E-Business

Unit- I
E-Business
Introduction:
E –Business is the way of doing business. The use of
internet and web technologies in business commonly
known as “e-business “ has changed how marketers
implements and enhance their business processes and
interact with environments.
Definition: E-business
Electronic business commonly referred to as”e-business” or
an internet business is generally referred as not only
buying and selling of goods or services through internet but
also servicing customers and collaborating with business
partners.
 Internet/intranet/Extranet
• The Intranets are the network connections
between the company and its other locations.
• The extranets are the network connections
between the company and its business
partners(like suppliers, customers etc..)
• Internet is the network connection outside
the company to other firms to connect
globally.
 E-business includes

• Planning and analysis

• Warehousing
• Customer service
• Shipping
• Customer Relationship Management (CRM)
• Other logistics etc..
 E-commerce
• E-commerce or electronic commerce is the
buying and selling of goods and services or the
transmitting of funds or data over an
electronic network (internet)
 History of E-commerce
(1) 1887: US statistician Herman Hollerith (1860–1929) sets
up the forerunner of IBM (International Business
Machines), a company that will pioneer electronic
formsof doing business in the decades that follow.
(2) 1950s–1960s: IBM pioneers online transaction
processing (OLTP): a way of handling money
transactions instantly (in "real-time") using
sophisticated computerized systems. With American
Airlines, IBM develops an OLTP system called SABRE
(Semi Automatic Business Research Environment) that
revolutionizes airline reservations. In 1969, IBM's
transaction-processing software evolves into CICS
(Customer Information Control System), one of its least-
known but most successful products.
• (3) 1970: US company Docutel invents the ATM (automated
teller machine, also known as the "cashpoint"), which
works using online transactions made through bank
computers. The popularity of ATMs leads to even more
sophisticated forms of transaction processing.
• (4) 1980s: CompuServe, Prodigy, and AOL (America Online)
let people shop from home using their computers and
telephone lines.
• (5) 1989: Tim Berners-Lee (1955–) invents the World Wide
Web, unwittingly laying the foundations for an explosive
growth of E-Commerce in the years that follow. (6) 1994:
Jeff Bezos (1964–) founds Amazon.com, the iconic e-store.
• (7) 1994: Marc Andreessen (1971–) develops the Netscape
Navigator web browser, which ships with a feature called SSL
(Secure Sockets Layer): built-in encryption that allows credit card
transactions to be carried out securely online. There is a huge
explosion in online shopping and business and the dot.com
phenomenon begins.
• (8) 2000/2001: The dot.com bubble bursts and over 750 online
businesses go to the wall. At one point, Amazon.com's share price
plunges to less than 10 percent of its original value.
• (9) 2008: E-Commerce represents about 3.4 percent of total sales.
• (10) 2012: The US Census Bureau reports that US E-Commerce
retail sales for the second quarter of 2012 are $51.2 billion
(adjusted for seasonal variation). In 2Q 2012, ECommerce
represents about 4.7 percent of total sales (up from 4.2 percent
one year before).
 Types of E-commerce
• B2B business to business
• B2C business to consumer
• C2B Consumer to Business
• C2C consumer to Consumer
• B2A Business to Adminstration
• C2A Consumer to Adminstration
• P2P peer to peer
 Comparison of Traditional Commerce and E-
commerce
Work involved Traditional E-commerce
Process of transactions Manual Automatic
Duration of working Limited time 24*7*365
Inspections possibilities Physically goods can be No inspection. Only by
inspected by physical figure /sketch etc.
touch/vision before use
Scope of business Limited in a particular area World wide contact
Marketing one way One-to-one
Customer interaction direct face to face through computer internet
Exchange of information no uniform platform uniform platform available

Focus Supply side demand side

Payment Cash , cheque, credit card Credit and EFT
Goods delivery immediate on the spot takes little time
• Commerce Trade (Buying and selling of goods and services
(Encompasses all the those activities that for cash and kind
Simplify activities of goods and services
From manufacturer to the final
Consumer) Auxiliaries to trade(Like
banking, insurance,invlov
 E-commerce Business models
•Business 2 Business
Business - to - Business (B2B) is a transaction that occurs between
two companies, as opposed to a transaction involving a consumer.
This term may also describe a company that provides goods or
services for another company.
Business - to - Business (B2B) is a transaction that exists between
businesses, such as those involving a manufacturer and wholesaler,
or, a wholesaler and a retailer. Website following B2B business model
sells its product to an intermediate buyer who then sells the product to the
final customer. As an example, a wholesaler places an order from a
company's website and after receiving the consignment, sells the end
product to final customer who comes to buy the product at wholesaler's
retail outlet.
 Benefits of Business to Business
• It helps to reach Global
• Cost effective
• Improved Customer relationship:
• No Middlemen
• Mass Customization and Competitive
advantage
 Examples of websites

