated with communicating by substituting systems, such as Live Help, that let custom- ers chat live with support or sales staff.

Online air travel reservations cost less than those booked over the telephone. Online ordering also offers the possibility of merging a sales order system with order fulfillment and delivery so customers can check the progress of their orders at all times. Ebusinesses can also inexpensively attract new customers with innovative marketing and retain pres- ent customers with improved service and support.13

One of the most exciting benefits of ebusiness is its low start-up costs. Today, anyone can start an ebusiness with just a website and a great product or service. Even a dog- walking operation can benefit from being an ebusiness.

Improving Operations

Ebusiness has had some of its biggest impacts on customer service. Communication is often faster, more available, and more effective, encouraging customers to learn more about the product. Customers can often help themselves, using the content richness only a website can provide, and they can both shop and pay online without having to leave the house. Companies can also use email, special messages, and private password access to special areas for top customers.

Improving Effectiveness

Just putting up a simple website does not create an ebusiness. Ebusiness websites must create buzz, be innovative, add value, and provide useful information. In short, they must build a sense of community and collaboration.

IT measures of efficiency, such as the amount of traffic on a site, don’t tell the whole story. They do not necessarily indicate large sales volumes, for instance. Many websites with lots of traffic have minimal sales. The best way to measure ebusiness success is to use effectiveness IT metrics, such as the revenue generated by Web traffic, number of new customers acquired by Web traffic, and reductions in customer service calls resulting from Web traffic.

Interactivity measures advertising effectiveness by counting visitor interactions with the target ad, including time spent viewing the ad, number of pages viewed, and num- ber of repeat visits to the advertisement. Interactivity measures are a giant step forward for advertisers, since traditional advertising methods—newspapers, magazines, radio, and television—provide few ways to track effectiveness. Figure 3.8 displays the ebusi- ness marketing initiatives allowing companies to expand their reach while measuring effectiveness.14

The ultimate outcome of any advertisement is a purchase. Organizations use metrics to tie revenue amounts and number of new customers created directly back to the web- sites or banner ads. Through clickstream data they can observe the exact pattern of a consumer’s navigation through a site. Figure 3.9 displays different types of clickstream

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metrics, and Figure 3.10 provides definitions of common metrics based on clickstream data. To interpret such data properly, managers try to benchmark against other com- panies. For instance, consumers seem to visit their preferred websites regularly, even checking back multiple times during a given session.15

EBUSINESS MODELS

A business model is a plan that details how a company creates, delivers, and generates revenues. Some models are quite simple: A company produces a good or service and sells it to customers. If the company is successful, sales exceed costs and the company gener- ates a profit. Other models are less straightforward, and sometimes it’s not immediately clear who makes money and how much. Radio and network television are broadcast free to anyone with a receiver, for instance; advertisers pay the costs of programming.

The majority of online business activities consist of the exchange of products and ser- vices either between businesses or between businesses and consumers. An ebusiness model is a plan that details how a company creates, delivers, and generates revenues

LO 3.3: Compare the four categories

of ebusiness models.

F I G U R E 3.8

Marketing Received Tremendous Benefits from Ebusiness

Marketing via Ebusiness

An associate (affiliate) program allows a business to generate commissions or referral fees when a customer visiting its website clicks on a link to another merchant’s website. For example, if a customer to a company website clicks on a banner ad to another vendor’s web- site, the company will receive a referral fee or commission when the customer performs the desired action, typically making a purchase or completing a form.

A banner ad is a box running across a website that advertises the products and services of another business, usually another ebusiness. The banner generally contains a link to the advertiser’s website. Advertisers can track how often customers click on a banner ad result- ing in a click-through to their website. Often the cost of the banner ad depends on the number of customers who click on the banner ad. Web-based advertising services can track the number of times users click the banner, generating statistics that enable advertisers to judge whether the advertising fees are worth paying. Banner ads are like living, breathing classified ads. Tracking the number of banner ad clicks is an excellent way to understand the effectiveness of the ad on the website.

A click-through is a count of the number of people who visit one site and click on an advertisement that takes them to the site of the advertiser. Tracking effectiveness based on click-throughs guarantees exposure to target ads; however, it does not guarantee that the visitor liked the ad, spent any substantial time viewing the ad, or was satisfied with the information contained in the ad.

A cookie is a small file deposited on a hard drive by a website containing information about customers and their browsing activities. Cookies allow websites to record the comings and goings of customers, usually without their knowledge or consent.

A pop-up ad is a small Web page containing an advertisement that appears outside of the current website loaded in the browser. A pop- under ad is a form of a pop-up ad that users do not see until they close the current Web browser screen.

Viral marketing is a technique that induces websites or users to pass on a marketing message to other websites or users, creating expo- nential growth in the message’s visibility and effect. One example of successful viral marketing is Hotmail, which promotes its service and its own advertisers’ messages in every user’s email notes. Viral marketing encourages users of a product or service supplied by an ebusi- ness to encourage friends to join. Viral marketing is a word-of-mouth type advertising program.

F I G U R E 3.9

Clickstream Data Metrics Types of Clickstream Data Metrics

The number of page views (i.e., the number of times a particular page has been presented to a visitor).

The pattern of websites visited, including most frequent exit page and most frequent prior website.

Length of stay on the website.

Dates and times of visits.

Number of registrations filled out per 100 visitors.

Number of abandoned registrations.

Demographics of registered visitors.

Number of customers with shopping carts.

Number of abandoned shopping carts.

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on the Internet. Ebusiness models fall into one of the four categories: (1) business-to- business, (2) business-to-consumer, (3) consumer-to-business, and (4) consumer-to- consumer (see Figure 3.11 ).

Business-to-Business (B2B)

Business-to-business (B2B) applies to businesses buying from and selling to each other over the Internet. Examples include medical billing service, software sales and licens- ing, and virtual assistant businesses. B2B relationships represent 80 percent of all online business and are more complex with greater security needs than the other types.

Electronic marketplaces, or emarketplaces , are interactive business communities providing a central market where multiple buyers and sellers can engage in ebusiness activities. By tightening and automating the relationship between the two parties, they create structures for conducting commercial exchange, consolidating supply chains, and creating new sales channels.

Business-to-Consumer (B2C)

Business-to-consumer (B2C) applies to any business that sells its products or services directly to consumers online. Carfax offers car buyers detailed histories of used vehicles for a fee. An eshop, sometimes referred to as an estore or etailer, is an online version of

METRICS MEASURING WEBSITE SUCCESS

Website Visit Metrics

Stickiness (visit duration time) The length of time a visitor spends on a website.

Raw visit depth (total Web pages

exposure per session)

The total number of pages a visitor is exposed to during a single visit to a website.

Visit depth (total unique Web pages

exposure per session)

The total number of unique pages a visitor is exposed to during a single visit to a website.

Website Visitor Metrics

Unidentified visitor A visitor is an individual who visits a website. An “unidentified visitor” means that no information about that visitor is available.

Unique visitor A unique visitor is one who can be recognized and counted only once within a given period of time.

Identified visitor An ID is available that allows a user to be tracked across multiple visits to a website.

Website Hit Metrics

Hits When visitors reach a website, their computer sends a request to the site’s computer server to begin displaying pages. Each element of a requested page is recorded by the website’s server log file as a “hit.”

F I G U R E 3.10

Website Metrics

F I G U R E 3.11

Ebusiness Models

Ebusiness Term Definition

Business-to- business (B2B)

Business-to- consumer (B2C)

Consumer-to- business (C2B)

Consumer-to- consumer (C2C)

Applies to businesses buying from and selling to each other over the Internet.

Applies to any business that sells its products or services to consumers over the Internet.

Applies to any consumer that sells a product or service to a business over the Internet.

Applies to sites primarily offering goods and services to assist consumers interacting with each other over the Internet.

Business

Business Consumer

Consumer

B2B

C2B

B2C

C2C

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99Business Driven MIS Module 1

a retail store where customers can shop at any hour. It can be an extension of an existing store such as The Gap or operate only online such as Amazon.com . There are three ways to operate as a B2C: brick-and-mortar, click-and-mortar, and pure play (see Figure 3.12 ).

Consumer-to-Business (C2B)

Consumer-to-business (C2B) applies to any consumer who sells a product or service to a business on the Internet. One example is customers of Priceline.com , who set their own prices for items such as airline tickets or hotel rooms and wait for a seller to decide whether to supply them. The demand for C2B ebusiness will increase over the next few years due to customers’ desire for greater convenience and lower prices.

Consumer-to-Consumer (C2C)

Consumer-to-consumer (C2C) applies to customers offering goods and services to each other on the Internet. A good example of a C2C is an auction where buyers and sellers solicit consecutive bids from each other and prices are determined dynamically. EBay, the Internet’s most successful C2C online auction website, links like-minded buyers and sellers for a small commission. Other types of online auctions include forward auctions where sellers market to many buyers and the highest bid wins, and reverse auctions where buyers select goods and services from the seller with the lowest bid.

Ebusiness Forms and Revenue-Generating Strategies

As more and more companies began jumping on the ebusiness bandwagon new forms of ebusiness began to emerge (see Figure 3.13 ). Many of the new forms of ebusiness went to market without clear strategies on how they were going to generate revenue. Google is an excellent example of an ebusiness that did not figure out a way to generate profits until many years after its launch.16

Google’s primary line of business is its search engine; however, the company does not generate revenue from people using its site to search the Internet. It generates rev- enue from the marketers and advertisers that pay to place their ads on the site. About 200 million times each day, people from all over the world access Google to perform searches. AdWords, a part of the Google site, allows advertisers to bid on common search terms. The advertisers simply enter in the keywords they want to bid on and the maximum amounts they want to pay per click per day. Google then determines a price and a search ranking for those keywords based on how much other advertisers are willing to pay for

F I G U R E 3.12

Forms of Business-to- Consumer Operations

Brick-and-Mortar Business A business that operates in a physical store without an Internet presence. Example: T.J. Maxx

Pure-Play (Virtual) Business

A business that operates on the Internet only without a physical store. Example: Google

Click-and-Mortar Business

A business that operates in a physical store and on the Internet. Example: Barnes & Noble

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the same terms. Pricing for keywords can range from 5 cents to $10 a click. Paid search is the ultimate in targeted advertising because consumers type in exactly what they want. A general search term such as tropical vacation costs less than a more specific term such as Hawaiian vacation. Whoever bids the most for a term appears in a sponsored adver- tisement link either at the top or along the side of the search-results page.17

Ebusinesses must have a revenue model, or a model for making money. For instance, will it accept advertising, or sell subscriptions or licensing rights? Figure 3.14 lists the different benefits and challenges of various ebusiness revenue models.18

F I G U R E 3.13

Ebusiness Forms Form Description Examples

Content providers Generate revenues by provid- ing digital content such as news, music, photos, or videos.

