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"Role in Net Control Up for Vote" USA Today (04/06/00) P. 3D; (Weise, Elizabeth): The Internet Corporation for Assigned Names and Numbers (ICANN) and the composition of its board is one of the more popular topics of discussion at the Computers, Freedom, and Privacy (CFP) conference, being held in Toronto this week. By November, Internet users will have the chance to elect at least five at-large members of ICANN's board. Jerry Berman of the Center for Democracy and Technology notes the importance of participating in the vote. "ICANN could end up making important policy issues affecting how the Internet is run," Berman says. Technology executive Karl Auerback scoffs at the ICANN election process, dubbing it "faux democracy." Many people believe that ICANN has already set its most important policies and that the vote will change nothing, Auerback says. Another subject on everyone's lips at CFP is the recent federal appeals court ruling that computer code is protected by the First Amendment, a decision that is very popular with the many civil-liberties activists and white hat hackers in attendance. John Gilmore of the Electronic Frontier Foundation says the ruling covers not just encryption, but all software source code, including DVD. The ruling could be used as a legal defense by programmers who are being sued by movie and music companies for publishing security-cracking programs on Web sites, Gilmore says. http://www.usatoday.com/usatonline/20000406/2117349s.htm *
Collaborative Electronic Commerce Technology and Research
"Internet Registrar to Be Sold for $21 Billion" New York Times (03/08/00) P. C2; (Fisher, Lawrence M.): Internet security company VeriSign yesterday signed a $21 billion deal to purchase Network Solutions, marking the most expensive purchase of an Internet firm to date. Many analysts question the wisdom behind VeriSign's decision to pay such a high price for Network Solutions, a company that no longer holds a monopoly in the registration of Internet domain names and faces growing competition in the area. Some experts feel VeriSign may have better served its interests by partnering with Network Solutions. Such analysts say rivals of Network Solutions have now become rivals of VeriSign, creating a situation that severely limits the potential for VeriSign to foster beneficial relationships with other businesses in the field of Internet address registration. Regardless, the acquisition will enable the companies to pool their resources and offer a range of services, including domain registration, global directory listings, basic Web site creation, and security for online transactions. VeriSign CEO Stratton Sclavos says Network Solutions is "one of the most undervalued assets on the Internet by any of the standard metrics--number of customers, type of business model, revenue growth, profitability, cash flow." http://www.nytimes.com/library/tech/00/03/biztech/articles/08net.html *
"Report Criticizes Viability of Internet Oversight Panel" New York Times (03/06/00) P. C6; (Clausing, Jeri): The Internet Corporation for Assigned Names and Numbers will face a crisis during its September board election this year if the organization fails to improve its plan that would give computer users from across the globe the ability to participate in the election, according to a report from two public interest groups, the Center for Democracy and Technology (CDT) and Common Cause. Under the terms of ICANN's plan, any computer user above the age of 16 who has an email and postal address can cast a vote to elect the members of a special council. These council members are charged with selecting nine of the organization's 18 board members. The report criticizes ICANN's mission as being too vague and contends that a lack of checks and balances leaves the special council vulnerable to the tug of special-interest groups. "This plan clearly is not ready for prime time," says CDT executive director Jerry Berman. The report argues that ICANN must take time to think through the issues surrounding the election and urges the group to hold direct elections to vote in the nine board members. ICANN interim Chairman Esther Dyson says the report is "sensible," but adds that her organization must move forward and cannot afford to heed the report's advice to go slow. *
Experts: Women well-suited for e-business
"Industrial-Strength E-Commerce" Global Technology Business (01/00) Vol. 3, No. 1, P. 44: E-commerce ventures are turning to mainframes as a way to handle drastically increasing volumes of site traffic. Mainframes, long viewed as an antiquated technology, have attracted renewed interest in the era of e-commerce because they offer unmatched reliability and scalability. Additionally, mainframes provide centralized manageability and enable companies to leverage existing hardware investments. Online brokerage Charles Schwab relies on the IBM System/390 mainframe to handle its IT operations. The company maintains that while the S/390 is not the newest technology on the market, it provides the reliability crucial to good online service. "At Schwab, innovation has never been just about technology," says Charles Schwab CIO Dawn Lepore. "Our focus has always been on the customer and ensuring that their online experience is exceptional." The scalability and reliability provided by mainframes are particularly important because it has become increasingly critical for e-commerce sites to avoid site crashes. The Standish Group reports that some e-commerce-intensive sites can lose as much as $10,000 in one minute of server downtime. Yet at the same time, large and unpredictable traffic loads have made avoiding downtime more difficult for less scalable systems. Scalability is expected to become even more necessary in time: IDC estimates that the population of online consumers will expand from 31 million in 1998 to more than 183 million in 2003. *
EBAY'S EFFORTS TO BLOCK 'BOTS' DRAW SCRUTINY The Justice Department's antitrust division is investigating eBay's attempts to stop other auction sites from using shopping bots to search its site. Investigators have met with auction sites AuctionWatch.com and Bidder's Edge, both of which use bots to compile lists of offerings from auction sites, including eBay, to allow users to search multiple sites for the lowest price. EBay has prevented the bots from searching its site, and the Justice Department will determine whether the move is anticompetitive. EBay's Jay Monahan says the issue centers on "eBay's right to prevent unauthorized intrusions." In December eBay brought charges against Bidder's Edge, accusing the smaller site of trespassing on eBay systems, unfair business practices, computer fraud, and misappropriation. Although eBay permits other online aggregators access to its site, the company is able to limit the access as part of the agreements. "What's at stake here is the architecture of commerce on the Internet, whether you can freely search others' sites or whether you have to have their permission," Bidder's Edge CEO James Carney says. (Wall Street Journal, 4 Feb 2000)** "Developers Rush to Meet Demands of E-Commerce" New York Times (01/23/00) P. 3; (Murphy, Todd): With e-commerce retailers expanding at a rapid clip, some real-world issues are emerging. A primary concern is finding sufficient warehouse space in different parts of the country to ship consumers' merchandise within hours of orders being placed online. This need is creating a bricks-and-mortar demand that commercial developers are acting quickly to fill. Trammell Crow, for example, has joined with AMB Property in developing two commercial buildings in Portland, Ore., to lease to e-retailers and to the companies that provide warehousing and delivery for them. When completed, the buildings will be located on the grounds of Portland International Airport and configured to make it easy for loading equipment to maneuver and pick up goods. Trammell's Steven Bradford says, "We feel like it's the next generation. It's the logical extension of e-commerce. The closer you can get to the air cargo center, the quicker your delivery time." However, most airports have limited land available. This makes the properties surrounding major terminals even more valuable. Still, for some e-businesses proximity to large airports is not as important. Amazon.com, for instance, added approximately 2.7 million square feet of distribution space nationwide in the last year in such remote areas as Coffeyville, Kan.; and McDonough, Ga. The firm pays more attention to being geographically close to potential customers and delivering to them through the Postal Service. http://www.nytimes.com/library/financial/sunday/012300biz-ecommerce.html *
YANKEES AMONG GROUPS PITCHING NET ACCESS: So-called "private-label" Internet service providers--ISPs that leverage the brand names of airlines, media groups, or celebrities--will become a significant force in the ISP market within the next three years, says Zia Wigder of Jupiter Communications. The services offered by private-label ISPs normally come free or at reduced cost. The New York Yankees are slated to launch a $15.95 service next month that will allow users to chat with players and coaches and be eligible for special offers. Meanwhile, the cost of David Bowie's service drops $5 to $14.95 this month. And Pepsi is teaming with Smart World Technologies to offer a $9.95 service. WJLA-TV, a Washington affiliate of ABC, recently partnered with 1stUp to offer free Internet access. ISPs benefit from private-label deals because the average cost of luring a customer drops from $150 to "practically nothing," says Danny Robinson of Spinway.com. (USA Today 01/03/99)**
"The Importance of Being Earliest" Industry Standard (01/31/00) Vol. 3, No. 3, P. 165; (Heuer, Steffan): Internet entrepreneurs are divided over whether it is best to launch a Web site quickly, before it is fully developed, or to wait until it is complete. While speed is imperative among Internet businesses, a badly executed site launch can plague companies just as they are starting out. HandSpring, for example, found that after a major marketing campaign, its site could not adequately handle online orders. As a result, some customers received notification of late delivery, while others received wrong orders. Now, observes Mobile Insights director David Hayden, "they have a growing contingent of dissatisfied customers." Other online ventures maintain that an early site launch is key to a good business. Guru.com, for example, launched its site after just six weeks of development and relied on customer suggestions to continuously upgrade the site. "It's a site, not surgery," says Guru.com CEO Jon Slavet. "Get the product out, let people test it and put a lot of trust in your customers. It builds brand loyalty and a sense of ownership." Although some have clear preferences on when to launch a site, most agree that striking a balance is the safest route. To launch a good site quickly, Internet ventures should take a few weeks to design a well-planned, well-tested architecture, then add features over time, based on customer response. Some also recommend that Internet firms delay a big marketing push until the site has been put to use. Dell Computer, for example, waited 10 days to launch a marketing campaign after implementing a new system. "Sure, you've done a lot of testing," says Dell's John Zoglin, "but you never know." No matter when a company chooses to launch its site, it should first ensure that it will be well received by the public. ActivMedia's Harry Wohlhandler says, "The bottom line is, it ought not to embarrass you when it's ready for prime time." *
"Chatting With the Web" Computerworld Online (02/23/00); (Hall, Mark): IBM this week previewed new speech recognition technologies designed to make Web surfing even easier at the Speech Fair held at IBM's Santa Theresa Research facility. IBM unveiled a Palm Pilot PDA equipped with IBM's prototype Personal Speech Assistant (PSA) to provide online speech recognition. The Palm Pilot, due out this year, and other PSA-enabled devices could be used to navigate the Internet using voice commands, says IBM researcher David Nahamoo. IBM also demonstrated voice recognition technology intended to bolster IT security efforts by authorizing users based on their speech patterns. The technology is intended to supplement existing password and data verification techniques, making it nearly impossible to achieve unauthorized access to a Web site, says analyst Judith Markowitz. Other coming improvements to speech recognition technology include the submission of the voice XML specification to the World Wide Web Consortium. IBM says the specification, which could propel speech recognition tools into the mainstream, will be submitted in the next two weeks. http://www.computerworld.com/home/print.nsf/idgnet/000223EEFA*
"Toshiba Launches $2.3B Internet Business Initiative" E-Commerce Times (02/15/00); Greenberg, Paul A. Japanese titan Toshiba announced on Monday that it plans to invest the equivalent of $2.3 billion dollars to form i-Value Creation, a division of the electronics company that will focus on wireless Internet communications and e-commerce. The venture is slated to launch by April 1, 2000. Additionally, Toshiba expects to have its procurement system online in 2001, a move designed mainly to reduce operating costs. Although competitors such as NEC, Sony, and Fujitsu have all already expanded their operations online, it is unclear why Toshiba is such a latecomer to the field of Internet ventures, though a recent lawsuit brought against the company for intentionally selling faulty equipment, and ultimately settled for $8.8 billion, may have contributed to the delay. As part of Toshiba's planned Internet endeavors, the company will enter into a cooperative agreement with a large Japanese online stock trading organization called Matsui Securities and will soon invest in Hon-ya-san, a leading Japanese Internet bookstore. http://www.ecommercetimes.com/news/articles2000/000215-1.shtml *
"Web's Next Big Thing Is Small" Washington Post (02/17/00) P. E1; (Walker, Leslie): Eager to capitalize on the promising small business market, vendors are introducing user-friendly packages to design and host small e-commerce sites. Small businesses account for half the nation's output, according to federal government estimates, yet are widely overlooked by service providers because they are often limited to a specific region and industry. Because the Internet offers the potential to break down these barriers, service providers have begun expressing strong interest in the small business market. "The opportunity goes both ways: Here is a new land where small businesses can promote their products more broadly, and also where they can be reached more effectively by big businesses," says Teymour Boutros-Ghali, CEO of startup AllBusiness.com. Top industry players such as IBM, Intel, and Amazon have begun offering low-cost, user-friendly Web design and Web hosting tools, while NetObjects launched this week a Web site-building portal called GoBizGo.com. Rounding out the barrage of offerings are free design tools from startups such as Freemerchant.com, BigStep.com, and eCongo.com. http://washingtonpost.com/wp-srv/WPlate/2000-02/17/253l-021700-idx.html *
"Study Tracks E-Business Investments" MMR (02/07/00) Vol. 17, No. 6, P. 46: U.S. companies spent an estimated $153 billion last year on e-business infrastructure, developing online strategies across the enterprise, according to a study by Internet Research Group and SRI Consulting. By 2003, U.S. investments in e-business infrastructure could jump to $348 billion, the study says. Last year companies from all industries started implementing Internet strategies aimed at boosting sales, improving customer relationships, refining marketing programs, streamlining internal systems, and integrating supply chains, says Internet Research Group vice president Larry Gordon. *
Big Brands Crashing Party" Interactive Week (02/07/00) Vol. 7, No. 5, P. 52; (Smetannikov, Max): The first wave of free ISPs was led by companies without household names, such as NetZero, but the second wave of free ISPs is being led by companies with established brand names, such as Kmart and General Motors. Offline giants getting into the free ISP business have advantages over ISPs without offline stores; Kmart is able to deliver access information to its 30 million shoppers per week, which means more users will be attracted by ISPs with brand names. Offline retailers are turning to companies such as Spinway, a virtual network operator that purchases modem ports around the country from GTE, ICG Communications, and other companies to resell to businesses looking to become ISPs, to create national infrastructures. Spinway also rakes in funds by selling advertising space to companies interested in advertising on the sites of brand-name service providers. Other companies such as MicroPortal.com are offering companies a sophisticated tool to track their customers' Internet travels and then cater ads specifically to users' interests. Traditional ISPs believe the success of free ISPs will not affect their business; free ISP users are a different demographic than the high-income males traditional ISPs attract. Traditional ISP Earthlink will make $1 billion in revenues this year, and only half of that revenue will come from the $19.95 a month the company charges users. Earthlink has developed many other ways to obtain revenue, such as Web hosting, that Kmart and other free ISPs have yet to provide users. *
