E-Commerce class has ended

This is my last blog for my e-commerce class. We had our final presentations last night and all that is left to do is finish writing this entry;)

I actually really enjoyed this class and I think I learned a lot too. I am a computer science professional so you would think this would be a “busy work” class for me, but there was a good bit of learning to be had. The professor was enthusiastic and enjoyed the subject he was teaching which carried over into my learning experience. I appreciated the other blogs I read as people posted interesting things they found. Key areas that peaked my interest were:

Both http://alexa.com/ as a tool to analyze web traffic and http://www.archive.org/ used to view “old” versions of websites were new to me (although they make sense in hindsight), and I think I learned the most by utilizing their functions. I have always approached my profession from the point of view as a software developer, and these tools gave me insights into how I might analyze my own business from the marketing spectrum with a more insightful customer approach. It was good to break out of my software engineering mold.

I also liked the debate format we had for our group presentations. This was a twist from our normal UW MBA program presentations, and it fostered a bit of a competitive edge to our presentation preparations. Although my group (actually – just Jeremy Fern and myself) didn’t fare too well in the peer reviews of our debate, I think we presented our case very well and our classmates used the opportunity to grade us low as a way to bring us down since they knew we were the team to beat. This is a similar approach to how community-led marketing is done: If you want to bring down the “big guy” use a community-led marketing drive by banding together to grade them low on their debate then you have a chance to beat them in the overall class ;) (just kidding).

I have a very busy job (I’m working half days now – only 12 hours a day…), but I did schedule time to read through the blogs of our entire class for about a half hour early every morning. I’m sure the professor’s intent for us in keeping these blogs of our learning activities was to promote sharing of ideas and learning experiences. It worked for me, as every blog I read (and I managed to read them all) I learned something from. I also managed to leave comments in a few places where the posting tweaked something in my own experience.

Our final presentations were good too. I was impressed with the amount of information and quality of presentations that people of the class put together. Standout presentations for me were:

Jeremy Fern and his google earth presentation. I recommend you try it out - it is way cool and I was able to zoom in to real photos everywhere I tried. I live on a horse farm in Kitsap county and my house doesn't show up very well which means there isn't high resolution satellite photos of it yet (a little disappointing). But I could clearly make out my pastures & fence lines and Hiway 3 is off to the far left (see below picture). Other places I tried were as crisp as if you were there: http://earth.google.com/.

Where Mike lives (patrolled by Dobermans and a Collie):














Eric Debelly presented Advergaming or online gaming ads which was very interesting especially the randomizing slide technique he used to grab our attention. Here is a link for more info: http://www.clickz.com/experts/media/media_buy/article.php/2239071

Melanie Jaegar presented e-medicine and specifically teleradiology. What a very interesting idea, I was totally enthralled with her presentation. Here’s a link: http://www.radiology.uiowa.edu/MoreRAD/Teleradiology/Tele.html

Donovan Pfeifer presented on Wiki or Wikipedia. Donovan, Donovan, Donovan… It was late at night, everyone was starting to drag and get tired, and then you talked about Wiki and stole the show. Awesome presentation!!!: http://en.wikipedia.org/wiki/Main_Page

Anyway – I liked this class and for the first time in my MBA career I am a little sorry the class had to end…

See you all this Fall :)

~Mike

VoIP

Wednesday, Aug 17th, was our last class and the night that we gave our final presentations. I chose to give mine on Voice over Internet Protocol (VoIP) and why it had huge future potential as an e-business. Since we were short on time, I decided to provide links here to some of the questions I was being asked after I presented.