• www.Getrespons.com:
• www.Incorporate.com:
• www.agriwatch.com
• www.foodtrader.com
• www.global.i-textile.com
The impact of B2B markets on the economy

• B2B e-commerce have a significant impact on the economy as

they help to lower various cost involved in business transaction.
• a) Search costs
Buyers need not go through intermediaries to search for
information about suppliers, products and prices as in a
traditional supply chain. Internet is more efficient
information channel then its traditional counterpart. So
effort, time and money can be saved. In B2B, buyers and
sellers are gathered together into a single online trading
community and reducing search cost even further.
(b )Processing cost:
Reduction in the costs of processing transactions (e.g. invoices, purchase orders and payment schemes), as B2B allows for the automation of transaction processes and therefore the quick implementation of the same compared to telephone and fax.
• (c) Avoid intermediaries:
Through B2B e-markets, suppliers are able to
interact and transact directly with buyers there
by eliminating intermediaries and distributors.
• (d) Transparency in pricing:
The gathering of a large number of buyers and
sellers in a single e-market reveals market price
information and transactions processing to
participants. Thus increases the price
transparency
Advantages
• It can efficiently maintain the moment of the supply chain and the
manufacturing and procuring processes.
• It can automate corporate processes to deliver the right products and
services quickly and cost-effectively.
• B2B is global trade market, where we can but anything at anytime.
• Creates new sales opportunities
• It lowers the search cost and time for buyers to find products and vendors
• Disadvantages:
• Delay of goods where the earliest to receive goods would be the next day
• Some goods cannot be purchased online such as perishable items
• unable to experience the product before purchasing
• Fraudulent websites and scams
• Security issues leading to credit card fraud or identity theft
 Business-to-Consumer(B2C)
• Business - to – Consumer(B2C) is a transaction in which the
businesses sells their products or services to the consumers
directly. It refers to the online online selling of products, or, e-
tailing, in which the manufacturers or retailers sell their
products directly to the consumers over the internet.
• Website following B2C business model sells its product
directly to a customer. A customer can view products shown
on the website of business organization. The customer can
choose a product and order the same. Website will send a
notification to the business organization via email and
organization will dispatch the product/goods to the customer.
 Business 2 consumer (B2C) :
i)Online transactions are made between businesses
and individual consumers
ii)(e-Tailing (online retailing)
Examples: amazon.com, dell.com
Examples of some of the B2C Websites:
1. Fashion & Lifestyle
Sunglassesindia.com, Brandsndeals.com, Shopperstop.com
2. Custom designed T-shirt, mug, calendar etc Myntra.com,
Zoomin.com
3. Gifts, cakes etc.
Infibeam.com, IndianGiftsPortal.com, Giftsandlifestyle.com
• Key features of a B2C model:
• Heavy advertising required to attract large
number of customers.
• High investment in terms of hardware/
software.
• Support or good customer care service.
• Consumer Shopping Procedure Steps used in
B2C E-Commerce :
• Types of B2C:
• Different types of B2C Ecommerce are: direct
sellers, online intermediaries, advertising
based models, community-based models and
fee-based models. Each type is so different
from the other that they are not directly
comparable. Some B2C businesses utilize
more than one type to reach different
audiences
 Type of B2C Description
Direct Sellers Direct sellers, such as online retailers, sell a
product or service directly to the customer via
a website. Direct sellers are divided into e-
tailers and manufacturers. E-tailers are
electronic retailers that either ship products
from other their own warehouses or trigger
deliveries from other companies Product
manufacturers use the Internet as a catalog
and sales channel to eliminate intermediaries

