E Business & e Commerce

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Chapter 38 - e-Business &

e-Commerce
Outline
38.1 Introduction
38.2 e-Business Models
38.2.1 Storefront Model
38.2.2 Shopping-Cart Technology
38.2.3 Auction Model
38.2.4 Portal Model
38.2.5 Name-Your-Price Model
38.2.6 Comparison-Pricing Model
38.2.7 Bartering Model
38.3 Building an e-Business
38.4 e-Marketing
38.4.1 Branding
38.4.2 Marketing Research
38.4.3 e-Mail Marketing
 2004 Prentice Hall, Inc. All rights reserved.

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e-Commerce
38.4.4 Promotions
38.4.5 Consumer Tracking
38.4.6 Electronic Advertising
38.4.7 Search Engines
38.4.8 Affiliate Programs
38.4.9 Public Relations
38.4.10 Customer Relationship Management (CRM)
38.5 Online Payments
38.5.1 Credit-Card Payment
38.5.2 Digital Cash and e-Wallets
38.5.3 Micropayments
38.5.4 Smart Cards

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e-Commerce
38.6 Security
38.6.1 Public-Key Cryptography
38.6.2 Cryptanalysis
38.6.3 Key Agreement Protocols
38.6.4 Key Management
38.6.5 Secure Sockets Layer (SSL)
38.6.6 WTLS
38.6.7 IPSec and Virtual Private Networks (VPN)
38.6.8 Security Attacks
38.6.9 Network Security
38.7 Legal Issues
38.7.1 Privacy
38.7.2 Defamation
38.7.3 Sexually Explicit Speech
38.7.4 SPAM
38.7.5 Copyright and Patents

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e-Commerce
38.8 XML and e-Commerce
38.9 Introduction to Wireless Technology and m-Business
38.10 m-Business
38.11 Identifying User Location
38.11.1 E911 Act
38.11.2 Location-Identification Technologies
38.12 Wireless Marketing, Advertising and Promotions
38.13 Wireless Payment Options
38.14 Privacy and the Wireless Internet
38.15 Web Resources

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Objectives
In this tutorial, you will learn:

– To understand how the Internet and World Wide Web are
revolutionizing business processes.
– To introduce various business models used on the Web.
– To explore the advantages and disadvantages of creating an
online business.
– To examine marketing, payment, security and legal issues
that affect e-businesses.

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38.1 Introduction
• Successful online businesses

– Recognize need or demand
– Meet that need
– Must constantly readjust to shifting trends and technologies
– Personalization
• Tradeoff between convenience and privacy concerns
• E-commerce vs. e-business
– E-commerce
• Aspects of doing business online that relate to exchanges with
customers, partners and vendors.
– E-business
• All aspects of e-commerce, plus internal operations of doing
business
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38.2 e-Business Models
• e-business
– Expansion of old technologies and techniques
• Electronic Funds Transfers, for example
– Requires new business models and categories
– Pioneered by early e-businesses
• Amazon.com, eBay, Yahoo among others

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38.2.1 Storefront Model
• Simulates the experience of shopping in a store

– Very common
– Provides services similar to real “brick and mortar” store
• Transaction processing
• Security
• Payment
• Information storage
– Products organized into catalogs that users can browse and
search

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38.2.2 Shopping-Cart Technology
• Shopping-cart metaphor
– Holds items a user has selected to buy
– Merchant server contains database of available items
– User puts all desired items in the cart
– When finished, user “checks out”
• Prices totaled
• Shipping, tax and other charges applied
• Shipping and payment details gathered
• Order confirmed

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• Online auctions
– Buyers bid on items made available by various sellers
• No fixed price
– Very attractive to customers
• Often able to get lower prices on goods than traditional stores
– Site is searchable to allow easy location of desired items
– Site receives a commission on each sale
– Model also employed in business-to-business transactions
– www.eBay.com is the leading auction site

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Fig. 38.1 eBay home page. (These materials have been reproduced with the permission of eBay Inc.
COPYRIGHT © EBAY INC. ALL RIGHTS RESERVED.)

