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Chapter 10 E-commerce: Digital Markets, Digital Goods 413

business and revenue models. We’ll also cover new technologies that help com-
panies reach over 184 million online consumers in the United States, and an
estimated 2 billion more worldwide.

TYPES OF E-COMMERCE
There are many ways to classify electronic commerce transactions—one is by
looking at the nature of the participants. The three major electronic commerce
categories are business-to-consumer (B2C) e-commerce, business-to-business
(B2B) e-commerce, and consumer-to-consumer (C2C) e-commerce.

• Business-to-consumer (B2C) electronic commerce involves retailing
products and services to individual shoppers. BarnesandNoble.com, which
sells books, software, and music to individual consumers, is an example of
B2C e-commerce.
• Business-to-business (B2B) electronic commerce involves sales of goods
and services among businesses. ChemConnect’s Web site for buying and
selling chemicals and plastics is an example of B2B e-commerce.
• Consumer-to-consumer (C2C) electronic commerce involves consumers
selling directly to consumers. For example, eBay, the giant Web auction site,
enables people to sell their goods to other consumers by auctioning their
merchandise off to the highest bidder, or for a fixed price. Craigslist is the
most widely used platform used by consumers to buy from and sell directly to
others.

Another way of classifying electronic commerce transactions is in terms of the
platforms used by participants in a transaction. Until recently, most e-commerce
transactions took place using a personal computer connected to the Internet
over wired networks. Several wireless mobile alternatives have emerged:
smartphones, tablet computers like iPads, and dedicated e-readers like the
Kindle using cellular networks, and smartphones and small tablet computers
using Wi-Fi wireless networks. The use of handheld wireless devices for
purchasing goods and services from any location is termed mobile commerce
or m-commerce. Both business-to-business and business-to- consumer
e-commerce transactions can take place using m-commerce technology, which
we discuss in detail in Section 10.3.

E-COMMERCE BUSINESS MODELS

Changes in the economics of information described earlier have created the
conditions for entirely new business models to appear, while destroying older
business models. Table 10.5 describes some of the most important Internet
business models that have emerged. All, in one way or another, use the Internet
to add extra value to existing products and services or to provide the foundation
for new products and services.

Portal
Portals are gateways to the Web, and are often defined as those sites which users
set as their home page. Some definitions of a portal include search engines
like Google and Bing even if few make these sites their home page. Portals
such as Yahoo, Facebook, MSN, and AOL offer powerful Web search tools as
well as an integrated package of content and services, such as news, e-mail,
instant messaging, maps, calendars, shopping, music downloads, video stream-
ing, and more, all in one place. Initially, portals were primarily “gateways” to

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