"Site Management Ins and Outs" Interactive Week (01/31/00) Vol. 7, No. 4, P. 68; (Babcock, Charles): To remain competitive in the explosive e-business market, systems management vendors are working to ensure that their traditional network products can be used to monitor Web sites. The top three systems management brands--Tivoli, Computer Associates' CA Unicenter TNG, and Hewlett-Packard's OpenView--are being revamped to provide strengthened Web site management. Over the past year the vendors have upgraded their offerings to manage a company's entire infrastructure, from the network router to the Web server. Often, the vendors measure site response times, provide site testing, and encourage feedback from site visitors. The vendors have also formed hundreds of partnerships to provide add-on features from third-party vendors. Carefully planned site management is crucial to avoiding e-business pitfalls such as site crashes, warns Tivoli's Jackie Gilbert. She finds that often, even as companies find that Web sites are necessary to business, "there's ... an unwillingness to make the investment [in management systems]." One solution is to gradually add management features to the Web site, says Gilbert. http://www.zdnet.com/intweek/stories/news/0,4164,2429659,00.html. *
"Computer Language Consensus Sought" Associated Press (02/01/00); (Kalish, David E.): Industry members are working to develop Extensible Markup Language (XML) on the grounds that it could be the piece of Internet infrastructure needed to enable widespread exchange of data across different computing platforms and software. There remain concerns regarding privacy and whether the many different companies seeking a competitive edge will leave the XML market fragmented, limiting the technology's potential as a universal data exchange standard. However, the potential benefits include the enabling of automated business networks that constantly exchange information, wireless Internet services such as the airline reservation system being developed by IBM and Nokia, wireless banking, and much more efficient Internet searches. XML applies tags that describe the content of data being transferred; unlike HTML code, XML allows companies to exchange information freely without concern for software programs. Click Here to View Full Article *
Web Building: Is Your Site Shoppable? The ultimate goal of your e-commerce site is to convert browsers to buyers. To encourage users to click that Buy button, you need to make your site as “shoppable” as possible. Put some of CNET Builder.com’s techniques to work, and you’ll have a site that provides a substantial lead and competitive advantage over your competitors: http://1.digital.cnet.com/cgi-bin1/flo?x=dBmAEgKYYwYuhouB*** "Web Site Upgrades: Build or Buy?" Computerworld (01/17/00) Vol. 34, No. 3, P. 1; (Sliwa, Carol): As companies expand business Web sites, they must decide whether to build their own technology or to buy off-the shelf e-commerce suites. Although building the technology allows a company to customize the site to their exact needs, this approach can be time consuming and requires significant resources. Meanwhile, buying an e-commerce suite lets a company launch a site quickly, but can require customization or restrict opportunities over time. Off-the-shelf products from vendors such as BroadVision, IBM, Intershop Communications, and Open Market help companies with e-business needs such as establishing storefronts and processing transactions. Experts say commercial suites have significantly improved and many companies are reevaluating developing their own software because of high maintenance costs. However, Yankee Group analyst Paul Scarpa says experienced online vendors such as CDNow might favor building their own technology. CDNow has its own technical staff that maintains software code, allowing the company to change its site rapidly. "We found it costs just as much to integrate third-party technology as to build upon our own proprietary platform," says CDNow Chief Development Officer Michael Krupit. Although analysts note that some off-the-shelf solutions are in their early stages and need refinement, they say packaged products might be adequate for sites with limited needs and budgets. http://www.computerworld.com/home/print.nsf/all/000117E036 *
"Challenge of the Millennium" Manufacturing Systems (03/00) Vol. 18, No. 3, P. 10; (Nesdore, Paul): Many manufacturers will work on developing effective e-business strategies this year. Some manufacturers rushed into e-commerce without first working out a strategy. To move smoothly into e-business, companies should focus on establishing a reliable internal infrastructure before launching an e-commerce site. The major technology issues that manufacturers should consider when moving into e-business are integration, visibility, analysis, and optimization, says Manugistics' Lori Mitchell-Keller. Many non-technology issues should also be addressed, including the reactions of employees and partners to the internal reorganization that accompanies e-business. For example, salespeople are often concerned that e-business will allow a company to circumvent the usual sales channel. E-business also condenses planning cycle times, forcing companies to move more quickly. Another challenge is that e-business requires companies to share information with customers, suppliers, and partners, and many companies are reluctant to do so. Software vendors are beginning to recognize that manufacturers do not want to completely rebuild their infrastructures, and are offering modular solutions that are flexible enough to be customized for a particular business. In response to manufacturer's concerns about integration, vendors are offering software that is easier to integrate with existing systems. For example, J.D. Edwards OneWorld development environment product uses an object type component structure that simplifies integration. *
"Rewiring the 'Old Economy'" U.S. World & World Report (04/10/00) Vol. 128, No. 14, P. 38; (Holstein, William J.): Business-to-business (B2B) e-commerce is revolutionizing even the most traditional U.S. companies, allowing them to increase efficiency and cut costs. For example, Aeroquip, a maker of parts for companies such as John Deere and Caterpillar, recently implemented a B2B system that allows customers to go online to see what parts are available and to order customized products that are shipped the same day. Before implementing the system, Aeroquip hand-sorted its sales slips and manually entered information into a computer system that did not display the data for 24 hours, leaving the company with no immediate way to determine what it had sold. As other companies join the B2B trend, B2B transactions will reach $2.8 trillion by 2004, up from $237 billion this year, Gartner Group predicts. The B2B move could result in productivity gains, allowing companies to cut 10 percent of their procurement costs, says investment bank Dresdner Kleinwort Benson. In addition, B2B offers old-line companies a chance to increase their stock valuations, and the trend could stimulate economic growth. Consumers are likely to benefit from B2B in terms of lower prices, a wider range of choices, and faster delivery. Cisco Systems, which makes B2B hardware such as routers and switches, is perhaps the paragon of an effective B2B company. Cisco's customers can research products and place orders online, with the information being routed through Cisco to suppliers. Sixty-five percent of Cisco's orders pass directly from the supplier to the customer, and inventory is kept at a minimum since products are built after they have been ordered. Developing a business model like Cisco's is easier for companies working from the ground up, but traditional companies should make the effort to transform their businesses to survive in the B2B era, experts say. http://www.usnews.com/usnews/issue/000410/b2b.htm *
"Online Trading Grows Up" Washington Post (04/05/00) P. G4; (Swoboda, Frank; Brown, Warren): Traditional brick-and-mortar businesses are turning their attention toward the Internet and e-commerce as a means of capitalizing upon their established brand names and vast buyer power. Online marketplaces were recently announced between American retailer Sears and French retailer Carrefour, and between automobile mammoths General Motors, Ford Motor, and DaimlerChrysler. Each exchange has the potential to dwarf its respective industry in terms of total volume of business and generate enormous savings for participants, which could be passed along to consumers in the form of reduced prices. "The bottom line is that suppliers and retailers are going to be able to communicate directly and competition is going to be enhanced," says Sears' Joe Laughlin. Many market analysts agree but caution the new B2B exchanges will likely receive attention from federal antitrust regulators. As buyers are given more power to choose their suppliers, buyer-supplier relationships are likely to shift in favor of the buyers. As a result, commodity suppliers unable to cope with new pressures and new forms of competition may be forced out of business. Some analysts also fear companies with financial interests in an exchange may misuse confidential information provided by suppliers in an attempt to gain the economic upper hand. They believe B2B marketplaces should be run by independent organizations outside of the specific industry in which the exchange participants operate. However, some companies, such as BMW, are not keen to jump on the Internet bandwagon. This reluctance could prove damaging to the new B2B exchanges, whose success may depend primarily upon securing support from a sufficient number of buyers and sellers. http://washingtonpost.com/wp-srv/business/feed/a14126-2000apr5.htm *
"All Yours" Economist (04/01/00) Vol. 355, No. 8164, P. 57: Manufacturers are trying to join the mass customization revolution, but many are discovering that they may have to change their entire production process to do so. In many ways, mass customization is based on the Internet because of the one-to-one marketing that the technology allows. Companies no longer have to rely on a direct sales force to find out what consumers want. Using the Internet, companies can communicate more effectively with consumers and address the specific needs of their customers. Although the services industries have embraced catering to the specific needs of customers, the concept may prove to be more problematic for manufacturers. In the auto industry, for example, the thinking of Henry Ford was to make the car then sell it afterwards. However, as Dell Computer has shown, the time may be now for manufacturers to allow consumers to pay first, and then make the product. Dell allows consumers to design their own computers at its Web site, and then the company makes the computers. The company outsources much of its production, and its inventories are low. Dell has been able to avoid running out of parts or the building up of inventory because of good communication and speed. Frank Piller, mass customization expert at the Technical University of Munich, says manufacturers will have to change the order in which they assemble products, as well as the design and the construction of products. One particular problem for automakers, for example, is how to allow consumers to customize a car when body color is determined early on in the production process. Each group of steps in modular production processes will have to be separated or clipped together "like Lego blocks," he says. At the same time, manufacturers must figure out how to manage customers because mass customization is less about what companies can produce than about what consumers want. As a result of the Internet, mass customization could be to the 21st century what mass production was to the 20th century. *
"Clicks & Bricks" CIO (03/15/00) Vol. 13, No. 11, P. 77; (Stuart, Anne): Retailers are starting to believe that the most effective business model is a combination of online and brick-and-mortar efforts, or click-and-mortar. In the past, many retailers have separated their online and offline efforts or chosen between the two. Now many companies, including hat specialty store Lids, are trying to create a seamless experience for customers regardless of whether they shop in real-world stores or on the Internet. Lids lets customers redeem gift certificates or return merchandise online or offline no matter where the original transaction took place. Meanwhile, some pure Internet companies are making an effort to build a physical presence. Egghead Software withdrew from brick-and-mortar sales in 1998 to become Egghead.com, but now the Internet-only firm is considering building physical stores. Egghead.com CEO George Orban believes that brick-and-mortar companies are the largest threat to online firms. Click-and-mortar companies are finding that Web sites bring traffic to their real-world stores. Many visitors at Sears.com use the site to research a product before purchasing it at one of the company's traditional stores. Conversely, some physical stores are directing traffic to Web sites, such as the real-world Gateway Country stores that allow customers to try out Gateway systems online. Some traditional companies such as Levi Strauss & Co. halted direct sales over the Internet after retailers became angry that the online efforts would detract from brick-and-mortar sales. Analyst Patricia Seybold says, "That's pre-Web mentality, that there's a scarcity of customers out there." To be successful, companies will ultimately sell merchandise online and offline, both directly and through retailers, Seybold says. Following the click-and-mortar model, companies need to ensure that information flows seamlessly among all channels. http://www.cio.com/archive/031500_click.html *
"Which Key Fits?" InfoWorld (03/13/00) Vol. 22, No. 11, P. 34; (Scannell, Ed): Although many companies recognize the advantages of Web-enabling their legacy applications, few firms have actually done so, according to a recent Cutter Consortium survey. Only 15 percent of 134 companies that responded to the survey have enabled their core applications for e-business. However, companies are increasingly moving to revamp their host systems because of the benefits of the Web and new methods of enabling host systems that simplify the process. Many companies begin Web-enabling their systems by tapping into their mainframes or other high-end host systems. Since companies have invested millions in these host systems, some are reluctant to modify the hosts. However, many companies are turning to middle-tier application servers that allow users to leave data and business logic on the mainframe and still access the information. When RLI Insurance decided to move its data to the Web, the company decided it did not need to redevelop its AS/400-based application. The company selected Seagull's J Walk as a front-end solution to provide systems with Web access without affecting the back-end system. J Walk, which includes developer's tools, server software, and thin-client technology, lets RLI merge application access to host functions for integration with Java and HTML. Meanwhile, oil-drilling service B.J. Services began its Web-enabling project after replacing 30 Banyan servers with a 10-server MetaFrame 1.8 server farm from Citrix as part of its Y2K remediation efforts. The company says MetaFrame allowed it to switch to thin clients, which cut costs on desktop hardware. After installing MetaFrame, B.J. Services Web-enabled the system by implementing Citrix' Nfuse, which lets MetaFrame-based applications be posted to the Web. http://www.infoworld.com/articles/hn/xml/00/03/13/000313hnhost.xml *
"Enabling a Successful e-Business Strategy Requires a Detailed Business Process Map" InfoWorld (03/06/00) Vol. 22, No. 10, P. 64; (Biggs, Maggie): A detailed business roadmap is key to a successful e-business implementation, writes InfoWorld's Maggie Biggs. Biggs predicts greater development in the business-to-business e-commerce space this year, which she says will create the need for businesses to examine their core processes to determine which are most compatible with the Internet. As companies assess their core processes, a logical business roadmap will emerge, enabling the company to determine the risks of e-business while designing a plan to manage those risks, says Biggs. In creating an e-business roadmap, Biggs suggests that companies start by mapping existing business processes using graphical tools or process modeling tools. Companies should examine how existing Web-enabled business processes are affecting the bottom line, and identify the actions rivals have taken to automate their processes, keeping an eye on how those actions have affected the market. Biggs says that next, companies should assess the long-term value of Web-enabled business processes, examining factors such as profitability, growth, time to market, and customer service. Companies should then consider their existing staff, identifying which, if any, additional skills would be necessary to run an e-business. Biggs says that after completing these analyses, a company should be able to identify which business processes are best suited for the Web. In implementing the e-business strategy, Biggs says that companies should identify any weaknesses in existing systems and processes that might complicate the end result. *