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Fig. 38.2 Placing a bid on eBay. (These materials have been reproduced with the permission of eBay Inc.
COPYRIGHT © EBAY INC. ALL RIGHTS RESERVED.)

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38.2.4 Portal Model
• Portal sites
– Combine many services into one page
• News
• Sports
• Weather
• Web searches
– Horizontal portals
• Search engines
• Aggregate information on broad range of topics
– Vertical portals
• Information on narrow range of topics
– Convenient, centralized access to information

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38.2.5 Name-Your-Price Model
• User submits price they are willing to pay

– Site then passes it along to partner sites, who evaluate the
offer
– If accepted, user must pay that price
– If rejected, user may submit a new price
– Many such sites employ intelligent agents
• Search, arrange, analyze large amounts of data

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38.2.6 Comparison-Pricing Model
• Poll merchants for lowest price on an item

– Often generate revenue through partnerships with other sites
– Convenient way to search multiple merchants
– Not always the true best price
• Non-partner merchants might have better offers, but be
unlisted
– Can employ search-engine technology to automatically seek
out best prices or related products

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38.2.7 Bartering Model
• Trade items rather than currency

– Similar to auction sites
– Merchant and customer haggle to a fair price
– In practice, transaction is usually a combination of currency
and items

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38.3 Building an e-Business
• Multiple approaches
– Turnkey solutions
• Ready-made e-Business sites
– e-Business templates
• Outline business’ structure
• Design details left open to owner
– Outsource control entirely to a specialized firm
• Expensive
• Little hassle, lets experts control it while you control your
business
– Build original, custom solution
• Allows maximum control, makes your site unique
• Most expensive, involves “reinventing the wheel”

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38.4 e-Marketing
• Marketing campaign
– Marketing your site through multiple means
– Market research
– Advertising
– Promotions
– Branding
– Public Relations (PR)
– Search engines

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38.4.1 Branding
• Brand
– Name, logo or symbol that defines company’s products or
services
• Unique
• Recognizable
• Easy to remember
– Brand equity
• “Value” of the brand
• Customer perception and loyalty
– Companies with existing brand may more easily establish
their brand on the Internet
• New companies must work to establish trust in their brand

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• Marketing research
– Marketing mix
• Product or service details
• Pricing
• Promotion
• Distribution
– Focus groups
– Interviews
– Surveys and questionnaires
– Secondary research
• Reviewing pre-existing data

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• Marketing research, cont.

– Demographics
• Statistics on human population
– Psychographics
• Lifestyles, backgrounds, values
– Online focus groups
• Easier to conduct than in-person testing
• Get feedback from real customers

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• e-Mail marketing
– Part of the reach of the campaign
• Span of people who marketing should target
– Direct mail vs. indirect mail
• Direct mail is personalized to the individual recipient
• Direct is often more effective
• Offers right product at right time
• Tailor mailing to customer’s interests
– Opt-in e-Mail lists
• Customer chooses to subscribe
• Send newsletters with information on offers and promotions

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• e-Mail marketing, cont.

– Dangers of e-Mail marketing
• Do not flood customers with too much e-Mail in too short a
time
• Do not send unsolicited e-Mail
– Spam
– Gives company a poor reputation, illegal in some areas

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38.4.4 Promotions
• Promotions
– Attract visitors
– Encourage purchasing
– Increase brand loyalty
– Should not be only reason people purchase from your
company
• Sign of weak product or brand
– Be sure cost of promotion is not so great that no profit is
ever seen

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• Consumer tracking
– Keep user profiles
– Record visits
– Analyze results of advertising and promotion
– Helps define target market
• Group toward whom it is most profitable to target marketing
resources
– Log files contain many useful details
• IP address
• Time and frequency of visits

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• Consumer tracking, cont.