Online Online intermediaries perform the same

Intermediaries function as any other broker. The business
allows non-B2C companies to reap some
Altering the price-setting processes. Of the
benefits. Brokers offer buyers a service and
help by
 Advantages
• 1) Advantages for the Business:
• It can reach worldwide market with unlimited volume of
customers.
• It can display information, pictures, and prices of products or
services without spending a fortune on colourful advertisements.
• Order processing an easier task than before.
• It can operate on decreased, little, or even no overhead.
• 2) Advantages for the Consumers:
• Convenience: Consumers can shop at any time of day, from the
privacy of their own home. Internet shopping can be done at time
either day or night.
• Many choice: Consumers is offered many choices for the same
products under various brands
• Less Hassle: Consumers can shop online without hassles like traffic,
congestion of the malls etc.
 Disadvantages:
• 1) Disadvantages for the Business:
• Many websites offering the same product to the
customers
• Technological problems can cause the website to not
operate properly thereby loosing the customer.
• People are hesitant to enter the credit card details if
the website does not have proper security norms.
• 2) Disadvantages for the consumer:
• Security issues, especially credit card information
which is very sensitive.
• Fraud, rip-offs are very common on the web.
• Customer service may not be satisfactory for the
consumers.
 Consumer to Consumer (C2C)
• C2C, or customer-to-customer, or consumer-to-consumer, is a
business model that facilitates the transaction of products or
services between customers.
• An example of C2C would be the classifieds section of newspaper,
or an auction. In both of these cases, a customer, not a business,
sells goods or services to another customer. The goal of a C2C is to
enable this relationship, helping buyers and sellers locate each
other. Customers can benefit from the competition for products
and easily find products that may otherwise be difficult to locate.
• Website following C2C business model helps consumer to sell their
assets like residential property, cars, motorcycles etc. or rent a
room by publishing their information on the website. Website may
or may not charge the consumer for its services. Another consumer
may opt to buy the product of the first customer by viewing the
post/advertisement on the website. consumer-to-consumer (C2C)
• Consumers sell directly to other consumer
• Example of Consumer to Consumer (C2C) Model
• Let us take an example of E-Bay. When a customer
plan to sell his products to other customers on the
Website of E-Bay, he first needs to interact with an E-
Bay site, which in this case acts as a facilitator of the
overall transaction. Then, the seller can host his
product on www.E-Bay.in which in turn charges him
for this.
• Any buyer can now browse the site of E-Bay to search
for the product he interested in. If the buyer comes
across such a product, he places an order for the
same on the Web site of E-Bay. EBay now purchase
the product from the seller and then, sells it to the
buyer. In this way, though the transaction is between
two customers, an organization acts as an interface
between the two organizations.
• Examples of C2C websites:
• 1) Craigslist: Craigslist is one of the top websites in the world and the
leading service for classified ads. Consumers can not only buy, sell and
trade items, but also conduct other transactions such as housing and
job searches.
• 2) E-Bay: E-Bay is a global online shopping and auction website that
offers millions of consumers a wide variety of goods and services.
Sellers pay a fee or commission to sell their items and buyers can shop
and make purchases for free. Buyers place bids just like in a traditional
auction and only acquire an item if they are the highest bidder.
Monetary transactions are typically completed through PayPal, a
service for online money transfers.
• Once a transaction is complete, buyers and sellers can rate each other
based on their trustworthiness

• Examples of other C2C websites:

