Many early e-commerce sites offered catalog display systems essentially duplicating brick-and-mortar storefronts. One of the primary goals of e-commerce at this point was to display or distribute information about products and services, but the emphasis was to drive customers to the physical store. In many cases, e-commerce sites operated as display windows for the brick-and-mortar store. For their part, customers began to visit these sites for comparison-shopping, not to buy online.

The e-commerce business model of this time closely mimicked the policies, procedures, and practices of the physical store. Much of the software, security protocols, and infrastructure were in early stages of development. Over time, software advanced, allowing greater support for online transaction processing, supply-chain management, customer relationship management (CRM), enterprise resource planning (ERP), ordering, inventory management, shipping and logistics, and data mining.

As technologies advanced, it became clear that e-commerce sites were more than electronic advertisements for a physical store, they were themselves viable storefronts. The focus shifted towards the Web, the consumer, and online marketing.

Rather than merely presenting catalog offerings to consumers, e-commerce applications developed around the business semantics of the transaction. True Internet e-commerce shifted from general selling to focusing on the individual customer. Online marketing became critical, and companies that did marketing best made money. Many e-business owners could see that their strategy had to move from passive marketing in which customers "happened" upon a Web site to aggressive marketing in which potential customers were brought to a Web site.

To do this, a strong emphasis was placed on "demographics" (characteristics of customers) and on understanding everything possible about potential customers. Internet marketing leveled the playing field in that anyone with a product or idea could easily publish a Web site and try online marketing. Many such entrepreneurs became wealthy overnight; many more lost everything.

Today, the World Wide Web is a marketing and advertising juggernaut with organizations scrambling to be part of it. Advertising controls much of the Web today; virtually every Web site displays a number of ads. In the background, companies seek personal information to profile potential customers and track surfing habits to see what sites are visited and why. Your Facebook account, for instance, reveals demographic information, and this information determines what ads appear when you check the site.

Where e-commerce is today is largely the focus of this chapter.

Web 2.0 developments and the Web 3.0 paradigm have launched the next stage of e-commerce. Consumers advertise their needs, and businesses or individuals compete to meet them. With the promise of the Semantic Web, intelligent agents will assist you in finding businesses or individuals to fulfill your needs. The Web browser will change from a mere interface to an intelligent personal assistant or agent.

Wireless and embedded Internet-enabled devices have made significant advances. Wireless technologies provide access to network computing anywhere. Smartphones and similar devices offer interaction quality that's comparable to desktop computers. Embedded devices have been emerging in homes and businesses alike. These devices not only provide access to an entity on the Internet, they also enable access to certain activities. It is a distributed e-commerce model in which e-commerce occurs anytime and anywhere.

Transforming a brick-and-mortar business to an e-business is not a straightforward process—you must make many decisions. Certainly, the establishment of an e-business requires more than just posting a Web site. Here's a to-do checklist when starting an e-business:

These are some considerations for planning an e-business. You will need to address each item to help ensure success. Setting up a Web site is just one step; the site then requires constant updating, marketing, and technology and security enhancements. This work will ultimately determine the success of your site.

Growing an online business also requires an understanding of customer life cycle management (CLM) and how it pertains to online marketing. CLM refers to the relationship with online visitors from the moment they click onto a Web site to the time they leave. CLM is an essential part of the online marketing campaign and forms the foundation from which all marketing strategies are designed and applied.

There are three distinct stages involved with the CLM:

These stages flow sequentially. There can be no conversion without acquisition and no retention with conversion. Some developers and marketing businesses simplify CLM by asserting that e-business success is all about acquisition and driving traffic to the site. This statement is only partially true. Growing your e-business online involves getting "qualified" traffic to your site. This means marketing strategies that focus on the acquisition of visitors who fit your desired demographic.

One of the greatest challenges facing e-business is driving traffic to the site. Designing and deploying an effective Internet marketing strategy does not happen by accident. Rather, it is a dedicated and proactive search for marketing avenues. Internet marketing is not passive, not simply waiting for visitors to arrive. Internet marketing requires knowing and actively seeking the demographic.

For example, assume an upstart e-business wants to sell craft supplies online. The competition for search engine optimization (SEO), covered in detail later in this chapter, would be very high for this type of business, making it a great challenge to draw visitors to the craft site.

Direct customer interaction and grassroots marketing is key. Following are 10 online marketing avenues that a craft-based Web site could use to drive traffic to its e-business site:

How and where businesses meet and interact with clients count. This is the foundation for modern Internet marketing. So, why aren't all e-businesses doing this? Many lack knowledge or time. Online marketing campaigns, writing articles, posting on forums, and more are time consuming and results can be slow. Those who do these tasks, however, will enjoy a much better ROI on their Internet investment.