– Cookies
• Text file stored on customer’s computer
• Can contain record of user’s actions, preferences, buying
habits

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• Advertising
– Establish and strengthen branding
– Publish URL in all advertising
• Internet advertising becoming important
– Links and banners on sites viewed often by target market
• Can be interactive or animated
– Allow advertising on your site in return for payment
– Pop-up ads
• Appear in a separate window when page loads
• Often extremely irritating to customers
• Actually decrease interest in advertised product due to
negative association with pop-up ad

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• Search engine advertising

– Pay for better placement of your site in search results
– Sites that receive more clicks on their advertisements move
higher in rankings

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• Search engines
– Scan websites for desired content
– Being highly ranked in search results important
• People tend not to browse results too deeply
– Some sites base your ranking on meta tags
• Hidden XHTML tags that contain information about site
• Keywords, title, summary
– Others simply “spider” the site
• Program reads content and decides what is important

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• Search engines, cont.

– Google a leading search engine
• Uses complex formulas to rank pages
• Number of sites linked to you, and their ranking
• Number of clicks on your site
• Relevance to keyword user is searching for

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38.4.8 Affiliate Programs
• Affiliate programs
– Company pays other sites to be affiliates
• Advertise the company’s products
• When their ad leads to purchases from the company, affiliate
site receives a commission
– Increases exposure and number of site visits
– Amazon.com has large, successful affiliate program

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38.4.9 Public Relations
• Public relations
– Provide customers with latest information
• Products and services
• Sales
• Promotions
– Press releases
– Presentations and speeches
– e-Mail
– Crisis management
• Issue statements regarding company problems
• Minimize damage to company, brand and reputation

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38.4.10 Customer Relationship Management
• Customer Relationship Management (CRM)

– Provision and maintenance of quality service
– Communicate with customers
– Deliver responses to customers’ wants and needs
– Customer satisfaction key to successful business
• Much easier, less expensive to retain customers than attract
new customers
– Challenging for online businesses
• Transactions not conducted in person
• Requires innovative new techniques
– eCRM, iCRM
• Refer to CRM conduced via Internet, interchangeable terms

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38.4.10 Customer Relationship Management
• Aspects of CRM
– Call handling
• Management of calls between customers and service
representatives
– Sales tracking
– Transaction support
• Support for people and technology involved in keeping
transactions running smoothly
– Personalization of customer experience

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38.5 Online Payments
• Electronic Funds Transfer

– Basis for online payments
– Multiple ways of conducting EFT’s and presenting them to
the customer
– Many companies offer EFT solutions

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38.5.1 Credit-Card Payment
• Online credit-card payment

– Popular and common
• Many people have and are familiar with credit cards
– Some customers have security and privacy concerns
– Require merchant account at bank
• Special card-not-present (CNP) account for online transactions

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38.5.2 Digital Cash and e-Wallets
• Digital cash
– Stored electronically
– Analogous to traditional bank account
• Customers deposit money
– Overcomes drawbacks of credit cards
• Digital cash accounts often allow deposits in form of checks or
bank transfers
• Allows merchants to accept customers without credit cards
• e-Wallets
– Store billing and shipping information
– Fill out forms at compatible sites in one click

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38.5.3 Micropayments
• Micropayments
– Merchants often charged fee for credit card transactions
• For small items, fee can exceed cost of item
– Micropayments allow merchants to avoid this problem
• Add together all small transactions and pay percentage of that
– Similar to concept of phone bill
• Pay one large sum monthly rather than tiny sum per each use

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38.5.4 Smart Cards
• Smart cards
– Memory cards
• Only allow for storage of information
– Microprocessor cards
• Like tiny computers
• Can do processing in addition to storing data
– Contact interface
• Card inserted into reading device for use
– Contactless interface
• Data transmitted via wireless device inside card
– Data and money protected by personal identification number
(PIN)

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38.6 Security
• Security is an increasingly important concern

– Highly confidential data being transmitted all the time
• Credit cards, social security numbers, business data
– Attackers attempt to steal, corrupt or otherwise compromise
this data
– Requirements for successful secure transaction:
• Privacy
• Integrity
• Authentication
• Authorization
• Non-repudiation
– Also concerned with availability of site

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• Cryptography
– Transforms data using cipher or cryptostream
– Key acts as password that combined with cipher will decrypt
encoded message into original message
– Early cryptography relied on symmetric cryptography
• Same key used to encrypt and decrypt
• Problem of how to securely transmit key itself arose
– Solution was public-key cryptography
• Two related but different keys used
• Sender uses receiver’s public key to encode
• Receiver decodes with private key
• Keys long enough that guessing or cracking them takes so
much time it is not worth the effort

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Fig. 38.3 Encrypting and decrypting a message using public-key cryptography.