"Seeking the Deeper Path to E-Success" InformationWeek (03/06/00) No. 776, P. 48; (Chabrow, Eric): Companies that have the most success with e-business are those that not only invest heavily in IT, but also show a strong commitment to e-business best practices, according to a recently released InformationWeek Research study. Significant business improvements have been made by companies that have implemented at least three of the following e-business practices: implementing customer-facing information systems, moving legacy electronic processes to e-business, streamlining value or supply chains, and redefining corporate culture around e-business, the study shows. Of the companies that have adopted at least three of those four practices, 75 percent say the online efforts offer a competitive edge, boost customer satisfaction, lower operating costs, create new revenue sources, and raise profits. The survey shows no large differences between IT managers and business managers in their outlook on e-business. IT managers and business managers alike say IT managers are spearheading e-business technology decisions. In addition, 91 percent of respondents say IT's increased role in overall business is the most important aspect in changing corporate strategy. The second most important factor is using IT to increase customer value, listed by 84 percent. Other changes respondents felt were important include partnering with Internet startups, acquiring e-businesses to broaden offerings, mergers and acquisitions, spinning off e-businesses, and holding IPOs. Although companies transitioning to the Internet face many business challenges, business issues are overshadowed by the difficulties of keeping up with the pace of change in technology, respondents say. http://www.informationweek.com/776/transform.htm *
"At Ford, E-Commerce Is Job 1" Business Week (02/28/00) No. 3670, P. 74; (Kerwin, Kathleen; Stepanek, Marcia): What started out last year as a study on how the Internet could improve auto manufacturing has turned into an e-business strategy that will reinvent manufacturing at Ford Motor. In two years the automaker expects its new build-to-order auto business to reach high volume. Moreover, Ford plans to use the Internet to allow dealerships greater communication with plants so problems can be addressed more quickly, and to allow suppliers to control inventories in a manner that is similar to the way Wal-Mart lets vendors stock its stores. The model of efficiency that Ford sees in making use of the Internet has made it the most ambitious old-line manufacturer when it comes to the Internet. Although General Motors has also announced plans to connect suppliers and dealers and offer ties with consumers at their PCs and in their cars, unlike Ford, GM has no plans to wire all its employees. Ford's major e-commerce plans have Oracle, Cisco, Microsoft, UUNet, Hewlett-Packard, PeoplePC, Yahoo!, Priceline.com, and TeleTech all working with the automaker. Dain Rauscher analyst Jonathan Lawrence says Ford could reap savings of about 25 percent of the retail price of a car by using the Internet to offer more efficient connections for suppliers and distributors. The newly created AutoXchange is part of the e-business strategy, and the online trading mart for some 30,000 Ford suppliers is expected to deliver to Ford a hefty cut of the $3 billion that the service is estimated to generate within five years. Analysts say this could save Ford $8 billion in procurement prices and about $1 billion in overhead, paperwork, and other transaction efficiencies each year. Ford is also considering offering Internet access in its vehicles, which could bring in monthly fees of up to $25 a month from its buyers. Although Wall Street estimates AutoXchange will have more than $500 million in revenue when Ford takes it public in 2001, some analysts do not appear to be impressed with the e-business strategy thus far. Concerns remain about whether Ford will neglect designing and building cars and trucks, whether consumers want cars with all sorts of extras that could be problematic, and whether the big savings could hurt suppliers and others. *
"For Online Businesses, Alliances With Bricks-and-Mortar Retailing Chains Promise Many Benefits" New York Times (02/28/00) P. C10; (Tedeschi, Bob): Pure online retailers are beginning to ally with physical stores of all kinds in order to lower customer acquisition costs and provide customers with product exchange and return services. Traditional stores with new online divisions have a distinct advantage in these important areas, leading the pure-play online stores to work hard to establish a physical customer service presence. Convenience store chain 7-11 is experimenting with Internet-enabled ATM machines, and may also begin to hold product return services for select online stores. UPS is building a number of new storefront locations to test the waters of e-commerce company support. Online delivery company Kozmo.com has inked a five-year, $150 million deal with Starbucks Coffee to set up product return centers in Starbucks stores. "The need for this is huge," says Tim Washer of market research company NFO Interactive. Washer says that by providing a physical retail presence for consumers, Internet stores will increase the public's overall confidence in shopping online. *
Want Opera Tickets? Just Swipe Your Card at the Soda Machine
Spiegel's expansion into virtual outlets takes many forms
"Companies Lag in Strategic Vision, Survey Shows" Global Business (01/00) P. 18: Most companies believe that e-commerce is a key part of their future success, but they are not tying e-commerce into corporate strategy, according to a recent KPMG study. Although 65 percent of the respondents say e-commerce is one of their most critical initiatives, only 26 percent have a centralized group responsible for e-commerce decisions. E-commerce activities are dispersed throughout the company with participation from diverse groups such as sales and marketing, since e-commerce tends to be driven by customers and revenue rather than internal operations and cost reduction, says Debra Hofman of Benchmarking Partners, which conducted the survey for KPMG. Less than half of the respondents have an official with an e-commerce title, and of the executives that have such a title, only 40 percent manage the e-commerce budget. In addition, only 50 percent of respondents could identify total e-commerce spending across the enterprise, and just 21 percent could identify spending by initiative. *
"Connecting the Dotcoms" Brill's Content (01/00) Vol. 2, No. 10, P. 70; (Savan, Leslie): "Old media" has become the advertising vehicle of choice for Internet companies that are not as confident about online banner ads being the best way to establish a brand that consumers can identify. The dot-coms are putting more of their money into print ads, radio, and television, in particular. Competitive Media Reporting says Internet advertisers spent 228 percent more on traditional media during the first half of 1999 than they did during the same period the previous year. The spending amounted to $755 million. In comparison, all other categories of advertisers saw their spending increase by just 5.5 percent. And market observers expect the spending of Internet advertisers on traditional media to soar even higher for the second half of 1999. "The media marketplace is in sellout mode on TV and radio," says Sarah King, account director at Swirl, the ad agency for Petopia.com. "Advertising rates have gone up dramatically. It's mostly because of the dot-com companies." When marketers talk about "share of mind" that online startups are clamoring for, they are not just talking about consumers. Making the right impression on Wall Street in commercials may be even more important to dot-coms that are hoping to receive the blessing of market experts. And old media remains the best way, hands down, to obtain share of mind, which comes from telling a story and reaching an emotional connection with viewers. *
"The Dot Com Within Ford" U.S. News & World Report (02/07/00) Vol. 128, No. 5, P. 34; (Holstein, William J.): Ford CEO Jacques Nasser is trying to bring his company into the Internet age and has been forming partnerships with high-tech firms such as Yahoo! and Oracle. Nasser's goal is to make the products customers want rather than pushing the products Ford already has by taking personalized customer orders over the Internet though services such as Microsoft's CarPoint. The orders would be fed into a supply chain system Oracle is creating that coordinates Ford's procurement from suppliers. In addition, Ford wants to provide customers with personalized Yahoo! Web pages that offer up-to-date vehicle information and schedule maintenance. Ford's supply chain plan faces a number of technological hurdles, such as linking Ford's many different computer systems with one another, and enabling these systems to accept customer orders. In addition, the incoming data needs to move seamlessly into procurement systems for many suppliers that all have different computer systems. In the past, Ford has ordered supplies six months in advance, based on estimates of how many cars it will produce. These estimates are often revised several times, and the system is wasteful and inefficient. Ford and Oracle are now working together in their Auto-Xchange partnership to build an interactive supply chain that connects Ford's internal systems to those of its suppliers. Eventually, Ford plans to use Auto-Xchange to jointly design vehicles with suppliers. Nasser believes the new system will help Ford better understand customer needs and cut manufacturing expenses. http://www.usnews.com/usnews/issue/000207/cars.htm *
"Putting the 'E' Back in E-Business" InformationWeek (01/31/00) No. 771, P. 45; (Wilder, Clinton; McGee, Marianne Kolbasuk): The Internet is revolutionizing the business world, so much so that soon, e-business will simply be defined as basic business. "Timeless, 24-by-7 access to information is becoming the standard way of doing business," says IBM's Ed Kilroy. "Companies' business partners are demanding it, and just as important, their competitors are driving them to provide it." Often, companies ease into e-business by beginning with initiatives that involve money, then gradually automate other processes. Procurement is one popular first initiative: Chase Manhattan reports that it has streamlined its purchasing process using e-business software, while hotel management firm Stonebridge Companies says that its online system has cut its procurement process from 20 days to 10 days. By the third quarter, Stonebridge plans to Web-enable most of its major business processes, including policy and procedure information and employee training. "It's an important evolution in people's thinking to realize that e-business isn't just one thing--because business isn't just one thing," says Fulton Wilcox, director of technology business development at BOC Gases, which is implementing e-business among most of its processes. While there can be difficulties in setting up e-business, including conflicts among supply chain members and problems in integrating disparate systems, most businesses now clearly understand that e-business is worth the effort. "Two years ago, the burden of proof was really on the e-commerce team to persuade everyone that e-business made sense," says Wilcox. "Now anyone who says we shouldn't be on the Net has a very tough argument to make." http://www.informationweek.com/771/ebiz.htm *
"Online Software Catches On" USA Today (02/04/00) P. 1B; (Davidson, Paul): New software companies want the Internet to transforms the industry into one in which consumers and companies go online to access software applications. By offering software products over the Internet, the new companies expect consumers to visit their Web sites instead of stopping at a nearby computer store for software. Similarly, application service providers (ASPs) are hoping that companies to do the same to fill their business needs. The emerging industry is a threat to industry mainstays such as Microsoft and IBM. Although Web-based software sales excluding service fees accounted for less than 1 percent, or $700 million, of the U.S. software market in 1999, by 2003 Web-based software sales are expected to represent 22 percent of the market, or $5.8 billion, according to Forrester Research. And most sales are expected to come from businesses. Among the companies moving software online are Desktop.com, Mi8, and myWebOS, and the startup frenzy is said to be driving the trend toward Web-based applications. For example, LoanCity.com was able to launch its venture in six months instead of a year by using the services of Corio. In addition, LoanCity did not have to build its own data center or hire 20 engineers because of the ASP. And Americasbaby.com sought out Mi8 because the baby-products retailer wanted its tech people working on its Web site rather having to deal with email. Still, there are some concerns and drawbacks concerning Web-based applications. Privacy advocates are concerned about the data that software company Web sites gather on visitors. Meanwhile, companies that rely on ASPs may have to put up with crashing networks, hackers, and corporate espionage. High prices are also a problem, although there are Web-based software companies that offer free products. http://www.usatoday.com/usatonline/20000204/1910838s.htm *
HOLD THE MORTAR: The most successful retailers will combine Internet presence with physical assets, write Philip Evans and Thomas S. Wurster, senior vice presidents at the Boston Consulting Group. The concept of "clicks and mortar" may be better suited for Internet ventures than traditional retailers, say the authors, because it is easier to add physical infrastructure to a business than to minimize an existing one. Witness the recent difficulties of Toys "R" Us and Barnes & Noble in setting up an e-business: Toys "R" Us damaged its online offering because it refused to criticize its existing processes, while Barnes & Noble spun off its Internet venture after having difficulty merging it with its physical stores. To succeed, traditional retailers must identify the most lucrative synergies between their physical and online presences, then leverage these synergies using the least amount of reorganization possible, say the authors. Soon, predict the authors, the best online ventures will team with the best providers of physical services. (Industry Standard, 7 Feb 2000) **
POINT, CLICK, WIN! After just one presidential cycle, candidates are turning to e-campaigning to gain supporters and mobilize them to volunteer and to attract even more supporters. Presidential hopefuls now have a Web strategy because they see it as being one of the key advantages of the technology. For example, the campaign of John McCain sent out some 50,000 e-mails to volunteers across the country after the campaign of George W. Bush attacked the senator's tax-cut plan. Some 1,100 McCain supporters were on the phones, buoyed by their sample script, within 12 hours. Steve Forbes is expected to embrace the Web more than any other candidate. In spending nearly $1 million on an e-campaign, Forbes is expected to approach the Web in the same manner that John Kennedy did with television. For the 17 percent of adults who go online for politics, the Internet will serve as another resource for learning more about the candidates. (Time, 31 Jan 2000)**
"Common Web Code Could Save Banks Money" TechWeb (01/24/00); (Acey, Madeleine): Banks such as Charlotte's First Union National Bank are experimenting with offering HTML-based transactions across various channels to increase the variety and value of services offered to customers and to lower the bank's operating costs. Banks can gain significant advantages by using a standard HTML-based code to run ATMs, Internet-banking systems, telephone-banking systems, and wireless-banking systems. For example, armed with a profile of any customer visiting an ATM, the bank can display personalized advertisements and offers for services likely to be of interest to the customer. High-speed Internet connections will enable the customer to actually buy the advertised services from an ATM or wireless device without adding much time to his or her originally intended task. The HTML-enabled system will "know what services [the customer] can afford--the potential for direct marketing is huge," says Paul Bessant, membership services manager at CommerceNet in London. Security is the main challenge to be overcome before the practice becomes more common. *
"Treading With E-caution" Austin American-Statesman (01/23/00) P. J1; (Pletz, John): All attention turned to the Internet at the National Retail Federation's annual convention last week in New York City. The three largest categories in the convention directory were e-commerce vendors, Internet services, and interactive shopping. Traditional retailers have begun to slowly position themselves on the Web as they realize the potential of sales online. But they are taking great caution. The consensus at this convention is that it is better to not be on the Internet at all than to be on and do it poorly. But everyone understands that, while it is a dangerous endeavor to undertake, the opportunity is too great to ignore. Many also believe that it is these traditional retail stores that have the potential for the best success on the Web, as their storefronts allow for convenient customer returns and exchanges, which is the major weakness in e-commerce. Technology companies are dominating the convention floor, demonstrating various products designed to help companies get on the Internet. http://www.austin360.com/statesman/editions/sunday/business_1.html*