Revenue diversification is a key consideration for many e-businesses. While the primary revenue source is often the sale of a product, the addition of alternate sources can boost revenues of the online venture.

Four key revenue streams are available online today:

A bedrock of online customer service is the personal touch. Poor customer service will drive customers away while great customer service will bring customers back. The following are three proven strategies for enhancing customer service:

One means of providing enhanced customer service is through self service. A "self-service" Web site allows customers to conduct business without direct involvement by a company representative. Many Web site development tools include personalization features that give self-service customers the feeling of one-to-one attention.

To be effective, a self-service Web site needs to be easy to use with accessible instructions and support. The success of a self-service e-business site hinges upon the quality, quantity, and ease of access of information. Often, a self-service site is tested and retested to make sure that it is user friendly and answers all relevant questions. The benefits of a well-designed self-service Web site are clear: reduced customer support costs and speed of transaction for the customer.

Enhancing customer service delivery also involves ensuring modern communication technologies are used. Voice over Internet Protocol (VoIP) transfers human voice over the Internet using IP data packets. VoIP technology provides a less-expensive alternative to standard phone service. VoIP avoids the high cost of regular phone calls by using the Internet. No monthly bills or expensive long-distance charges are required.

VoIP relies on the Session Initiation Protocol (SIP) to make communication happen. SIP is designed to establish and maintain multimedia sessions such as Internet telephony calls. This means that SIP can create communication sessions for such features as audio/videoconferencing, online gaming, and person-to-person conversations over the Internet. This makes SIP a viable option for e-business communications.

You'll learn about VoIP and SIP technology in Chapter 3, and best practices for securing VoIP and SIP communications in Chapter 14.

Remote access to the network and telecommuting is common in business today. It is impractical to use dedicated connections for each remote employee; instead, secure remote communication channels need to be established over a free network, the Internet. While the Internet provides the infrastructure through which remote employees can access the corporate network, it creates significant security concerns. To address security concerns, you can use a virtual private link between the employee system and the remote network. This private link is known as a virtual private network (VPN).

Secure Web communication protocols provide a way to authenticate clients and servers on the Web and to protect the integrity of communication between clients and servers. Three such protocols are:

You use each of these protocols to secure specific forms of communications via VPNs. Employees with access to the Internet can create a VPN link and access their corporate network as if they were sitting at it. In this way, a VPN extends a LAN to remote clients. Using secure protocols, the VPN provides a secure, point-to-point, dedicated link between two points over a public IP network.

Organizations use the VPN link as a secure, cost-effective, and convenient way to connect remote users to the network. Many elements are required to establish a VPN connection:

Many companies contract with a Web hosting company to host their e-business sites. Web hosting companies utilize several advanced methods to ensure availability. When choosing a Web hosting company, it is important to review the company's availability measures. Some of the problems Web hosting companies must protect against include:

A good Web hosting company will be aware of these threats and take the necessary precautions to mitigate them.

One of the great myths of e-business is that the more visitors who go to a site, the more sales or conversions. As mentioned earlier in the chapter, marketing and acquisition efforts must focus on getting qualified traffic to the site. Qualified traffic refers to those visitors who are searching specifically for your goods or services. If acquisition efforts are not focused, it is possible to waste advertising budgets and hamper the growth of the e-business.

There are three key steps involved in traffic acquisition:

Once these three conditions are met, it's possible to focus marketing budgets and drive qualified traffic to your site. Marketing and e-business success is hindered if the demographic is not clearly isolated.

As with offline stores, e-businesses have a number of customer service avenues. Feedback forms, e-mail, phone, and visitor forums are possibilities. The incorporation of customer service strategies will significantly change how well your online business is perceived and trusted. This will ultimately move your conversion rates in a positive direction.

There are three levels of customer service communication, each with its own advantages and disadvantages. These are one-way communication, limited two-way communication, and full two-way communication.

E-commerce requires an infrastructure of technologies that starts with the Internet and World Wide Web and includes hardware, software and networking components, distributing computer environments, middleware, user-interface technologies, server-side facilities and services, languages, and software development methodologies.

The five layers of e-commerce architecture are:

Today, e-mail marketing is a major marketing tool. Most companies have an e-mail marketing campaign whether formal or informal, because campaigns are cheap and effective. Advantages of e-mail marketing include:

With such advantages, e-mail will continue to be an effective marketing tool if used correctly. Poor e-mail marketing includes e-mail blasting, which is sending out unsolicited bulk e-mails, spamming, and not respecting requests to be taken off e-mail lists.

