1. © people & data | www. weigend. com Andreas S. Weigend, Ph. D. 韦思岸 教授 The Networked Economy: Information Management, Strategy, and Innovation 网络经济：信息管理，战略和创新 (9) The New Business of Consumer Data: Who pays whom?

2. 2 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 1. Data generation Instrument the enterprise Get others do contribute 2. Action Do experiments Make transparent decisions based on their outcomes 3. E-, Me-, We-Business Impact on Marketing Impact on the Data Business Discussion

3. 3 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 The (Old) Data Revolution Example: Amazon.com Mainly implicit data, some explicit data The New Data Revolution Example: Facebook Mainly explicit data Customers start interacting New business models The New Consumer Revolution How their attitudes to their info changes

4. 4 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Education Undergraduate: Karlsruhe, Bonn, Cambridge (UK) Graduate: Stanford University (Physics Ph.D.) Past full-time positions include New York University, Associate Professor of Information Systems (1997-2000) Amazon.com, Chief Scientist (2002-2004) China (since 1994) Teaching: Tsinghua, CEIBS, Shanghai Jiao Tong University, Cheung Kong GSB Advising: Alibaba, XiaoNei, Yobo, and others

5. 5 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 1970’s “Experts” learn a language the computer understands Digitizing back office 10M people 1980’s Front office interacts with back office 100M people 1990’s Customers interact with firm Search: 1bn people poking at stuff 2000’s 1bn people poking at stuff 100M people producing stuff Peer-production and collaboration Customers interact with customers Next Discovery in addition to search Serendipity: Discover what not searched People in addition to pages Social commerce Mobile in addition to PC (and paper) Continuous partial attention Model current situation plus history Sensing

6. 6 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800

7. Click to Call! 点击 直接通话

8. 8 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 “…. Please let us know what you plan to do at Amazon.com today” “…… 请告诉我今天你计划在亚马逊网站上 做什么 ” Free responses, hand-coded into non- exclusive categories 自愿回复，将回复进行分类编码，归入 一些非互斥的类型 Multiple assignments possible 可能回复多种可能 Average: 1.2 categories per response 平均：每个回复涵盖 1.2 个种类 Number of responses: 1023 回复数量： 1023 Response rate: 3.1% 回复率： 3.1% Date: February 11-12, 2003 日期： 2003 年二月 11-12 日

9. 9 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 35% Research: Response indicates having a target or topic for which customer wants to gather information in depth 搜索：抱着某种目标或主题，想深入收集一些信息（如 “ 寻找关于智利的书籍 ” ） 31% Browse: Looks at items casually at a more general level than Research 浏览：比搜索要低一个层次，更随意地浏览一些信息（如 “ 看看音乐 / 书籍方面的信息 ” ， 而没有特指） 16% Buy: Response indicates intent to buy in this visit (“buy a book”) 购买：访问网站是想购买（如 “ 买一本书 ” ） 10% Complain: Complains about some feature of the site 抱怨：抱怨对于网站有些方面的不满 9% Post-buy: Mentions checking order status, other account activities 购后：查询订单状态，以及其它的一些帐户活动 7% Community: Mentions usage of some feature of community, like reviews 交流：使用网站的一些社区功能，如论坛 7% Price: Mentions getting information about price for specific items (does not include “looking for deals”  Browse) 询价：查询一些特定商品的价格信息（不包括 “ 找找看看有没有要买的东西 ”—— 这属于 浏览）

10. 10 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 2.9% Goldbox: Mentions Goldbox activity 百宝箱活动：进行百宝箱活动 2.2% Gift: Indicates looking for a gift for someone else 礼物：为其他人找一些礼物 2.0% Sell: Mentions a selling activity 出售：从事一些卖出活动 1.4% Personalization: Mentions personalization feature (e.g., recommendations) 个性化的回复：一些个性化的东西（如提建议） 0.8% Used: Mentions finding or transacting a used item 二手交易：求购或者出售一些二手东西

11. 11 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Obtain insights by combining individual survey response with click analysis: 结合个人调查问卷的回复与点击情况分析，得出一些结论 Look at those who ended up buying something: 最终购物的网民中 Only about one-half of those making a purchase indicated that they wanted to buy something in this visit 只有 1/2 事先称计划购物 Look at those who said they wanted to buy something: 最初想来购物的网民中 Only about one-third of those indicating intent to buy ended up making a purchase in that visit 只有 1/3 最终完成购物 

12. 12 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Relate satisfaction rating to: 把满意度评价与下列两项联系起来： Visit intent (from survey) 访问意图（来源于调查问卷） Actions (from clickstream) 行动（从其点击行为看） Intermediate goal 中期目标 Predict satisfaction 预测满意度 Ultimate goal 最终目标 Increase satisfaction 提高满意度 Number of responses: 6117 回复的数量： 6117 Dates: March 15–24, 2003 日期： 2003 年 3 月 15-24 日

13. 13 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Capture context automatically I went to the bathroom and came back, and the page was still loading!! 我去了浴室，又回来，网页却还在下载！！

14. 14 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800

15. 15 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800

16. 16 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 November 2007 Adobe Flash installed on 820 million Internet-connected computers and mobile devices

17. 17 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 IMMI Listening into your room every 30 seconds, for 10 seconds.