Netflix.com, iTunes.com, CNN.com

Infomediaries Provide specialized information on behalf of producers of goods and services and their potential customers

Edmunds.com, BizRate.com, Bloomberg.com, Zillow.com

Online marketplaces Bring together buyers and sellers of products and services.

Amazon.com, eBay.com, Priceline.com

Portals Operate central website for users to access specialized content and other services.

Google.com, Yahoo.com, MSN.com

Service providers Provide services such as photo sharing, video sharing, online backup and storage.

Flickr.com Mapquest.com YouTube.com

Transaction brokers Process online sales transactions. Etrade.com, Charlesschwab.com, Fidelity.com

F I G U R E 3.14

Ebusiness Revenue Models Ebusiness Revenue Model Benefits Challenges

Advertising fees ■ Well-targeted advertisements can be perceived as value-added content by trading participants.

■ Easy to implement

■ Limited revenue potential ■ Overdone or poorly targeted

advertisements can be disturbing elements on the website.

License fees ■ Creates incentives to do many transactions

■ Customization and back-end integration lead to lock-in of participants.

■ Up-front fee is a barrier to entry for participants.

■ Price differentiation is complicated.

Subscription fees ■ Creates incentives to do transactions

■ Price can be differentiated. ■ Possibility to build additional

revenue from new user groups

■ Fixed fee is a barrier to entry for participants.

Transaction fees ■ Can be directly tied to savings (both process and price savings)

■ Important revenue source when high level of liquidity (transaction volume) is reached

■ If process savings are not completely visible, use of the system is discouraged (incentive to move transactions offline).

■ Transaction fees likely to decrease with time

Value-added

services fees

■ Service offering can be differentiated.

■ Price can be differentiated. ■ Possibility to build additional

revenue from established and new user groups (third parties)

■ Cumbersome process for customers to continually evaluate new services

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101Business Driven MIS Module 1

EBUSINESS TOOLS FOR CONNECTING

AND COMMUNICATING

As firms began to move online, more MIS tools were created to support ebusiness processes and requirements. The tools supporting and driving ebusiness are highlighted in Figure 3.15 and covered below in detail.

Email

Email, short for electronic mail, is the exchange of digital messages over the Internet. No longer do business professionals have to wait for the mail to receive important docu- ments as email single-handedly increased the speed of business by allowing the transfer of documents with the same speed as the telephone. Its chief business advantage is the ability to inform and communicate with many people simultaneously, immediately, and with ease. There are no time or place constraints, and users can check, send, and view emails whenever they require.

An Internet service provider (ISP) is a company that provides access to the Internet for a monthly fee. Major ISPs in the United States include AOL, AT&T, Comcast, Earthlink, and Netzero, as well as thousands of local ISPs including regional telephone companies.

Instant Messaging

Real-time communication occurs when a system updates information at the same rate it receives it. Email was a great advancement over traditional communication methods

LO 3.4: Describe the six

ebusiness tools for connecting

and communicating.

BUSINESS DRIVEN START-UP

Rich Aberman and Bill Clerico found themselves in the difficult position of deciding whether to graduate from college and pursue their dreams of build- ing their own company or heading off to graduate school and entry-level jobs. Aberman choose to head off to law school while Clerico choose an entry-level job as an investment banker. After several months they both decided that it was now or never if they truly wanted to build their dream business as they were both becoming more and more comfortable with their new lifestyles. Obviously, it would become harder and harder to leave their comfortable positions for the uncertainty of being an entrepreneur.

Aberman left law school and Clerico quit his job and the pair cofounded WePay, an online funds management company. WePay allows individuals and groups all over the world to establish an account and collect money in a vari- ety of ways—from paper checks to credit cards—and then use a debit card to spend the money in the account. WePay collects transaction fees ranging from 50 cents to 3 percent of credit card payments. Luckily, their decision paid off and a little over a year after founding the company, Aberman and Clerico had raised nearly $2 million from high-profile Internet investors. WePay boasts sev- eral thousand customers ranging from sports teams to fraternities to groups of roommates managing rent and utilities.19

Have you thought of starting your own business? What are the advantages and challenges associated with building your own business early in your career? Research the Internet and find three examples of highly successful col- lege start-ups. What do you think were the primary reasons the start-ups found success? What are the advantages of starting your own business while you are still in college? What are a few of the challenges you might face if you choose to start your own business today?

Go for It!

APPLY YOUR KNOWLEDGE

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Chapter 3 Ebusiness: Electronic Business Value 102

such as the U.S. mail, but it did not operate in real time. Instant messaging ( IMing ) is a service that enables instant or real-time communication between people. Businesses immediately saw what they could do:

■ Answer simple questions quickly and easily.

■ Resolve questions or problems immediately.

■ Transmit messages as fast as naturally flowing conversation.

■ Easily hold simultaneous IM sessions with multiple people.

■ Eliminate long-distance phone charges.

■ Quickly identifying which employees are at their computers.

Podcasting

Podcasting converts an audio broadcast to a digital music player. Podcasts can increase marketing reach and build customer loyalty. Companies use podcasts as marketing communication channels discussing everything from corporate strategies to detailed product overviews. The senior executive team can share weekly or monthly pod- casts featuring important issues or expert briefings on new technical or marketing developments.

Videoconferencing

A videoconference allows people at two or more locations to interact via two-way video and audio transmissions simultaneously as well as share documents, data, computer displays, and whiteboards. Point-to-point videoconferences connect two people, and multipoint conferences connect more than two people at multiple locations.

Videoconferences can increase productivity because users participate without leav- ing their offices. It can improve communication and relationships, because participants

F I G U R E 3.15

Ebusiness Tools

Content Management

System

Email

Podcasting

Videoconferencing

Instant Messaging

Web Conferencing

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103Business Driven MIS Module 1

see each other’s facial expressions and body language, both important aspects of com- munication that are lost with a basic telephone call or email. It also reduces travel expenses, a big win for firms facing economic challenges. Of course, nothing can replace meeting someone face-to-face and shaking hands, but videoconferencing offers a viable and cost-effective alternative.

Web Conferencing

Web conferencing, or a webinar, blends videoconferencing with document sharing and allows the user to deliver a presentation over the Web to a group of geographically dispersed participants. Regardless of the type of hardware or software the attendees are running, every participant can see what is on anyone else’s screen. Schools use Web con- ferencing tools such as Illuminate Live to deliver lectures to students, and businesses use tools such as WebEx to demonstrate products. Web conferencing is not quite like being there, but professionals can accomplish more sitting at their desks than in an airport waiting to make travel connections.

Content Management Systems

In the fourth century BC Aristotle catalogued the natural world according to a systematic organization, and the ancient library at Alexandria was reportedly organized by subject, connecting like information with like. Today content management systems (CMS) help companies manage the creation, storage, editing, and publication of their website con- tent. CMSs are user-friendly; most include Web-based publishing, search, navigation, and indexing to organize information; and they let users with little or no technical exper- tise make website changes.

A search is typically carried out by entering a keyword or phrase (query) into a text field and clicking a button or a hyperlink. Navigation facilitates movement from one Web page to another. Content management systems play a crucial role in getting site visitors to view more than just the home page. If navigation choices are unclear, visitors may hit the “Back” button on their first (and final) visit to a website. One rule of thumb to remember is that each time a user has to click to find search information, there is a 50 percent chance the user will leave the website instead. A key principle of good website design, therefore, is to keep the number of clicks to a minimum.

Taxonomy is the scientific classification of organisms into groups based on similari- ties of structure or origin. Taxonomies are also used for indexing the content on the web- site into categories and subcategories of topics. For example, car is a subtype of vehicle. Every car is a vehicle, but not every vehicle is a car; some vehicles are vans, buses, and trucks. Taxonomy terms are arranged so that narrower/more specific/“child” terms fall under broader/more generic/“parent” terms. Information architecture is the set of ideas about how all information in a given context should be organized. Many com- panies hire information architects to create their website taxonomies. A well-planned taxonomy ensures search and navigation are easy and user-friendly. If the taxonomy is confusing, the site will soon fail.

THE CHALLENGES OF EBUSINESS

Although the benefits of ebusiness are enticing, developing, deploying, and man- aging ebusiness systems is not always easy. Figure 3.16 lists the challenges facing ebusiness.20

Identifying Limited Market Segments

The main challenge of ebusiness is the lack of growth in some sectors due to product or service limitations. The online food sector has not grown in sales, in part because food products are perishable and consumers prefer to buy them at the supermarket as needed. Other sectors with limited ebusiness appeal include fragile or consumable goods and highly sensitive or confidential businesses such as government agencies.

LO 3.5: Identify the four challenges

associated with ebusiness.

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Managing Consumer Trust

Trust in the ebusiness exchange deserves special attention. The physical separation of buyer and seller, the physical separation of buyer and merchandise, and customer per- ceptions about the risk of doing business online provide unique challenges. Internet marketers must develop a trustworthy relationship to make that initial sale and generate customer loyalty. A few ways to build trust when working online include being accessible and available to communicate in person with your customers; using customers’ testimo- nials that link to your client website or to provide their contact information; accepting legitimate forms of payment such as credit cards.

Ensuring Consumer Protection

An organization that wants to dominate with superior customer service as a competi- tive advantage must not only serve but also protect its customers, guarding them against unsolicited goods and communication, illegal or harmful goods, insufficient informa- tion about goods and suppliers, invasion of privacy and misuse of personal information, and online fraud. System security, however, must not make ebusiness websites inflexible or difficult to use.

Adhering to Taxation Rules

Many believe that U.S. tax policy should provide a level playing field for traditional retail businesses, mail-order companies, and online merchants. Yet the Internet marketplace remains mostly free of traditional forms of sales tax, partly because ecommerce law is vaguely defined and differs from state to state. For now, companies that operate online must obey a patchwork of rules about which customers are subject to sales tax on their purchases and which are not.

section 3.2 W E B 2 . 0 : B U S I N E S S 2 . 0

L E A R N I N G O U T C O M E S

3.6 Explain Web 2.0, and identify its four characteristics.

3.7 Explain how Business 2.0 is helping communities network and collaborate.

3.8 Describe the three Business 2.0 tools for collaborating.

3.9 Explain the three challenges associated with Business 2.0.

3.10 Describe Web 3.0 and the next generation of online business.

F I G U R E 3.16

Challenges Facing Ebusiness Identifying

Limited Market

Segments

Managing

Consumer Trust

Ensuring

Consumer

Protection

Adhering to

Taxation Rules

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105Business Driven MIS Module 1

WEB 2.0: ADVANTAGES OF BUSINESS 2.0

In the mid-1990s the stock market reached an all-time high as companies took advan- tage of ebusiness and Web 1.0, and many believed the Internet was the wave of the future. When new online businesses began failing to meet earning expectations, how- ever, the bubble burst. Some then believed the ebusiness boom was over, but they could not have been more wrong.