VoIP general FAQ (Wikipedia): http://en.wikipedia.org/wiki/VoIP

How about Skype? Skype is a free VoIP service that you can use to talk to anyone anywhere: http://www.skype.com/

What about 911 calls? I heard VoIP still can’t handle them yet. This is partially true, because of the portability of VoIP systems, 911 calls can be hard to route since VoIP doesn’t necessarily use traditional phone syatems. Some providers simply can’t do it but there is a federal mandate that all VoIP providers make enhanced 911 services avail by Nov. 28. Interesting article on the subject: http://news.com.com/FAQ+Why+the+FCC+is+targeting+VoIP+911+calls/2100-7352_3-5712788.html

Since VoIP works over the internet is their a problem with SPAM? Great question – yes: http://www.tomshardware.com/hardnews/20041007_122306.html

Can VoIP calls be traced for police reasons? Another great question - not yet; BUT the federal government is funding a tapping research project to develop a prototype surveillance tool created by George Mason University: http://news.com.com/2100-7348_3-5825932.html

Article about California government shifting to VoIP to save cash: http://www.linuxworld.com.au/index.php/id;804074535;fp;4;fpid;4

Charging you for FREE Credit Reports

A lot of people are in the business of fraudulently “spoofing” websites or using other devious means to gain consumer’s banking information so that they can steal from them. Identity theft is on the rise and has become a very much publicized manner of fraudulent activity. In partial response, the Federal Government has passed laws that make it easy and affordable for consumers to check their credit report to see if they have any unknown accounts out there or as a means to verify what creditors might be able to see. The service is called https://www.annualcreditreport.com , is free and is the ONLY government site provided for this service.

There have been numerous “legal” scam sites setup to make money off of you that basically connect to this free service and then charge you for the info. Among them in www.freecreditreport.com and www.consumerinfo.com. Here is an article by CNET News describing the rising problem: http://news.com.com/Imposter+sites+plague+free+credit+report+site/2100-1028_3-5789299.html

Just today there is an article about how www.consumerinfo.com was fine $950,000 and ordered to pay restitution for its fraudulent practices: http://www.internetnews.com/ec-news/article.php/3527756

When online be very careful about making monetary transactions only from sites that you trust, and know where you are before responding with personal info. NEVER respond to a solicitation mail!

Online Communities - are they good?

I think online communities are one thing that is very good about the internet experience. They provide a great way to network with others who share your same interests and share info. I am a member of several family history communities where I use “cousins” to locate information about my ancestors. Using this method of family research has been incredibly fruitful for me. There are literally hundreds of my relatives out there who have access to documents, books and even photos that I never would have had the opportunity to find without extensive and costly research (BTW – I like the online communities that are available from http://rootsweb.com the best). In turn, I can pass my storehouse of data on to others when they ask. Using online networking has enabled me to completely document 10 generations of my entire family, and 100+ generations of my paternal family (over 25000 ancestors in my dB). Great Stuff!!

Here is a very good article about building online communities: http://www.oreillynet.com/pub/a/network/2002/10/21/community.html

Is Open Source Software really better?

There are a lot of internet articles and computer geeks advocating the use of open source software as being the best way for everyone to go for their software needs. Source code that is open to everyone allows a lot of eyes to find the problems and fix them – but is this really true? or just hype?

I think it is mostly hype. I agree that open source software allows more eyes to see the code, but I think the eyes that are fervently looking for the exploits (for free – since they aren’t getting paid) aren’t doing so to patch the problems, but are doing so to find the problems so they can exploit them just like the hackers do for paid software. The one big difference so far is that free software doesn’t have the mass market penetration yet that would allow the hacker to make the most out of the effort they expend. In other words, if you were going to spend time to find a problem in software that you could then exploits for cash, you’re going to be investing this time in the software that is on 90% of the machines out there. Not the ones that are on 5% like linux. This is why we haven’t seen a lot of news articles about free software vulnerabilities that are found – but they are out there... Here is an article from TechWeb talking about a major flaw with Firefox (interesting why this wasn’t front page news?) Even more interesting is that the flaw is in all browsers except Microsoft’s IE: http://www.techweb.com/wire/security/59301618

As a matter of fact, Computer Weekly reported just a few weeks ago that there have been more security flaws found with Firefox this year than have been found with IE. The report in the UK-based IT trade publication states: "There have now been more flaws in the Firefox browser this year than in Microsoft's Internet Explorer." The 2005 Secunia vulnerability report for Firefox 1.x states that there have been seventeen security flaws in Firefox this year, while the 2005 Secunia vulnerability report for Internet Explorer 6.x includes only nine advisories.

