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P E N N S Y L V A N I A L A W S C
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L E C T R O N I C C O M M E R C
E : V E R S I O N 2.0
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Congratulations to the Fall 2001 class for an excellent semester.
eCommerce will return next year.
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eCommerce Business Models
[ Thursday, August
30, 2001 ]
R E A D I N G S
Electronic Commerce: Making Money Today
& Tomorrow
As we'll use it in this course, the term "electronic
commerce" is broad enough to encompass all forms of commercial activity
with the Internet as a component. Thus, electronic commerce encompasses
not only the "dot-com" companies that garnered much attention in the
late 1990s, but also includes older or more established companies
that are venturing online, plus the various companies engaged in Internet-related
services. Thus, ecommerce is not limited to commercial activity that
occurs entirely online (though, as we shall see through the course,
these types of transactions raise many interesting legal issues).
In the late-1990s, Wall Street (collectively, investors,
analysts, bankers, etc.) was very enthusiastic about the future of
electronic commerce. At present, the markets seem to be reevaluating
this approach. Why? Which view is correct? Read the following summary
of one major investment house's current thoughts.
Morgan Stanley, Overview of Recent Internet Reports, April
2001 [pdf, 1.8 mb]
[in presentation format for fast reading -- pay special attention
to the graphs and charts]
Electronic Commerce: A Broader View
What is "New" About the "New Economy"?
Notwithstanding Wall Street, is electronic commerce
really "new"? Observers have noted that earlier technologies, such
as television and the telephone, were at least as significant to the
course of business. Indeed, Ward Hanson of the Stanford Business School
notes that the mid-to-late-1990s period of "euphoria" over the Internet
and eCommerce bears remarkable resemblance to excitement and explosion
of popularity of radio in the 1920s:
Ward Hanson,
The Original WWW: Web Lessons from the Early Days of Radio
(1996) [pdf, 92 kb].
Electronic Commerce as Restructuring the Economy
For a more sweeping view of the nature of ecommerce,
read the following short articles by Draper, Fisher, Jurvetson, a
top Silicon Valley venture capital firm:
Steve
Jurvetson, Amazon.com is an Anachronism (1999).
Steve
Jurvetson, The eyeball bandits are coming to a desktop near you
(1999).
Steve
Jurvetson, B2B Business at Web-Speed: The Internet Changes Everything
(2000).
. . . or Not . . .
Has the recent well-publicized downturn foiled the
best-laid plans of the new economy? Or are the big changes yet to
come?
Terry
Lefton, The Great Flameout, The Industry Standard, March 19,
2001
In
Search of Online Ad Boosts, Reuters, July 30, 2001.
Business Models: Specific Examples
Listed below are several examples of ecommerce businesses.
Follow the links to each company's web site, spend some time looking
around, and consider: (1) what the business model is (how does the
company make money); (2) what strategic challenges the business might
have; and (3) how the legal system might impact the company.
Wine.com
[www.wine.com]
eBay
[www.ebay.com]
PayPal
[www.paypal.com]
DealTime
[www.dealtime.com]
World
Wide Gamble [www.worldwidegamble.com]
Covisint
[ www.covisint.com ]
Priceline [ www.priceline.com
]
N O T E S & Q
U E S T I O N S
1. The Drivers of Electronic Commerce.
Consider the Morgan Stanley reading. How would you summarize
their views on the future of electronic commerce? Do you agree or
disagree? What will drive the growth of ecommerce: more users of the
Internet, new business models enabled by technology, or something
else altogether? What business models / business areas would you invest
in today?
2. The Historical Aspect. Note
Hanson's thesis: that while the early days of radio generated a great
deal of popular interest, the real impact on commerce didn't become
evident until much later. Do you think that the same might be true
of the 'net? If early radio and the current 'net can be compared,
what might the lessons of radio (some 75 years on) imply about the
future of ecommerce, especially the legal implications?
3. New Business Models. If the
'net spells the end of vertical integration (especially in retailing),
what impact will this have on the legal environment for ecommerce?
That is, will trademarks become less important, or more? Will disputes
over web-linking become more (or less) prevalent? What about consumer
protection -- privacy, antitrust? Do you see any legal issues for
the "eyeball bandits"? What about for the B2B businesses Jurvetson
describes in the third article?
4. The Role of the Legal System. Does
a look at various electronic commerce business models shed any light
on the appropriate role of the legal system? Should regulation be
used to encourage certain types of businesses (and discourage others)?
Do you foresee any special obstacles - from a business perspective
- to regulating ecommerce?
[ pageprints
]
C
O P Y R I G H T © 2001 R. P O L K W
A G N E R.