"Toyota Is Likely to Offer Online Stock Trading" Wall Street Journal (01/28/00) P. A14; (Shirouzu, Norihiko): Toyota is expanding its Web site, gazoo.com, to provide brokerage assistance and various consumer products. Toyota wants gazoo.com to eventually become an electronic commerce provider that offers customers many kinds of products and services including insurance and options that do not relate to automobiles. Toyota may develop these new services with a company that specializes in finance or do so independently. Toyota projects that by 2004, gazoo.com may earn $5.68 billion. Companies like GE Capital Corp. and Softbank have made similar moves into the field of financial services in the past. *
"Automakers, Tech Firms Form Alliance to Put Motorists Online" Washington Post (01/25/00) P. E4; (Brown, Warren): IBM, Motorola, and Intel have joined forces to create an online system to be deployed in automobiles for as little as $300 by 2003. The system will allow automakers and dealers to provide car owners with additional services such as notices of impending vehicle problems and personal computer access. The technology could also ease tensions between automakers and dealers over which group will control auto retailing in the coming years. "Either we enter this new Internet age together, or we die separately and let some third party take over the business," says National Automobile Dealers Association board member Lou N. Kairys, alluding to the threat posed by upstart independent online dealerships. http://www.washingtonpost.com/wp-srv/WPlate/2000-01/25/043l-012500-idx.html *
CITRUS GROWERS EMBRACE DIGITAL TECHNOLOGY IN SALES: Florida orange growers are transmitting digital images of their fruit via the Internet as a way to market their product and resolve disputes over damaged shipments. The use of digital cameras cannot replace on-site inspecting or tasting in the packing house, but this technology is valuable as an additional resource for the industry. Voita Citrus President Jack Cane says his company's field buyers in Florida, Texas, and California all use digital cameras. "We call it our daily beauty contest," Cane says. "It's impossible to describe certain conditions over the phone." Orange growers tag every load of photographed oranges to prove to distributors that the fruit is the same. The U.S. Department of Agriculture has also begun using this technology and charges $43 an hour to perform this service. (Houston Chronicle, 18 Jan 2000)**
"Brick-and-Mortars in 2000: Payback Time" Internet World (01/01/00) Vol. 6, No. 1, P. 31; (Andrews, Whit): Armed with decades of retail experience, brick-and-mortar companies are preparing to tackle e-business. Traditional retailers such as Barnes & Noble and Williams-Sonoma plan to battle Internet-only ventures by combining Web strategies with traditional sales strategies. For example, Barnes & Noble has begun accepting returns of books sold online at any brick-and-mortar branch, while Williams-Sonoma plans to develop a combination online and offline gift registry. Maidenform is considering offering Web coupons for use at both online retailers and brick-and-mortar sites. Unlike Internet-only firms, traditional retailers often view Internet sales as an additional opportunity for growth, alongside models such as catalogs and outlet stores. Maidenform's Cindy Davis predicts that the company's new Web site will mirror its outlet store strategy, which garners about 25 percent of the company's revenue. Even so, Davis maintains that Maidenform's Web strategy is important: "You need to be in this medium, and available to your customers." Offline retailers also have the advantage of distributing resources to other firms and sales models, whereas online ventures rely on keeping customers online throughout the shopping experience, from product selection to delivery. Maidenform is currently testing a partner's system that may enable it to outsource the commerce and fulfillment process. Meanwhile, online retailer C-Tribe has begun selling gift certificates for brick-and-mortar firms. "We're going to drive consumers back into stores," says C-Tribe president Tim Brennan. *
"Net Technology Connects Data With Marketers" Advertising Age (01/17/00) Vol. 71, No. 3, P. 2; (Mermigas, Diane): DigitalConvergence.com's keystroke automation technology (KAT) can instantly connect TV sets to specific Internet sites, and Sears, Roebuck & Co. and Forbes are already making plans for the technology. KAT gives users direct access to online information when they click on an icon during TV programming or when they scan a printed code. Forbes intends to mail the required software and scanner to over 800,000 subscribers before its September "Best of the Web" supplement, and readers will be able to view Web content pertaining to the products, subjects, or services featured in print. Forbes eventually wants to make all its content interactive. Sears plans to refer consumers to specific sales and product information online by scanning a code printed in newspaper inserts. Advertising executives say the possibilities for KAT are limitless when it comes to strengthening consumer ties, launching new businesses, and increasing sales, and DigitalConvergence.com says it can provide advertisers with general demographic and preference data on its registered users, without names or email addresses. The company expects to have over 100 participating advertisers by KAT's midyear launch. Other big advertisers expressing interest in KAT include CitiBank, AT&T, Colgate-Palmolive, Toys 'R' Us, Warner Bros., and IBM. Warner Bros. intends to use it to provide access to streaming film trailers, contests, and local show data. Advertisers will be able to track consumers directly. *
"Internet Power Sparks Business" InformationWeek (01/17/00) No. 769, P. 65: InformationWeek recently held a panel discussion with three top IT executives on the topic of how IT and the Internet will change their businesses this year. Participating in the discussion were Dave Bent, CIO of Visteon Automotive Systems, Ford's auto-parts business division; Rob Carter, CTO of Federal Express; and John Keast, CIO and CTO of Branders.com, a startup that will provide online ordering of company branded products. Asked how IT shapes core competencies, Bent says technology is becoming Visteon's product. "We transition from a core competency of manufacturing to that of technology development, selling and bringing technology to the customer," Bent says. Carter says FedEx differentiates itself from competitors by providing information that benefits the customer. Meanwhile, Keast emphasizes the role of IT in integrating the value chain. The same information that a company uses internally is also valuable to customers, says Keast. All three executives agree that information delivered to customers through the Internet is an important part of business, and sometimes selling information is more profitable than selling their main products. In terms of specific technologies that help determine core competencies, Carter notes the importance of XML in enabling business-to-business transactions. Bent says Visteon emphasizes voice recognition, which makes information easier for drivers to access. Keast notes the importance of minimizing the amount of data entry and simplifying navigation so consumers will not be frustrated. Finally, the executives note that as products become more linked to the Internet, the roles of IT and operations are increasingly overlapping. http://informationweek.com/769/qanda.htm *
"Ford, GM Drive Onto Information Highway" Washington Post (01/15/00) P. E1; (Brown, Warren): The 2000 North American International Auto Show showed that competition between auto executives is becoming oriented toward electronics, wireless communications, and Internet access rather than engine power and exterior design. Ford showed off the 24/7 concept vehicles, which are full of telecommunications and other equipment. Ford CEO Jacques Nasser said the 24/7 vehicles are "about establishing the car as the Internet on wheels." General Motors officials spoke similarly. At the show, Ford announced a deal in which Yahoo! will carry thorough information about Ford, with GM announcing similar deals with AOL and NetZero. But the announcements did not mention making prices available online, which auto dealers are against, arguing that only they should be allowed to set prices. However, Ford and GM executives all say the dealers will eventually lose the battle and prices will be made available online; some already are on Edmunds.com and other sites. DaimlerChrysler is trying to head off clashes with dealers in the U.S. by moving into e-commerce more slowly, but the company is set to announce its own strategy for e-commerce. This could also affect traditional media, which could lose a great deal of automakers' advertising money to the Internet. A KPMG research report says these are the natural results of the industry's move into the information age, in which automakers will have to focus on marketing rather than manufacturing. *
MORE FIRMS SEEK UNITY OF ADS ON WEB, TV: Most big advertising firms are now attempting to supplement their TV advertising initiatives with advertising on the Internet, according to the heads of network ad sales. "Some of our mainstream clients recognize that they would be missing the boat not to communicate through the Net," says ABC's Laura Nathanson. Oldsmobile was a supporting advertiser of November's Webcast of The Drew Carey Show, which pulled in 2 million viewers. Meanwhile, General Motors advertised during Saturday Night Live's 25th anniversary show on NBC; General Motors helped promote the show with prize drawings on the Web. CNN's Larry Goodman says the company placed 33 percent of its TV advertisers on its CNN.com site during 1999. Goodman expects CNN to place more than half of its advertisers on the Web this year. Content players are helping to meet advertisers' demand for integrated advertising, says Jupiter Communications analyst Drew Ianni. (USA Today, 21 Jan 2000)**
"The Net Will Be the Driving Force": Major companies are increasingly embracing the Internet and releasing products that will allow consumers to access online information from anywhere and at any time. For example, General Motors is adding Internet access to its automobiles, and is planning a portal called TradeXchange that will connect it to its business partners. In addition, GM is designing a vehicle called the GenX SUV, which consumers will be able to design to their specifications by working with engineers over the Web. The GenX SUV might be able to receive satellite television signals or download information that will alter the car's driving and handling characteristics. Like GM, many traditional companies are reinventing themselves as e-businesses. In order to make the Web-based technologies of the future possible, companies in the next five to 10 years will push the adoption of fixed broadband, wireless broadband, voice recognition software, organic self-healing networks and clients, XML, Wireless Markup Language, and WAP. Wireless technology will play a large role in future technologies, and Starbucks is already using wireless registers. Cell phones and handhelds will become more widespread and more advanced, while the PC will transform into a "WebTop" controlled by a back-end server. Many cell phones will have an LCD screen with 256 colors by 2001, and the phones will be able to display about six lines of text. By 2005, wireless connections will hit 1 Mbps, up from the current 14.4 Kbps. As mobile devices proliferate, many companies will be forced to outsource network management because of a critical labor shortage as well as the expense and difficulty of managing a network. http://www.zdnet.com/pcweek/stories/news/0,4153,2412877,00.html *
"Avon Tries to Exploit Internet Without Alienating Its 'Ladies'": Avon Products faces the challenge of moving its business onto the Internet without abandoning its traditional direct sales force of "Avon ladies." E-commerce offers great potential for Avon: the company estimates it saves $1 to $3 for every online U.S. order, ... http://www.acm.org/technews/articles/1999-1/1229w.html#item2*
BEHIND THE WEDDING OF BRICKS AND CLICKS: NEED TO WOO MORE CUSTOMERS: Major Internet companies have recently formed deals with large brick-and-mortar retailers in an effort to gain more customers. As Internet use moves into the mainstream, Internet companies need to form a retail strategy to attract more users and display their brands and services. Retailers benefit from the partnerships by improving their own Web efforts. AOL and Wal-Mart yesterday announced a partnership through which AOL's CompuServe will offer an inexpensive Internet access service with Wal-Mart's brand, and Wal-Mart in return will promote the service and AOL. Also this week, Yahoo! and Kmart announced an alliance in which users of Kmart's e-commerce site will get a free Web access service that uses Yahoo! as a default page and features links to Yahoo!. Yesterday, Microsoft announced plans to invest $200 million in Best Buy as part of a partnership in which Best Buy will promote Microsoft's MSN Internet service. Some experts have forecast that the growth of U.S. Internet users will slow, and the market valuations of companies like Yahoo! and AOL depend on rapid growth. (Wall Street Journal 12/17/99)**
FTC OFFICIAL: NET PRIVACY VIOLATORS NOT IMMUNE: Europe has a privacy directive in place, but that does not mean that Europeans have more privacy than Americans, said FTC Commissioner Mozelle Thompson, speaking at the Computers, Freedom, and Privacy conference last week. The U.S. privacy model depends on industry self-regulation, and if companies deviate from their stated privacy policies, the FTC will actively pursue them, Thompson said. The FTC has brought fraud and deception charges against some 120 people during the past two- and-a-half years, said Thompson, adding that last month alone the agency and other groups uncovered more than 1,600 Web sites offering Internet scams. Thompson said he has voted in the past--along with other FTC commissioners--against recommending online privacy legislation to lawmakers. Thompson said the U.S. government would be better served by educating the public about privacy than playing a role in enforcing it. (CNN Interactive, 10 April 2000) **
NSA Chief Tries to Dispel Privacy Worries" Wall Street Journal (04/13/00) P. A4; (King Jr., Neil): The National Security Agency (NSA), viewed by many as a sinister and all-powerful intelligence body, continues to defend itself in the face of mounting criticism from U.S. and European privacy advocates. On April 12, the director of the NSA denied that the agency ever takes part in foreign economic espionage on behalf of U.S. corporations and explained that it will only snoop on Americans under strict conditions. Air Force Lt. Gen. Michael Hayden, who has been defending the agency from such accusations for about a year now, explained that if the NSA is ever compelled to eavesdrop, it must prove to a special court that the matter is relevant to national security. It must also prove that the target of the investigation is an agent of a foreign power, a spy, or a terrorist. Hayden said such surveillance requests occur about six times a year. However, in recent months the American Civil Liberties Union and other groups, along with a number of European officials, have accused the NSA of abuses stemming from the use of its Echelon spy system. The agency has been charged with using Echelon to sift through private emails, faxes, and telephone calls both at home and abroad. Some members of Congress are calling for new, tech-conscious legislation aimed at keeping the NSA more in check. The agency's use of its network of powerful listening stations is supposed to be reserved for tracking money laundering, weapons proliferation, and corporate corruption. *
"Computer Bugs Seen Spreading to New Hosts" Reuters (04/12/00): There is a growing concern among industry officials and employees that because any product connected to the Web is subject to Web-based attacks, future Internet-enabled systems, such as 911 switchboards or burglar alarms, could be at risk. Additionally, because hackers learn from their history and technology is advancing at an astonishing rate, the potential damage caused by an attack increases with every attempted system sabotage. A team of researchers at IBM is studying how to protect entire networks from attack using software sophisticated enough to detect a security threat, pinpoint the source, and apply remedies in real time. Many experts similarly believe that the best means of defense is to protect the Web infrastructure and are therefore working to secure ISPs and their networks. http://www.mediacentral.com/channels/search/04_12_2000.reutr-story-N12147565.html *