• www.olx.in (internet classified)
• www.carwale.com (internet classified)
• www.gaadi.com (internet classified
•Key features of a C2C model:
•Consumers interact directly with other consumers.
They exchange information such as : • Expert
knowledge where one person asks a question about
anything and gets an email reply from the
community of other individuals.
•Opinions about companies and products
•There is also an exchange of goods between people
both with consumer auction sites such as e-bay,
swapitshop.com, where individuals swap goods with
each other without the exchange of money.
• In more recent times the blogging phenomenon has
incorporated this business model well. The
development of online communities with specific niche
interests can gain huge followings. Most current C2C
sites, such as E-Bay, have both streamlined and
globalised traditional person-to-person trading, which
was usually conducted through such forms as garage
sales, collectibles shows, flea markets and more, with
their web interface. This facilities easy exploration for
buyers and enables the sellers to immediately list an
item for sale within minutes of registering.
• C2C sites make money by charging fees to sellers.
Although it’s free to shop and place bids, sellers place
fees to list items for sale, add on promotional features,
and successfully complete transactions.
•Advantages and disadvantages of C2C Model:
•Advantages:
•Customers can directly contact sellers and
eliminate the middle man.
•Anyone can now sell and advertise a product in
the convenience of one’s home.
•Sellers can reach both national and
international customers and greatly increase
their market.
• Feedback on the purchased product helps both
the seller and potential customers.
•The transactions occur at a swift rate with the
use of online payments systems such as paypal.
•Disadvantages
•Although online auctions allow one to display his or her
products, there is often a fee associated with such exhibitions.
Other times, websites may charge a commission when products
are sold. With the growing use of online auctions, the number
of internet-related auction frauds has also increased.
• Identity theft has become a rising issue. Scam artists often
create sites with popular domain names such as “e bay “ in
order to attract unknowing E-Bay customers. These sites will ask
for personal information including credit card numbers.
Numerous cases have been documented in which users find
unknown charges on their credit card statements and
withdrawals in their bank statements after purchasing
something online.
• Illegal or restricted products and services have been found on
auction sites. Anything from illegal drugs, pirated works have
appeared on such sites.
 Consumer to Business(C2B)
• Consumer to business E-Commerce refers to the transactions taking place
between consumers to business organisations. The C2B model completely
transposes the traditional business-toconsumer (B2C) model, where a
business produces services and products for consumer consumption.
• Customer to business (C2B), sometimes known as Consumer to Business is
the most recent ECommerce business model. In this model, individual
customers offer to sell products and services to companies who are
prepared to purchase them. This business model is the opposite of the
traditional B2C model. The idea is that the individual/end user provides a
product or service that the business can use to complete a business
process or gain competitive advantage.
• In this model, a consumer approaches website showing multiple business
organizations for a particular service. Consumer places an estimate of
amount he/she wants to spend for a particular service. For example,
comparison of interest rates of personal loan/ car loan provided by various
banks via website. Business organization that fulfils the consumer's
requirement within specified budget approaches the customer and
provides its services. Consumer2business (C2B)
• Individuals use the Internet to sell products or
services to organizations
• The C2B model involves a transaction that is
conducted between a consumer and a business
organization. It is similar to the B2C model,
however, the difference is that in this a case the
consumer is the seller and the business
organisation is the buyer. In this kind of a
transaction, the consumers decide the price of
a particular product rather than the supplier.
This category includes individuals who sell
products and services to organisations.
• In the C2B model, a consumer provides a business with a fee-
based opportunity to market a product or service on the
consumer’s website or blog. In this type of relationship, a website
owner is paid to review the product or service through blog
posts, videos or podcasts. In most cases, paid advertisement
space is also available on the consumer website.
• For the C2B relationship to be fulfilled, the players must be
clearly defined. The consumer could be any individual who
has something to offer a business, either a service or a
good. Examples could be a blogger, as mentioned before, or
a photographer offering stock images to businesses. This
could also be someone answering a poll through a survey
site, or offering job hiring service by referring someone
through referral hiring sites.
Example of C2B Model:
• There are only a few kinds of companies whose trading
models could be considered as C2B.
• •Online Advertising sites like Google Ad sense, affiliation
platforms like Commission Junction and affiliation programs
like Amazon are the best examples of C2B schemes.
Individuals can display advertising banners, contextual text
ads or any other promotional items on their personal
websites. Individuals are directly commissioned to provide
an advertising/selling service to companies.
• Online surveys (Gozing Surveys, Surveyscout, and Survey
Monkey) are also typical C2B models. Individuals offer the
service to reply to the company’s survey and companies pay
individual for this service
• Key features of a C2B model:
• Exchange of products, information or services are from
individuals to business. A classic example of this would be
individuals selling their services to businesses.
• Steps involved in C2B model:
• Consumer approaches website showing multiple business
organisations for a particular service. Consumer places an
estimate of amount he/she wants to spend for a particular
service.
• Business organisation who fulfils the consumer’s requirement
within specified budget approaches the customer and provides
its services..

