The history and evolution of E-commerce

Nowadays, internet has changed the way that we buying and selling goods or services. We can make business transactions online on such a regular basic such as online banking and online booking for hotel rooms as well. This action of buying and selling goods or services through the internet is called “E-commerce”. E-commerce is not just about buying and selling, it is also about electronically collaborating, communicating, and discovering information which sometimes also referred as e-business. It is about e-learning, e-government, social networks and others else.

In the early 1970s, development of e-commerce applications set up with electronic funds transfer (EFT) which transfers of funds between accounts by electronic such as Automatic Teller Machines (ATM). Electronic data interchange (EDI) was developed in the late of 1970s to improve the limitation of EFT. It is a set of standards developed in the 1960’s to exchange business information and do electronic transactions.

When the United States government allowed public to access to the internet in 1991, there was a significant change for e-commerce. Online retail products were offers by CompuServe to its consumer and this gives people the first opportunity to buy things online. E-commerce started to become famous during 1994 and it took four years for it to build the security protocols and DSL which permit rapid access and connection to the internet.

E-commerce shifted from business-to-consumer to business-to-business in 1999 and change from business-to-business to business-to-exchange in 2001. The 5 largest and most popular world wide internet retailers are Amazon, Dell, Staples, Office Depot and Hewlett Packard. E-commerce is one of the leading forces of economic growth today. It bring many benefits to users, suppliers and consumers such as saving costs and times but it may also bring some limitations such as security and lack of trust. E-commerce still has a bright future and has the ability to change.

The summary of evolution e-commerce:

1984
Electronic Data Interchange (EDI) was standardized through ASC X12 and it is guaranteed that companies would be able to complete transactions with one another reliability.

1990
The first web browser, World Wide Web (WWW) was written by Tim Berners-Lee by using a NeXT computer.

1992
An online retail product was offers by CompuServe to its customers. This gives people the first opportunity to buy things using their computer.

1994
Netscape arrived and providing users a simple browser to surf the Internet and a safe online transaction technology called Secure Sockets Layer.

1995
Amazon.com and eBay.com which are the two biggest names in e-commerce are being launched.

1998
The Digital Subscriber line (DSL) provides faster and always-on Internet service to subscriber across California. This prompts people to spend more money and time.

1999
According to Business.com, retail spending over the Internet reaches $20 billion.

2000
The dot-com bust.

2003
Amazon had its first year with a full year of profit.

An example of an E-Commerce failure and its causes

The example of an E-Commerce failure that we choose is the DrKoop.com.

DrKoop.com was launched in July 1998 by Donald W. Hackett and John F. Zaccaro with $6 million from Superior Consultant Company Inc., a healthcare IT firm in Bloomfield, Michigan. Drkoop.com was a leading global healthcare Network providing measurable value to individuals worldwide. Its mission was to empower consumers with the information and resources they need to become active participants in the management of their own health. He is unlike most dot-com celebrities of the era; Koop owned a famous face before co-founding an Internet company and, indeed, before the Web even existed. As President Ronald Reagan’s surgeon general from 1981 to 1989, Koop and his iconic beard led a well-known anti-smoking campaign.

During the 1998 which in the operating revenues, It notched just $43,000, but that didn’t keep the company from going public in June 1999 and achieving, briefly, a peak market with capitalization of $1 billion. Subsequently, DrKoop.com’s business plan rested on advertising, and in 1999 there weren’t enough healthcare advertisers to support it and the many other healthcare dot-coms trolling for ad buyers.

However, the DrKoop.com fail to achieve complete success and are not able to face the challenges in market via Internet. Due to their unimpressive and non-persuaded marketing capacity as well as other weaknesses, they became bankrupt and failed to achieve success. Later, DrKoop.com, the medical information Web site that was once valued at over $1 billion, was sold to a Florida company for $186,000 in cash. Moreover, their shares, sold to the public in June 1999, rose as high as $45.75 three years ago, before falling with the collapse of the Internet stock bubble. Andrew Zipern (NYT)

There are several points that DrKoop.com fail:

• E-commerce has perceived by the management as important to achieve the goals of the company. However, the DrKoop.com stills an unrealized goal of the health-care industry.
• The Company sank into a cash crisis for the trademark, website and others.
• It is difficult to build the trust and brand value associated with his name to the consumer via internet. Moreover, it is related the health, so the consumer need more approval and confidence.
• Drkoop.com also is the target of several class-action lawsuits.
• The DrKoop.com project has to be building around an important competence of the company.

