Where can I get news about the Internet, surveys,
and reports?
Keeping up with net happenings is a full-time job.
Here are some sites that provide information about
Internet events. Nua Internet Surveys. This email
newsletter gives concise summary of most surveys and
market research results. To subscribe to free, weekly
reports, send an email to: surveys-request@nua.ie with
the word "subscribe" in the body of the
message. Check also its Surveys webpage. Forrester
Research Internet News by Cowles/Simba (Merklermedia)
Jupiter Communications
Why is the Internet different from other computer and
network technologies?
Computers and networks are nothing new. They have
existed and business applications such as LAN and EDI are
well established long before the World Wide Web took
over. Then, why the sudden talk of the Digital Age and
the advance of electronic commerce? Two things make the
Internet quite different from any other existing
communications media. Unlike broadcasting media, the
Internet allows two-way communications and is built
around open standards. A two-way communication means
targeting audience and the possibility of feedback.
Broadcasting sends out messages to no one in particular
and without knowing quite who has gotten the message.
(What do Nielson and a horde of market research firms do
for their living?) An open standard (e.g. TCP/IP) means
interoperability and the advantage of a large market and
the possibility of integrating one product or process
with another. Both of these characteristics are being
challenged. To the WebTV generation, the digital future
looks like another version of the passive one-way
broadcasting. The new media sums up how publishers and
media companies view the digital medium. We are so
accustomed to receiving random messages that we often
forget the fact that broadcasting was a 20th century
phenomenon. Even interactive television envisioned by
today's media is a way of providing a more lively
entertainment, offering more information related to
existing contents (e.g. detailed information about
characters, plots, and commercials shown on TV).
Multichannel, digital TV broadcasting may very well be a
model for future entertainment, but it needs to be
remembered that it is only one application of the digital
communications network. The commercialization of the
Internet is forcing businesses to differentiate their
products from others by making products incompatible.
Unlike the public Internet where standards were open,
firms attempt to capture and dominate the market with
their proprietary products. In such an environment,
TCP/IP would have had a very slim chance of becoming a
standard and opening up the digital, networked economy.
Whether markets driven by private interests can bring
about a better result (e.g., more efficient,
technologically superior, etc. system) is still a concern
left for arguments. Perhaps telephone networks are quite
similar to the Internet (and indeed most Internet traffic
goes through telephone networks). But unlike telephones,
the Internet's user interface (computers) is much more
sophisticated and flexible. Because of its beginning as a
public research network, the Internet has no pricing
regime of telephone companies. The worldwide connection,
then, may be considered to have been an accident. When
usage-based, long-distance charges are implemented, the
Internet may look quite similar to the telephone network.
Do we have a truly worldwide network?
The ultimate goal of a global network like Teledesic
is to make the globe into your home base. Currently,
local ISPs provide subscribers with local access
telephone numbers for dial-up. This means that you have
to pay for long distance calls when you are checking your
email from different cities. Roaming services often offer
Internet access at cheaper prices than long distance
calls. A few service providers have point of presence
(POP) in many cities. Smaller ISPs can join an alliance
so as to cover a larger number of POPs worldwide. For
example, iPass Alliance covers over 1,000 POPs in 150
countries. Any ISP allied with iPass will offer its own
pricing schedule. (E.g. HomeGate). AimQuest is another
collection of about 80 ISPs including Netcom which has
its own 1,500 POP in 70 countries. Find out whether your
ISP offers roaming service and if so get 800 numbers
before you head out. Also in the work is Cencert Internet
Dial Roaming Service, a joint venture by MCI, BT and
Japan's NTT Data Corp.
What choices do I have to connect to the Internet
locally?
The way our computers connect to the global network
varies greatly. At work, computers are commonly
hard-wired maintaining constant connection (i.e., through
local area networks using Ethernet). Dial-ups establish
temporary connections, typically through modems and via
some telecommunications networks. These include the plain
old telephone system, coaxial cables used for cable TV,
wireless and cellular networks and satellite networks.