"Microsoft Acknowledges Its Engineers Placed Security Flaw in Some Software" Wall Street Journal (04/14/00) P. A3; (Bridis, Ted): Microsoft engineers deliberately placed a file in some of the company's Internet-server software that could allow hackers to obtain Web site management files from thousands of sites, the software giant admitted yesterday after two security experts reported the flaw. The secret password violates Microsoft's policy and is a firing offense for the still unidentified programmers who wrote the code, said Microsoft security response center manager Steve Lipner. Microsoft will warn users through email and on its Web site to delete the file named "dvwssr.dll" that is installed on the company's Internet server software with Frontpage 98 extensions. Many Web sites use the software, and hackers could use the password to access site management files, which could lead to the discovery of information such as credit card numbers. The three-year-old software was written at the height of the browser wars between Microsoft and Netscape, and the illicit code includes a slur referring to Netscape engineers as "weenies." Security experts say the file is a major security threat, especially to commercial Internet-hosting providers. http://www.msnbc.com/news/394839.asp *
"Valley Cool to Cybercrime Plan" Associated Press (04/06/00); (Mendoza, Martha): Attorney General Janet Reno did not make much of an impression on Silicon Valley CEOs at the recent cybercrime conference at Stanford University Law School. Although Reno asked executives for increased information sharing between private and public entities, high-tech companies realize that the federal government does not have the resources to prosecute most cybercrimes. Therefore, because the Justice Department admits that only one cybercrime gets prosecuted for every 50 complaints (1998 Justice Department statistics), it is not worth reporting such crimes and facing the resulting governmental scrutiny of their operations. Most companies have a lot of proprietary information that they do not want the government or their competitors to see. That is why most companies report only the most serious cyber-intrusions to the FBI. Instead, many companies such as eBay and Oracle use private consultants to help fight their cyberwars, in an effort to avoid negative publicity and to keep company secrets out of the hands of government and competitors. http://dailynews.yahoo.com/h/ap/20000406/tc/cybercrime_4.html *
"Attorneys General Strive for Net Privacy, Crime Solutions" Reuters (03/24/00): The National Association of Attorneys General (NAAG) voted on Friday to put computer crime and consumer privacy at the top of its agenda. The NAAG hopes to see Internet companies at the negotiating table rather than in court in order to force them to protect consumers' privacy, says NAAG President Washington State Attorney General Christine Gregoire. Efforts to pass laws protecting consumers' privacy from online companies, financial firms, and insurance companies have failed in 16 states thus far, according to Gregoire. Several state attorneys general are currently negotiating an end to their privacy battles with DoubleClick. http://news.cnet.com/category/0-1005-200-1583993.html *
"Bills to Protect Privacy Need Public Support" SiliconValley.com (03/27/00); (Gillmor, Dan): The U.S. has sacrificed privacy for the sake of commerce, and consumers should help remedy the situation by supporting emerging privacy bills, writes Dan Gillmor. Businesses freely share consumer's Social Security numbers and other private information, while law enforcement rarely prosecutes such crimes as cybertheft, leaving victims to repair the damage of such crimes. The Internet has made more people aware of privacy issues, as consumers recognize the danger of companies opening up databases of private information for others to use. Aiming to curb information sharing, Sen. Debra Bowen (D-Calif.) has introduced several privacy bills. SB 1767 would prohibit third parties from using Social Security numbers to identify people unless required to do so by law. In addition, the bill would outlaw sharing or obtaining a person's Social Security number without that person's written consent. Consumers would also be able to freeze their credit records so credit bureaus could not share private information with third parties without permission. Another bill, SB 1599, would prevent video providers, specifically cable and satellite systems, from gathering and selling data about a consumer's viewing habits without consent. The two bills will be evaluated by legislators at the end of April, and consumers should write or call legislators about the bills to ensure a fair hearing, Gillmor says. http://www.mercurycenter.com/svtech/columns/gillmor/docs/dg032800.htm *
"SEC's Plan to Snoop for Crime on Web Sparks a Debate Over Privacy" Wall Street Journal (03/28/00) P. B1; (Moss, Michael): The Securities and Exchange Commission recently announced plans to create a Web monitoring system for fraud and other criminal online activities, placing the commission at the center of a growing debate over where the privacy line should be drawn when initiating crack downs on cybercrime. The SEC has already heard from several vendors who wish to build the automated system, which would scour Web sites, chat groups, and bulletin boards for suspicious activities--including speech. One vendor, PricewaterhouseCoopers, has already announced its refusal to work on the project due to privacy concerns. "We had serious concerns about the implications for the privacy of individuals on the Web, and the implications for businesses on the Web," says Pricewaterhouse's Beth Trent. The SEC's project could spawn a legal fight with ISPs such as AOL that staunchly defend the privacy of chat room and message board users. George C. Brown, assistant general counsel at the SEC, says the commission will be sure not to infringe on privacy laws and policies. The SEC plan calls for the creation of a database of collected information, including title lines and dates of postings, the user names and email addresses of those responsible for the postings, and the nature of the postings. http://www.msnbc.com/news/387655.asp *
WEB PRIVACY GROUP TO OFFER A SEAL OF APPROVAL: Consumer privacy on the Internet is again drawing the attention of the online industry, this time in the form of a self-regulatory privacy seal program to be known as the Personalization Consortium. The group consists of 26 online advertisers, including DoubleClick, and will be formally introduced Wednesday at the Internet World trade show, being held in Los Angeles. Among the rules established by the consortium are guidelines requiring that companies disclose to consumers what types of data are being collected. The Personalization Consortium will force its members to not only conduct an annual audit of their privacy practices, but clarify any opt out procedures as well. Other members of the consortium include 1:1 Marketing, American Airlines, Broadvision, and KPMG. The group's rules will extend further than those of the Network Advertising Group, another self-regulation initiative on privacy created in November by DoubleClick and other online advertisers. (New York Times, 3 April 2000) **
"Is Security the Next Big Thing?" Network Computing (03/20/00) Vol. 11, No. 5, P. 72; (Shipley, Greg): Roughly 90 percent of the organizations polled use firewalls and antivirus software, and 60 percent believe that their security products and measures are both top-of-the-line and very current, according to a recent Network Computing magazine computer security survey of 500 various organizations. Forty-two percent of the respondents say intrusion-detection systems will be the hot new product in the coming year, and the same percentage plans to purchase some type of intrusion-detection system. Although the survey reveals some positives about corporate computer security, such as the fact that companies seem to be taking it more seriously and are confident in their products and policies, Network Computing questions whether the respondents are simply naive. This is because only 23 percent of the organizations say they actually review their security systems and policies on a regular basis, despite the fact that 60 percent claim that those systems and policies are up to date. Fifty-four percent of respondents outsource their firewall management, 34 percent outsource their antivirus mechanisms, and 63 percent have no full-time IT security staff. These facts lead Network Computing to believe that many organizations are ignorant when it comes to computer security, and that these organizations simply purchase a few products and then bury their heads in the sand, hoping the products will be the silver-bullet that averts a potential calamity. On the positive side, Network Computing says the survey shows a growing interest in computer security products, which should translate into more sales of such products, particularly intrusion-detection devices. http://www.networkcomputing.com/1105/1105f24.html *
"Some Countries Seek Keys to Digital Code-Scramblers" New York Times (04/03/00) P. C4; (Clausing, Jeri): Although many countries around the world are liberalizing rules on encryption, many are attempting to expand computer surveillance powers of various law enforcement agencies, according to the Electronic Privacy Information Center (EPIC). Singapore and Malaysia now require computer users to give encryption keys to law enforcement authorities upon request or be fined or jailed. Britain and India are also considering similar laws, although legal analysts say that such a practice amounts to self-incrimination, which people are protected against in many of the world's legal systems. In the U.S. and several other countries, bills are being proposed that would mandate that third-party escrow agents give encryption keys to authorities upon request, so that individuals would not be required to incriminate themselves. Intelligence and law enforcement agencies worldwide are also being granted increased funding and expanded powers for computer surveillance, EPIC says. http://www.nytimes.com/library/tech/00/04/biztech/articles/03cryp.html *
"Canada Called Hotbed of Cyberterrorism" Newsbytes (03/27/00); (Stone, Martin): The U.S. Defense Intelligence Agency recently issued a report for Canada's Department of National Defense that calls the country a "Zone of Vulnerability" for cyberattacks. The report states that roughly 80 percent of the foreign attacks on U.S. computers either were directly from Canada or were routed through Canadian computers. The report also warns that the U.S. expects Canada to take action against such activity. FBI Director Louis Freeh says at least one Canadian Internet server was used in the recent denial-of-service attacks that hit Yahoo!, eBay, and other major commercial Web sites. Canadian computer experts say the country may be an attractive place for cyberterrorists because it is highly computerized. However, security experts say Canadians are also often the victims of cyberattacks, citing the recent example of two 18-year-old Welsh hackers who used the alias "Curador" to break into nine e-commerce sites, including at least one Canadian site. Sam Porteous, director of intelligence at Kroll Associates Canada, also says the estimates about Canada may be inflated, as the military often uses extremely broad benchmarks when it comes to defining cyberattacks. Other experts have expressed doubts about the accuracy of the report as well. http://www.newsbytes.com/pubNews/00/146343.html *
KEEP AWAY FROM MY COOKIES, MORE MARKETERS SAY: Prompted primarily by a desire to retain online consumer information for their own corporate use, several large companies are prohibiting Internet ad networks from using data gathered about the personal interests and Web surfing habits of visitors to the corporate Web sites and the various Web sites containing corporate advertisements. Procter & Gamble, General Motors, and Ford Motor Co. are leading the initiative to safeguard their consumer data from Internet ad networks such as DoubleClick, Real Media, and MatchLogic, which place advertisements on Web pages and then gather information by using cookies to track how individual visitors navigate sites containing those ads. Such information is used by both the advertiser and the ad network to tailor Web sites and advertisements to the preferences of individual visitors. P&G and Ford have restricted how MatchLogic uses data gathered from their Web sites. Other companies, including IBM and WPP Group's J. Walter Thompson, have joined the protective initiative and made arrangements with Web sites and ad networks to ensure data collected via online ad campaigns is used solely by the corporations and not the Web sites or online advertising firms. (Wall Street Journal, 20 March 2000) **
"Web Firms Have Sorry Record on Public's Privacy" Los Angeles Times (03/20/00) P. C1; (Piller, Charles): The Internet industry wants the government to refrain from introducing online privacy legislation, yet statistics show that the industry's self-regulation efforts are faring poorly. Indeed, a soon-to-be-released survey by Enonymous.com finds that not even 23 percent of 29,000 Web sites examined post privacy policies on their sites. And most of the policies posted by the sites are paper tigers, according to the survey. Forrester Research says the industry's failure to develop consumer trust is keeping millions of people from shopping on the Internet. A number of recent privacy invasions by high-profile Web sites emphasize this point. The Enonymous.com survey graded Internet companies' privacy policies on a scale of zero to four stars. More than three of every four sites did not receive a star because they did not post a privacy policy. Nearly 8 percent earned one star for failing to give consumers privacy rights. Close to 9 percent of the sites received two stars, indicating that a site will share users' personal data only after receiving users' consent, while three stars were given to 2.7 percent of the sites, meaning that, in addition, the sites will not contact users without their permission. Four stars were awarded to 3.5 percent of Web sites, which extended full privacy protections to consumers. America Online was the only major Web site to receive four stars, while MSN, Yahoo!, and eBay were awarded one. http://www.latimes.com/business/20000320/t000026443.html *
"A Glimpse of Cyberwarfare" U.S. News & World Report (03/13/00) Vol. 128, No. 10, P. 32; (Strobel, Warren P.): Various governments around the world are using the Internet to suppress dissent, harass their enemies, obtain trade secrets, and even prepare for war. Although computer security experts admit that some of the worst-case scenarios have yet to happen, such as rogue governments using computers to wreak havoc on financial systems, they warn that more than 12 countries, including China, Iraq, Iran, and Russia already possess fairly sophisticated information-warfare know-how. For example, China is currently debating whether to devote a fourth branch of its military solely to information warfare, and the Pentagon will consolidate its offensive cyberwarfare programs at the U.S. Space Command in Colorado later this year. Experts say cyberwars pose great ethical and legal dilemmas, as there is no clear separation point between military sites and those devoted to civilian infrastructure, as in physical wars. Military analysts admit that the U.S. may be the biggest loser if cyberwarfare becomes an accepted form of battle, as it is the country most tightly strung together by computer networks. Because of the widespread damage that cyberwarfare could lead to, some countries such as Russia have proposed treaties on the matter, similar to arms control agreements. However, experts say verifying such an agreement would be nearly impossible given the nature of computer networks. Electronic spying could also become as problematic as cyberwarfare, as many government agencies are rich with detailed, classified information that is extremely valuable to an enemy. Security professionals say not only can information be taken from a computer, but an unfriendly entity could also place bogus information into a computer, causing military leaders to make decisions about troop locations or battlefield conditions based on fictional data. Most military analysts contend that the computer has made the world an even more dangerous place. *
"NY Senate Seeks Internet Privacy Laws" Reuters (03/08/00): The New York state senate announced the introduction of a legislative package that would increase the privacy protections of consumers, patients, and other individuals. The protections extend beyond the Internet, protecting consumers from a wide range of data-collecting organizations, including credit agencies, telemarketers, financial institutions, schools, and hospitals. The underlying theme of the privacy proposals is that individuals should know who is collecting their personal data, how the data is used, and whether the data is being used by others without their permission, says Senate Majority Leader Joseph Bruno (R). The new legislation will go through the approval process next week; the state assembly says it will host a pair of consumer-privacy hearings in March. http://dailynews.yahoo.com/h/nm/20000308/wr/privacy_newyork_3.html *