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• Digital signatures
– Same concept as physical written signatures
• Authenticate signer
• Difficult to forge
– Part of public-key cryptography
– Generated by running phrase through hash function
• Returns hash value
– Hash value for a phrase is over 99% guaranteed unique
• ie., two different phrases very unlikely to generate same value

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Fig. 38.4 Authentication with a public-key algorithm.

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• Public Key Infrastructure

– Digital certificates
• Digital documents issued by certification authority
• Name of individual/group
• Public key
• Serial number
• Expiration date
• Signature of trusted authority
– Certificate repositories
• Hold database of public digital certificates

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• PKI implementations
– More secure than standard point-of-sale (POS) transactions
• Strong encryption can take decades to crack using current
technology
– RSA encryption popular choice for PKI
• Developed at MIT in 1977
– Pretty Good Privacy (PGP)
• Implementation of PKI
• Very popular way to encrypt e-mail
• Operates using web of trust

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• Searching for weaknesses in encryption

– Try to find ways to decrypt ciphertext without having key
– Not just done by malicious attackers
• Researchers want to find and fix flaws before attackers find
and exploit them
• Cryptanalytic attacks
– Common attack searches for relationship between ciphertext
and key
– Easier when all or part of decoded message known in
advance
• Goal not to determine original message, but to discover key
• Allows attacker to forge messages from that sender

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• Preventative measures
– Key expiration dates
• If attacker breaks or steals key, only useful for limited time
– Exchange secret keys securely with public-key cryptography

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38.6.3 Key-Agreement Protocols
• Public-key encryption not perfect solution

– Requires significant computing power
– Best used to exchange secret keys once, then use those keys
for rest of transaction
• Key-agreement protocol
– Protocol is set of rules for communication
– Digital envelope most common
• Encrypt message using secret key
• Encrypt secret key with public-key encryption
• Both encrypted portions sent to receiver
• Receiver decrypts secret key using private key
• Receiver then uses decrypted secret key to decrypt message

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38.6.3 Key-Agreement Protocols
Fig. 38.5 Creating a digital envelope.

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38.6.4 Key Management
• Protecting private keys vital to security

– Key generates possible source of vulnerability
• Susceptible to brute-force cracking
• If keys always chosen from small subset of all possible keys,
much easier to crack
• Algorithm must generate random keys from large set of
possible keys
– Key should be very long
– Common standard is 128 bits
• 2 to the 128 power

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• SSL facilitates secure online communications

– Developed by Netscape
– Built into most browsers and servers
• Standard Internet communication process
– Data sent and received through sockets
• Software mechanism that sends, receives and interprets
network data
– Transmission Control Protocol/Internet Protocol (TCP/IP)
• Standard protocol for Internet communication
• Controls how data is transferred and interpreted over networks
– Messages broken down into packets
• Add ordering, routing and error-correction information

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• Standard Internet communication process, cont.

– Packet’s destination is an IP address
• Unique number that identifies computer on network
– TCP puts received packets in order and checks for errors
• Can request retransmission if errors discovered
– Only basic error checking exists
• Attackers can forge data with relative ease
• More secure methods necessary to increase integrity

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• SSL
– Layer on top of TCP/IP
– Implements public-key encryption using RSA algorithm
– Generates secret key referred to as session key
• Rest of transaction encrypted using this key
– Messages still sent through TCP/IP after encryption step
– Generally used for point-to-point connections
• One computer communicating with another directly
– Transport Layer Security (TLS) another similar technology