Online Auctions

Online auctions are very popular and in hindsight were an incredibly profitable marketing idea (wish I had it;). I have friends who are consumed with buying and selling online and one who does it as a very practical part time money making adventure. He got started by cleaning his garage one day, and he had a huge pile of junk he needed to take to the dump. He had the nifty idea to sell what he could through E-bay in order to cut down his dumping fees. Well to make a long story short, he found buyers for every piece of his junk, including a garbage can full of old oily rags and several broken tools (incredible what people will buy online). One caveat to be aware of while buying/selling online is you must be careful about fraudulent sellers, and always use trusted “middle software” (like paypal) to handle financial transactions to protect your accounts.

Have you ever wondered how online auctions work? I work with software databases every day and below is my brief description of what goes on “behind the scenes” of an online auction in the hopes of improving the understanding for less technical users.

On the surface you would think an online auction is similar to a regular auction. Bids are made on a product in competition with other people. At the end of the auction the item goes to the highest bidder.

However, because you are in “cyber space” the process is a little different behind the scenes than the traditional auction. For one, you have to register on the auction site you are using, and it keeps track of items you bid on and sell via its software engine created for this purpose. This software determines the amount you need to bid to become the highest bidder and you can accept this amount, or enter a bid of your own choosing. The computers doing this auction compare your bid against others to determine the winner at the end of the auction.

The software behind the scenes is a relational database that keeps track of all auction items, bids, winners etc... Most auction dBs are made up of three relational tables: 1) the user registration table, which contains all user-related information; 2) the item listings table, which includes the item, description, and lot number; and the 3) transaction table, where each bid record is stored. These tables are linked by related fields and constantly work together to track bids on an item.

As an example: a given bid record will contain the user ID from the user registration table, the lot number from the item listings table, the bid amount, and the date and time stamp. The auction software continuously runs computational comparisons on the bid records to determine the highest bidder. When the auction ends a winner is declared, automated notifications are sent to the buyer and seller, and then the process starts all over again for the next item.

FYI - So that you don't have to constantly watch your auction, many sites employ a piece of software known as a “proxy bidder”, which automatically places bids on your behalf. To use the proxy bidder, you designate the maximum amount you wish to spend on an item. Then, each time a bid is placed that is higher than yours, the proxy bidder kicks into action and places a bid for you. It will only increase your bid amount by as much as is necessary to top the current bid, and will not exceed the maximum amount unless directed by you to do so.
Of course – the best software auctions are powered by Microsoft’s SQL Server Database Engine. Once MS SQL Server 2005 is released in a few Months, auctions powered with this product will be an awesome sight to behold ;)

Amazon.com debate

Tonight we had our group presentation debates. Jeremy Fern and myself were assigned the position that Amazon.com should have remained an online bookseller and not diversified into a huge money losing conglomerate. Our premise was that it was better for Amazon to be a medium sized, yet very profitable company instead of a huge unprofitable one which it currently is. Its current debt load will be over 2 Billion dollars by the end of the year which will put at risk its future ability to be nimble in the ever decreasing “profit margin” business environment it serves. It really does feel like Jeff Bezos is chasing his ego instead of serving his stock holders – remember Amazon is a public company.

Anyway, our adversaries did an excellent job presenting the opposite point of view (Amazon should have diversified as they did). Unfortunately for them, the financials don’t support this. Increasing revenue is great unless COGS and debt is increasing so fast it turns revenue into loss.

Side Note - I thought that having a "debate" with our presentations was an interesting twist to the learning experience we enjoy at UW's MBA program. I think it was a good departure from the normal "this is what I found out and recommend" presentations we've done thus far.

