Microsoft Word - Document1
Assignment 8: Venues for E-commerce
BU460 – Electronic Commerce
Directions: Answer in complete sentences and be sure to use co
ect English
spelling and grammar. Sources must be cited in APA format. Your response
should be four (4) pages in length; Margins 1” all sides, Headings Bold, Type
Style and Size Times New Roman, 12-point, Software - MS Word
Read the case eBay Evolves on pp XXXXXXXXXXof your text. Respond to the following.
Part A: List and describe four different types of auctions.
Part B: Contrast eBay’s original business model with its cu
ent business model.
Part C: What are the problems that eBay is cu
ently facing? How is eBay trying to solve
these problems?
Part D: Are the solutions eBay is seeking to implement good solutions? Why or why not?
Are there any other solutions that eBay should consider?
Part E: Who are eBay’s top competitors online, and how will eBay’s strategy help it
compete?
BU460V Chapter 11.pptx
E-Commerce 2018: Business. Technology. Society
Fourteenth Edition
Chapter 11
Social Networks, Auctions, and Portals
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
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1
Learning Objectives
11.1 Describe the different types of social networks and online communities and their business models.
11.2 Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud.
11.3 Describe the major types of Internet portals and their business models.
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
Slide 2 is list of textbook LO numbers and statements
2
Social Network Fever Spreads to the Professions
Class Discussion
How has the growth of social networks enabled the creation of more specific niche sites?
What are some examples of social network sites with a financial or business focus?
Describe some common features and activities on these social network sites.
What features of social networks best explain their popularity?
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
Social Networks and Online Communities
Internet began as communications medium for scientists
Early communities were bulletin boards, newsgroups (e.g., the Well)
Today social networks, photo/video sharing, blogs have created new era of online socializing
Social networks now one of most common Internet activities
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
What is an Online Social Network?
Working definition of social network
Group of people
Shared social interaction
Common ties
Sharing an area for period of time
Online social network
Internet removes geographic and time limitations of offline social networks
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The Growth of Social Networks and Online Communities
Top social networks: over 90% of social networking activity
Facebook users: More than 35% are 44+
Growth of new social networks like Pinterest, Instagram, Snapchat
Search engine advertising still generates more revenue than advertising on social networks
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
Figure 11.1: Top U.S. Social Networks 2017
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
Figure 11.1, Page 729
Facebook is by far and away the dominant social network in the United States in terms of monthly unique visitors.
7
Turning Social Networks into Businesses
Most social networks monetize audiences through advertising
LinkedIn – fees for premium services
Twitter – struggling to make profits
Business use of social networks
Marketing and
anding
Reaching younger audience
Listening tool, monitoring online reputation
Collaboration tool
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Figure 11.2: U.S. Ad Spending on Social Networks, 2017
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
Figure 11.2, Page 732
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Insight on Society: the Dark Side of Social Networks
Class discussion:
How can businesses accurately judge whether negative comments are trolling or have merit and should be responded to?
Have you ever left a negative comment about a product or business? Have others’ negative comments influenced a purchase?
Should a business have any say in how an employee uses social networks outside of the office?
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
Types of Social Networks and Their Business Models (1 of 2)
General communities:
Offer opportunities to interact with general audience organized into general topics
Advertising supported by selling ad space on pages and videos
Practice networks:
Offer focused discussion groups, help, and knowledge related to area of shared practice
May be profit or nonprofit; rely on advertising or user donations
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
Types of Social Networks and Their Business Models (2 of 2)
Interest-based social networks:
Offer focused discussion groups based on shared interest in some specific subject
Usually advertising supported
Affinity communities:
Offer focused discussion and interaction with other people who share same affinity (self or group identification)
Advertising and revenues from sales of products
Sponsored communities:
Created by government, nonprofit, or for-profit organizations for purpose of pursuing organizational goals
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Social Network Features and Technologies
Algorithms, computer algorithms
Produce relationship-based content
Affinity groups
Profiles, Newsfeed, Timeline, Favorites (Like)
Friends networks, Groups, Network discovery
Games and apps
Instant messaging, Message boards
Storage
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Insight on Technology: Trapped Inside the Facebook Bu
le?
Class Discussion
How does Facebook’s Trending Topics work? How does the News Feed algorithm work?