"Mining Everyone's Business" Brandweek (02/28/00) Vol. 41, No. 9, P. 32; (Wasserman, Todd; Khermouch, Gerry; Green, Jeff): Data mining is becoming increasingly popular among retailers eager to tap customer buying patterns to create more effective marketing programs. Data mining systems analyze corporate information to discover patterns and obscure relationships in the data to predict future results. A variety of companies now use data mining to cater to customer preferences in an attempt to draw in new and loyal customers. This increased use has been encouraged by a wave of new, user-friendly packaged solutions. The greater ease of use and affordability provided by these packaged solutions is quickly making data mining a standard among companies. "It's a price of entry, and becoming so inexpensive it's becoming very difficult not to use it," says Frequency Marketing's Patrick LaPointe. Yet the proliferation of data mining solutions has raised several criticisms. First, the collection of customer data has sparked privacy concerns from consumers wary of fraud. To offset such concerns, Todd Higginson, marketing manager at NCR's Teradata unit, recommends that companies post detailed privacy policies on their Web sites. Also at issue is the notion that packaged solutions offer little customization, providing marketing suggestions without describing the basis for these tips. Yet vendors maintain that data mining solutions have improved due to recent advances in visualization tools. "Before we tell you to stock more dog food, that relationship would be visualized," says IBM's Jeff Jones. "We never simply tell you, 'Do this and this, period.'" *
"Mind Your Business" InformationWeek (03/06/00) No. 776, P. 22; (Whiting, Rick): Consumer privacy has become a precarious issue for online firms, which are trying to improve marketing efforts by collecting customer data while remaining sensitive about privacy concerns. Privacy fears have increased as a result of recent incidents in which online firms have broken user trust by exposing private information. For example, Intuit last week admitted that its Quicken.com site transmitted data about users' income, assets, and debts to DoubleClick due to a software flaw. Meanwhile, H&R Block's policy says all information on its site will remain confidential, but the company last month revealed users' financial data to other customers when an effort to upgrade its tax-preparation system went awry. Such leaks not only damage consumer confidence, but also pose the threat of lawsuits and the loss of financial backing from investors. Online companies are now reconsidering their privacy policies and the use of cookies. Online brokerage firm BuyandHold.com is considering gathering data for marketing purposes, but would implement an opt-in policy that would obtain permission from users before collecting information. Other online companies such as E-Loan.com and TowerRecords.com have limited their use of cookies in response to privacy concerns. Overall, online companies are collecting more user information than ever before and the trend is likely to continue due to the success of targeted marketing. However, the possibility remains that the U.S. government will step in with laws dictating how online firms can gather and use customer data. http://www.informationweek.com/776/privacy.htm *
"The Bots That Bind: Digital Age Contract Law" Upside Today (03/07/00); (Jolish, Barak D.; Reyna, Jeffrey W.): The Uniform Computer Information Transactions Act (UCITA), aimed at changing contract law by defining standards that apply to transactions in "computer information," is a controversial proposal that has been enacted by Virginia and is being considered by other states. UCITA includes many provisions that critics say give the software industry too much control over their products. The law could have a broad impact even if all 50 states do not approve the measure, because "choice of law" clauses would allow software firms to pick any state's laws to govern their contracts. UCITA would make mass market licenses (MMLs), also known as shrink-wrap licenses, enforceable. In the past, no law formally validated shrink-wrap licenses, although some courts found that the licenses were enforceable. Consumer advocates and other critics say UCITA's shrink-wrap laws give software firms too much freedom, allowing them to disclaim responsibility for known glitches. Meanwhile, UCITA advocates say the law benefits consumers by forcing vendors to prominently display such disclaimers. Another controversial aspect of UCITA is a provision that would let vendors remotely shut off software if the user is in "material breach" of contract. Opponents say this provision would allow vendors to abuse their power over customers by threatening to disable their software, while proponents note that vendors must follow a strict set of rules before shutting off access. Another concern about UCITA is that it would let vendors write contracts that would prohibit reverse engineering of their products, making it difficult for developers to build compatible products. http://www.upside.com/texis/mvm/upside_counsel?id=38c41cee0 *
YOUNGER NET USERS WORRIED ABOUT MONITORING: Younger Internet users are more hostile to the idea of Internet-usage monitoring--including government attempts to consolidate separately held collections of user data--than are older Internet users, according to a report authored by three international researchers. The "User Attitudes Toward Possible Governmental and/or Organizational Surveillance, Monitoring and/or Eavesdropping on the Internet" report was put together by Urs E. Gattiker of the Denmark-based Aalborg University, Jon Miller of South Africa's Ensselear Associates, and Holger Holsten of Germany. The report finds that men are more concerned than women about potential online privacy violations carried out by governments or employers. Curiously, the study finds discrepancies in individual respondents' attitudes toward privacy violations, depending on which side of the monitoring the individual is on. For example, only 55.3 percent of Internet users who expressed concern about their e-mail being monitored would feel the same concern if they were forced to monitor employees' e-mails as part of their job requirement. Such discrepancies in attitudes among Internet users will make it difficult to improve privacy, the authors say. (Newsbytes, 7 March 2000)**
ALTAVISTA, KOZMO DISTANCE THEMSELVES FROM DOUBLECLICK OVER PRIVACY WORRIES: Fallen advertising firm DoubleClick is finding that its recent consumer-privacy woes are threatening to give it pariah status among online firms. Web home-delivery service Kozmo.com is rushing to cut its ties with DoubleClick, and search company AltaVista is moving to reduce the amount of customer data it shares with the company. Kozmo was planning to end its relationship with DoubleClick even before the firm's troubles started, as their partnership centered on the use of banner ads, which Kozmo has decided to stop carrying as part of the re-launch of its Web site. The Center for Democracy and Technology informed the FTC that DoubleClick was using video rental-data from Kozmo's customers, which could be construed as a violation of the federal Video Privacy Protection Act. Kozmo CEO Joseph Park denies that the company shared the data with DoubleClick. Meanwhile, AltaVista has decided to adopt an opt-in method for sharing consumer data, a decision that could profoundly impact the online advertising industry if other companies decide to follow suit. (Wall Street Journal, 1 March 2000) **
"Online Banking Fraud Raises More Security Concerns" E-Commerce Times (02/01/00); (Greenberg, Paul A.; Caswell, Stephen): Critics of online banking cite the recent security breach at X.com, a California-based startup, as a perfect example of why banks should be cautious in moving operations to the Internet. X.com allowed its new customers to specify the account number from which funds would be transferred in order to set up a new account with the company. However, X.com failed to check whether the person creating the account was allowed to move the original funds. Therefore, anyone with knowledge of another person's account number and check routing numbers could theoretically take money out of that account, transfer it to the new X.com account, and then withdraw it. Fortunately, the company says it is aware of only one incident of theft, where a customer boasted on an Internet chat room of transferring $25,000 from an account and then withdrawing $4,500 from the new X.com account. However, online banking detractors say in the mad rush to move banking operations to the Web banks are pushing security concerns to the back burner, and that banks and customers would be better served if plans to move online were postponed until better security measures were in place. X.com says it has since implemented anti-fraud measures, such as requiring that customers only transfer money from accounts that are in the same name, and mandating that new customers send X.com a copy of a cancelled check before being allowed to transfer funds from an account. However, security experts say one of the biggest new consumer-related scams is to steal checks from mailboxes and then make fake checks, a practice that would completely circumvent X.com's security procedures. http://www.ecommercetimes.com/news/articles2000/000201-2.shtml *
"Europe Angered by Claims of U.S. Spying" Los Angeles Times (02/24/00) P. A1; (Dahlburg, John-Thor; Drogin, Bob): Some Europeans are accusing the National Security Agency (NSA) of intercepting communications sent by private citizens and using economic espionage to the advantage of U.S. corporations. A committee of the 15-nation European Parliament recently heard testimony from Duncan Campbell, a physicist and journalist, who insists that the NSA's legendary "Echelon" computer network not only spies on private citizens but also helped U.S. companies Boeing and Raytheon beat European rivals for contracts in foreign markets. NSA, which has never publicly acknowledged the existence of Echelon, has adamantly denied the accusations, saying that it is illegal for the agency to give intelligence to private companies for their economic benefit. Echelon is allegedly operated in conjunction with Britain, Australia, New Zealand, and Canada, which some analysts say makes the European's charges more suspect. And many European intelligence experts admit that France, Germany, and Russia consistently spy on other countries to gain commercial trade secrets for the benefit of domestic corporations. However, many Europeans insist that the NSA is spying on private citizens, and blame the agency in part for Europe's high unemployment rates because of the advantage that NSA's alleged industrial spying has given to American firms. Campbell suggests that Europeans start using encryption to protect the integrity of their communications. http://www.latimes.com/news/nation/updates/lat_snoop000224.htm *
EU POLICE PUSH FOR CROSS-BORDER E-EAVESDROPPING: The European Union is trying to create some guidelines on electronic surveillance among its member countries. As crime becomes more high-tech and global, many police in European countries have decried the lack of clear guidelines on the interception of e-mails, faxes, and cell phone calls from criminals operating across various borders. However, a bill that is pending in the EU legislature would allow a police department in one EU state to conduct surveillance of electronic communications in another member state. However, some privacy and civil rights organizations worry about what kind of limits will be placed on the surveillance operations. EU authorities are also currently trying to get law-enforcement agencies to work with Internet service providers to help fight such cybercrimes as money-laundering and pornography distribution. (Wall Street Journal, 25 Feb 2000) **
U.S. LETS SCIENTIST POST SOURCE CODE FOR ENCRYPTION SOFTWARE ON WEB SITE: The U.S. government has notified computer scientist Daniel J. Bernstein that he is free to publish the source code for his encryption software online, following a lengthy legal battle that began in 1993 when the State Department prohibited Bernstein from posting the code because of encryption laws at the time. An appeals court ruling last May found that preventing Bernstein from posting the code infringed on his First Amendment rights and restricted scientific expression. Although the government requested a review of the appeals-court ruling, export laws on encryption were significantly relaxed in January, and a district-court judge, taking the new laws into consideration, ruled that Bernstein should be permitted to post the code for his Snuffle encryption software. However, Bernstein's lawyer Cindy Cohn says she and Bernstein might continue their case against the government, since some aspects of the new rules, such as how they apply to mirror sites, are still unclear. (Wall Street Journal, 25 Feb 2000) **
US AND BRUSSELS IN BREAKTHROUGH ON DATA PRIVACY: The U.S. and European Union have reached a tentative consensus on their long-standing disagreement over the EU's data privacy directive. The finer details of the agreement remain to be ironed out, but the EU has agreed to go along with the U.S. "safe harbor" proposal and has found a policy of enforcement that it is comfortable with. "We've had a breakthrough on enforcement issues with regard to data on EU subjects," said John Mogg, the EU's internal market director-general. The two sides have agreed on standards that will be used to determine if a U.S. company is eligible to be included on the safe harbor list, as well as on the penalties for companies that fail to follow the privacy rules. U.S. companies could be prosecuted under criminal law for not following the agreed-to privacy guidelines, said David Aaron, U.S. undersecretary for electronic commerce. (Financial Times, 23 Feb 2000) **
FTC REVIEWS PRIVACY ISSUES AT HEALTH WEB SITES: The FTC has launched a review concerning improper personal information sharing with third parties by health care Web sites. HealthCentral.com and iVillage.com are among the companies being reviewed. The investigation resulted from a study of health care Web sites last month by the California Healthcare Foundation, which found that some companies were sharing consumer information with third parties or were not following their own company privacy policies. Among the third party companies reviewed was DoubleClick. The Michigan Attorney General Jennifer Granholm has threatened action against the company. In light of the California Healthcare Foundation report, HealthCentral President Al Green said his company is striving to improve its policies and procedures, while a spokesman for iVillage.com said security and privacy of the company's members remains a top priority. Meanwhile, a group of health care companies have formed an association called the Hi-Ethics Alliance to conquer issues such as privacy. (Wall Street Journal, 18 Feb 2000)**
"Hacking Marches in Step with E-Commerce" VNUNet.com (02/15/00); (August, Vicki): Firms such as IBM, PricewaterhouseCoopers (PwC), and Deloitte & Touche have responded to the needs of their clients, who are often wary of approaching law-enforcement authorities, by establishing so-called "cyber fraud squads" to handle the increasingly common problem of online computer attacks. High-street bank HSCB, Lloyds of London, Virgin, and even the United Nations have all reported victimization by Internet intruders, also known as hackers. Internet crime has risen by 29 percent in the U.K. and by 43 percent in the U.S. within the past year and an FBI survey of Fortune 500 companies, 62 percent reported computer security breaches in 1999. Analysts at the Gartner Group said most Global 2000 organizations can expect to suffer serious computer breaches within the next twelve months and that national governments can expect similar threats on a monthly basis by 2001. Companies like Visa, which cost European Visa banks $250 million to Internet credit card fraud last year, are taking steps to heighten security. "Credit card purchases over the Internet are twice as likely to be disputed as those via the telephone," said John Prideau, executive vice president of Visa's new European products. Solutions like smart cards and secure electronic transactions (SET) standards can help, but only a comprehensive and costly security investment will ensure protection, though even then, no system is perfect. When hackers inevitably succeed in breaching protected systems businesses eager to prosecute and recover some of the cost required to repair damage find that there is not a suitable legal infrastructure in place to deal with it. The U.K. government has apportioned 337,000 pounds to the National Criminal Intelligence Service to create a high-tech crime squad. But, due to the often international nature of Internet crime, fighting it without an international legal body is difficult. "Lots of countries have established laws to protect individuals and businesses from online crime," said Dominic Fox, head of operations at the cybercrime unit of the International Chamber of Commerce. "But many of them run into problems when they try to cross national boundaries. There is no global law." http://www.vnunet.com/print/106572 *
Chinese Site Suffers Attack (http://www.nytimes.com/library/tech/00/02/biztech/articles/18china-hacker.html) By REUTERS: Sina.com, a top Chinese Internet portal, suffered a hacker attack around the same time several popular American Web sites were crippled by online raids, a Sina.com executive said. Can Cookies Act as Stalkers? (http://www.nytimes.com/library/tech/00/02/cyber/cyberlaw/18law.html) By CARL S. KAPLAN: Under Texas law, a person who follows another person around repeatedly in a way that is calculated to cause the victim to fear for his safety is guilty of the crime of stalking. In the Internet age, can the law be applied to a Web site?
