1. e-commerce: From online stores to social networks Michael McDonnell Winterstorm Solutions michael@winterstorm.ca http://syntheticlibrarian.com/ 2007-10-30

2. e-commerce - Michael McDonnell My Background E-Commerce Experience TELUS Charitable Giving System ($X,000,000+) Skibanff.com ($X00,000) Bernard Callebaut Chocolate e-store ($X0,000) E-commerce infrastructure at TELUS ($X0,000) Mortgage Application for many Credit Unions

3. e-commerce - Michael McDonnell Online Stores Advertising Networks Social Networks B2C E-Commerce: Overview 1 2 3

4. e-commerce - Michael McDonnell Online Stores: Components & Processes CustomerCatalogue Shopping Cart Checkout Payment Collection a b c d Catalogue List of Products Descriptions Prices Options, size, etc. Pictures 1 Shopping Cart A temporary list of item to be purchased 2 Checkout Billing Info Shipping Address Shipping Cost Record Order Process Payment 3

5. e-commerce - Michael McDonnell Online Store Example: Chapters.ca http://chapters.ca/ Site sells books The website has an extensive catalogue BIG Database Probably uses software called “endeca” (very popular for high-end retail and large university libraries) All “e-commerce” is handled “on-site” Shopping cart Checkout Payment processing (with the exception of payment clearing)

6. e-commerce - Michael McDonnell Online Store Example: Bubblehut.ca http://www.bubblehut.ca Site sells soaps and candles The website is just a catalogue No database at all Just “flat” files stored on the web server All “e-commerce” is handled by the 3 rd party Shopping cart Checkout Payment processing Paypal never tells bubblehut your CC info

7. e-commerce - Michael McDonnell Pay the Merchant Payment Process: Internet Merchant Account Customer Store Website Payment Gateway a b c d Charge Credit Card Example: http://www.beanstream.com/http://www.beanstream.com/

8. e-commerce - Michael McDonnell Pay the Merchant Payment Process: PayPal Account Customer PayPal a bc Charge Credit Card

9. e-commerce - Michael McDonnell Payment Security: Virtual Accounts at Citi Bank

10. e-commerce - Michael McDonnell Payment Secutiy: Visa Chip Cards  A typical plastic card with an embedded computer chip and microcomputer. Enables encryption of confidential information and personalization of usage limits.  A card reader reads the encrypted data, and password authentication is used to verify users.

11. e-commerce - Michael McDonnell Payment Security: Mastercard SecureCode

12. e-commerce - Michael McDonnell Online Purchase Behaviour Most PurchasedLeast Purchased 1.Food 2.Cars & Car Parts 3.Pet Supplies 4.Appliances and tools 5.Health & Beauty Products == “High Touch” Items 1.Computers & Software 2.Travel 3.Gift Cards 4.Toys 5.Videogames == “Commodity” Items Digital Products – Ideal for Online Sale 1.Commodity-like 2.Mass-customizable 3.Delivered by download 4.No need for intermediary 5.Global in reach Examples: Tickets (travel, events) Music, Images, Video Books, News, other info. Software Source: Shop.org; Forrester Research

13. e-commerce - Michael McDonnell Advertising Networks Online stores are now common Internet used to increase sales not just to facilitate sales Advertising is now big business US$7.9 BILLION in 1 st Q 2006 37% higher than 1 st Q 2005 Web Analytics is growing Analyze web data to convert visitors into buyers

14. e-commerce - Michael McDonnell Example: Google AdWords Pay-per-click – Price set by bid – Pay when user clicks Ads appear on – Search results – Related Website – Other places Targeted by keyword – Select keywords – Set maximum price for add to appear with that keyword Ad Position – Determine by competition based on bids http://adwords.google.com/

15. e-commerce - Michael McDonnell Example: Google AdSense Display Ads – Get paid! Pay-per-click – Paid when user clicks Pay-per-impression – Paid when is displayed 1000 times Targeted by keyword – Ad keywords match content of your webpage – Ad are relevant to your audience Ad Appearance – You determine size, and appearance of ads http://www.google.com/adsense/

16. e-commerce - Michael McDonnell E-commerce 2.0 Important Cliches The Tipping Point (viral marketing) The Long Tail (social networks) The Market as “conversation” Examples Amazon E-bay “Professional” Bloggers My Space / Facebook

17. e-commerce - Michael McDonnell Example: YouTube Customers distribute the ads http://www.youtube.com/watch?v=zBu5dL4QCnY