To be effective, many companies use opt-in or distribution lists in which visitors agree to receive company e-mails. An e-mail distribution or opt-in list is the best approach for e-mail marketing.

While many e-business sites measure conversion success in terms of sales, other sites are designed for lead generation. These Web sites get contact information from a visitor to encourage a future purchase rather than one today. These types of sites can be very effective if you can contact the visitor and close the sale. Often the goal of lead-generation Web sites is to get visitors' contact information for later use.

One type of page used in a lead-generation Web site is known as a "landing page." A landing page is the Web page arrived at when clicking an online ad, e-mail link, or any other form of online marketing campaign. Landing pages are not Web sites. Rather, they are a focused page typically designed for a single purpose, often to have a visitor perform a specific action. With lead generation, the landing page obtains a visitor's contact information. Landing pages effectively engage visitors and may be the next wave in online marketing strategies.

One well-documented online marketing strategy is search engine optimization (SEO). SEO refers to a collection of procedures to make a Web site more browser-friendly and, in turn, increase a site's placement in search engine results. This is important because Internet users typically do not look past the first 10 displayed results. To move higher in search rankings, a site has to be search-engine friendly. The key is keywords.

<HTML>
<HEAD>
<TITLE>This is a keyword example text</title>
</HEAD>
<BODY>

<HEAD>
<TITLE>This is a keyword example text</title></HEAD>
<META name="description" content="It is important to place keywords in the description tag. This should help the search engines index the site accurately.">
<BODY>

As you've seen, there are many avenues open to e-business marketing. Some marketing strategies, such as banner ads, require a budget and close monitoring over time to modify the budget based on the effectiveness of the ads. Other strategies require little or no up-front costs. However, most marketing strategies require an investment of time and effort, and some are highly time consuming. The success of an e-business site often depends on how much time and energy goes into these marketing campaigns.

Table 2-1 highlights marketing strategies and the potential time commitment of each.

A conservative estimate suggests that managing Internet marketing strategies requires 20 to 25 hours per week. The more time you put in, the better the results. Table 2-1 outlines 10 possible marketing strategies, but there are more. Each e-business must decide which strategies provide the best ROI and which are not manageable.

In the networking world, there are two types of networks, public and private. The private networks are the local and wide area networks owned by organizations. Private networks are tucked behind a firewall, secured so that no user outside the organization is allowed entry. Companies of all shapes and sizes have secured private networks.

Public networks are a different story. The Internet is the largest public network; it is unregulated and full of dangers. Every time you connect to the Internet, you leave the relative safety of the local area network and head into a very public place.

For personal use, the dangers of the public Internet are not as significant as they are for business. Before going online, a business should have a full understanding of the potential risks to data and how to protect that data. Internet and application security are discussed further in Chapter 8.

Today on the Internet, governments, defense industries, and companies in finance, utilities, and telecommunications are all subjected to a barrage of attempted cyber attacks. The threats are numerous and managing them is an arduous responsibility. The Internet is not a secure medium; it is unmonitored, unmanaged and full of potential risks. However, this is where e-commerce sites reside. So, making them safe is a critical consideration. Listed below are a few security considerations.

Threats to be aware of include:

A breach of confidentiality and the theft of personal data will severely harm an e-business. That makes it imperative to invest in procedures to mitigate the risk of a loss of confidentiality.

Confidentiality, as defined by the International Organization for Standards in the ISO-17799 document, is "ensuring that information is accessible only to those authorized to have access." Unless it is clear that the information can be made public, what you disclose to a business or a party should be kept between you and the other party. In other words, confidentiality is the prevention of intentional or unintentional unauthorized disclosure of contents. To ensure confidentiality of customer data, e-commerce sites implement network security protocols, network authentication services, and data encryption services.

In addition to security protocols, organizations should have detailed policies identifying how they handle customer data and maintain privacy. This includes how long data is kept, how it is stored, how it is disposed of, and more. These polices should be on the e-business Web site for customers to read.

Web applications are software entities that do not operate in a vacuum. As software, their code, usually a large collection of programming commands that may or may not reside in one place, provide vulnerabilities that malicious individuals may want to exploit. Once built, Web applications operate on networks and inherit the vulnerabilities of the networks. Most of the time, attacks happen where the money is. Thus, sites that typically handle financial transactions are of particular interest to malicious individuals. They may operate on their own or assemble groups of criminals of various technical skills, engaging a network of hijacked computers to execute elaborate attacks while covering their tracks. To mitigate these risks, several areas must be considered.