2. Copyright © 2004 Pearson Education, Inc. Slide 11-1 E-commerce Kenneth C. Laudon Carol Guercio Traver business. technology. society. Second Edition

3. Copyright © 2004 Pearson Education, Inc. Slide 11-2 Chapter 11 Online Service Industries

4. Copyright © 2004 Pearson Education, Inc. Slide 11-3 Learning Objectives Describe the major features of the online service sector Discuss the trends taking place in the online financial services industry Identify the key features of the online banking and brokerage, insurance, and real estate industries Explain why online travel services can be considered the most successful B2C segment Explain why career services online may be the ideal Web business

5. Copyright © 2004 Pearson Education, Inc. Slide 11-4 NetBank Expands: The Future of Branchless Banking Page 625

6. Copyright © 2004 Pearson Education, Inc. Slide 11-5 The Service Sector: Offline and Online Service sector: Largest and most rapidly expanding part of economies of advanced industrial nations

7. Copyright © 2004 Pearson Education, Inc. Slide 11-6 What are Services? Service occupations: Are “concerned with performing tasks” in and around households, business firms and institutions Service industries: “Domestic establishments providing services to consumers, businesses, governments and other organizations Finance, insurance and real estate is largest segment of services industry

8. Copyright © 2004 Pearson Education, Inc. Slide 11-7 Online Investing and Banking Figure 11.5, Page 634

9. Copyright © 2004 Pearson Education, Inc. Slide 11-8 Online Banking Penetration in Various Countries (2002, As a Percentage of Total Banking) Table 11.1, Page 635

10. Copyright © 2004 Pearson Education, Inc. Slide 11-9 Financial Service Industry Trends Financial services industry provides four generic kinds of services:  Storage of and access to funds  Protection of assets  Means to grow assets  Movement of funds

11. Copyright © 2004 Pearson Education, Inc. Slide 11-10 Traditional Providers of Financial Services Table 11.3, Page 636

12. Copyright © 2004 Pearson Education, Inc. Slide 11-11 Financial Portals Provide comparison shopping services, independent financial advice and financial planning Financial portals generate revenue from advertising fees and subscription fees Examples: Yahoo! Finance, Quicken.com, MSNMoney, AOL’s Personal Finance channel

13. Copyright © 2004 Pearson Education, Inc. Slide 11-12 Online Mortgage and Lending Services Today, 4 basic types of online mortgage vendor:  Established online banks  Pure online mortgage bankers  Mortgage brokers  Mortgage service companies

14. Copyright © 2004 Pearson Education, Inc. Slide 11-13 Online Mortgage Originations as Percentage of Total Mortgages Figure 11.8, Page 654

15. Copyright © 2004 Pearson Education, Inc. Slide 11-14 Online Insurance Services Online term life insurance: one of few product groups in which Internet actually lowered search costs, increased price comparison and resulted in lower prices to consumers However, in other insurance product lines, Web has offered insurance companies new opportunities for product and service differentiation and price discrimination

16. Copyright © 2004 Pearson Education, Inc. Slide 11-15 Online Real Estate Services Vision of E-commerce I (that the historically local, complex, and agent-driven real estate industry would be transformed into a disintermediated marketplace where buyers and sellers would transact directly) has not been realized About 70% of Internet-using prospective home buyers use Web to gather information, view listings

17. Copyright © 2004 Pearson Education, Inc. Slide 11-16 Online Travel Services Arguably, the single most successful B2C e- commerce segment – attracts single largest audience, and largest slice of B2C revenues Internet becoming most common channel used to research travel and book reservations Popular because they offer consumers more convenience (one stop – offers content, commerce, customer service) than traditional travel agents

18. Copyright © 2004 Pearson Education, Inc. Slide 11-17 Total U.S. Online Travel Booking Revenue Figure 11.9, Page 663

19. Copyright © 2004 Pearson Education, Inc. Slide 11-18 Career Services Next to travel services, one of Internet’s most successful online services. Online recruiting provides a more efficient and cost- effective method of linking employers and potential employees, while reducing total time-to-hire Ideally suited for Web due to information-intense nature of process