18. e-commerce - Michael McDonnell Example: Amazon “user generated content” Reviews Ratings Buying Patterns “People who bought this book also bought…” Online Bookstore or Online Community? More participation = More value

19. e-commerce - Michael McDonnell Example: E-bay Customer-to-Customer (C2C) Sales Customer Participation IS the business Reputation Ratings Payment Processing More participation = More value

20. e-commerce - Michael McDonnell Example: Professional Bloggers FREE Content PAID for Advertisements Goal: attract anATTENTION Goal: find anAUDIENCE Audience Participation Builds COMMUNITY More participation = More value (to community)

21. e-commerce - Michael McDonnell Light Reading Fiction – Rainbow’s End by Verner Vinge – Pattern Recognition by William Gibson Non-fiction – The Tipping Point by Malcolm Gladwell – The Long Tail by Chris Anderson Makin’ Money! – AdWords (Pay for Ads) AdWords – AdSense (Get Paid for Ads) AdSense Blogs – Seth Godin Seth Godin – Micropersuasion Micropersuasion – Charlene Li (Forrester Research) Charlene Li – Many-to-many Many-to-many – Apophenia (Web 2.0 section) Apophenia Articles – Viral Marketing (Jurvetson 1997) Viral Marketing – What is Web 2.0 (O’Reilly 2005) What is Web 2.0

22. e-commerce - Michael McDonnell Questions? michael@winterstorm.ca http://syntheticlibrarian.com/ I would be happy to answer your questions you have now, or by email later.

23. e-commerce - Michael McDonnell OLD SLIDES All slides after this one are old slides deleted from the presentation but preserved for reference.

24. e-commerce - Michael McDonnell Products Prices Descriptions Accounts Your Website Database Web Hosting Company Suppliers Online Stores Customers Banks Payment Processor

25. e-commerce - Michael McDonnell Online Stores: Hardware Infrastructure Catalogue Shopping Cart Checkout Software Programs 1.Catalogue 2.Shopping Cart 3.Checkout 4.Payment Processing 5.Static Data Images Web Pages Web ServerDatabase Server Data 1.Product Info 2.Shopping Cart Contents 3.Orders 4.Customer Account Info

26. e-commerce - Michael McDonnell Early e-commerce: Online Stores Internet used to conduct retail sales (B2C) A bit of history: Problem:No Security = No Sales Solution:Encryption and Digital Signatures SSL : Secure Socket Layer HTTPS = HTTP + SSL (Security)

27. e-commerce - Michael McDonnell Why SSL? Encryption Encryption Hackers “sniff” and capture data Encrypted data can be captured, but not decrypted BrowserRouter Server Router Hacker Sniffer

28. e-commerce - Michael McDonnell Why SSL? Digital Signatures BrowserRouter Server Router Hacker FAKE Server Authentication Hackers reroute connections Server “key” cannot be faked Fake server cannot pretend to be real one

29. e-commerce - Michael McDonnell Online Store 3 rd Party Hosted Shopping and Payment CustomerCatalogue Shopping Cart Checkout Payment Collection 1 2 3 4 Payment Processing Company

30. e-commerce - Michael McDonnell Online Store Website 3 rd Party Payment Only CustomerCatalogue Shopping Cart Checkout Payment Collection 1 2 3 4 Payment Processing Company

31. e-commerce - Michael McDonnell Payment Processing Hidden From User CustomerCatalogue Shopping Cart Checkout Payment Collection 1 2 3 4 Payment Processing Company Payment Gateway 5 Online Store Website

32. e-commerce - Michael McDonnell B2C Marketing: Spawn.com Video http://highered.mcgraw- hill.com/sites/007305223x/instructor_view0/vi deos.htm# http://highered.mcgraw- hill.com/sites/007305223x/instructor_view0/vi deos.htm#

33. e-commerce - Michael McDonnell Future e-commerce: Web 2.0 Collaboration and Participation Read+WRITE vs Read-ONLY Examples Flickr http://flickr.com/ Del.ico.us http://del.ico.us/ AskMetaFilter http://ask.metafilter.com

34. e-commerce - Michael McDonnell Example: My Space & Facebook “Social Networks” PAID for Advertisements PAID for Customer Profile Information?? Goal: develop aNETWORK Audience Participation Reveals IDENTITY Builds COMMUNITY More participation = More value (to business)