Any of these connections may be constant if the line is
dedicated to that purpose. The physical link from your
home to trunk lines (where the traffic coming out of
individual users is aggregated and carried by
high-capacity coaxial and fiber optic cables) is referred
to as the last mile. The sheer number of individual users
and the complex switching equipment required to manage
traffic make the last mile relatively costly
(representing between a quarter and a third of the total
networking costs). At the same time, various
telecommunications players are converging into this
market. This will intensify competition among last-mile
players. Will this competition lead to cheaper and better
networking options for consumers?
Is the Internet secure?
The proper question will be: Is the Internet secure
enough, enough for commercial uses? Despite the reliable
encryption and other technologies, which are sometimes
superior to telephone and other communications networks,
non-digital media are full of hypercritical view of the
Internet security. While it is unwise to play down known
security risks, it is also unnecessary to imagine a
doomsday scenario for every occasion. Does the Internet
need to provide more security than physical markets?
Probably so because the electronic marketplace lacks some
elemental safeguards available in physical markets. For
example, buyers have certain assurance about a seller
with a retail store although that seller might be
operating a bogus shop that particular moment. But bogus
operations are more difficult to recognize on the
Internet. Indeed, any online trading partner cannot be
sure about the identity of the other person. Technologies
and legal frameworks are needed to address such problems,
e.g. nation-wide digital IDs.
How do I start selling online?
From cheap and simple to expensive and complex,
there's a wide range of products designed to get your
eCommerce site up and selling in a matter of days or
weeks. Small businesses may not have to look beyond their
local Internet service providers for a bare-bones
solution. For example, Brooklyn-based Forman Interactive
offers Internet Creator for less than $150. The software
uses a series of wizards to help you create secure pages
for selling your product. Plus, if your pages reside on
Forman's servers, the company handles electronic payments
via CheckFree. If you're ready to step up, you can use
Yahoo's Yahoo Store, which lets you create a
transactional business Web site from your browser. Yahoo
hosts the site, and the cost is based on number of
items--$100 per month for a store selling 50 items and
$300 per month for up to 1,000 items. However, most
eCommerce development tools targeted at small and midsize
businesses cost $5,000 to $10,000. They generally include
templates for online catalogs and databases, so it's easy
to change items and prices. Dynamic database searches can
serve different information when an item is out of stock
or on special, and they can be hooked up to existing
back-end systems for order fulfillment and a range of
automatic payment options. Companies that have a high
volume of sales--especially those that deliver soft goods
such as articles, reports, software, or music over the
Net--require industrial-strength solutions costing
anywhere from $10,000 to $100,000 or more. Of course, the
software sticker price is only a small fraction of what
it costs to run an eCommerce site. Many high-end
eCommerce products are used by third-party companies to
provide services for individual merchants. Most companies
take advantage of eCommerce hosting services run by the
likes of AT&T, MCI, and GTE's BBN Planet. "This
is a low-risk, low-cost way of finding out how to do
it," says Karl Lewis, vice president of production
at Proxicom. Proxicom is a Web consulting company that
recently set up an eCommerce site for Day-Timer and an
extranet for Mobil Oil and its distributors.
What is intranet? Extranet?
Intranets and extranets have become en vogue.
Intranets and extranets share the common protocol
(TCP/IP) and Web technologies with the Internet. Intranet
is a closed, business-wide network, but it uses open
standards such as TCP/IP instead of proprietary protocols
traditionally used for LANs (local area networks, usually
hard-wired) and WANs (wide area networks, usually LANs
connected by cable, telephone and wireless networks).
Extranet is a private WAN running on public protocols.
That is, an extranet is a virtual private network among
private parties based on open network and protocols. To
assure security and privacy, an extranet relies on
secured channel using tunneling protocols and digital ID.
In a way, extranet is a private street built on public
land (although costs may be borne by private parties).
What’s the difference between physical stores
and Web stores?
Web storefronts integrate various functions such as
physical presence as a store, sales representatives,
ordering and payment functions (combined cash register,
credit card reader, etc.), backoffice supports and
various data interchanges (for inventorying, supply
ordering, etc.)
Should Web pages be jazzy or content-oriented?
Those accustomed to the old text-based Internet seem
to favor simple, information-driven Web sites with not
much fancy graphics. New generations of Web designers
prefer graphic-rich, jazzy layouts. This is not
surprising since they come predominantly from graphics
professionals, and newspaper and magazine layout artists.