Web 2.0 (or Business 2.0) is the next generation of Internet use—a more mature, dis- tinctive communications platform characterized by new qualities such as collaboration, sharing, and free. Business 2.0 encourages user participation and the formation of com- munities that contribute to the content. In Business 2.0, technical skills are no longer required to use and publish information to the World Wide Web, eliminating entry bar- riers for online business.

Traditional companies tended to view technology as a tool required to perform a pro- cess or activity, and employees picked up information by walking through the office or hanging out around the water cooler. Business 2.0 technologies provide a virtual envi- ronment that, for many new employees, is just as vibrant and important as the physical environment. Figure 3.17 highlights the common characteristics of Business 2.0.22

Content Sharing Through Open Sourcing

An open system consists of nonproprietary hardware and software based on publicly known standards that allows third parties to create add-on products to plug into or interoperate with the system. Thousands of hardware devices and software applications created and sold by third-party vendors interoperate with computers, such as iPods, drawing software, and mice.

Source code contains instructions written by a programmer specifying the actions to be performed by computer software. Open source refers to any software whose source code is made available free (not on a fee or licensing basis as in ebusiness) for any third party to review and modify. Business 2.0 is capitalizing on open source software. Mozilla, for example, offers its Firefox Web browser and Thunderbird email software free. Mozilla believes the Internet is a public resource that must remain open and accessible to all; it continuously develops free products by bringing together thousands of dedicated volun- teers from around the world. Mozilla’s Firefox now holds over 20 percent of the browser

LO 3.6: Explain Web 2.0, and identify

its four characteristics.

BUSINESS DRIVEN GLOBALIZATION

Kiva’s mission is to connect people through lending for the sake of alleviating poverty. Kiva is a micro-lending online nonprofit organization that enables individuals to lend directly to entrepreneurs throughout the world. If you want to participate in Kiva you simply browse the website ( www.kiva.org ) and choose an entrepreneur that interests you, make a loan, then track your entrepreneur for the next 6 to 12 months while he or she builds the business and makes the funds to repay the loan. When the loan is up you can relend the money to some- one else who is in need.21

Kiva is an excellent example of blending ethics and information technology. How is Kiva operating differently than traditional nonprofits? What are the risks associated with investing in Kiva? When you invest in Kiva you run three pri- mary risks: entrepreneur risk, local field partner risk, and country risk. Analyze each of these risks for potential unethical issues that might arise when donating to Kiva.

Collaborating for Nonprofits—Kiva

APPLY YOUR KNOWLEDGE

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market and is quickly becoming a threat to Microsoft’s Internet Explorer. How do open source software companies generate revenues? Many people are still awaiting an answer to this very important question.23

User-Contributed Content

Ebusiness was characterized by a few companies or users posting content for the masses. Business 2.0 is characterized by the masses posting content for the masses. User- contributed content ( or user-generated content) is created and updated by many users for many users. Websites such as Flickr, Wikipedia, and YouTube, for example, move control of online media from the hands of leaders to the hands of users. Netflix and Ama- zon both use user-generated content to drive their recommendation tools, and websites such as Yelp use customer reviews to express opinions on products and services. Com- panies are embracing user-generated content to help with everything from marketing to product development and quality assurance.

One of the most popular forms of user-generated content is a reputation system, where buyers post feedback on sellers. EBay buyers voluntarily comment on the qual- ity of service, their satisfaction with the item traded, and promptness of shipping. Sell- ers comment about prompt payment from buyers or respond to comments left by the buyer. Companies ranging from Amazon to restaurants are using reputation systems to improve quality and enhance customer satisfaction.

Collaboration Inside the Organization

A collaboration system is a set of tools that supports the work of teams or groups by facilitating the sharing and flow of information. Business 2.0’s collaborative mind-set generates more information faster from a wider audience. Collective intelligence is collaborating and tapping into the core knowledge of all employees, partners, and cus- tomers. Knowledge can be a real competitive advantage for an organization. The most common form of collective intelligence found inside the organization is knowledge management (KM), which involves capturing, classifying, evaluating, retrieving, and sharing information assets in a way that provides context for effective decisions and actions. The primary objective of knowledge management is to be sure that a company’s knowledge of facts, sources of information, and solutions are readily available to all employees whenever it is needed. A knowledge management system (KMS) sup- ports the capturing, organization, and dissemination of knowledge (i.e., know-how)

F I G U R E 3.17

Characteristics of Business 2.0

Business 2.0 Characteristics

Content Sharing

Through Open Sourcing

Collaboration Inside the

Organization

User- Contributed

Content Collaboration Outside the

Organization

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107Business Driven MIS Module 1

throughout an organization. KMS can distribute an organization’s knowledge base by interconnecting people and digitally gathering their expertise.

A great example of a knowledge worker is a golf caddie. Golf caddies give advice such as, “The rain makes the third hole play 10 yards shorter.” If a golf caddie is good and gives accurate advice it can lead to big tips. Collaborating with other golf caddies can provide bigger tips for all. How can knowledge management make this happen? Caddies could be rewarded for sharing course knowledge by receiving prizes for sharing knowledge. The course manager could compile all of the tips and publish a course notebook for dis- tribution to all caddies. The goal of a knowledge management system is that everyone wins. Here the caddies make bigger tips and golfers improve their play by benefiting from the collaborative experiences of the caddies, and the course owners win as busi- ness increases.

KM has assumed greater urgency in American business over the past few years as millions of baby boomers prepare to retire. When they punch out for the last time, the knowledge they gleaned about their jobs, companies, and industries during their long careers will walk out with them—unless companies take measures to retain their insights.

Explicit and Tacit Knowledge Not all information is valuable. Individuals must determine what information qualifies as intellectual and knowledge-based assets. In general, intellectual and knowledge-based assets fall into one of two categories: explicit or tacit. As a rule, explicit knowledge consists of anything that can be documented, archived, and codified, often with the help of IT. Examples of explicit knowledge are assets such as patents, trademarks, business plans, marketing research, and customer lists. Tacit knowledge is the knowledge contained in people’s heads. The challenge inherent in tacit knowledge is figuring out how to recognize, generate, share, and man- age knowledge that resides in people’s heads. While information technology in the form of email, instant messaging, and related technologies can help facilitate the dissemina- tion of tacit knowledge, identifying it in the first place can be a major obstacle.

Collaboration Outside the Organization

The most common form of collective intelligence found outside the organization is crowdsourcing, which refers to the wisdom of the crowd. The idea that collective intel- ligence is greater than the sum of its individual parts has been around for a long time (see Figure 3.18 ). With Business 2.0 the ability to efficiently tap into its power is emerg- ing. For many years organizations believed that good ideas came from the top. CEOs

F I G U R E 3.18

Crowdsourcing: The Crowd Is Smarter Than the Individual

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collaborated only with the heads of sales and marketing, the quality assurance expert, or the road warrior salesman. The organization chart governed who should work with whom and how far up the chain of command a suggestion or idea would travel. With Buisness 2.0 this belief is being challenged, as firms capitalize on crowdsourcing by opening up a task or problem to a wider group to find better or cheaper results from outside the box.

With Business 2.0, people can be continuously connected, a driving force behind collaboration. Traditional ebusiness communications were limited to face-to-face con- versations and one-way technologies that used asynchronous communications, or communication such as email in which the message and the response do not occur at the same time. Business 2.0 brought synchronous communication, or communications that occur at the same time such as IM or chat. Ask a group of college students when they last spoke to their parents. For most the answer is less than hour ago, as opposed to the traditional response of a few days ago. In business too, continuous connections are now expected in today’s collaborative world.

NETWORKING COMMUNITIES WITH BUSINESS 2.0

Social media refers to websites that rely on user participation and user-contributed content, such as Facebook, YouTube, and Digg. A social network is an application that connects people by matching profile information. Providing individuals with the ability to network is by far one of the greatest advantages of Business 2.0. Social networking is the practice of expanding your business and/or social contacts by constructing a per- sonal network (see Figure 3.19 ). Social networking sites provide two basic functions. The first is the ability to create and maintain a profile that serves as an online identity within the environment. The second is the ability to create connections between other people

LO 3.7: Explain how Business 2.0 is

helping communities network and

collaborate.

BUSINESS DRIVEN INNOVATION

Deciding whether a given site is Web 1.0 or Web 2.0 is not as straightforward as it appears. Websites do not have version numbers and many are dynamic enough to be in “permanent beta testing.” Facebook and MySpace are good Web 2.0 examples, primarily due to their social networking functions and their reliance on user-generated content. Some sites are easy to identify as Web 1.0 in their approach: Craigslist, for example, emulates an email list server and has no public user profiles or dynamic pages. Many other sites are hard to catego- rize. Amazon.com launched in the mid-1990s and has gradually added features over time. The principal content (product descriptions) is not user-created, but much of the site’s value is added by user reviews and ratings. Profiles of users do exist, but social features such as friend links, although present, are not widely adopted.24

Review the following websites and categorize them as Web 1.0, Web 2.0, or both. Be sure to justify your answer with the characteristics that classify the website as 1.0, 2.0, or both. Why would certain types of businesses choose to remain Web 1.0 and not offer collaboration or open source capabilities?

■ www.ebay.com ; www.amazon.com ; www.facebook.com ; www.foursquare. com ; www.paypal.com ; www.vatican.va ; www.twitter.com ; www.irs.gov ; www.google.com ; www.youtube.com.

■ For the following be sure to use your personal websites as references. www.Your college’s website.com ; www.Your Visa Card.com ; www.Your Bank.com

Is It Web 1.0 or Web 2.0?

APPLY YOUR KNOWLEDGE

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109Business Driven MIS Module 1

within the network. Social networking analysis (SNA) maps group contacts (personal and professional) identifying who knows each other and who works together. In a com- pany it can provide a vision of how employees work together. It can also identify key experts with specific knowledge such as how to solve a complicated programming prob- lem or launch a new product.

Business 2.0 simplifies access to information and improves the ability to share it. Instead of spending $1,000 and two days at a conference to meet professional peers, business people can now use social networks such as LinkedIn to meet new contacts for recruiting, prospecting, and identifying experts on a topic. With executive members from all the Fortune 500 companies, LinkedIn has become one of the more useful recruiting tools on the Web.