"In Wake of Hacks, Banks Called Relatively Safe" American Banker (02/14/00) P. 7; (Weitzman, Jennifer): Last week's "denial of service" attacks on several major commercial Web sites did not affect any online banking operations, according to Keynote Systems, an Internet performance monitor. In fact, technology security experts say that online banks and brokers came out of last week's attacks better than any other sites, mainly because they have better security processing and more sophisticated security software, such as "intrusion-detection" technology. Experts say that banks are also somewhat insulated against denial of service attacks because service interruptions are very common in the industry, even before the advent of online banking. However, banks are still tempting targets for hackers due to their nature, and security professionals warn that banks may be in danger if they have too many links to other Web sites. Therefore, banks need to be very certain that those connecting sites practice good security, such as implementing solid firewalls and creating and enforcing strict security policies and procedures. *
"Leads Narrow List of Suspects in Web Attacks" Wall Street Journal (02/14/00) P. A3; (Hamilton, David P.; Carlton, Jim; Cloud, David S., et al.): Computer security experts have located several of the systems used in last week's cyberattacks on major e-commerce sites, finding evidence that implicates at least two hackers. Investigators are focusing on the two suspects, known only by their hacker names at this point, as a result of information obtained from network traffic analysis, computer-security logs, and monitoring of hackers on Internet Relay Chat (IRC). The individual suspected in the Yahoo! attack was especially skilled, experts say. The suspect, who recently stopped using IRC, is believed to live in the U.S. A second, less-sophisticated hacker, who experts believe lives in Canada and uses the online name "mafiaboy," is being monitored as a potential copycat. Mafiaboy was reportedly recorded in an IRC chat soliciting orders to knock out the CNN and e-Trade Group sites, says Michael Lyle of security firm Recourse Technologies. Meanwhile, experts are watching a German hacker known as "Mixter" who is believed to have written the Tribe Flood Network (TFN) software that was possibly used in the attacks. Mixter has said in email interviews that he is not directly linked to the attacks and that he wrote TFN to point out online security flaws. Investigators have determined that computers at a number of California universities, including Stanford, the University of California at Santa Barbara, and the University of California at Los Angeles were used in the attacks. School officials say their systems were hijacked and used to launch the data that bombarded target sites. *
"Web Abuses Bring Call For a Crackdown" Washington Post (02/14/00) P. A9; (Schwartz, John): The Clinton administration will discuss the recent attacks on the nation's major Web sites--as well as the possibility of greater government policing of the Internet--at a meeting between government officials and representatives of high-tech firms scheduled for tomorrow. The Justice Department is expected to repeat its request for an extra $37 million to patrol the Internet; the money would come from the nearly $2 billion that the White House has asked for in 2001 to combat cyber-terrorism. The administration has already created a plan for the national monitoring of data traffic on federal computer networks, with a matching system that monitors computers in the private sector. The Justice Department has also worked in conjunction with phone companies to facilitate the wiretapping of communications networks, and it has also tried to decrease the amount of encryption software available. However, many civil liberties and electronic privacy advocates are concerned about the new calls for government intervention on the Web, saying that technology already exists for companies to fend off the "denial of service" attacks that took place last week. Civil libertarians say that companies are too cheap to implement the security measures, and are also hesitant because such software may slow down their service. Still, critics contend that companies need to form long-term security strategies rather than short-term tactics. *
Now It Is EBay's Turn to Face Government Scrutiny
CLINTON TO HOLD INTERNET SECURITY SUMMIT: President Clinton will hold an Internet-security meeting next Tuesday with some of the major players in the industry to address the recent attacks on some of the world's biggest Web sites. Companies such as Yahoo!, eBay, America Online, and Microsoft are said to have been invited to the summit, where they will meet with President Clinton, Attorney General Janet Reno, Commerce Secretary William Daley, and National Security Adviser Samuel R. Berger. The National Security Council is in charge of the hastily organized meeting, leading analysts to speculate that the government considers the recent attacks as bona-fide security risks, not just economic disruption. The meeting is expected to discuss whether the government should take a greater role in regulating the Internet, as well as self-policing initiatives for Internet firms. (Wall Street Journal, 11 Feb 2000)**
"Redesigning the Internet: Can it Be Made Less Vulnerable?" Wall Street Journal (02/11/00) P. B1; (Hamilton, David P.): Computer experts say that increasing the security of the Internet will be the most difficult task the medium has ever had to face. The problem lies in the decentralized nature of the technology, which has no one governing authority, but rather a confederation of loosely connected, self-governing entities. Experts say technical solutions to ward off attacks such as the ones recently launched against Yahoo! and E*Trade would not be that hard to find. Technology already exists to make it nearly impossible to falsify the "return addresses" on packets of data, as do methods to verify that both users and servers on the Web are really who they claim to be. However, implementing these steps would severely limit the anonymity that Internet users enjoy. Analysts say that although individual sites can improve their own security, making the Internet more secure as a whole is much more difficult, as there is no one governing body to enforce homogenized standards. The Internet Engineering Task Force (IETF) is about the closest thing to a standards board, but the organization has no authority to enforce its ideas and recommendations. The IETF says that switching from the Internet protocol currently in use, IPv4, to one called IPv6, would make it difficult for hackers to conduct "denial of service" attacks, like the ones launched against Yahoo! However, moving to IPv6 would be expensive for the industry, and there is little support for doing so. Experts say the basic problem with the Internet is that all of its communication protocols were designed with the naive belief that no one would try to abuse them, meaning that there is no "worst case" scenario mechanism to stop such abuse from taking place. Security experts say that the Internet will most likely remain an insecure place well into the future, as efficiency, not security, is its top priority. http://www.msnbc.com/news/368809.asp *
"Security Firm Says It Has Web Defense, But It Won't Be Available Right Away" Wall Street Journal (02/11/00) P. B5; (Bulkeley, William M.): RSA Security recently announced that it has created software to fight "denial of service" attacks, such as the ones that afflicted Yahoo! and eBay this week. However, the company says the software will not be on the market until at least the second half of 2000. RSA says the program works by sending a cryptographic puzzle to a computer every time that it makes a request. Although a typical computer can solve this puzzle in less than 0.25 seconds, PCs that are attempting to launch a denial of service attack make thousands of requests a minute. Therefore, with thousands of puzzles that it must solve, RSA says the hacker's computer will be overwhelmed and would shut down before it can damage a company's Web site. However, RSA is concerned that Web sites may not want to implement any security mechanisms that slow down their systems. *
"Companies Won't Say if They Were Insured for Net Attacks" New York Times (02/10/00) P. C6; (Treaster, Joseph B.): Whether or not Yahoo, eBay, and the other companies that were attacked by cyberhackers have insurance remains unknown. Often the insurers of these companies tell them not to discuss their insurance out of fears that any information might provoke an attack. Usually the policies for Internet companies protect against losses endured by customers, as well as systems and data losses. But many of the biggest Internet companies do not carry any coverage. Emily Freeman, who heads cybercoverage at Marsh & McLennan Cos., says, "The hot shots of the Internet are focused on their business models--getting venture capital money, getting their brand and their product out there. They're not thinking about insurance--risk management." Marsh offers up to $250 million worth of coverage. http://www.nytimes.com/library/tech/00/02/biztech/articles/10insure.html *
"Chip, Software Vendors Rush to Boost E-Commerce Security" Broadband Week Online (01/31/00); (Dawson, Fred): Internet firms and cable vendors are scrambling to develop efficient public-key infrastructures (PKI) and other means of protecting Web transactions to allay the fears of security-wary consumers. PKI allows users with encrypted "session keys" to access secured data through a third-party authentication service. Companies such as Broadcom, Intel, Royal Philips Electronics, Microsoft, and Cisco Systems have begun intensifying their efforts to develop PKI, but no clear leader has emerged. "We don't see a lot of major PKI deployments," says K.S. Shankar, a security strategist at IBM. PKI is held back by strategic-planning errors, lack of uniform approaches, and inadequate definition of security needs. "There are a lot of RFP's on the street for PKI implementation," Shankar says, "but most don't state what the problem is." The assumption of PKI developers is that the wide-scale availability of computers capable of downloading security systems will make implementation of PKI easier. Recent developments include directory-based security, Simple Certificate Enrollment Protocol, Differentiated Services Protocol, and PKI enabled smart cards. http://www.multichannel.com/b1.shtml *
Amazon Subsidiary Subject of FTC Probe and Two Lawsuits
Privacy Debate in a Digital Age
"Life, Auto, Home and Hackers" Computer Reseller News (01/31/00) No. 879, P. 1; (Rogers, Amy): Insurers are adding to their usual repertoire and are now offering policies that protect businesses from data breaches that harm online business. Arnall Golden & Gregory attorney Becky Stone says that mission-critical applications are being transmitted over the Web, which means that people are trying to ensure that the service continues to function. Ace Insurance business development manager Mark Greisiger says that Ace has been selling its Secure Systems product since 1998, and intends to introduce a new one next month--Voyant--that will add liability coverage to policies covering network extortion, hacks, and software damage. Greisiger says Ace sells such insurance mostly to dot-coms, but roughly 30 percent of the policies go to traditional businesses. Hamilton Dorsey Alston Co. risk financing specialist Brad Halliday says that most people are unaware that such policies exist. Insuretrust.com offers security assessments and insurance, and founder Steve Haase says that Internet connections bring up questions both of risk and of accountability. Resellers themselves would rather their customers had security solutions first, before buying insurance. *
"Critics Press Legal Assault on Tracking of Web Users" New York Times (02/07/00) P. C1; (Tedeschi, Bob): The uneasy relationship between privacy advocates and DoubleClick recently exploded into open hostilities after the company was accused of collecting Web users' personal information without their permission and combining the data with information from its database unit, Abacus Direct. At the heart of the dispute is consumers' ability to opt out of DoubleClick's tracking program--privacy advocates say it is not easy. The Electronic Privacy Information Center has decided to take its complaint with DoubleClick to the FTC. Meanwhile, the Center for Democracy and Technology is attempting to convince consumers to not participate with DoubleClick's tracking program. Industry insiders are also criticizing the company. DoubleClick is defending its data-collecting efforts by claiming that consumers benefit from the targeted advertising the data helps produce. Roughly 50,000 people have opted out of DoubleClick's tracking program over the past four years, but the majority of consumers want to receive targeted ads, says DoubleClick's Jonathan Shapiro. Also, DoubleClick claims it will not collect financial, medical, or sexual data, nor will it collect data on children's Web usage. Privacy advocates point out that DoubleClick has no legal obligation to abide by those rules. At least one company, Real Media, is utilizing technology that takes consumer privacy concerns seriously. Real Media's approach will go over well in Europe and other foreign markets where privacy is a big concern, says Real Media Chairman Dave Morgan. http://www.nytimes.com/library/tech/00/02/cyber/commerce/07commerce.html *
"Free Services on Web Can Assess and Fortify Computer's Defenses" International Herald Tribune (02/07/00) P. 6; (Dembart, Lee): Computer security experts warn that computers with cable or telephone digital subscriber lines to the Internet are much more vulnerable to hackers than those with dial-up connections, as these lines are basically always operating. However, two new free services offered on the Internet at www.grc.com and www.secure-me.net will try to hack into a computer and then download a report of the findings, as well as some suggestions. To decrease the possibility of hacking, experts also suggest that computers be turned off when not in use; the system's file- and print-sharing functions should also be disabled. Firewalls can also be implemented on home computers, and cost much less than those purchased for commercial use. Programs such as BlackIce Defender cost $40 and can be downloaded from www.networkice.com. *