In fact, most fancy Web sites decidedly look a lot like a
magazine or a front page of a newspaper. As both these
print media and screen-restricted Web page have the same
spatial limitation and the need to grab eyeballs, this
jazzy approach seems to make a lot of sense. Furthermore,
popular sites tend to have jazzy graphics. However, are
jazzy sites drawing more visitors, or do (already)
popular sites tend to employ a lot of graphics? That is,
New York Times Online does have the definite advantage of
being well known so that even if its Web site is
text-oriented, easy to navigate, and well classified for
organization, it might still draw heavy traffic. Greater
emphasis on contents than on appearance will reduce
congestion and unnecessary delay. Too much emphasis on
graphics and multimedia (although that may be interesting
and act as a drawing factor) but not enough contents will
ultimately convince us that the Internet is indeed as
shallow as the media we have known all along is.
Should websites sell advertisements?
The balance between advertising revenues and
subscription fees are puzzling content sellers on the
Internet. In the end, the choice between the two is a
moot issue because both ad-based and subscription-based
selling is viable options. The question is which method
is good for what products. Our experience with broadcast
and print media will not help to answer that question
because broadcast and print media are fundamentally
different from the digital medium. For example,
commercial-ridden television came about because there was
no sure way of charging audience for what was being
broadcast randomly over the air with no one targeted in
particular. Printed newspapers and magazines are
constrained by the economics of mass production in
pricing, in content selection and in distribution. These
factors are non-existent on the Internet. Simply
abstracting from traditional media will lead to wrong
conclusions. Innovations will make things more complex.
For example, commercials and advertising are indeed
information goods so that there are some who are willing
to pay to receive them. Why not charge for
advertisements. That is indeed what CyberGold and other
pioneers are attempting to experiment. The electronic
marketplace presents a unique opportunity to improve the
way we disseminate product information (i.e.
advertisements), charge consumers (and ultimately
integrating the process into market research, product
development and the next stage of marketing in a seamless
process). The problem with spam is not only that they are
distributed randomly but also that they have no market
prices (or ways to transact). If there is a way, some
spam receivers may be paid to receive advertisements;
others may be willing to pay to receive them. The legacy
of the broadcast and print media has been that of
artificially coupling advertisements with contents
because of inability to charge or the economics of
physical market. An efficient market will allow prices of
these two different products to be determined separately.
What questions should I ask when selecting a web
designer?
You don't really want a college student who has just
learned HTML. You need a website design firm that will
take time to understand your business, and has previous
experience. Here are some important questions: What are
the names and phone numbers of other small business
clients you have served? You'll learn a lot by asking
these references, "Would you hire this person to
work for you on another project?" What are the URLs
of some websites you have designed? Then ask your
web-savvy friends to evaluate the sites with you. What
kind of website do I really need to accomplish my
objectives as a business? Unless the designer knows how
to accomplish business purposes with a website, she is of
no use to you. Do you have a contract that outlines our
agreement? Get it in writing. What will this cost, how
long will it take, and at what points will various
payments be due? Define what will be accomplished before
each payment is made. Will you register the site with
search engines and perform any other marketing tasks? If
this isn't included in their services, learn to do it
yourself or find where to outsource it. A website without
marketing is like a car without gasoline - nice to
admire, but of no use at all.
What is a cookie and how does it help an e-business?
A cookie is a small amount of information that is
stored on your computer when you visit a website, see a
banner, purchase something at an online store, etc.
Cookies help the e-business identify you the next time
you come to the site so it can greet you by name, show
you a banner you haven't seen yet, remember your username
and password, etc. Cookies can also track how a visitor
got to your website, so when he makes a purchase you can
pay a commission to the affiliate who sent him. Some
people see cookies as an insidious breach of privacy -
and it can be when connected with databases like
DoubleClick's whose information collection spans many
thousands of websites. Cookies smooth eCommerce for both
the customer and the business. Now if they could just
perfect a way of e-mailing me a chocolate chip cookie for
every site I visit, I would be really happy.
What is the electronic marketplace?