Social networking sites can be especially useful to employers trying to find job can- didates with unique or highly specialized skill sets that may be harder to locate in larger communities. Many employers also search social networking sites to find “dirt” and character references for potential employees. Keep in mind that what you post on the Internet stays on the Internet.26

Social Tagging

Tags are specific keywords or phrases incorporated into website content for means of classification or taxonomy. An item can have one or more tags associated with it, to allow for multiple browseable paths through the items, and tags can be changed with minimal effort (see Figure 3.20 ). Social tagging describes the collaborative activity of marking shared online content with keywords or tags as a way to organize it for future naviga- tion, filtering, or search. The entire user community is invited to tag, and thus essentially defines, the content. Flickr allows users to upload images and tag them with appropriate keywords. After enough people have done so, the resulting tag collection will identify images correctly and without bias.

Folksonomy is similar to taxonomy except that crowdsourcing determines the tags or keyword-based classification system. Using the collective power of a community to identify and classify content significantly lowers content categorization costs, because there is no complicated nomenclature to learn. Users simply create and apply tags as they wish. For example, while cell phone manufacturers often refer to their products as mobile devices, the folksonomy could include mobile phone, wireless phone, smart phone, iPhone, BlackBerry, and so on. All these keywords, if searched, should take a user to the same site. Folksonomies reveal what people truly call things (see Figure 3.21 ). They have been a point of discussion on the Web because the whole point of having a website is for your customers to find it. The majority of websites are found through search terms that match the content.27

F I G U R E 3.19

Social Network Example25

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A website bookmark is a locally stored URL or the address of a file or Internet page saved as a shortcut. Social bookmarking allows users to share, organize, search, and manage bookmarks. Del.icio.us, a website dedicated to social bookmarking, provides users with a place to store, categorize, annotate, and share favorites. StumbleUpon is another popular social bookmarking website that allows users to locate interesting web- sites based on their favorite subjects. The more you use the service, the more the sys- tem “learns” about your interests and the better it can show you websites that interest

F I G U R E 3.20

Social Tagging Occurs When Many Individuals Categorize Content

F I G U R E 3.21

Folksonomy Example: The User-Generated Names for Cellular Phones Cellular

Phone

Mobile Phone

BlackBerry

iPhone

Cell

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you. StumbleUpon represents a new social networking model in which content finds the users instead of the other way around. StumbleUpon is all about the users and the content they enjoy.28

BUSINESS 2.0 TOOLS FOR COLLABORATING

Social networking and collaborating are leading businesses in new directions, and Figure 3.22 provides an overview of the tools that harness the “power of the people,” allowing users to share ideas, discuss business problems, and collaborate on solutions.

Blogs

A blog, or Web log, is an online journal that allows users to post their own comments, graphics, and video. Unlike traditional HTML Web pages, blog websites let writers communicate—and reader’s respond—on a regular basis through a simple yet custom- izable interface that does not require any programming.

From a business perspective, blogs are no different from marketing channels such as video, print, audio, or presentations. They all deliver results of varying kinds . Consider Sun Microsystem’s Jonathan Schwartz and GM’s Bob Lutz, who use their blogs for mar- keting, sharing ideas, gathering feedback, press response, and image shaping. Starbucks has developed a blog called My Starbucks Idea, allowing customers to share ideas, tell Starbucks what they think of other people’s ideas, and join discussions. Blogs are an ideal mechanism for many businesses since they can focus on topic areas more easily than traditional media, with no limits on page size, word count, or publication deadline.29

Microblogs Microblogging is the practice of sending brief posts (140 to 200 charac- ters) to a personal blog, either publicly or to a private group of subscribers who can read

LO 3.8: Describe the three Business

2.0 tools for collaborating.

BUSINESS DRIVEN DEBATE

Before the Internet, angry customers could write letters or make phone calls, but their individual power to find satisfaction or bring about change was rela- tive weak. Now, disgruntled consumers can create a website or upload a video bashing a product or service, and their efforts can be instantly seen by millions of people. Though many companies monitor the Internet and try to respond to such postings quickly, power has clearly shifted to the consumer. Create an argument for or against the following statement: “Social networking has given power to the consumer that benefits society and creates socially responsible corporations.”

Anti-Social Networking

APPLY YOUR KNOWLEDGE

F I G U R E 3.22

Business 2.0 Communication and Collaboration Tools

Mashups

Blogs Wikis

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the posts as IMs or as text messages. The main advantage of microblogging is that posts can be submitted by a variety of means, such as instant messaging, email, or the Web. By far the most popular microblogging tool is Twitter, which allows users to send microblog entries called tweets to anyone who has registered to “follow” them. Senders can restrict delivery to people they want to follow them or, by default, allow open access. Microblog- ging is covered in detail in Chapter 7.30

Real Simple Syndication (RSS) Real Simple Syndication (RSS) is a Web for- mat used to publish frequently updated works, such as blogs, news headlines, audio, and video, in a standardized format. An RSS document or feed includes full or summarized text, plus other information such as publication date and authorship. News websites, blogs, and podcasts use RSS, constantly feeding news to consumers instead of having them search for it. In addition to facilitating syndication, RSS allows a website’s frequent readers to track updates on the site.

Wikis

A wiki (the word is Hawaiian for quick) is a type of collaborative Web page that allows users to add, remove, and change content, which can be easily organized and reorga- nized as required. While blogs have largely drawn on the creative and personal goals of individual authors, wikis are based on open collaboration with any and everybody. Wikipedia, the open encyclopedia that launched in 2001, has become one of the 10 most popular Web destinations, reaching an estimated 217 million unique visitors a month.31

A wiki user can generally alter the original content of any article, while the blog user can only add information in the form of comments. Large wikis, such as Wikipedia, pro- tect the quality and accuracy of their information by assigning users roles such as reader, editor, administrator, patroller, policy maker, subject matter expert, content maintainer, software developer, and system operator. Access to some important or sensitive Wikipe- dia material is limited to users in these authorized roles.32

The network effect describes how products in a network increase in value to users as the number of users increases. The more users and content managers on a wiki, the greater the network affect because more users attract more contributors, whose work attracts more users, and so on. For example, Wikipedia becomes more valuable to users as the number of its contributors increases.

Wikis internal to firms can be vital tools for collecting and disseminating knowl- edge throughout an organization, across geographic distances, and between functional business areas. For example, what U.S. employees call a “sale” may be called “an order booked” in the United Kingdom, an “order scheduled” in Germany, and an “order pro- duced” in France. The corporate wiki can answer any questions about a business process or definition. Companies are also using wikis for documentation, reporting, project man- agement, online dictionaries, and discussion groups. Of course, the more employees who use the corporate wiki, the greater the network effect and valued added for the company.

Mashups

A mashup is a website or Web application that uses content from more than one source to create a completely new product or service. The term is typically used in the context of music; putting Jay-Z lyrics over a Radiohead song makes something old new. The Web version of a mashup allows users to mix map data, photos, video, news feeds, blog entries, and so on to create content with a new purpose. Content used in mashups is typically sourced from an application programming interface (API), which is a set of routines, protocols, and tools for building software applications. A programmer then puts these building blocks together.

Most operating environments, such as Microsoft Windows, provide an API so that programmers can write applications consistent with them. Many people experimenting with mashups are using Microsoft, Google, eBay, Amazon, Flickr, and Yahoo APIs, lead- ing to the creation of mashup editors. Mashup editors are WYSIWYG, or What You See Is What You Get tools. They provide a visual interface to build a mashup, often allowing the user to drag and drop data points into a Web application.

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Whoever thought technology could help sell bananas? Dole Organic now places three-digit farm codes on each banana and creates a mashup using Google Earth and its banana database. Socially and environmentally conscious buyers can plug the numbers into Dole’s website and look at a bio of the farm where the bananas were raised. The site tells the story of the farm and its surrounding community, lists its organic certifi- cations, posts some photos, and offers a link to satellite images of the farm in Google Earth. Customers can personally monitor the production and treatment of their fruit from the tree to the grocer. The process assures customers that their bananas have been raised to proper organic standards on an environmentally friendly, holistically minded plantation.34

THE CHALLENGES OF BUSINESS 2.0

As much as Business 2.0 has positively changed the global landscape of business, a few challenges remain in open source software, user-contributed content systems, and collaboration systems, all highlighted in Figure 3.23. We’ll briefly describe each one.

Technology Dependence

Many people today expect to be continuously connected, and their dependence on tech- nology glues them to their Web connections for everything from Web conferencing for a university class or work project to making plans with friends for dinner. If a connection is down, how will they function? How long can people go without checking email, text messaging, or listening to free music on Pandora or watching on-demand television? As society becomes more technology-dependent, outages hold the potential to cause ever- greater havoc for people, businesses, and educational institutions.

LO 3.9: Explain the three challenges

associated with Business 2.0.

BUSINESS DRIVEN MIS

It’s a common, if not a little morbid, practice for news organizations to pre- pare obituaries well in advance of celebrities’ actual death. So Bloomberg had a 17-page obituary for Apple’s Steve Jobs ready to run on his death; unfortunately, the obit was accidently published in 2008 on Bloomberg’s financial website. The error occurred despite the markers on the story saying “Hold for Release” and “Do Not Use.”

In addition to publishing the obituary, Bloomberg also accidentally pub- lished the list of people its reporters should contact when Steve Jobs does die. That list includes Microsoft founder Bill Gates, former Vice President Al Gore (a member of Apple’s board of directors), and Google CEO Eric Schmidt. Bloomberg caught the mistake and pulled the obituary within minutes, but in today’s instant information culture, the damage was already done. Now Jobs’ obituary is all over the Web, and if he so desires, he has the unique opportunity to read his own obituary.33

While Jobs was very much alive, a few stockholders may have gone into car- diac arrest after reading the obituary. What kind of financial impact could a story like this have on Apple? With so many different forms of collaboration, how does a company monitor and track each one to ensure the content is error- free? Once erroneous content is posted to the Internet or written in a text mes- sage, what can a company do to rectify the situation? What types of safeguards can a company implement to ensure false information is not posted to a wiki or blog?

Steve Jobs Resurrected from the Afterlife

APPLY YOUR KNOWLEDGE

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Information Vandalism

Open source and sharing are both major advantages of Business 2.0, and ironically they are major challenges as well. Allowing anyone to edit anything opens the door for indi- viduals to purposely damage, destroy, or vandalize website content. One of the most famous examples of wiki vandalism occurred when a false biography entry read that John Seigenthaler Sr. was assistant to Attorney General Robert F. Kennedy in the early 1960s and was thought to have been directly involved in the assassinations of both Ken- nedy and his brother, President John F. Kennedy. Seigenthaler did work as an assistant to Robert Kennedy, but he was never involved in the assassinations. Wiki vandalism is a hot issue and for this reason wiki software can now store all versions of a Web page, track- ing updates and changes and ensuring the site can be restored to its original form if the site is vandalized. It can also color-code the background ensuring the user understands which areas have been validated and which areas have not. The real trick to wiki soft- ware is to determine which statements are true and which are false, a huge issue when considering how easy and frequently wiki software is updated and changed.35

Violations of Copyright and Plagiarism

Online collaboration makes plagiarism as easy as clicking a mouse. Unfortunately a great deal of copyrighted material tends to find its ways to blogs and wikis where many times blame cannot be traced to a single person. Clearly stated copyright and plagiarism policies are a must for all corporate blogs and wikis. These topics are discussed in detail in Chapter 4.