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• SSL, cont.
– SSL does not protect data stored on server
• Only data that is currently traveling across network
– Stored data should be encrypted by another means
– Always take standard precautions against cracker attacks
• Making SSL more efficient
– Encryption taxing on server resources
– Dedicated SSL encoding/decoding hardware exists
• Peripheral component interface (PCI) cards
• Offload these tasks from CPU

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38.6.6 WTLS
• Wireless Transport Layer Security

– Security layer for Wireless Application Protocol (WAP)
• WAP used for wireless communication on cell phones and
other devices
– Provides authentication, integrity, privacy and denial-of-
service protection
– Encrypts data sent between WAP device and WAP gateway
• Where wireless network connects to wired network
– Data translated from WTLS to SSL at gateway
• For an instant, data is unencrypted
• WAP gap
• No successful WAP gap attack ever reported

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38.6.7 IPSec and Virtual Private Networks
(VPN)
• Types of networks
– Local Area Network (LAN)
• Connects physically close computers
– Wide Area Network (WAN)
• Connect computers in multiple locations
• Employ private phone lines, radio waves or other techniques
– Virtual Private Network (VPN)
• Leverage Internet to simulate LAN for multiple remote
networks and wireless users
• Secure tunnel over Internet
• Data protected by encryption

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(VPN)
• Internet Protocol Security (IPSec)
– Developed by Internet Engineering Task Force (IETF)
– Uses public-key and symmetric-key cryptography
– Protects against data manipulation and IP-spoofing
– Conceptually similar to SSL
• Secures entire network rather than point-to-point transaction
– Often employs RSA or Diffie-Hellman encryption for key
exchange
– DES or 3DES used for secret key
• IPSec packets
– Three components

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(VPN)
• IPSec packets, cont.
– Authentication header (AH)
• Verifies identity of sender and integrity of data
– Encapsulating security payload (ESP)
• Encrypts packet to prevent reading while in transit
– Internet Key Exchange (IKE)
• Authenticates encryption keys
• VPN shortcomings
– Time consuming and complicated to initially set up
– Must be careful who is given access
• VPN users essentially the same as LAN users
• Potentially have access to sensitive data

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• Security of greater concern than ever before

– Great variety of attacks to defend against
– Denial of Service (DoS) and Distributed DOS (DDoS)
• Flood server or network with data packets
• Prevents any legitimate traffic from passing through
• DDoS occurs when attacker gains control of multiple
machines
• Uses them all to coordinate massive attack
– Viruses
• Malicious programs
• Attach to or overwrite legitimate programs
• Vary in severity from minor irritations to complete destruction
of hard drive data

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• Security of greater concern than ever before, cont.

– Worms
• Similar to viruses
• Able to reproduce and spread over networks
• Generate extreme amount of traffic, slowing networks
• CodeRed and ILOVEYOU two infamous worms
• Attackers commonly called hackers or crackers

– Traditionally, terms not interchangeable
• Hacker is a skilled programmer and computer user
• Cracker maliciously attacks computers for personal gain
• In practice, hacker has become blanket term for computer
criminals

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• Protecting against attacks

– Software exists to mitigate effects of these attacks
– Anti-Virus software
• Detects and deletes viruses and worms before they execute

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• Network security
– Allow authorized users access they need
– Prevent unauthorized users from accessing and damaging
network
– Firewall a vital tool for network security
• Protects LANs from unauthorized traffic
• Placed between external Internet connection and computers on
local network
• Blocks or allows traffic based on rules set by administrator
• Administrator must balance users’ needs for functionality
against need for network security

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• Network security, cont.