Facebook has been described as an echo chamber. What is this, and is this a feature of other social networks?
Should Facebook be held responsible for presenting an equal number of both liberal and conservative opinions?
Should algorithms for presenting news to readers be monitored and adjusted by human editors? Why or why not?
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
Online Auctions
C2C auctions, e.g. eBay
B2C auctions
Several hundred different auction sites in United States alone
Online retail sites are adding auctions
Can be used to
Sell goods and services
Allocate resources
Allocate and bundle resources
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
Benefits of Auctions
Liquidity
Price discovery
Price transparency
Market efficiency
Lower transaction costs
Consumer aggregation
Network effects
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Risks and Costs of Auctions
Delayed consumption costs
Monitoring costs
Possible solutions include fixed pricing
Equipment costs
Trust risks
Possible solution—rating systems
Fulfillment costs
Merchants also face risks; e.g. nonpayment, false bidding, bid rigging, and so on
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Auctions as an E-Commerce Business Model
No inventory
No fulfillment activities
No warehouses, shipping, or logistical facilities
eBay makes money from every stage in auction cycle
Transaction fees, listing fees, financial services fees, advertising or placement fees
Difficulty in establishing audience
eBay dominates online auction market
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
Types of Auctions (1 of 2)
English auction:
Single item up for sale to single selle
Highest bidder wins
Dutch Internet auction:
Public ascending price, multiple units
Final price is lowest successful bid, which sets price for all higher bidders
Penny (bidding fee) auction
Must purchase bids ahead of time
Items owned by the site
Timed auction; last and highest bidder wins
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Types of Auctions (2 of 2)
Name Your Own Price Auction
Users specify what they are willing to pay for goods or services and multiple providers bid for their business
Prices do not descend and are fixed
Consumer offer is commitment to buy at that price
Enables sellers to unload unsold excess capacity
Example: Priceline
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Table 11.6: Factors to Consider When Choosing Auctions
Considerations Description
Type of product Rare, unique, commodity, perishable
Stage of product life cycle Early, mature, late
Channel-management issues Conflict with retail distributors; differentiation
Type of auction Seller versus. buyer bias
Initial pricing Low versus. high
Bid increment amounts Low versus. high
Auction length Short versus. long
Number of items Single versus. multiple
Price-allocation rule Uniform versus. discriminatory
Information sharing Closed versus. open bidding
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Auction Prices: Are They the Lowest?
Auction prices not necessarily the lowest
Auctions are social events
Herd behavio
Unintended results:
Winner’s regret
Seller’s lament
Loser’s lament
Consumer trust an important motivating factor in auctions
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Fraud and Abuse in Auctions
Fraud produces information asymmetries between buyers and sellers, causing auctions to fail
Types include:
Bid rigging, price matching, shill feedback, feedback extortion, shill bidding, bid siphoning
Fraud prevention solutions include:
Rating systems, watch lists, proxy bidding
Investigation units
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E-Commerce Portals
Most frequently visited sites on We
Original portals were search engines
As search sites, attracted huge audiences
Today provide:
Navigation of the We
Commerce
Content (owned and others’)
Goal is to keep visitors present and viewing ads
Enterprise portals
Help employees find important organizational content
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Figure 11.4 the Top U.S. Portal/Search Engines, 2017
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
Figure 11.4, Page 753
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Insight on Business: Verizon Doubles Down on Portals
Class discussion:
What prompted Verizon’s change in business focus?
What steps is Verizon taking to accomplish its goal?
How does the purchase of A O L and Yahoo help Verizon accomplish its goal?
What abilities does Verizon have to use in become a major player in online media and advertising?
Copyright © 2019, 2018, 2017 Pearson Education, Inc. All Rights Reserved
Types of Portals
General purpose portals:
Attempt to attract very large general audience
Retain audience by providing in-depth vertical content channels
Example: Yahoo
Vertical market portals:
Attempt to attract highly-focused, loyal audiences with specific interest in:
Community
Specialized content
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Figure 11.5 Two General Types of Portals: General Purpose and Vertical Market Portals
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Figure 11.5, Page 757
There are two general types of portals: general-purpose and vertical market. Vertical market portals may be based on affinity groups or on focused content.
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Portal Business Models
General advertising revenue
Tenancy