Chapter-3-E-commerce-Digital-markets-Digital-Goods - 3...

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3. E-commerce: Digital markets, Digital Goods Electronic Commerce and the Internet E-commerce refers to the use of the internet and the Web to transact business. The Growth of E-commerce Business Transformation E-commerce remains the fastest growing form of commerce when compared to physical retail stores, services and entertainment The 1 st wave of e-commerce transformed the business world of books, music and air travel. In the 2 nd wave, new industries facing similar transformation: advertising, telephones, movies, TV, bill payments and software. The breadth of e-commerce offerings grows, esp. in the services economy of social networking, travel, information clearing houses, entertainment, retail apparel and appliances. The online demographics of shoppers broaden to match that of ordinary shoppers. Pure e-commerce business models are refined further to achieve higher levels of profitability, whereas traditional retail brands use e-commerce to retain their dominant retail positions. Small businesses continue to flood the e-commerce market place, often riding on the infrastructures created by industry giants, such as eBay. Technology Foundations Wireless internet connections grow rapidly Powerful handheld devices support many functions. The Internet broadband foundation becomes stronger in households and businesses as transmission prices fall. New internet based models of computing such as .NET expands B2B opportunities. New Business Models Emerge More than half the internet use population join an online social network, contribute to social bookmarking sites, and create blogs. Create massive online audience that is attractive to marketers. The traditional advertising business model is severely disrupted as Google and other technology players such as Microsoft seek to dominate online advertising, and expand into offline ad brokerage for TV and newspapers. Newspapers and other traditional media adopt online, interactive models but are losing advertising revenues to the online players despite gaining online readers.
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