Electronic markets ordinarily refer to online trading
and auction, for example, online stock trading markets,
online auction for computers and other goods. The
electronic marketplace refers to the emerging market
economy where producers, intermediaries and consumers
interact electronically or digitally in some way. The
electronic marketplace is a virtual representative of
physical markets. The economic activities undertaken by
this electronic marketplace collectively represent the
digital economy. Electronic commerce, broadly defined, is
concerned with the electronic marketplace. The electronic
marketplace resembles physical markets (the one we know)
in many aspects. As in physical markets, components of
the digital economy include: players (market agents such
as firms, suppliers, brokers, shops and consumers)
products (goods and services;) and processes (supply,
production, marketing, competition, distribution,
consumption, etc.). The difference is that, in the
electronic marketplace, at least some of these components
are electronic, digital, virtual or online (whichever
term you may prefer). For example, a digital player is
someone with an email or a Web page. Purely
"physical" sellers may be selling a digital
product, e.g. digital CD-ROM. One that sells physical
products at a physical store may offer product
information online (thereby allowing consumers to
"search online"), while production, ordering,
payment and delivery are done conventionally. Currently,
the emphasis is on the core of the electronic marketplace
where everything (i.e. all value chains or business
activities) is online. But, if any aspect of your
business or consumption dwells upon the digital process,
you are already part of the electronic marketplace. That
is, almost all of us are already players in the
electronic marketplace!
How is the electronic marketplace different from
physical markets?
Business strategies must be based on a sound
understanding of the market dynamics, for which we rely
on standard economics. Is the electronic marketplace a
perfect, frictionless market? Will transaction costs
become zero? Will the market be perfectly competitive,
yielding lowest possible prices? Should the market be
left alone to march toward those predictions? On the
surface, the electronic marketplace appears to be
something of a perfect market, where there are numerous,
worldwide sellers and buyers, who in turn have bountiful
information about the market and products, and where no
intermediaries are necessary. Such a market is very
competitive and efficient (with no need to regulate or
intervene arbitrarily). However, closer looks indicate
that consumer searches are not very efficient (due to the
cost of having a complete, easily searchable database,
and because sellers may not provide all information
necessary). Although wholesalers and retail outlets may
not be needed, other types of intermediaries appear to be
essential for the electronic market to function
adequately (e.g. certification authorities, electronic
malls who guarantee product quality, mediators for
bargaining and conflict resolution, etc.). All these
brokers add transaction costs. Will prices be lower?
Digital products are highly customizable due to its
transmutability, i.e. easy to revise, reorganize and
edit. With information about consumer tastes, products
will be differentiated (or customized, e.g. custom news).
The number of potential sellers may be low, or even only
one, in a highly differentiated and segmented market, and
the price will tend to approach the maximum price the
buyer is willing to pay. (In economic terms, sellers
practice first degree or perfect price discrimination,
which is exact opposite to the result we get in a
perfectly competitive market.) How about the often heard
zero marginal cost argument that digital products will be
priced at zero (given out free) because their
reproduction costs will be minimal? The price will
approach zero only if (1) the marginal cost is really
approaching zero and (2) there is effective competition
among sellers. In short, the marginal cost of a digital
product may be substantial. Even when it is close to
zero, prices in a non-competitive market will be
determined more by demand (or the buyer's willingness to
pay) than by marginal cost. Unless we think all
information and digital products are of no value, they
will never be priced at zero by sellers with market
power. (Giving out free products today does not mean that
sellers are doing it because the costs are zero nor that
they will continue to do so when they monopolize the
market.)
How do I choose keywords and summaries that will get
my site more hits?
On every webpage you can place META tags in which you
specify keywords and descriptions that some search
engines use to index and display your webpage. (We're
talking about HTML tags here, so if your eyes glaze over,
I understand.) While there's a whole science to
optimizing pages for search engines, here are some simple
steps. First, try to determine the words that your
potential customers are likely to use to find your kind
of business in search engine. Make a list of 10 or 20 of
the top such words or phrases. Second, make sure your
TITLE tag is descriptive AND includes as many of the
keywords as are appropriate. Not "Acme
Manufacturing" but "Acme Manufacturing -
bicycle seats, handlebars, and safety reflectors".
Should be between 5 and 20 words. Third, list the
keywords in your keyword META tag, separating words and
phrases with commas. Example: Use plural instead of
singular, and don't repeat the same word twice in a row.