• Example: Comparison of interest rates of personal loan/ car loan

provided by various banks via website.
 Peer – to – to peer (P2P)

•Definition of Peer to Peer Model:

•A peer-to-peer (P2P) network is a type of decentralized and distributed networks
architecture in which individuals nodes in the network (called “peers”) act as both suppliers
and consumers of resources, in contrast to the centralized client-server model where client
nodes request access to resources provided by central servers. Users in a P2P network can
pool their resources, sharing each other’s files, storage systems, and applications, thereby
paving the way for extensive collaboration and efficient information sharing.
•P2P is not only a E-Commerce type, but also a technology that allows people to share
computer files and computer resources without going through a central web server. The
required software should be installed by both sides so that they can communicate on the
common platform. As from the beginning this type of E-Commerce has been launched to
the free usage, it has quite low revenue. It consists in mutual help of consumers. The main
disadvantage of this model of transaction often entangles cyber laws.
•Peer – to – to peer (P2P) technology enables the internet users to share the files and
computer resources directly without going to the central web server. Therefore, P2P works
without an intermediary.
Peer to peer Model (P2P)
• Example:
• (A) Napster.co., which was established to aid
the internet users in finding and sharing the
online music files known as MP3 files, is
perhaps the most well known example of
• Peer – to – to peer(P2P) E-Commerce . Also, it
is important to note that Napster is partially
• Peer – to – to peer(P2P), because, it relies on a
central database to show which users are
sharing the music files.
• Since 1999, entrepreneurs and venture capitalists have
attempted to adapt various aspects of peer-to-peer technology
into peer-to-peer (P2P) E-Commerce . In a peer-to-peer
network, tasks such as searching for files or streaming
audio/video are shared amongst multiple interconnected
peers who each make a portion of their resources such as
processing power, disk storage or network bandwidth directly
available to other network participants, without the need for
centralized coordination by servers.
• Security, of course, is a major concern for businesses looking
to implement P2P networks. Since P2P allows users direct
access to other’s hard drives. Another obvious security
concern was the heightened need to safeguard against
malicious or careless P2P users uploading viruses directly into
other’s computers.
 Key features of a P2P model
• Peer-to-peer model does not rely on centralized
networking services such as DNS to connect end users’
computers.
• Peer-to-peer technology enables internet users to
share files and computer resources directly without
having to go through a central web server.
• File sharing is used.
• It has its roots in locally based hardware arrangements
in which each individual system shares certain identical
features and capabilities.
 Emerging Trends
E-commerce has helped expand industries and telecommunications
enabling small-scale businesses to flourish and spread internationally. This
new form of interaction has brought along many new trends, a few of
which are given below:
1. Deals
• Offline deals and coupons were always a trend, but have not been taken
up online. Depending on certain seasons, anniversaries or holidays,
businesses offer their promising customers with irresistible deals and
coupon codes. Upon making your purchase, these deals will significantly
lower the cost of what you desire.
2. Innovations
• From being a site that offers only information about hotels, or just offers
bookings, these have been consistently transformed and recreated.
Jovago.com offers its customers with not only the best deals on hotels
and destinations, but also detailed reviews and pictures about them.
3. Online Sales
• Massive department sales have been transferred online, with
exclusive online sales occurring that encourage online shopping.
Brands enjoy sample sales, distributing samples to their valued
customers!
4. Global Consumption
• Through e-commerce, purchase of foreign goods has become
easily accessible. This has resulted in more vendors featuring
their products online that facilitates further consumption and
sales.
5. Virtual advertising
• Since shopping has become readily available online, so has the
advertisement of such goods. Visual and video imagery is very
popular, featured on television, Internet and spread further
through sponsorships.
 Advantages of E-commerce
• Much faster transactions available 24/7.
• Products and services are easy to find.
• Easier time managing a business.
• Doesn’t require much (if at all) physical space.
• No geographical limitations translates as a bigger
customer reach.
• Higher quality of services and lower operational costs.
 Disadvantages of E-commerce
• No guarantee of product quality.
• Customer loyalty becomes a bigger issue as there is a
minimal direct customer-company interaction.
• Inability to experience products beforehand leads to
more checkout dropouts.
• Anyone can start an online business, which
sometimes leads to scam and phishing sites.
• Hackers target web shops more often than you think.
• Mechanical failures can get quite more punishing.
 Web Auctions
• Definitions
• History of web Auctions
• Types of Web auctions
• Benefits of Web auctions
 Web Auctions
• A web auction/online auction is an auction which is held
over the internet. Online auctions remove the physical
limitations of traditional auctions such as geography,
presence, time, space and target much wider audience.
This arrival in reach ability has also made it easier to
commit unlawful actions within an auction.
• Web Auction is a simple auction designed for
organizations or individuals who want to hold an auction.
It is not like E-Bay in the sense that only Administrator
can add products. Products can have pictures, price,
minimum bids, bid increments, and more.
• Definition and Examples: Web Auction or Online Auction
• Online auctions are places that people can go in order to
buy or sell goods or services online for a small fee.
Anyone can sell an item and anyone can bid on an item.
The highest bidder wins the auction and pay for the good
or service and then expects for to receive their winning in
the next couple of days through the mail or some other
way of delivery.
• The largest online auction website is E-Bay followed by
other sites such as Yahoo ad Amazon. These sites allow
ordinary web citizens to sell their goods. The sale is
generally based on a system of trust, but some people are
finding profit in abusing the trust of others, while some
are stretching the limits of the law via online auctions.
 Web Architecture
Web Client Database

