1. Starting an E-business Dr. John P. Abraham Professor UTPA

2. Pre-requisite Finish studying how to start a business in Texas. Complete all necessary requirements to start a business in texas.

3. Determine what model of ecommerce Most common is Business to consumer If you are a manufacturer, business to business is the way to go. If you are a manufacturer, selling directly to the customers might impede your growth.

4. Selling directly to consumers It appears starting a business with either eBay or Amazon (or both) initially would be easier. Consumers are now used to going to one or both of these websites for purchases. You have a built in customer base.

5. Before launching your business Get registered with a name –Network solutions, or another registrar –Try to get a.com. Hard to get..co would be your second choice. –Choose a name that is short and easy to remember.

6. Agencies that controls –ICAAN (internet corporation for assigned names and numbers) oversees the domain registration. –W3C (weld wide web consortium) sets standards for HTML and web –IETF (internet engineering task force) sets standards for Internet architecture.

7. Get a broadband service ISDN – integrated services digital network 128 Kbps DSL digital subscriber line 144 Kbps to 8 Mbps. It is asynchronous. T1 – 1.5 Mbps up and down T2 is a combined foru t1 lines to give over 6Mbps T3 is comnbination of 28 t1 lines– up to 44.736 Mbps

8. Build a website Start with Static (passive) web presence –Just showing your presence Advertise on the web to generate traffic. This is what you gain from being on eBay or Amazon. When advertising know how many people will be exposed to your ad, and how long. Checkout google, ebay, microsoft, aol, ask, etc. for advertising Register with search engines Titles and metatags are important for each page.

9. Create a Web Service Other web services can integrate with yours.

10. Determine how to collect payments Bank accounts –Wire transfer Setup credit card services Paypal Google payment

11. Accounting Integrated with online sales Payroll Automatic completion of reporting forms (sales tax, w-2, 941s and so on) Inventory control, ordering (PO), receiving, RMAs Must collect tax if sold in Texas.

12. Shipping Determine how you want to ship Trucking UPS, FedEx, USPS Create volume shipping rates

13. Web programming Move up to interactive dynamic web pages This is what we have been covering so far –AJAX, PHP, Ruby on Rails, ASP, etc.

14. Alliances If you are a BtB, register with an alliance such as the airline alliances, hospitality, hotels, etc. Become a business at social networks, such as Facebook, Twitter, etc.

15. Other issues

16. Marketing Issues E-Mail marketing –Cheap –Must know target (reach) –Use customer names where possible –Different languages (www.logos.it - does translations to 20 languages)www.logos.it –Consider outsourcing – Boldfish.com, messagemedia.com, digitalimpact.com, ilux.com, etc.

17. Marketing Issues (2) Promotions –Netcentives.com –Frequent miles –Directcoupons.com, coolsavings.com, etc. Advertising –TV, movies, newspapers, magazines –Online advertising Linking your site, banner ads, search engine ads, etc.

18. Marketing Issues (3) Buying and selling ads on the web –Put your ad on other popular sites that sells similar products –Sell banner ads on your site. –Cost is based on hits, pay-per-lead, pay-per- click, pay-per-lead,etc. –www.valueclick.comwww.valueclick.com –Webcasts (Victoria Secret).

19. Public Relations Chat sessions Crisis management (within company) Press releases www.prweb.comwww.prweb.com CRM customer relationship management – www.datadistilleries.com, egain.comwww.datadistilleries.com –Datamining –Record customers’ behavior

20. Online Monetary Transactions Credit-card –Merchant account with a bank –www.cybercash.com www.icat.com will set up accounts so that you can accept credit cards online.www.cybercash.comwww.icat.com COD Debit Cards and debit-it.com (just give bank account info). Digital currencty – ecash.com – internetcash.com Paypal.com Smart cards

21. Monetary transactions (2) Micropayments – save on credit card fees –Combining many small charges into one charge, like a telephone bill. Check free Electronic Fund transfer (for large amounts) Bank credit line

22. Legal Issues Privacy – a major concern in web practices. Tracking devices Cookies – advantages of cookies come at the price of security. Keystroke cops (employer/employee tension) Defamation Child pornography Intellectual property – napster Spam Internet taxation

23. Advertising related

24. Traditional Advertising Print, TV, Radio, Direct Mail, Yellow Pages National Advertising –Dominated by large holding companies like Omnicom or WPP Local Advertising –Small businesses Pricing vary based on quantity.

25. Online Advertising Banner Ads –Some relevance to content viewed, may be directed to locality. Search Linked Ads –Related search terms Context linked Ads –Related Content on the page –Up to Google, or Yahoo’s capability to determine content

26. Advertising money (year 2006) 220 to 240 billion with 1-2% growth per year $17 billion spent for internet advertisingwith rapid grown. (Google’ revenue is ~7billion)

27. Search share Google 46% Yahoo 23% MSN 11% AOL 7%

28. Search Engine Marketing Per click cost per keyword –Example laptop $2.00 per click Bid on this, based on bid an ad may go first place to second place, etc. Bid is the determinant of ad position Bidding on the word takes place continuously

29. Auction for keyword Internet user enters a search term Gets a page with results Also shows ads to the side If a user click on ad – pay for click Top ads are clicked most Advertisers submit bids stating maximum pay for click Ad with highest bid is displayed on top Advertisers can change their bid frequently

30. Generalized Second Price Auction (GSP) New mechanism used by search engines to sell online advertising. –Advertiser submit bids stating their maximum willingness to pay for a click for a key word. –If a user click an advertiser that is not on top, the advertiser pays an amount equal to the next highest bid (bid for advertiser i+1) –http://repositories.cdlib.org/cgi/viewcontent.cgi ?article=1015&context=berkeley_econ221