WEB 3.0: DEFINING THE NEXT GENERATION OF

ONLINE BUSINESS OPPORTUNITIES

While Web 1.0 refers to static text-based information websites and Web 2.0 is about user- contributed content, Web 3.0 is based on “intelligent” Web applications using natural language processing, machine-based learning and reasoning, and intelligent applica- tions. Web 3.0 is the next step in the evolution of the Internet and Web applications. Business leaders who explore its opportunities will be the first to market with competi- tive advantages.

Web 3.0 offers a way for people to describe information such that computers can start to understand the relationships among concepts and topics. To demonstrate the power of Web 3.0, let’s look at a few sample relationships, such as Adam Sandler is a come- dian, Lady Gaga is a singer, and Hannah is friends with Sophie. These are all examples of descriptions that can be added to Web pages allowing computers to learn about rela- tionships while displaying the information to humans. With this kind of information in place, there will be a far richer interaction between people and machines with Web 3.0.

Applying this type of advanced relationship knowledge to a company can create new opportunities. After all, businesses run on information. Where Web 2.0 brings peo- ple closer together with information using machines, Web 3.0 brings machines closer together using information. These new relationships unite people, machines, and infor- mation so a business can be smarter, quicker, more agile, and more successful.

LO 3.10: Describe Web 3.0 and the

next generation of online business.

F I G U R E 3.23

Challenges of Business 2.0

Technology Dependence

Information Vandalism

Violations of Copyright

and Plagiarism

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One goal of Web 3.0 is to tailor online searches and requests specifically to users’ pref- erences and needs. For example, instead of making multiple searches, the user might type a complex sentence or two in a Web 3.0 browser, such as “I want to see a funny movie and then eat at a good Mexican restaurant. What are my options?” The Web 3.0 browser will analyze the request, search the Web for all possible answers, organize the results, and present them to the user.

Tim Berners-Lee, one of the founders of the Internet, has described the semantic Web as a component of Web 3.0 that describes things in a way that computers can understand. The semantic Web is not about links between Web pages; rather it describes the relationships between things (such as A is a part of B and Y is a member of Z) and the properties of things (size, weight, age, price). If information about music, cars, concert tickets, and so on is stored in a way that describes the information and asso- ciated resource files, semantic Web applications can collect information from many different sources, combine it, and present it to users in a meaningful way. Although Web 3.0 is still a bit speculative, some topics and features are certain to be included in it, such as:36

■ Integration of legacy devices: the ability to use current devices such as iPhones, laptops, and so on, as credit cards, tickets, and reservations tools.

■ Intelligent applications: the use of agents, machine learning, and semantic Web concepts to complete intelligent tasks for users.

■ Open ID: the provision of an online identity that can be easily carried to a variety of devices (cell phones, PCs) allowing for easy authentication across different websites.

■ Open technologies: the design of websites and other software so they can be easily integrated and work together.

■ A worldwide database: the ability for databases to be distributed and accessed from anywhere.

Egovernment: The Government Moves Online

Recent business models that have arisen to enable organizations to take advantage of the Internet and create value are within egovernment. Egovernment involves the use of strategies and technologies to transform government(s) by improving the delivery of services and enhancing the quality of interaction between the citizen-consumer within all branches of government.

One example of an egovernment portal, FirstGov.gov, the official U.S. gateway to all government information, is the catalyst for a growing electronic government. Its pow- erful search engine and ever-growing collection of topical and customer-focused links

BUSINESS DRIVEN DISCUSSION

When you are considering connectivity services for your business, you need to take continuous access and connectivity seriously. What if one of your employ- ees is about to close a huge multimillion-dollar deal and loses the Internet connection, jeopardizing the deal? What if a disgruntled employee decides to post your business’s collective intelligence on an open-source blog or wiki? What if your patient scheduling software crashes and you have no idea which patients are scheduled to which operating rooms with which doctors? These are far worse scenarios than a teenage boy not gaining access to his email or Facebook page. What management and technical challenges do you foresee as people and businesses become increasingly dependent on connectivity? What can managers do to meet these challenges and prevent problems?

Connectivity Breakdown

APPLY YOUR KNOWLEDGE

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connect users to millions of Web pages, from the federal government, to local and tribal governments, to foreign nations around the world. Figure 3.24 highlights specific egovernment models.

Mbusiness: Supporting Anywhere Business

Internet-enabled mobile devices are quickly outnumbering personal computers. Mobile business (or mbusiness, mcommerce ) is the ability to purchase goods and services through a wireless Internet-enabled device. The emerging technology behind mbusiness is a mobile device equipped with a Web-ready micro-browser that can perform the following services:

■ Mobile entertainment—downloads for music, videos, games, voting, ring tones, as well as text-based messaging services.

■ Mobile sales/marketing—advertising, campaigns, discounts, promotions, and coupons.

■ Mobile banking—manage accounts, pay bills, receive alerts, and transfer funds.

■ Mobile ticketing—purchase tickets for entertainment, transportation, and parking including the ability to automatically feed parking meters.

■ Mobile payments—pay for goods and services including in-store purchases, home delivery, vending machines, taxis, gas, and so on.

Organizations face changes more extensive and far reaching in their implications than anything since the modern industrial revolution occurred in the early 1900s. Tech- nology is a primary force driving these changes. Organizations that want to survive must recognize the immense power of technology, carry out required organizational changes in the face of it, and learn to operate in an entirely different way.

F I G U R E 3.24

Extended Ebusiness Models

Business

Business Consumer

Consumer

B2B conisint.com

C2B priceline.com

B2C dell.com

C2C ebay.com

Government G2B

export.gov G2C

medicare.gov

Government

B2G lockheedmartin.com

C2G egov.com

G2G disasterhelp.gov

L E A R N I N G O U T C O M E R E V I E W

Learning Outcome 3.1:  Compare disruptive and sustaining technologies, and explain

how the Internet and WWW caused business disruption.

Disruptive technologies offer a new way of doing things that initially does not meet the needs of existing customers. Disruptive technologies redefine the competitive playing fields of their

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respective markets, open new markets and destroy old ones, and cut into the low end of the marketplace and eventually evolve to displace high-end competitors and their reigning technologies.

Sustaining technologies produce improved products customers are eager to buy, such as a faster car or larger hard drive. Sustaining technologies tend to provide us with better, faster, and cheaper products in established markets and virtually never lead in markets opened by new and disruptive technologies.

The Internet and WWW caused business disruption by allowing people to communicate and collaborate in ways that were not possible before the information age. The Internet and WWW completely disrupted the way businesses operate, employees communicate, and prod- ucts are developed and sold.

Learning Outcome 3.2:  Describe Web 1.0 along with ebusiness and its associated

advantages.

Web 1.0 is a term to refer to the World Wide Web during its first few years of operation between 1991 and 2003. Ebusiness includes ecommerce along with all activities related to internal and external business operations such as servicing customer accounts, collaborating with partners, and exchanging real-time information. During Web 1.0, entrepreneurs began creating the first forms of ebusiness. Ebusiness advantages include expanding global reach, opening new markets, reducing costs, and improving operations and effectiveness.

Learning Outcome 3.3:  Compare the four categories of ebusiness models.

■ Business-to-business (B2B) applies to businesses buying from and selling to each other over the Internet.

■ Business-to-consumer (B2C) applies to any business that sells its products or services to consumers over the Internet.

■ Consumer-to-business (C2B) applies to any consumer that sells a product or service to a business over the Internet.

■ Consumer-to-consumer (C2C) applies to sites primarily offering goods and services to assist consumers interacting with each other over the Internet.

The primary difference between B2B and B2C are the customers; B2B customers are other businesses while B2C markets to consumers. Overall, B2B relations are more complex and have higher security needs; plus B2B is the dominant ebusiness force, representing 80 per- cent of all online business.

Learning Outcome 3.4:  Describe the six ebusiness tools for connecting and

communicating.

As firms began to move online, more MIS tools were created to support ebusiness processes and requirements. The ebusiness tools used to connect and communicate include email, instant messaging, podcasting, content management systems, videoconferencing, and Web conferencing.

Learning Outcome 3.5:  Identify the four challenges associated with ebusiness.

Although the benefits of ebusiness are enticing, developing, deploying, and managing ebusi- ness systems is not always easy. The challenges associated with ebusiness include identify- ing limited market segments, managing consumer trust, ensuring consumer protection, and adhering to taxation rules.

Learning Outcome 3.6:  Explain Web 2.0, and identify its four characteristics.

Web 2.0, or Business 2.0, is the next generation of Internet use—a more mature, distinctive communications platform characterized by new qualities such as collaboration, sharing, and free. Web 2.0 encourages user participation and the formation of communities that contribute

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to the content. In Web 2.0, technical skills are no longer required to use and publish informa- tion to the World Wide Web, eliminating entry barriers for online business. The four charac- teristics of Web 2.0 include:

■ Content sharing through open sourcing. ■ User-contributed content. ■ Collaboration inside the organization. ■ Collaboration outside the organization.

Learning Outcome 3.7:  Explain how Business 2.0 is helping communities network and

collaborate.

A social network is an application that connects people by matching profile information. Providing individuals with the ability to network is by far one of the greatest advantages of Business 2.0. Social networking is the practice of expanding your business and/or social con- tacts by constructing a personal network. Business 2.0 simplifies the way individuals commu- nicate, network, find employment, and search for information.

Learning Outcome 3.8:  Describe the three Business 2.0 tools for collaborating.

The three tools that harness the “power of the people” for Business 2.0 include blogs, wikis, and mashups. A blog, or Web log, is an online journal that allows users to post their own com- ments, graphics, and video. Blog websites let writers communicate—and reader’s respond— on a regular basis through a simple yet customizable interface that does not require any programming. A wiki is a type of collaborative Web page that allows users to add, remove, and change content, which can be easily organized and reorganized as required. While blogs have largely drawn on the creative and personal goals of individual authors, wikis are based on open collaboration with any and everybody. A mashup is a website or Web application that uses content from more than one source to create a completely new product or service. A mashup allows users to mix map data, photos, video, news feeds, blog entries, and so on to create content with a new purpose.

Learning Outcome 3.9:  Explain the three challenges associated with Business 2.0.