---

--- Interne customer

t

---
Gateway Software
interface Application

Web client
Web Server
• Below is a listing of some of the major online auction sites on
the Internet.
• • Auction-Warehouse - http://www.auction-warehouse.com
• • Craigslist - http://www.craiglist.org
• • E-Bay – http://www.ubid.com

• Online auctions are a widely accepted business model for the

following reasons:
• • Flexible time limits
• • No fixed time constraint
• • No geographical limitations
• • Offers highly intensive social interactions
• • Includes a large numbers of sellers and bidders, which
encourages a high-volume online business
• Online auctions include business to business (B2B),
business to consumer (B2C), and consumer to
consumer (C2C) auctions. E-Bay is the best example
of an auction site that uses all three methodologies.
• The online auction business model continues to
evolve according to market needs. Examples include
E-Bay, Web Store, Online Auction and Overstock. E-
Bay and other providers encourage legitimate
bidding activity through bidder block lists. E-Bay
also offers Dutch auctions for large inventories,
where auction bidders pay according to an item’s
highest sale price.
 History of web auctions
• Online auctions were taking place even before the release of
the first web browser for personal computers callled NCSA
mosaic.
• The first web based commerical activity regarding online
auctions that made significant sales in may 1995 with the
company Onsale.
• In sep same year ebay also began trading
• The web offered new advantages such as the use of
automated bids via electronic.
• Online auctions have greatly increased the variety of goods
and services that can be brought and sold.
Types of Online Auctions
There are 6 different types
• 1.English auctions:
• In live terms, English auctions are where bids are announced by either an
auctioneer or by the bidders and winners pay what they bid to receive the
object. English auctions are claimed to be the most common form of third-
party on-line auction format used and is deemed to appear the most
simplistic of all the forms.[4] The common operational method of the format
is that it is an ascending bid auction in which bids are open for all to see.
2.Dutch auctions.
• Dutch auctions are the reverse of English auctions whereby the price begins
high and is systematically lowered until a buyer accepts the price. Dutch
auction services are usually misleading and the term 'Dutch' tends to have
become common usage for the use of a multiunit auction in a single unit
auction as opposed to how it is originally intended for that of a declining
price auction.
3)First-price sealed-bid
• First-price sealed-bid auctions are when a single bid is
made by all bidding parties and the single highest bidder
wins, and pays what they bid. The main difference
between this and English auctions is that bids are not
openly viewable or announced as opposed to the
competitive nature which is generated by public bids.
4)Vickrey auction
• A Vickrey auction, sometimes known as a second-price
sealed-bid auction, uses very much the same principle as
a first-price sealed bid. However, the highest bidder and
winner will only pay what the second highest bidder had
bid.
 5) Reverse auctions:
• Reverse auctions are where the roles of buyer and
seller are reversed. Multiple sellers compete to
obtain the buyer's business and prices typically
decrease over time as new offers are made.
6)Shill bidding
• Placing fake bids that benefits the seller of the item
is known as shill bidding. This is a method often used
in Online auctions but can also happen in standard
auctions. This is seen as an unlawful act as it unfairly
raises the final price of the auction, so that the
winning bidder pays more than they should have
Benefits of online auctions
• Online auctions hold two other potential benefits for
small businesses, as well. First, buying and selling over
the Internet can help expand the global reach of a small
business, opening international markets that would have
been impossible to reach via normal marketing channels.
• Second, auctions can help new businesses-or those
offering new products-to establish market prices based
on supply and demand. Small businesses can use online
auctions to gauges interest in their products and find out
what customers are willing to pay. Furthermore,
companies can collect such information quickly and
informally, rather than investing in time-consuming and
expensive market research.
 VIRTUAL COMMUNITY
• DEFINITION
• A Virtual community is a community of people sharing common interests,
