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440 Part Three Key System Applications for the Digital Age

micropayments. The GPS capabilities of smartphones make possible geoadvertising, geosocial, and geoinfor-
mation services.

6. What issues must be addressed when building an e-commerce presence?
Building a successful e-commerce site requires a clear understanding of the business objectives to be
achieved by the site and selection of the right technology to achieve those objectives. E-commerce sites can
be built and hosted in-house or partially or fully outsourced to external service providers.

Key Terms
Advertising revenue model, 416
Long tail marketing, 421
Affiliate revenue model, 420
Market creator, 415
Behavioral targeting, 421
Market entry costs, 408
Business-to-business (B2B), 413
Marketspace, 405
Business-to-consumer (B2C), 413
Menu costs, 410
Co-location, 437
Micropayment systems, 419
Community providers, 416
Mobile commerce (m-commerce), 413
Consumer-to-consumer (C2C), 413
Net marketplaces, 430
Cost transparency, 408
Personalization, 408
Crowdsourcing, 420
Podcasting, 415
Customization, 409
Prediction market, 421
Digital goods, 411
Price discrimination, 408
Direct goods, 430 Price transparency, 408
Disintermediation, 410 Private exchange, 430
Dynamic pricing, 410 Private industrial networks, 430
Electronic data interchange (EDI), 429 Revenue model, 416
E-tailer, 414 Richness, 408
Exchanges, 431 Sales revenue model, 418
Free/freemium revenue model, 419 Search costs, 408
Geoadvertising, 433 Social graph, 425
Geoinformation services, 433 Social shopping, 420
Geosocial services, 433 Streaming, 415
Indirect goods, 430 Subscription revenue model, 419
Information asymmetry, 409 Transaction costs, 405
Information density, 408 Transaction fee revenue model, 419
Intellectual property, 415 Wisdom of crowds, 420
Location-based services, 432

Review Questions

1. What are the unique features of e-commerce, • Name and describe the e-commerce revenue
digital markets, and digital goods? models.
• Name and describe four business trends and 3. How has e-commerce transformed marketing?
three technology trends shaping e-commerce • Explain how social networking and the
today. “wisdom of crowds” help companies improve
• List and describe the eight unique features of their marketing.
e-commerce. • Define behavioral targeting and explain how it
• Define a digital market and digital goods and works at individual Web sites and on
describe their distinguishing features. advertising networks.
2. What are the principal e-commerce business and • Define the social graph and explain how it is
revenue models? used in e-commerce marketing.
• Name and describe the principal e-commerce 4. How has e-commerce affected business-to-
business models. business transactions?

MIS_13_Ch_10 Global.indd 440 1/17/2013 2:29:39 PM