18. 18 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Clicks Music Dating

19. 19 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Amount of data 数据量 Level 层次 Customer 消费者 Orders 订单 Session aggregates 访问总计 Clicks 点击 Data collected 2007 2007 年搜集的数据 100 MB 10 GB 1 TB 100 TB

20. 20 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 From Stanford Stat252/MS&E238 (Data Mining and E-Business): Clicks Selection Intention Search Attention Engagement Interaction Relationship Situation Discovery Location Mobile phones, GPS http://aweigend.wikispaces.com/Data+Mining+and+E-business+Stanford+Spring2007

21. 21 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800

22. 22 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Mapping companies did not realize that users can add value… NAVTEQ spent USD 300M to reach breakeven, was acquired by Nokia for USD 8.6B …vs Amazon.com realizing early on that users can add value E.g., by reviewing books Google enables external developers to build services using company’s data Application Programming Interface When will airlines, banks etc follow? Group discussion: Develop scenarios for one of your group member’s company’s data strategy?

23. 23 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 “ 车开起来再 付钱 ” 保险

24. 24 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 7M business cards (2007.12) 200k members Community corrects Jigsaw collects

25. 25 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Use information about candidates from interviews at other companies

26. 26 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Community Interaction Participation Experimentation Data Web 2.0 Web 1.0

27. 27 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Community Interaction Participation Experimentation Data Web 2.0 Web 1.0

28. 加入购物车

29. 去收银台 等一下！再加 16.01 美元就能 …… 加入购物车 戴维斯的专辑 Also want to make recommendations! 添加推荐 !

30. 30 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Also want to make recommendations! 添加推荐 ! 购买戴维斯专辑的消费者 也买了另两张专辑 购买戴维斯专辑的消费者 也买了另两张专辑 想买戴维斯专辑的消费者 同时浏览了其它同类专辑 想买戴维斯专辑的消费者 同时浏览了其它同类专辑 Substitutes (buy instead of) 替代（选择购买） Customers who shopped for X also shopped for Y (based on clicks) Z 买了 X 的消费者也会再 Complements (buy in addition to) 互补（额外购买） Customers who bought X also bought Y 买了 X 的消费者会再买 Y

33. 33 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Metrics 衡量标准 Conversion rate: Percentage of visits placing an order 转化率：下订单的浏览者所占的比例 Order size: Number of additional (from the second page) items put into cart 订单大小：（从第二页起）新购商品数量 Result 结果 “Your Shopping Cart” on right is about 1% better than on left “Your Shopping Cart” 置于右侧比置于左侧的效果提高 1% All customers 所有消费者 Existing customers 现有消费者 Cart-adds from 2nd page: 从第二页起新购商品数量： +0.6% Cart-adds from 2 nd page: 从第二页起新购商品数量： +0.8% Wishlist-adds: 选择礼物清单： +1.4% DVD Cart-adds: 新购 DVD ： +0.8% DVD (USD):+1.1%DVD (USD):+1.0%

34. 34 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Community Interaction Participation Experimentation Data Web 2.0 Web 1.0

36. 36 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Web1.0Web2.0 Read-only 只读网页 Read + write 可读写网页 High barrier of exit (stickiness) 高的退出壁垒（粘性） Low barrier of adoption 较低的进入壁垒 Pretest and validate 预先测试和验证 Launch and learn; Push and pray 发起和学习；推进和请求 Taxonomy (controlled directory) 基于超链接的探索（体现出作者的控制） “Tagsonomy” (not controlled) 标签法（不受控制的） Discovery based on hyperlinks (expressing control of author) 基于超链接的探索（体现出作者的控制） Discovery based on social relations (trust, reputation) 基于社会关系的发现（信任，信誉）以及其他 人的元数据。 Push: Supply driven. 推式广告：供给驱动 Pull: Demand driven 拉式发现：需求驱动 Target 目标定位 Search 搜索 Discover 发现

37. 37 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 User focus (Me-business, not E-Business) User is at the center of Web2.0 (not the company) VRM (Vendor Relationship Management) not CRM (Customer Relationship Management) System engineered for feedback System engineered to improve over time by leveraging user data (not deteriorating over time) Network effects Demand-side economies of scale (not only supply-side economies of scale) Transparency Google Maps: Create API for developers to use the data (not increase security)

38. 38 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Incentives Pay people (e.g., Yahoo directory index) Get volunteers (e.g., Wikipedia) Create self-interest (e.g., BitTorrent) Participation Youtube: 0.19% visits to video upload Flickr: 0.2% of visits are uploads Wikipedia: 3.89% of visits are edits to entry Why do people participate? Spread their ideas Need for belonging

39. 39 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 2007 : You 2008 : Who? 2008 : Us!