As much as Business 2.0 has positively changed the global landscape of business, a few chal- lenges remain in open source software, user-contributed content systems, and collaboration systems. These challenges include individuals forming unrealistic dependencies on technol- ogy, vandalism of information on blogs and wikis, and the violation of copyrights and plagiarism.

Learning Outcome 3.10:  Describe Web 3.0 and the next generation of online business.

Web 3.0 is based on “intelligent” Web applications using natural language processing, machine-based learning and reasoning, and intelligent applications. Web 3.0 is the next step in the evolution of the Internet and Web applications. Business leaders who explore its oppor- tunities will be the first to market with competitive advantages.

Web 3.0 offers a way for people to describe information such that computers can start to understand the relationships among concepts and topics.

O P E N I N G C A S E Q U E S T I O N S

1. Knowledge: Do you consider Facebook, MySpace, and LinkedIn forms of disruptive or sus- taining technology?

2. Comprehension: Create a list of the online businesses discussed in the case and deter- mine if they are examples of Web 1.0 (ebusiness) or Web 2.0 (Business 2.0).

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3. Application: Describe the ebusiness model and revenue model for Linked In, MySpace, or Facebook.

4. Analysis: What is open source software and can a business use it for a social networking platforms?

5. Synthesis: Create a plan for how a start-up company could take advantage of Web 3.0 and generate the idea for the next great website.

6. Evaluation: Evaluate the challenges facing social networking websites and identify ways companies can prepare to face these issues.

K E Y T E R M S

Application programming interface (API), 112

Asynchronous communication, 108

Blog, or Web log, 111 Business model, 97 Business-to-business (B2B), 98 Business-to-consumer

(B2C), 98 Clickstream data, 96 Collaboration system, 106 Collective intelligence, 106 Consumer-to-business

(C2B), 99 Consumer-to-consumer

(C2C), 99 Content management system

(CMS), 103 Crowdsourcing, 107 Cybermediation, 96 Digital Darwinism, 90 Disintermediation, 95 Disruptive technology, 90 Ebusiness, 92 Ebusiness model, 97 Ecommerce, 92 Egovernment, 115 Eshop (estore or etailer), 98 Explicit knowledge, 107 Folksonomy, 109 Hypertext markup language

(HTML), 92

Hypertext transport protocol (HTTP), 92

Information architecture, 103 Information reach, 94 Information richness, 94 Instant messaging (sometimes

called IM or IMing), 102 Interactivity, 96 Intermediaries, 95 Internet, 91 Internet service provider

(ISP), 101 Knowledge management

(KM), 106 Knowledge management

system (KMS), 106 Long tail, 94 Mashup, 112 Mashup editor, 112 Mass customization, 94 Microblogging, 111 Mobile business (mcommerce,

mbusiness), 116 Network effect, 112 Open source, 105 Open system, 105 Paradigm shift, 92 Personalization, 94 Podcasting, 102 Real Simple Syndication

(RSS), 112 Real-time communication, 101

Reintermediation, 96 Reputation system, 106 Semantic Web, 115 Social bookmarking, 110 Social media, 108 Social network, 108 Social networking, 108 Social networking analysis

(SNA), 109 Social tagging, 109 Source code, 105 Sustaining technology, 90 Synchronous

communication, 108 Tacit knowledge, 107 Tags, 109 Taxonomy, 103 Universal resource locator

(URL), 92 User-contributed content

(also referred to as user- generated content), 106

Web 1.0, 92 Web 2.0 (or Business 2.0), 105 Web browser, 92 Web conferencing

(webinar), 103 Website bookmark, 110 Wiki, 112 World Wide Web

(WWW), 92

R E V I E W Q U E S T I O N S

1. What is the different between sustaining and disruptive technology?

2. Do you consider the Internet and WWW forms of sustaining or disruptive technology?

3. How has the Internet and WWW created a global platform for business?

4. What is the difference between ebusiness and ecommerce?

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5. What are the benefits and challenges associated with ebusiness?

6. What are the benefits and challenges associated with Business 2.0?

7. Explain business models and their role in a company. How did ebusiness change tradi- tional business models?

8. How can a company use mass customization and personalization to decrease buyer power?

9. How does ebusiness differ from Business 2.0?

10. What are the differences among collective intelligence, knowledge management, and crowdsourcing?

11. Why is knowledge management critical to a business?

12. What are the benefits and challenges associated with wikis?

13. How do disintermediation, reintermediation, and cybermediation differ?

14. What is the semantic Web?

15. How does mbusiness different from ebusiness?

C L O S I N G C A S E O N E

BBC Taps Web 3.0 for New Music Site

The BBC’s recently launched semantic Web music project could indicate the future direction of the corporation’s online presence. The public beta of the BBC Music website has been recently relaunched incorporating semantic Web technology in its artist pages resource. The BBC artist pages, a repository of information on singers and bands played on several BBC radio stations, has been running as a closed beta project since June 2008, but with the launch of the new BBC Music website, its semantic Web technology has now been exposed to the wider public.

For the BBC, the site represents a new way of thinking about online content—where the pri- ority is publishing data rather than simply publishing Web pages. Such thinking is likely to filter through to other parts of the BBC, with discussions taking place between editorial departments on how to aggregate and meaningfully link data. Matthew Shorter, interactive editor for music at the BBC, told silicon.com : “We’re kind of on a journey of moving from what’s effectively a magazine/print publication-based metaphor around Web publishing . . . to a world where we recognize that that’s not the way that people use the Web. We’re working towards a scenario where we really don’t want to see any dead ends between bits of the BBC online offering.”

The semantic technology is not the only improvement on the BBC Music site. The way in which the BBC’s online music resource is constructed now makes it easier to search for con- tent due to the way it’s been tagged and linked to other content, according to Shorter. From an SEO point of view, once we start generating a lot of meaningful links among our pages, then we’re going to improve the find-ability of our content via Web search which is a part of our strategy of doing this.

The BBC is also making its music-related application programming interfaces (APIs) avail- able for third-party developers so they can reuse the content—in a similar way as YouTube and Flickr. The open platform could see individuals use the artist play-count data as shown on the BBC Music homepage and display it in a different way, for example. By having an open system, the BBC hopes that people will create unique content that will benefit from incoming links.37

Questions

1. Do you consider the BBC’s use of semantic technology a disruptive or sustaining technology? 2. Do you consider the BBC’s new music site a form of Web 1.0 or Web 2.0?

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3. What benefits will the BBC receive from using an open system? 4. Why would collaboration, collective intelligence, and crowdsourcing be important to the

BBC’s radio station? 5. Brainstorm a few of the security issues a company should prepare for when using Halo.

C L O S I N G C A S E T W O

Amazon.com —Not Your Average Bookstore

Jeffrey Bezos, CEO and founder of Amazon.com , is running what some people refer to as the “world’s biggest bookstore.” The story of Bezos’ virtual bookstore teaches many lessons about online business. Out of nowhere, this digital bookstore turned an industry upside down. What happened here was more than just creating a website. Bezos conceived and implemented an intelligent, global digital business. Its business is its technology; its technology is its business. Shocking traditional value chains in the bookselling industry, Amazon opened thousands of virtual bookstores in its first few months of operation.

Bezos graduated from Princeton and was the youngest vice president at Banker’s Trust in New York. He had to decide if he would stay and receive his 1994 Wall Street bonus or leave and start a business on the Internet. “I tried to imagine being 80 years old, looking back on my life. I knew that I would hardly regret having missed the 1994 Wall Street bonus. But hav- ing missed being part of the Internet boom—that would have really hurt,” stated Bezos. One evening he compiled a list of 20 products he believed would sell on the Internet. Books, being small-ticket items that are easy and inexpensive to ship, were on the top of the list. It was also apparent that no bookstore could conceivably stock more than a fraction of the 5 million books published annually. Bezos, who had never sold a book in his life, developed a strategic plan for selling books on the Internet. Amazon launched three years later. In the fall of 1994, Amazon filled its first book order—personally packaged by Bezos and his wife.

Amazon’s Ebusiness Strategy

Amazon is a pure-play business and does not operate any physical stores. All of its sales occur through its website. It is consistently pushing the technological envelope in its search to provide a satisfying, personalized experience for its customers. What started as a human- edited list of product suggestions morphed into a sophisticated computer-generated recom- mendation engine. The company captures the comments and recommendations of buyers for site visitors to read—similar to the friendly salesperson in a store offering advice on which books to buy. The website tracks customer traffic, the number of visitors who access the site, how long they stay, what pages they click on, and so forth. The company uses the information to evaluate buying and selling patterns and the success of promotions. Amazon has quickly become a model success story for ebusinesses around the globe.

Amazon retains customers with website features such as personalized recommenda- tions, online customer reviews, and “1-click ordering”—the creation of a true one-stop shop- ping establishment where customers can find anything they want to buy online. Through the Amazon.com Auctions, zShops (independent third-party sellers), and more recently the Amazon.com Marketplace (where customers can sell used items), the company is able to offer its customers almost everything.

Shaping Amazon’s Future

Amazon released a free Web service that enables its business partners (whom Amazon calls “associates”) to interact with its website. More specifically, this service allows its partners

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to access catalog data, to create and populate an Amazon.com shopping cart, and even to initiate the checkout process. In 16 months, the company has inspired 30,000 associates to invent new ways to extend Amazon’s visibility on the Internet. With over 30 million custom- ers, Amazon has become a household brand. Amazon is always looking for new ways to take advantage of ebusiness. Here are a few of its creations:

■ Amazon S3: Amazon launched an online storage service called Amazon Simple Storage Service (Amazon S3). Any type of data, from 1 byte to 5 gigabytes in size, can be stored on the service and the customer is charged monthly fees for data stored and transferred.

■ Amazon MP3: The online music store sells downloadable MP3s. Amazon MP3 is selling music from the top four record labels—EMI, Universal, Warner Music, and Sony BMG— as well as many independents.

■ Vine: Amazon launched Amazon Vine, which rewards top product reviewers by providing them with free access to products from vendors participating in the program.

■ Kindle: Amazon launched Amazon Kindle, an ebook reader that downloads content over “Whispernet,” a free wireless service on the Sprint Nextel network. Initial offerings include approximately 90,000 books, newspapers, magazines, and blogs. The screen uses E Ink technology to reduce battery consumption.