Pricing of Digital Product

Our first case analysis write-up was due today. It was an analysis of NYTimes.com and their decision to begin charging subscription fees for its news content. Are people willing to pay a fee for web content? Will web “bundling” help them pay this fee?

The majority of the class felt that it was a good idea for NYTimes to start charging a subscription fee to its site. My group (Jeremy Fern and myself – yep only 2…) found that people really aren’t ready to pay subscription fees yet for news content; especially when they can go elsewhere to find the same content for free. Charging a subscription fee can have other detrimental affects such as inadvertently decreasing advertising dollars (less traffic to your site means less advertising payments).

Here is a couple of good articles on the subject:

Business week: “People are willing to pay”: http://businessweek.com/magazine/content/03_28/b3841012_mz001.htm

People are willing to pay if they think the content is worth it: http://www.clickz.com/experts/design/freefee/article.php/3310761

When are people willing to pay for online content?: http://samvak.tripod.com/busiweb25.html

BTW – the only online subscription service I pay for is bluemountain.com (online postcards). This used to be free when I started using it, but when they started charging for it I kept it since none of my family lives close by (this was probably the marketing intent too ;)

Online price competition

The online “virtual” shopping and information gathering experience is good because you can shop or find just about anything you wish from the comfort of your own home. No getting in your car, going to the mall, and then buying something that you may or may not be able to get cheaper elsewhere. Also, there is a sense of anonymity since you can do this by yourself in your home, without face-to-face time with another human (hard to fall for a sales pitch in this case ;).

On the bad side, you have to have a measure of trust that whoever you are buying from online is trustworthy. There is also a sizable illegal business by people who wish to “impersonate” trustworthy online retailers to get your credit card info and steal from you. The anonymity that you experience while online surfing is actually an illusion too, as everything you do on the web leaves a trail, and can easily be tracked to your computer’s IP address…

Monday’s E-Commerce class (8/1/2005) was about this “trustworthy” computing, and whether or not online shoppers are only looking for the lowest price? Or are they willing to pay a premium from a retailer they have developed trust in? There was a good discussion about this with varying opinions, but I think the “average” web shopper is far more trust driven than they are price driven. Personally I’d rather pay a few dollars more to be assured my purchases will be delivered on time and be what I expect. The evidence sited in class bears out this hypothesis too. One study showed: “After analysis of 105 e- retailers it was shown that price dispersion is persistent.” With the ease that an online shopper can compare prices, one would think that online pricing would be very competitive and much more homogenous. But this simply isn’t the case. I think most people (me included) look for the best price amongst sites we trust and then make our purchases based upon a variety of factors with price not being the only one (I have often paid more to get an item faster).

Alexa.com

I did the homework assignment using Alexa.com to analyze traffic flow for Dell.com and its top 10 competitors. I thought this was an interesting exercise for me, and something I can definitely make use of now and in the future. One interesting note is that even though Dell is the financial “leader’ of manufacturing computers, it is Apple.com that is actually the “web-traffic” leader.

One complaint I have is that the homework instructions weren’t correct and I played around a lot with the numbers before I finally decided that the instructions had to be wrong and did the math in a way that coincided with the sample calculations that were given since they also made sense. I spent so much time playing with this that I really didn’t have the time left to write a thorough analysis of what I found with my recommendations L.

Although Alexa.com provides useful data I think there are drawbacks to it too:
1) To measure web traffic flow it is required that the Alexa toolbar is installed on client machines so web surfing data can be sent back to the Alexa server. This essentially amounts to “spyware” and with all the negative publicity surrounding this activity I have doubts that “computer savvy” people would install this toolbar (I didn’t). This means that the data being gathered is not really a true gauge of what is going on across the web; just what is going on with a “select group” who either don’t mind or don’t understand that they are essentially being spied upon ;). 2) Alexa is tied to Amazon.com and I wonder what that company is doing with the data being collected? Since Amazon is a major e-commerce portal, I personally doubt they’re providing web traffic info for the benefit of all of us, but more so that there is an agenda that they’ll be using the data for (another reason not to install the toolbar).