ideas, and feelings over the internet or other collaborative networks.
• Virtual Community:
• A virtual community is a group of people who share common interests,
feelings or ideas, or pursue similar goals over the Internet or over any
collaborative network. Social media is the most common vehicle for this
sharing and interaction, which can potentially transcend geographical
boundaries, race, culture, political views and religion when people are
connected by another common interest or agenda.
• One of the most pervasive types of virtual community operates under
social networking services consisting of various online communities. In a
virtual community group of individuals interact through specific social
media, potentially crossing geographical and political boundaries in order
to pursue mutual interests or goals.
• The Virtual Community, (1993) Rheingold defines
virtual communities as “social aggregations that
emerge from the Internet when enough people
carry on public discussions long enough and with
sufficient human feeling to form webs of
personal relation
• Here are some common examples of virtual
community types: Forums, online chat rooms,
and specialized information communities, email
groups these are made up of people who either
discuss or share about a common topic/theme.
nships in cyberspace”.
 Types of virtual communities
Internet message boards:
• An online message board is a forum where people can discuss
thoughts or ideas on various topics or simply express an idea. Users
may choose which thread, or board of discussion, they would like
to read or contribute to. A user will start a discussion by making a
post
Online chat rooms
• Just after the rise of interest in message boards and forums, people
started to want a way of communicating with their "communities"
in real time. The downside to message boards was that people
would have to wait until another user replied to their posting,
which, with people all around the world in different time frames
• Virtual worlds
• Virtual worlds are the most interactive of all virtual community
forms. In this type of virtual community, people are connected by
living as an avatar in a computer-based world. Users create their
own avatar character (from choosing the avatar's outfits to
designing the avatar's house) and control their character's life and
interactions with other characters in the 3-D virtual world.
• social networking services
• Social networking services are the most prominent type of virtual
community. They are either a website or software platform that
focuses on creating and maintaining relationships. Facebook,
Twitter, and Myspace are all virtual communities. With these sites,
one often creates a profile or account, and adds friends or follow
friends. This allows people to connect and look for support using
the social networking service as a gathering place.
 Benefits of Online/Virtual Community:
1)Gives your business worldwide exposure: One of the benefits of
online communities is that it gives your business a worldwide
exposure. Reaching out to people from any part of the world, from
all walks of life is the first benefit of online community. An online
community was developed so that people have a common place
where they can share information on significant topics
2)Gain knowledge from other online community members: The
second benefit of online community is that you gain knowledge
from other members of the online community you will join.
Interact with other people who are members of your online
community and put their principles into practice, whenever it is
appropriate.
3)Form a formidable partnership: The third benefit of online
community is that we you get the chance to form a formidable
partnership with other members. Approach people/businesses,
which complement yours and ask them if they are interested in
working with you towards a common goal. The online community
is where you will build your credibility as an entrepreneur, before
you approach complementing businesses.

4)Maximize your presence in your online community: Keep in

mind that you are not only building a relationship when you join
an online community you are also marketing your business in a
subtle way. So as a marketer be sure that your online profile is
complete, which means that you need to include more
information about yourself and of course your business.
• 5)Be wise in choosing your online community:
Verify who the members are in the online
community you are planning to join. Be selective
with the online community you will join to avoid
mixing in with the wrong type of people/business.