Mobile Amazon

Amazon.com has collaborated with Nokia to pioneer a new territory. With the launch of its Amazon.com Any-where service, it has become one of the first major online retailers to rec- ognize and do something about the potential of Internet-enabled wireless devices. As content delivery over wireless devices becomes faster, more secure, and scalable, mcommerce will surpass landline ebusiness (traditional telephony) as the method of choice for digital com- merce transactions. According to the research firm Strategy Analytics, the global mcom- merce market was expected to be worth more than $200 billion by 2005, with some 350 million customers generating almost 14 billion transactions annually. Additionally, information activi- ties such as email, news, and stock quotes will progress to personalized transactions, “one- click” travel reservations, online auctions, and videoconferencing.38

Questions

1. How has Amazon used technology to revamp the bookselling industry? 2. Is Amazon using disruptive or sustaining technology to run its business? 3. How is Amazon using personalization to keep customers loyal? 4. What is Amazon’s ebusiness model? 5. How can Amazon use mbusiness to increase sales? 6. What are the Web 1.0 characteristics of Amazon.com ? 7. What are the Web 2.0 characteristics of Amazon.com ? 8. How can Amazon.com use Web 3.0 to create the future bookstore?

C R I T I C A L B U S I N E S S T H I N K I N G

1. Anything but Online Your best friend, Susan Stewart, has started a highly successful custom T-shirt business from your dorm room. Susan is art major, and each week she creates a limited edition T-shirt focusing on the lyrics from up-and-coming indie bands. Being an MIS major, you see the advantages Susan could reap by porting her business to the Internet. Susan,

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being an art major, does not like technology and does not believe she needs it to grow her business. Do you agree or disagree that Susan needs to compete online? How can creating an ebusiness benefit Susan? What are the challenges Susan will face as she moves her business to the Internet? How could Susan use Web 2.0 to build loyalty among her followers?

2. The Future of Wikipedia Wikipedia is a multilingual, Web-based, free-content encyclopedia project written collab- oratively by volunteers around the world. Since its creation in 2001, it has grown rapidly into one of the largest reference websites. Some people believe Wikipedia will eventually fail under an assault by marketers and self-promoting users. Eric Goldman, a professor at the Santa Clara University School of Law, argues that Wikipedia will see increasingly vigorous efforts to subvert its editorial process, including the use of automated marketing tools to alter Wikipedia entries to generate online traffic. The site’s editors will burn out trying to maintain it, he projects, or Wikipedia will change its open-access architecture and its mission. Do you agree or disagree with Professor Goldman’s argument? What can Wikipedia do to combat the challenges of information vandalism and copyright/plagiarism issues?39

3. Is Facebook Becoming the Whole World’s Social Network? Facebook’s growth, which we already know is massive, is truly a global phenomenon. Nations with the fastest membership growth rate are in South America and Asia. Is Facebook becoming the global phone book? If you review InsideFacebook.com , you’ll find a detailed analysis of the numerical growth rate of members per nation and the penetra- tion Facebook is achieving among each nation’s population. Particularly interesting was the monthly growth rate for Indonesia, the Philippines, Mexico, Argentina, and Malaysia— each of which showed about a 10 percent jump in Facebook membership in a single month. In a group answer the following:40

■ What potential business opportunities could be created by a worldwide social media network or phone book?

■ Facebook, which contains personal data on each member, is becoming the world’s phone book. What are the implications of a world phone book for social change?

■ What do you think would be the benefits and challenges of global social networking?

■ How would tags and crowdsourcing be impacted by a global social network?

4. The Toughest College Test You’ll Ever Take If your professor asked you today to kick your social networking habits, do you think you could do it? Can you go without Facebook, cell phones, or the Internet for a week? For a day? Recently, a University of Minnesota professor challenged her public relations class to go five days without media or gadgets that didn’t exist before 1984. Out of the 43 stu- dents in the class, just a handful made it even three days without new technology. Among those who didn’t, one student said, “My mother thought I died.” How long could you go without any social media? What types of issues might you encounter without constant connections to your friends? How has social media impacted society? How has social media impacted businesses?41

5. Competing with the Big Boys Provenzo’s Rentals is a small privately owned business that rents sports equipment in Denver, Colorado. The company specializes in winter rentals including ski, snow- board, and snowmobile equipment. Provenzo’s has been in business for 20 years and, for the first time, it is experiencing a decline in rentals. Greg Provenzo, the company’s owner, is puzzled by the recent decreases. The snowfall for the past two years has been

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outstanding, and the ski resorts have opened earlier and closed later than most previous years. Reports say tourism in the Colorado area is up, and the invention of loyalty pro- grams has significantly increased the number of local skiers. Overall, business should be booming. The only reason for the decrease in sales might be the fact that big retailers such as Walmart and Gart’s Sports are now renting winter sports equipment. Provenzo would like your team’s help in determining how he can use ebusiness and Business 2.0 to help his company increase sales, decrease costs, and compete with these big retailers.

6. Book’em You are the CIO of Book’em, a company that creates and sells custom book bags. Book’em currently holds 28 percent of market share with over 3,000 employees operating in six countries. You have just finished reading The Long Tail by Chris Andersen and The Innovator’s Dilemma by Clayton Christensen, and you are interested in determining how you can grow your business while reducing costs. Summarize each book and explain how Book’em could implement the strategies explained in each book to create competitive advantages and increase sales.

7. Five Ways Google Docs Speeds Up Collaboration Google Docs wants you to skip Microsoft Office and collaborate with your group in your browser for free, especially when you’re not in the same physical space. Visit Google Docs and answer the following questions.

■ What are five ways the new Google Docs can help your team accomplish work more efficiently, even when you’re not in the same room together.

■ Is Google Docs open source software? What revenue model is Google Docs following?

■ Why would putting Google Docs and Microsoft Office on your résumé help differenti- ate your skills?

■ What other applications does Google create that you are interested in learning to help collaborate and communicate with peers and co-workers?

8. Secure Collaboration As the methods and modes of communication continue to evolve, challenges will mount for businesses trying to secure their data and for law enforcement agencies looking to monitor communications as part of their investigations. That was the theme of the keynote that Sun Microsystems chief security officer and renowned cryptographer Whitfield Diffie delivered at the AT&T Cyber Security Conference.

Diffie believes that with millions of people joining Second Life and companies building facilities there, it may be that virtual communities will become the preferred communica- tion method for humans as virtual communities become a growing source of collective intelligence that can be easily watched and monitored.42

Who would be interested in monitoring and spying on the collective intelligence of vir- tual communities? What is your answer to the following question: As we create new and better ways to collaborate, what happens to information security?

9. City Council Member Fired for Playing Farmville Game at Work More than 80 million Facebook users are obsessed with Farmville, and one of the more devoted players is Bulgaria’s Plovidv City Council member Dimitar Kerin. During council meetings, Kerin would take advantage of the city hall’s laptops and wireless connec- tion to tend to his farm. This caught the attention of the council chair, who many times scolded Kerin for his virtual farming, warning him that the game was not allowed during meetings. Kerin kept on, arguing that he had to catch up with other council members,

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who achieved higher levels on the game. Kerin pointed out logically that many other members used city hall for their Farmville pleasures, and he cited the fact that one councilman had reached level 46, whereas Kerin was stuck at level 40. Shockingly, council members voted Kerin off the board in a split 20–19 decision, suggesting that perhaps half the council members in Bulgaria’s second-largest city are committed to the Facebook application. Do you agree with the firing of Dimitar Kerin? Do you agree that it is inappropriate to use social networking applications at work? If Dimitar Kerin was fired for playing Farmville, should all other council members who use social networking applications at work be fired? Have you ever been reprimanded for playing a game while at school or at work? What could you do differently to ensure this situation does not happen to you?43

10. 48 Hour Magazine That sound you hear, of thousands of writers, designers, and photographers banging their heads against the wall to the beat of a ticking clock? That’s the sound of 48 Hour Magazine, an innovative publication that aims to go from inspiration to execution in 48 hours and begins . . . now. 48 Hour is available to the eager public as a real, printed magazine and as a website too. What are the limitations of “old media”? How are the editors of the 48 Hour Magazine using Web 2.0 to overcome these limitations? What are the advantages and disadvantages of 48 Hour Magazine’s model? What type of revenue model would you recommend 48 Hour Magazine implement? If you had $50,000 would you invest in the 48 Hour Magazine? Why or why not?44

E N T R E P R E N E U R I A L C H A L L E N G E

B U I L D Y O U R O W N B U S I N E S S

1. To build a sense of community, you have provided a mechanism on your business website where customers can communicate and post feedback. You review the communication daily to help understand customer issues and concerns. You log in and find the following anonymous posting: “I do not recommend visiting this business on Thursdays at 2:00 p.m. because the Children’s Story Hour is taking place. I hate children, especially in a business. I’m not sure why this business encourages people to bring their children. In fact, I recommend that children should be banned from this business altogether.” How would you respond to the above post? Is the customer’s viewpoint ethical? How do you encourage an open line of communication with your customers and still maintain an open forum on your website?

2. Your business needs to take advantage of ebusiness and Business 2.0 strategies if it wants to remain competitive. Detail how your business could use Web 1.0 and Web 2.0 to increase sales and decrease costs. Be sure to focus on the different areas of business such as marketing, finance, accounting, sales, customer service, and human resources. You would like to build a collaboration tool for all of your customers and events. Answer the questions below as they pertain to your business.

■ What type of collaboration tool would you build? ■ How could you use the tool to facilitate planning, product development, product test-

ing, feedback, and so on. ■ What additional benefits could a customer collaboration tool provide that could help

you run your business?

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3. The Yankee Group reports that 66 percent of companies determine website success solely by measuring the amount of traffic. Unfortunately, large amounts of website traffic do not necessarily indicate large sales. Many websites with lots of traffic have minimal sales. The best way to measure a website’s success is to measure such things as the revenue generated by Web traffic, the number of new customers acquired by Web traffic, any reductions in customer service calls resulting from Web traffic. As you deploy your Business 2.0 strategy, you want to build a website that creates stickiness and a sense of community for your customers. Explain why measuring Web traffic is not a good indicator of Web sales or website success. How would you implement Business 2.0 character- istics to create a sense of community for your customers? How could a wiki help grow your business? Could you use blogs to create a marketing buzz? What else can you do to ensure your website finds financial success?45

A P P LY Y O U R K N O W L E D G E B U S I N E S S P R O J E C T S

P R O J E C T I Analyzing Websites

Stars Inc. is a large clothing corporation that specializes in reselling clothes worn by celebri- ties. The company’s four websites generate 75 percent of its sales. The remaining 25 percent of sales occur directly through the company’s warehouse. You have recently been hired as the director of sales. The only information you can find about the success of the four websites follows:

Website Classic Contemporary New Age Traditional

Traffic analysis 5,000 hits/day 200 hits/day 10,000 hits/day 1,000 hits/day

Stickiness (average) 20 minutes 1 hour 20 minutes 50 minutes

Number of abandoned shopping carts

400/day 0/day 5,000/day 200/day

Number of unique visitors

2,000/day 100/day 8,000/day 200/day

Number of identified visitors

3,000/day 100/day 2,000/day 800/day

Average revenue per sale

$1,000 $ 1,000 $50 $1,300

P r o j e c t F o c u s

You decide that maintaining four separate websites is expensive and adds little business value. You want to propose consolidating to one site. Create a report detailing the business value gained by consolidating to a single website, along with your recommendation for con- solidation. Be sure to include your website profitability analysis. Assume that at a minimum 10 percent of hits result in a sale, at an average 30 percent of hits result in a sale, and at a maximum 60 percent of hits result in a sale.