– Intrusion detection systems (IDS)
• Detect that an attacker has penetrated the firewall
• Monitor network traffic and log files
• If intrusion detected, immediately closes that connection and
alerts administrator through various means

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38.7 Legal Issues
• Internet poses new challenges to lawmakers

– File-sharing could redefine copyright laws
– Marketing techniques clash with users’ desire for privacy
– Cyberspace requires rethinking many traditional legal ideas

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38.7.1 Privacy
• U.S. Constitution has no explicit right to privacy

– Regardless, privacy is vital concern to many people
– Many sites track activity and personal information
• Provides personalization and sometimes better service
• Balanced against desire for marketers to not follow one’s
every move or steal valuable information
– Affects company employees as well as customers
• Companies install key loggers or keystroke cops
• Monitor what employees do on their system
• Right of company to ensure employees doing their jobs versus
employee desire for privacy and free-speech
– Idea of right to privacy still being created in courts

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38.7.2 Defamation
• Defamation
– Consists of slander and libel
• Slander is spoken
• Libel is written or spoken in a broader context than slander
• Proving defamation
– Plaintiff must:
• Show that statement was written, spoken or broadcast
• Reasonably identify individual responsible
• Show that the statement is indeed defamatory
• Show that the statement was intended to cause harm and
known to be false
• Show evidence of injury or actual loss

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38.7.3 Sexually Explicit Speech
• Pornography is protected by First Amendment

– Obscenity is not
– Miller test has been deciding factor between the two
• Obscenity “appeals to the prurient interest”
• Lacks serious literary, artistic, political or scientific value
– In cyberspace, community standards are different
• “Communities” not defined by physical location
• Issues of jurisdiction are unclear
– Problem of what standard to hold Internet to
• Broadcast laws restrict content rather than audience
• Print laws use non-content-related means
• Restrict audience rather than content
• Either is possible on the Internet

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38.7.4 Spam
• E-mail marketing
– Can be useful or harmful
– Unsolicited mass-mailings, or Spam, strongly frowned on
• Many Internet users received hundreds per day
• Content often at best irrelevant and at worst highly offensive
• Possible for children to receive pornography, for example
– Legislation being created to deal with Spam epidemic
– Software to combat spam also exists
– Spammers constantly evolve to circumvent new measures
– One of the toughest usability and privacy issues with
Internet today

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38.7.5 Copyrights and Patents
• Copyright
– Protection given to author of original piece
• Protects an expression of idea, not idea itself
– Incentive to create by guaranteeing credit for work
• Life of author plus 70 years
– Digital technology has made copyright gray area
• Fair use vs. piracy
• Copies can be perfect, not cheap imitations
– Movies and MP3-encoded music files hottest area of debate
• File-sharing programs lets users download copyrighted works
freely
• Costs distributors and artists money
• Users want to sample music, enjoy lower prices

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38.7.5 Copyrights and Patents
• Patents
– Grant creator sole rights to a discovery
– Designed to foster invention and innovation
• Guarantees new idea cannot be stolen from inventor
– Possible to patent method of doing business
• Must be non-obvious to person skilled in relevant field
– Also contentious area
• Some feel patents stifle rather than foster innovation
• 20-year duration may be too long in fast-paced software world
• Some companies file patents solely to profit from infringement
lawsuits later on

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38.8 XML and e-Commerce
• Extensible Markup Language (XML)

– One parent of XHTML
– Allows users to create customized tags to mark up data
• Share data in standard, easily-used format worldwide
• Portable between multiple applications and platforms
– Some industries have standard XML formats already
• MathML
• CML
• XMI
• OSD
– Facilitates Electronic Data Interchange (EDI)

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38.9 Introduction to Wireless Technology
and m-Business
• Wireless technology
– One of technology’s fastest growing sectors
– Brings communications and Internet everywhere
– Wireless devices support increasing number of features
– Convergence beginning to occur
• Features of several distinct products combined into one
• PDAs merging with cell phones

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38.10 m-Business
• Mobile business
– E-business enabled by wireless technology
– Relatively new, but rapidly growing
– Access critical business information anytime, anywhere
• Employees can conduct their duties more easily
• Customers can interact with online businesses in new ways
and locations

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38.11 Identifying User Location
• Location-identification technologies
– Determine users’ physical location to within yards
– Useful in wireless marketing
• Send promotion data when user is near relevant location
– Great benefits to emergency services
• Quickly and accurately locate victims
– Made possible by relationships between wireless providers,
networks and users
– Multipath errors can cause problems
• Signals reflecting off nearby objects

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38.11.1 E911 Act
• Enhanced 911 Act