• 6)Builds relationships: The last and probably the

most important benefit of online community is that
it gives you a chance to build a relationship with
people. We all know the importance of relationships
when it comes to business
disadvantages
• While instant communication means fast access, it
also means that information is posted without
being reviewed for correctness.
• It is difficult to choose reliable sources because
there is no editor who reviews each post and
makes sure it is up to a certain degree of quality.
• Users who use online communities are vulnerable
to online identity theft.
 Web portal
• Definition
• A web portal is specially designed web page at a website which brings
information together from diverse source in a uniform way. example such
as E-Mail, forums, search engines and online shopping malls.
The first web portals were online services, such as AOL, that provided
access to the Web, but, by now, most of the traditional search engines have
transformed themselves into web portals to attract and keep a larger
audience.
• A web portal is a single Web interface that provides personalized access to
information, applications, business processes, and much more. By using
portal technology, an organization can lower development and
deployment costs and significantly increase productivity. Using a portal,
information can be aggregated and integrated within a particular working
environment application, or service, or a single interface can be used to
target an individual user’s needs and interests. Portals help to harmonize
content, commerce, and collaboration with business goals.
 Features of web portals
• Each information source gets its dedicated area on the page for
displaying information called as a portal the user can configure which
ones to display.
• The role of the user in an organization may determine which content
can be added to the portal or deleted from the portal configuration.
• A portal may use a search engine API to permit users to search
intranet content as opposed to extranet content by restricting which
domains may be searched.
• Apart from this common search engines feature, web portals may
offer other services such as e-mail, news, stock quotes, information
from databases and even entertainment content.
• Portals provide a way for enterprise and organization to provide a
consistent look and feel with access control and procedures for
multiple applications and databases, which otherwise would have
been different web entities at various URLs.
 Types of web portals
• They are different types of portals
(1) Vertical Portals:
(2) Horizontal portal Its brief explanation is as follows:
Vertical Portals:
• A vertical portal (also known as a "portal") is a specialized entry point to a
specific market or industry niche, subject area, or interest. They provide
access to a variety of information and services about a particular area of
interest.
• These are web portals which focus only on one specific industry, domain
or vertical. Vertical portals provide tools, information, articles, research
and statistics on the specific industry or vertical. As the web has become
a standard tool for business Example:
• “http://www.wine.com” is a vertical portal. Such portals offer information
and services eg video posting,blogging.
• Horizontal portal
• Its used as a platform to several companies in the same economic
sector or to the same type of manufacturers or distributors.
• These are web portals which focus on a wide array of interests and
topics. They focus on general audience and try to present something
for everybody. Classic examples of horizontal portals are yahoo.com,
msn.com etc which provide visitors with information and on a wide
area of topics.
• They are often referred to as “mega portals”, target the entire
internet community. Sites like
• “http://www.yahoo.com”
• “http://www.netscape.com”
• These sites always contain search engines and provide the ability for
a user to personalize the page by offering various channels(i.e.)
access to the other information such as regional weather, stock
quotes, or news updates.
Enterprise portals:
These are portals developed and maintained for use by members of
the intranet or the enterprise network. It providing employees with is
information on regularly updating manner, online training courses and
webcasts etc..
Knowledge portals:
Knowledge portals increase the effectiveness of knowledge workers by
providing easy acess to information that is necessary or helpful to
them in one or more specific roles.
Corporate portals
It become one of the hottest new technologies of the internet.initially
called intranet portals-corporate portals existing for the benefits of the
company ‘s own employees, this set of techonologies has developed to
assist and provide access to a company’s business partners as well.
Search portals
Search portals aggregate results form several search engines into one
page.
 E-business Revenue Models

• A company’s revenue model describe how the

company will earn revenue, generate profitsm
and produce a better return on invested
capital.
• The function of business organization is both
to generate profits and to produce returns of
invested capital that exceed alternative
investments. Eg. Sell a product such as a
laptop, to a customer who pays for the
computer using cash or a credit card.
 Types of Revenue Model

• Advertising revenue model:

In this model a website that offers its users content services,and or
products also provides a forum for advertisements and receives fees
from advertisers.

Subscription revenue model:

In this model a website that offers its users content or services charges
a subscription fee for access to some or all of its offerings. Eg download
any book only to subscribers.

Transaction Fee revenue model:

In this model, a company receives a fee for enabling or executing a
transaction. For ex: Ebay provides an online auction marketplace and
receives a small transaction fee from the seller if seller is successful in
selling the item.
• Sales revenue model:
In this model companies derive revenue by
selling goods, information, or services to
customers. Such as flipkart , Amazon etc..
• Affiliate revenue model
In this model sites that steer business to an
“affiliate” receive a referral fee or percentage of
the revenue from any resulting sales eg. HDFC
bank offers 5 rewards point for every 100 rupees
spend on the card.