P R O J E C T I I Wiki Your Way

Wikis are Web-based tools that make it easy for users to add, remove, and change online content. Employees at companies such as Intel, Motorola, IBM, and Sony use them for a host of tasks, from setting internal meeting agendas to posting documents related to new products.

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P r o j e c t F o c u s

Many companies rely on wikis to engage customers in ongoing discussions about products. Wikis for Motorola and T-Mobile handsets serve as continually updated user guides. TV net- works, including ABC and CBS, created fan wikis that let viewers interact with each other as they unraveled mysteries from such shows as Lost and CSI: Crime Scene Investigation. You would like to implement wikis at your new company, The Consulting Edge, a small com- puter consulting company catering to mid- and large-sized businesses. Answer the following questions:

■ How can a wiki help you attract customers and grow your business?

■ How can a wiki help your partners and employees?

■ What ethical and security concerns would you have with the wiki?

■ What could you do to minimize these concerns?

P R O J E C T I I I Blogging for Dollars

You have purchased a financial investment company, The Financial Level, that caters to indi- viduals and families. You would like to develop a few blogs for your customers, employees, and partners. The goals for your customer blog are to gather honest feedback, provide a place for customers to interact, and help find new opportunities for your businesses. The goals for the employee blog are to gather knowledge, collect employment feedback, and offer a place where employees can post anonymous feedback for issues and concerns so you can better manage your staff.

P r o j e c t F o c u s

a. Research the Internet and find several customer blogs and employee blogs.

b. Determine the top three blogs for customers and for employees, and critique the blogs for content, ease of use, and overall value.

c. Design a prototype customer blog and a prototype employee blog for The Financial Level using Word, PowerPoint, or a tool of your choice.

P R O J E C T I V 14th Annual Webby Awards Nominees

Who needs the Academy Awards when you can witness the Webby Awards? The Webby Awards are the leading international awards honoring excellence in interactive design, cre- ativity, usability, and functionality on the Internet. With nearly 70 categories, website entries make up the majority of Webby winners, nominees, and honorees. Some are beautiful to look at and interact with. Others are a testament to usability and functionality. And a handful excel across the board. To be selected among the best is an incredible achievement worthy of praise and perhaps a little bragging.46

P r o j e c t F o c u s

Visit the latest edition of the Webby Awards at www.webbyawards.com and answer the following questions:

■ Which nominations were the most surprising?

■ Which nominations were you unfamiliar with but will now use?

■ Were there any examples of Web 1.0 winners?

■ Were there any examples of Web 3.0 winners?

■ List the top five websites you think deserve to win a Webby.

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P R O J E C T V Creating a Podcast

Podcasting is a form of audio broadcasting on the Internet. The reason it became linked with the iPod in name was because people download podcasts (audio shows) to listen to on their iPods. However, you don’t have to listen to podcasts only on iPods; you can use your com- puter with some music software such as Windows built-in Media Player or Winamp, or other portable music players (iPod competitors) such as Creative Zen or iRiver. As long as you have some way to play music on your computer, you will be able to listen to podcasts.

P r o j e c t F o c u s

a. Download Audacity from audacity.sourceforge.net. It is open source, is cross-platform, is free, and lets you mix multiple audio files. Windows, Mac OS 9 or X, and Linux/Unix versions are available. You will also have to download the LAME MP3 encoder, which allows Audacity to export MP3 files. You will see the download link for that on the same page as the Audacity download. Once you download the LAME MP3 encoder, place it in the Audacity program folder (C:Program\Files\Audacity\Plug-Ins\). Then, open a .WAV file in Audacity, and select the menu option “File” then choose “Export As MP3.” When you do, you will see this message: At this Point, browse to where you placed the “lame_enc.dll” file (such as C:Program\Files\Audacity\Plug-Ins). Click on the “lame_enc.dll” file. Once finished, you can now effectively use the Export As MP3 menu option to create MP3 files.

b. Open Audacity and check the preferences. Make sure your playback and recording device are set. If you are going to record a stereo signal, set the number of channels to record to 2 (Stereo) on the Audio I/O preferences. When picking a device to record from, make sure you have set up all the connections properly, such as plugging a microphone into the Mic Input, and any other device into the Line In of your sound card.

c. Click on the red “Record” button to begin recording. You can also click on the blue “Pause” button to pause the recording. Press it again to continue. Click on the yellow “Stop” button to cease recording. The cursor will return to its previous position, before the recording was started.

d. MP3 is the standard format for podcasts. When saving, use the minimum bit rate that provides good results. Here are some suggested settings:

■ 48–56k Mono—sermons, audio books, talk radio. ■ 64k Stereo—music, music and talk combinations. ■ 128k Stereo—good-quality music.

e. Create a two-to-three-minute podcast that you can share with your class about a successful Business 2.0 entrepreneurial company. A few examples include Digg.com , karmaloop.com , Foursquare.com , Flickr.com . Figure out what will be said (or not said) during the show. There are almost no limits to what content can be included in pod- casts. Podcasting allows you to create shows, dramatizations, vignettes, commentar- ies, documentaries, and any other content imaginable. However, you need to script out your content before you start to record.

P R O J E C T V I Photo Story 3—Creating a Video Résumé

Microsoft Photo Story 3 for Windows helps create exciting video stories from pictures. For example, you could create a video story that features narrated photographs from a family vacation or a video story that includes pictures and sounds of an athletic race or game. In a few simple steps, you can import and edit your pictures, add titles, record narration, add background music, and save your story using the optimal quality settings (profile) for the way your story will be played.

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P r o j e c t F o c u s

Download Photo Story 3 from www.microsoft.com/windowsxp/using/digitalphotography/ photostory/default.mspx . Review the requirements section to make sure your computer is able to run this application. Click the “Continue” button in the Validation Required section to begin the short validation process. Once validated, you will be sent to a page with specific instruc- tions for obtaining the download.

When you run Photo Story 3, with the view to making a new project, the first option is to select “Begin a new story.” After clicking this option, your first task is to “import” pictures. You can import pictures from your computer, a network folder, or a website. For each story, you can import up to 300 pictures, which can be files with .bmp, .dib, .eps, .gif, .jhif, .jpe, .jpeg, .jpg, .pcd, .pcx, .png, .psd, .rle, .tga, and .tif file name extensions.

Your pictures appear in the filmstrip at the bottom of the page. If you import more pictures, Microsoft Photo Story 3 adds them at the end of the filmstrip.

By clicking on a series of buttons or options, you can remove black borders, add titles to your picture, add narration and custom motion, and add background music to your story.

Develop a 30-second professional commercial. This is a short description of who you are, what job you are looking for, and the skills that make you suited for the job. Building a qual- ity 30-second commercial can be tougher than it sounds. The goal is to be able to contact a stranger and let him or her know who you are, what your skills are, and why you are approach- ing the person. Create a list of words describing your skills and interests. Begin broadly and then narrow your list to skills related to your current job search.

P R O J E C T V I I Sticky Wiki

Wiki (Hawaiian for “quick”) is software that allows users to freely create and edit Web page content using any Web browser. The most common wiki is Wikipedia. Wikis offer a powerful yet flexible collaborative communication tool for developing websites. The best part of a wiki is that it grows and evolves by the collaborative community adding content—the owner of the wiki does not have to add all of the content as is typical in a standard Web page.

Many sites offer free wiki software such as Socialtext, a group-editable website. As one of the first wiki companies, Socialtext wikis are designed for anyone that wants to acceler- ate team communications, better enable knowledge sharing, foster collaboration, and build online communities. Socialtext also offers WikiWidgets, which make it easy for nontechnical business users to create rich, dynamic wiki content. Today, more than 3,000 organizations use Socialtext, including Symantec, Nokia, IKEA, Conde Nast, Ziff-Davis, Kodak, University of Southern California, Boston College, and numerous others.

P r o j e c t F o c u s

Create your own wiki. Wikis can address a variety of needs from student involvement, frater- nities and sororities, group activities, sport team updates, local band highlights, and so on. Choose a free wiki software vendor from the list below and create a wiki for something you are involved in or excited about and want to share with others. This could include a student organization, fraternity or sorority, academic organization, favorite author, book, movie, band, musician, or sports team.

■ www.socialtext.com —easy-to-use, business-grade wikis proven by Fortune 500 companies.

■ www.wetpaint.com —a free easy-to-use wiki building site. ■ www.CentralDesktop.com —Easy-to-use, a wiki for non-techies. ■ www.xwiki.com —Open source and free hosting with professional services.

If you have different wiki software you prefer, feel free to use it to create your wiki.

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If you are looking for Excel projects to incorporate into your class, try any of the following after reading this chapter.

AY K A P P L I C AT I O N P R O J E C T S

Project

Number

Project

Name Project Type

Plug-In

Focus Area Project Focus

Project

Skill Set

Page

Number

1 Financial Destiny

Excel T2 Personal Budget

Introductory Formulas

AYK.4

2 Cash Flow Excel T2 Cash Flow Introductory Formulas

AYK.4

3 Technology Budget

Excel T1, T2 Hardware and Software

Introductory Formulas

AYK.4

4 Tracking Donations

Excel T2 Employee Relationships

Introductory Formulas

AYK.4

5 Convert Currency

Excel T2 Global Commerce

Introductory Formulas

AYK.5

6 Cost Comparison

Excel T2 Total Cost of Ownership

Introductory Formulas

AYK.5

7 Time Management

Excel or Project

T2 or T12 Project Management

Introductory Gantt Charts

AYK.6

8 Maximize Profit

Excel T2, T4 Strategic Analysis

Intermediate Formulas or Solver

AYK.6

9 Security Analysis

Excel T3 Filtering Data Intermediate Conditional Formatting, Autofilter, Subtotal

AYK.7

10 Gathering Data

Excel T3 Data Analysis Intermediate Conditional Formatting, PivotTable

AYK.8

11 Scanner System

Excel T2 Strategic Analysis

Intermediate AYK.8

12 Competitive Pricing

Excel T2 Profit Maximization

Intermediate AYK.9

13 Adequate Acquisitions

Excel T2 Break-Even Analysis

Intermediate AYK.9

24 Electronic Resumes

HTML T9, T10, T11 Electronic Personal Marketing

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AYK.16

25 Gathering Feedback

Dreamweaver T9, T10, T11 Data Collection

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AYK.16

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