E Commerce Term paper
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Table of Contents
o The (other) Great American Pastime (introduction). 3
o Dialing up for dollars 3
o Growing Pains ..4
o Walking dead ....5
o The top 10 barriers and inhibitors to eCommerce .5
o The Speed Limit 6
o The Bright Future a head . for some (conclusion) .7
o Works Cited ..7
The (other) Great American Pastime.
In 1969, The United States Department of Defense started a project called ARPANet (Advanced Research Projects Agency Network) to exchange research information. It eventually linked the computers of several universities and research centers across the country, and, over time, it developed into the worldwide Internet, as we know it today. In less than a decade the Internet has gone from an obscure technological toy for computer geeks to a fixture of everyday life. More than half (52%) of U.S. households had Internet access as of July 2000, according to research by Nielson Netratings. This is a 35% increase from last year, and the firm predicts 60% of American households will be online by the end of 2000. The average minutes of 55,000 U.S. Internet users online in July 2000, was more than 1,123 minutes. The most remarkable thing about it all is how important it has become to us. A web use has increased nearly four hours per month (from about 12.5 hours in June 1999 to nearly 16.5 hours in June 2000) in the last year alone. 38% of a random sample of 1000 Internet users felt the Internet was nearly a necessity in their lives.
Dialing up for dollars.
Money is the single largest factor in influencing and speeding the growth of the Internet. The Internet s transformation from a small network of university and government research computers to the mass media that it is is due mainly to entrepreneurs recognizing its potential as marketing resource. The Internet can be compared to the radio about 80 years ago. Big businesses realized just how influential it could be, started to advertise. And thanks to money paid from sponsorships, the amount and quality of radio programming improved and increase considerably. And thanks to modern Web advertising and commercial web sites, the amount of information available online grows daily. It grows at an estimated 7 million pages per day. Compared to traditional methods of advertising and selling, the costs are relatively low. The constant access to a company over the Internet makes the web a perfect platform for small-business owners and corporations alike.
Although estimates vary from source to source, it is clear that companies are more willing to spend a bundle on web advertisements around the web. According to research firm IDC, total Internet revenues in the United States reached $1.2 billion in 1998 and nearly doubled in 1999 to $2 billion. But these numbers don t compare to the numbers coming in from e-businesses alone. According to the United States Department of Commerce, online retail sales in the United States reached $5.198 billion by the fourth quarter of 1999. E-tailer revenues continue to grow steadily despite the in and out of many dot com companies.
Growing Pains.
In a June 1999 retailing report, Goldman Sachs defined three phases of development: vision, discrimination (the phase we are in today), and demonstration. The first phase is like the grand opening of a typical retail store. When prices are artificially low, promotional activity is unusually high, and staffing is above normal. Over time a shakeout testes the business s viability. Afterward, prices rise, promotional activity subsides, and payroll costs are leveraged by rising sales volumes, enabling a store to achieve a satisfactory economic return. This makes the e-market very volatile for any newcomers. The start up losses of an e-tailer are bound to be much larger and last longer than the local five and dime stores because of it s instant global access. To open an e-business is to open an entire chain with worldwide reach. The genetics for an e-tailer aren t that much different that that of the typical retailer....
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