40. 40 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Node: The individual Clicks Logs Intention Search Why is intra-site so hard? Google (Advertising) Attention Tags,… Attensa (News) Location Links: Relationships between individuals MySpace, Facebook, XiaoNei ( 校内网 )

41. 41 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Community Interaction Participation Experimentation Data Web 2.0 Web 1.0

42. 42 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 20 years ago: Produced news Publicized opinion (“Veröffentlichte Meinung”) 10 years ago: Search Search: Already know what you are looking for Discovery: Find something you didn’t know you were looking for (Serendipity) Blogs, Wikipedia Now: Social network Discover via people you are connected to “Generation C”

43. 43 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Connectivity Convergence Cooperation Community Creation Co-creation Conversation

44. 44 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Conversation Between whom? Company Individuals downcasting

46. 46 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 The Tsinghua/INSEAD course: The Digital Networked Economy: Information Management, Strategy, and Innovation Digital: Convergence Networked: Communication at center Economy: Emerging business models Today’s lecture: 1. Data Instrument the enterprise Base decisions on transparency 2. Action Do experiments 3. Impact of Web2.0 on Enterprise Examples Discussion

48. 48 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Leaders Elders Experts Celebrities Alternative opinions Friends and family The man on the street The Age of Deference 服从时代 The Age of Reference 关系时代 The man on the street Friends and family Alternative opinions Celebrities Established authorities Elders Leaders Most trusted source 信任度最高 Least trusted Source 信任度最低 领导 长者 专家 名人 备选方案 亲友 陌生人

50. © people & data | www. weigend. com Andreas S. Weigend, Ph. D. 韦思岸 教授 Thank you! Andreas Weigend aweigend@stanford.edu +1 (650) 906-5906 www.weigend.com

51. 51 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800

52. Appendix: Google’s e-commerce

53. 53 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 53 Google’s role in e-commerce Google Users Google helps users more easily and efficiently find merchants and purchase products. Merchant Customers * Internet Retailer news, March 6, 2007 ** Custom Analysis by ComScore/Google, Sept. 2006 Search Find Buy 51% of internet users are influenced by search engines for their purchases.* Google reaches more Internet users worldwide than any other web property or ad network. Google receives more than 475 million unique visitors/month.**

54. 54 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 54 What is holding back eCommerce? Long checkout processes 63% of shopping carts are abandoned after beginning checkout** Too many accounts Average number of passwords per internet user: 17** (Source: Verisign, 2004) Fear of sharing personal information Consumers are afraid of their personal information being compromised * Verisign, 2004 ** Online Customer Experience Survey, Allurent, February 2006 Online retail purchases accounted for 2.8% of total retail sales in 2006. 2006 Consumer Purchases Share by Channel 2.8% 97.2% Online sales Offline sales Total eCommerce sales: $108.7B Total Retail sales: $3.9 Trillion* Quarterly Retail eCommerce Sales, 2006, US Census Bureau Note: These numbers do not include travel

55. 55 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Google Checkout is an online checkout process that provides a fast, secure way to buy and sell online. Payment Guarantee covers 98% of all Checkout orders When resolving disputes, we assume our merchants are honest and trustworthy Fraud ProtectionLess costMore sales Free credit card processing on all Checkout sales until 2008 Beginning 2008, earn free transaction processing with AdWords Google Checkout badge attracts more customers Streamlined checkout process increases conversions For Sellers… For Buyers… ConfidenceSpeedConvenience Single login across the web with sreamlined checkout One place to track purchases Credit card number concealed

56. 56 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Shoppers use Google and Product Search to search for items to buy. 56

57. 57 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Product Search and Checkout help shoppers find exactly what they’re looking for and where to buy it from. 57

58. 58 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 To buy, shoppers need only click Google Checkout and enter their username/password. 58

59. 59 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Google Checkout users can easily manage all of their purchases in a central location. 59

60. 60 © people & data | www.weigend.com | +1 650 906-5906 | +49 174 906-5906 | +86 138 1818 3800 Checkout has acquired millions of buyers and thousands of sellers, including 25% of the top 500 merchants. 60 “The new Google Checkout badge … has given us a 23% lift in clickthrough rate. And Google Checkout does a great job of helping convert that additional traffic into more sales; customers that use Google Checkout convert 24% more frequently than those that go through our standard checkout process. – Fred Lerner, Jockey “Since starting with Google Checkout, business has grown 20 percent per month, the company is saving 50 percent on transaction processing costs, and repeat business is on the rise too: more than 60 percent of new customers who use Google Checkout purchase again within the same month.” – Floyd Wallace, Coffee Bean Direct