Keyword spamming may get you removed from the search
engine. Fourth, compose a description that uses as many
of your keywords as possible, while eliminating
throw-away words that will never be searched on, such as
"the, and, that." You don't need to repeat the
words in the title, but it won't hurt. Example: About 25
words is a good length. Some search engines display this
description if you've included it on your page. Not all
search engines consider keyword and description META
tags, but if you consistently take these steps with each
page, you WILL place higher on search engines and receive
more targeted traffic.
I am searching for government grant money to finance
a new business, a non-profit group or business
enterprise. How do I go about finding available grants?
A good place to start for grant information is:
Catalog of Federal Domestic Assistance
(http://www.business.gov/cgi-bin/outsideurl.cgi?url=http://www.gsa.gov/fdac
).
The Catalog of Federal Domestic Assistance (CFDA) is a
government-wide compendium of federal programs, projects,
services, and activities, which provide assistance or
benefits to the American public. It contains financial
and non-financial assistance programs administered by
departments and establishments of the federal government.
All these electronic payment systems, are they any
different?
There are dozens of electronic payment systems
proposed or already in practice. But they can be grouped
into three based on what information is being transferred
online. The first type uses a trusted third party that
maintains all sensitive information (such as bank account
and credit card numbers) for its clients, which include
both buyers and sellers. When there is a transaction,
order information is transmitted along with information
about payment confirmation and clearing, all of which do
not include sensitive information. In effect, no real
financial transaction is done online. The primary example
of this type is First Virtual. In this type of system,
the information need not be encrypted since financial
transactions are done completely off-line. The second
type is an extension of the conventional notational fund
transfer. In credit card or check transactions, sensitive
information is being exchanged. For example, you give
your credit card to a merchant, who sends the card number
through phone line and receives confirmation. Banks
meanwhile receive the same information and adjust buyer
and merchant's accounts accordingly. The information
being transmitted online in this case is encrypted for
security. The primary example is the use of digital
credit cards (e.g. CyberCash and VISA/Mastercard's
SET-based transactions). This type is becoming the
mainstay of online payment methods because consumers are
familiar with this system and current players have vested
interest in extending that system to the Internet. The
problem with transactional security has been overly
played on the traditional media, but with proper caution
and encryption, the Internet may be more secure than
phone lines for this same old payment methods. (Can you
encrypt your voice when you give your credit card number
over the phone? Can you be sure who the other person is?)
The third type includes variations of digital cash,
electronic money and coins. What distinguishes these
systems from the other two is not simply the anonymity
they afford, but the fact that what is being transferred
is value or money itself. With the second type described
above, some one can commit fraud by lifting your message
(credit card number) by running up the charge on your
account. With digital currency, intercepting a message is
an outright theft of your property, not just information.
What's the deal with digital currency? Do we need
them?
Digital money, currency or coins are but an encrypted
serial number representing money, but money in all sense
since they are convertible to real money (e.g. U.S.
dollar) if desired. (Just as U.S. dollar bill is only a
paper with funny graphics.) It took hundreds of years
before people accepted paper money (and checks) as
payment. Digital currency will become dominant when
paper-based economy finally turns into the digital
economy. In the short run, digital money is just a
convenient form of existing money since digital money is
created against existing money. However, in the long run,
digital money may be created on its own if users accept
it on its face value, which will be determined by how
dependable its issuers are. All monies are only as good
as their issuers. Why do we need digital currency? Not
because it is the ultimate in anonymous money. Rather,
digital money is necessary if we are to operate fully in
the digital marketplace. Non-currency electronic payment
systems will be sufficient for some transactions; for
others, digital currency will be more efficient, e.g.
microtransactions as well as anonymous trades.
Furthermore, digital currency is very flexible since it
can be made to behave like electronic checks or anonymous
cash as situation warrants. Electronic checks or digital
credit cards become useless if their sensitive payment
information is erased, or become costly if that
information is hidden and calls for an elaborate process
of verification.
Smart cards, what are they good for?
The smart card will emerge as the ultimate interface
device for the mobile digital economy. It will hold your
cash, ID information, house and office keys, subway
tokens, all types of preference files (for house
temperature setting, driver seat setting, etc.) and other
information. You will exchange these information and
digital products with other people, transact business,
present to police officers, check into a hotel or a
sports arena, and all other things yet to be imagined.
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