– Standardize 911 service across mobile devices
– Improve response time to calls made from cell phones
– First phase requires cellular providers to disclose phone
number of caller as well as location of nearest cell site
– Second phase requires disclosure of location of caller to
within 125 meters
– Several benefits
• Callers often do not know their exact location
• If call breaks up, emergency responders can still send help

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• Methods of locating the user

– Triangulation
• Analyze angle of signals from at least two fixed points
– Information presented as geocode
• Latitude and longitude
– Different methods have varying degrees of accuracy

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Technology Degree of Accuracy

Cell of Origin (COO) Least accurate. User could be anywhere in tower’s range.
Meets only Phase I of E911 Act.
Angle of Arrival (AOA) Fairly accurate. User is within the overlap of two towers’
cell sites. Used primarily in rural areas where there are
fewer towers. Complies with Phase II of E911.
Time Difference of Arrival Accurate. User’s location is determined by triangulating
(TDOA) from three locations. Complies with Phase II of E911. Most
effective when towers are close together.
Enhanced Observed Time Accurate. User’s location is determined by triangulating
Difference (E-OTD) from three locations. Complies with Phase II of E911.
Location Pattern Matching Accurate. User’s location is determined by analyzing
multipath interference in a given area, making the method
more effective for locating a device in an urban area.
Global Positioning Systems Highly accurate. Satellites determine a user’s location
(GPS) anywhere on earth. However, GPS is not as effective when
the user is indoors.
Fig. 38.6 Location-identification technologies.

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38.12 Wireless Marketing, Advertising and
Promotions
• Wireless Marketing
– Wireless technology provides unique opportunities
– Augments, rather than replaces, traditional marketing
• Push and pull strategies
– Pull
• Users request data to be sent in real-time
– Push
• Company delivers messages at time it deems appropriate
– Using either one, advertising should be opt-in
• User must have explicitly requested the service
• Otherwise it is essentially spam, creates ill-will toward the
company

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Promotions
• Effective wireless marketing
– Must deliver right content at right time
– Perfect match for location-identification technology
– Advertisers much more likely to place and pay more for ads
that are well-targeted and likely to generate response
– Several challenges and obstacles
• Security
• Ensuring ads display properly on diverse devices
• Additional middle-men
• Selecting suitable publisher and transmission technology

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Promotions
• Short Message Service
– Deliver simple text-only messages
– Interactivity is limited
– Nearly no load time
– Work well for quick, simple alerts

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38.13 Wireless Payment Options
• Wireless payments (m-payments)

– Must be secure and reliable, like standard online payments
– Mobile Virtual Network Operators (MVNOs)
• Purchase bandwidth and re-brand with added services
• Option for banks to make micropayments profitable
– M-wallets
• Users store billing and shipping information
• Recall with one click
• Promote convenience

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• Privacy problems magnified on wireless devices

– Transmissions can be intercepted
– Users located accurately
– Accepted standard is opt-in policy
• Users request to be sent information
• Consumer should always expect the information they receive
• No unauthorized information sharing with partners
– Sometimes double opt-in
• User requests information, then has to confirm decision
– Opt-out frowned upon
• Send users information unless they say to stop

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• CITA
– Cellular Telecommunications and Internet Association
– Group that has created guidelines for consumer privacy
– Outlined four guidelines
• Alert consumers when location being identified
• Always use opt-in marketing
• Consumers able to access their own information
• Same protections offered by all devices and carriers

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E Business & e Commerce

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1

Chapter 38 - e-Business &

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In this tutorial, you will learn:

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• Successful online businesses

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• Simulates the experience of shopping in a store

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• User submits price they are willing to pay

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• Poll merchants for lowest price on an item

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• Trade items rather than currency

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• Marketing research, cont.

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• e-Mail marketing, cont.

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• Consumer tracking, cont.

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• Search engine advertising

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• Search engines, cont.

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• Customer Relationship Management (CRM)

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• Electronic Funds Transfer

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• Online credit-card payment

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• Security is an increasingly important concern

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• Public Key Infrastructure

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