The DrKoop.com project also has to add value for the user. They need to identify the demands and need of the consumers as well as to understand the market and the needs of the consumers. In conclusion, the DrKoop.com needs to implementation of effective business strategies and a strategic management process for the betterment of the company desirable for achieving long lasting success of an e-commerce company.

Here is some source of E-Commerce Failure

An example of an E-Commerce success and its causes

E-commerce is the buying and selling of goods and services via computer networks, such as those used on Internet and World Wide Web. E-commerce may be conducted B2B (business to business) or B2C (business to consumer).

An example of an E-commerce success is eBay. San Jose, California is the headquarters for eBay and overall probably has something in the neighborhood of employees. The eBay is the world’s largest online trading community. They offering users is an opportunity to come together in one Internet site and be able to buy and trade a wide range of items, including fine collectibles. It allows people to pursue their interest and passions in the areas of their hobbies and collectibles.

The eBay successes because it allows people to often times connect with some very fond and special early childhood memories. It could be anything from collecting baseball cards to toy soldiers to Barbie dolls to doll houses, and so forth. It allows people to make that connection and relive a lot of those very vivid and very fond memories that they have from an earlier period of time. Another factor is that people really enjoy the experience of the shopping bazaar. The users can enjoy looking around for merchandise. The other component is that users really enjoy the competition of the bidding process. Everybody likes to get a bargain, and everybody, in some way, shape, or form, likes to haggle a little bit over the price. The eBay auction format allows users to do that. The other thing is that as it has grown, it has become a very practical place to buy and sell collectibles or commodities.

The causes for eBay success, it’s a fun place to work because the great majority of people who are selling on eBay are really warm, decent, trustworthy and honest people. It's great to see how they interact and show those same characteristics toward their fellow eBay users. The eBay have created in how to sell their items. The eBay might be the first example where a commerce site has actually been built around a community where people are exchanging information and exchanging goods, services and merchandise. So, many people have established additional brick-and-mortar businesses are slowly moving a lot of that business over to eBay. For example: eBay sets the rules for commerce and implement them in order for transactions to be fair, cheap and foreseeable. Majority of the consumers can buy and sell with reasonable confidence as well as they will also get what they were promised, even though eBay still have flaws that are fraud and irregularities. Nowadays on the eBay, they continue to make changes and unite the policies and technologies that make day-to-day activities even more faithful, honest, and efficient.

Google, Amazon and Ebay Revenue Model

Google is one of the Search Engine in the world. The main source of Google id from Advertising. For the year of 2006, Google have gain US$10.492 Billion from it Advertising Revenues wherelse US$112 Billion from Licensing and Other Revenue. GoogleAdwords and GoogleAdsense is the revenue model for Google. GoogleAdwords which offer pay-per-click (PPC) Advertising programm targeted advertising for text and banner advertisment. The program includes local,, national and international distribution. It is to allow the advertisers to present their advertisements to people at the moment the people are looking for information, which related to what the advertiser has offer. GoogleAdsense is an Ad serving program. The website owners can enroll to the program to enable text, image, and video advertisements on their sites. Revenue is generated on a per-click or the per-thousand-ads-displayed basis. The ads are administered by Google. The Google advertisers are required to pay the Google a fee, on each time a user clicks on one of their ads displayed on the web sites.

Google Adwords

Google Adsense

*More information of Google Advertising Program and Google Revenue Model

Amazon started by Online Bookstore. After sometime it diversified to vary product lines. Amazon is the first Major company sells goods by internet which the Amazon is completely e-commerce company. It also allow the user to leave down the comment, submit review and rating scale from one to five of the product. Amazon is pioneer affiliate partnership marketing. Partner of Amazon can display book from it website and sends the customer to Amazon website to purchase the book. Amazon will pay commission to the site owner.

eBay is the world largest auction site. It revenue model is online auction which mean the participants bid for the product and services over the internet. The highest bid will get the product and services from the seller. eBay also owns Paypal and skype. Paypal is a online transaction which the customer need not to disclose his/her credit card number which is more safe to the owner of the credit card. While skype is the buyer can have video conferencing with the seller via online so that the buyer can understand more and receieve more information regarding the product.

** Users can access to the homepage of Google, Amazon and eBay by clicking the Hyperlink from the words of Google, Amazon and eBay.