VYOU.COM INTRODUCES SOFTWARE TO PROTECT INTELLECTUAL PROPERTY ON THE INTERNET: California software startup Vyou.com recently released software that protects Web sites' content. The software prevents intellectual property such as text, images, and source code from being printed, saved, or co-opted without the Web site's permission. The Web site's main page is protected by a pop-up window that allows users to view the page; objects on the page, such as images and sidebars, are protected separately if the Web publisher so desires. Vyou.com CEO Peter Levy says the company is a "do-gooder of the Web" that aims to improve the quality of online intellectual property. One of the benefits of Vyou.com's software is that it does not display Web content as a separate, special file, and thus does not alienate Web site visitors, says one professional photographer who uses the software. Two other companies, ICopyright and Intertrust Technologies, also offer software that helps protect proprietary content on the Web. (Wall Street Journal, 7 Feb 2000)**
REPORT RINGS ALARM BELLS ABOUT PRIVACY ON THE INTERNET: Government officials and privacy groups were surprised by last week's report from the California HealthCare Foundation that showed that health sites on the Web are not adequately protecting consumer privacy. The FTC has been monitoring e-commerce for the past half-decade without substantial incident, but privacy groups are touting the report's findings as proof that industry self- regulation of the Internet is not working. Seven of the sites criticized in the report are members of TRUSTe, one of the foremost privacy certification programs available. TRUSTe is concerned enough with the report's findings that it has decided to investigate the member sites and conduct a random privacy investigation of some of its other 1,300 member sites. TRUSTe plans to remind its members that any contracts with third parties that allow those parties to track consumer data must be specifically identified in their privacy policies. (New York Times, 7 Feb 2000)**
INTERNET USERS WARNED OF SECURITY THREAT: Security experts yesterday issued a warning that personal information a user provides to a Web site can be captured and sent to third parties through a hacker technique called cross-site scripting. Hackers can embed malicious code in links to popular Internet sites, and the links can be e-mailed to targets or posted to online discussion groups or Web pages. The threat occurs when sites fail to confirm that hidden code from a user's browser is safe, and more often than not, sites do not check code, says Microsoft security program manager Scott Culp. "Any information that I type into a form, what pages I visit on that site, anything that happens in that session can be sent to a third party, and it can be done transparently," Culp says. The only way to eliminate the problem is to organize a large-scale effort by Web site designers, says Carnegie Mellon's CERT Coordination Center. In the meantime, experts recommend that users not click on questionable Web links, such as those included in unsolicited e-mail or sent to discussion groups. (Los Angeles Times, 3 Feb 2000)**
ALERT: New Web Site Security Issue - Cross Site Scripting Vulnerability Microsoft has identified a serious security vulnerability that could potentially affect many web sites and web site users. The vulnerability is not due to a defect in any product, but instead results from certain web coding practices. Microsoft, CERT, and other industry leaders are working to provide customers with information on this issue and what they can do. http://www.microsoft.com/technet/security/crssite.asp
"Thumbs Down on Net Wiretaps" Wired News (02/03/00); (McCullagh, Declan): The Internet Engineering Task Force, the committee that creates Internet standards, recently announced that it was against online wiretapping. The decision came after months of debate, spurred by an FBI request to allow wiretapping on the Web in certain cases. The task force's decision will become an Internet standard unless there is major opposition to it; however, analysts say that the high-tech community is relatively unanimous in its opposition to building wiretapping protocols into the Internet. http://www.wired.com/news/politics/0,1283,34055,00.html *
CERTIFIED TIME ARRIVES ON THE INTERNET: Internet startup firm CertifiedTime is allegedly the first company to offer to set computers' clocks to the time kept by the National Institute of Standards and Technology (NIST), thus providing a legal trail that can be used by auditors for companies involved in e-commerce disputes. CertifiedTime's service is called DirectConnect, and it creates a secure connection between companies who have signed up for the service and the NIST's federally traceable timeservers. CertifiedTime contends that the risks associated with e-commerce can be greatly decreased using the DirectConnect service, as the company can be used as an evidentiary witness in its customers' disputes over the timing of events. Direct Connect's technology is employed by providing a private leased line to a "private router" that is installed in a customer's secured operations center, thus allowing for a high-speed, secure connection to one of the regional Certified Timing Centers located around the U.S. (E-Commerce Times, 26 Jan 2000)**
TEXAS COMPANY ACCUSES YAHOO OF PRIVACY VIOLATIONS: Educational video provider Universal Image filed a $4 billion lawsuit against Yahoo! last month alleging that Yahoo! broke a Texas anti-stalking law by tracking the Internet activities of computer users without their permission. Universal Image attorney Larry Friedman says the suit "concerns the right of privacy of every Internet user in America." Universal Image conducts business on the Internet under the name Chalkboardtalk.com. (Bloomberg, 26 Jan 2000) **
"Security Expert: E-Commerce Hacks Happen All the Time" PC Week (01/24/00) Vol. 17, No. 4, P. 18; (Kerstetter, Jim): Corporate Web sites are broken into all the time, but the public does not hear about them, says Mark Fabro, worldwide director of assessment services for Secure Computing. Fabro's job requires that he keep track of underground hacker sites to stay on top of the latest attacks and to discover when security has been breached. Fabro says the recent attack on CD Universe, in which a hacker broke into a database and stole customer credit card numbers, "happens all the time." Fabro contends that people are often unaware of major hacking operations into large companies because those companies keep the attacks hush-hush in order to not to cause further damage to the company. In the case of banks and health care companies, Fabro says that reporting a hacking could lead to an investigation of those companies' operations by the government. Fabro says that most companies have the encryption and firewall technologies to keep hackers out; however, most hackers find a way to bypass this technology by playing upon human errors, such as poor management of employee policies and weak implementations. Click Here to View Full Article*
"Security Flaw Discovered at Online Bank" New York Times (01/28/00) P. C2; (Markoff, John): X.com, an online startup bank, recently discovered a major security breach in its system that allowed anyone with knowledge of another person's account and bank routing number to take money from that account, put it in an X.com account, and then withdraw the funds. The company says there were only five or 10 transactions that were "problematic", and that the problem has now been fixed. Computer experts say the case is a textbook example of the dangers of moving banking online too fast, without fully testing Internet banking systems for security holes. Experts say the bank erred when it decided to directly interconnect its online application form with the country's Automated Clearing House network. X.com now requires that customers fax or mail a copy of a canceled check to verify that they actually own an account before they are allowed to transfer any money, and only transfers from accounts with a customer's name on it can be used to open an account with X.com. *
"Congress Faces Cyber-Agenda" Interactive Week (01/17/00) Vol. 7, No. 2, P. 69; (Brown, Doug): The Internet will probably become a major topic for Congress this year, with the biggest issue being the balance between individuals' privacy rights and online companies' collection, use, and selling of user data. Industry representatives have touted self regulation and warned that government intervention could stifle the growth of e-commerce, but polls indicate that citizens consider personal privacy a top concern. Congress introduced several bills dealing with online privacy during 1999, including the Internet Consumer Information Protection Act, and more are due this year. The Act would regulate the ability of ISPs to share data about specific subscribers, and would bar the disclosure of data that could identify individuals, unless the provider complied with a number of conditions. The Online Privacy Protection Act would set up general guidelines for company online privacy policies. Electronic Privacy Information Center general counsel David Sobel says neither bill satisfies privacy advocates, though he adds that the Online Privacy Protection Act could be a beginning framework. Sobel contends that Capitol Hill does not have a cohesive vision for privacy, and says that a workable approach must be a general privacy law whose principles apply in any context. However, Information Technology Association of America senior vice president Marc Pearl says the states may do a better job of balancing consumer rights versus business rights. Taxation of e-commerce will hit Congress this year as well--the Advisory Commission on Electronic Commerce is to vote in March on how and whether e-commerce should be taxed, and then to send Congress a report with recommendations in April. The use and ownership of databases will also be an issue. The Collections of Information Antipiracy Act is supported by industry groups that want to own huge information networks, while the Digital Future Coalition wants information to be opened up to organizations and individuals. There are 18 bills, at least, pending in Congress to deal with digital authentication. Other issues include infrastructure protection and security, encryption exports, unsolicited commercial email, and Internet gambling. http://www.zdnet.com/intweek/stories/news/0,4164,2424096,00.html*
SURFER BEWARE: ADVERTISER'S ON YOUR TRAIL: Internet advertising server DoubleClick is tracking the online activity of users, recording their names, purchases, and addresses, reports USA Today. DoubleClick is combining the data it accumulates on Web user activity with a direct marketing database of 90 million households maintained by Abacus Direct, which DoubleClick acquired last year. Privacy International's David Banisar says the move threatens online anonymity, while consumer advocates say they will complain to the FCC. Junkbusters' Jason Catlett says, "For four years [DoubleClick] has said [the services] don't identify you personally, and now they're admitting they are going to identify you." DoubleClick says the practice allows ads to target users better, improving the online experience, and the company also points out that users can opt to not have their use tracked. Banisar claims that opt out language is usually buried in a site's privacy statement. (USA Today, 26 Jan 2000)**
"World Cybercrime Treaty May Be Underway" Newsbytes (01/14/00); (Gold, Steve): The governments of the United States, European Union, Japan, South Africa, Canada, and other countries are working to develop a draft treaty on Internet security that would outlaw hacking and unauthorized Internet eavesdropping and surveillance, according to unsubstantiated Usenet reports. The reports suggest that the treaty would also ban Web sites that post lists of passwords and codes for unauthorized access to computer systems. Spam would not be covered by the treaty, the reports say. EU press officers did not comment on the reports. *
"Online Security Remains Elusive" Wired News (01/18/00); (Oakes, Chris): E-commerce security is becoming an increasingly important issue in light of the recent hacks of a French company's 56-bit encryption key and the American e-commerce site Online CD, from which 300,000 credit card numbers were stolen. Dr. Tai Rabin, security specialist at IBM's T.J. Watson Research Center, says more complex safeguards such as "elliptic curve" technology are needed. Many in the industry are not just calling for financial information to be secure, but also for consumer privacy from e-commerce itself. Secure Web connections "do nothing to protect me against who's watching to see what books I'm interested in," said Sun Microsystems' Whitfield Diffie. Kocher suggests an e-commerce regulatory agency be set up, but is skeptical of putting such control in the hands of the government. "You need a regulatory entity that is controlled by the relying parties," Kocher says. http://www.wired.com/news/print/0,1294,33569,00.html *
"Finnish Bank Leonia Launches Wireless Online Banking Services Using Digital Certificates" Network World Online (01/19/00); (Messmer, Ellen): Sixty-two percent of Finnish people use GSM-based mobile phones, so the nation's second-largest bank, Leonia, has decided to make many of its online banking services accessible by wireless handheld devices. However, the bank is concerned about the security of using wireless devices for such activities as online stock trading and mutual fund investment, and has said that it wants to be able to ascertain a user's identity and encrypt transactions. In order to create a secure environment, Leonia has contracted with Finnish mobile telco firm Sonera to help handle its wireless applications. As currently planned, any phone or device that supports the Wireless Application Protocol or Phase II GSM phones containing a Subscriber Identity Module, which is a smart card that keeps information about the device's owner, can use Leonia's new banking services. However, regardless of what kind of phone a customer wants to use, Leonia will require that it be upgraded in order to employ a CyberTrust digital certificate that will identify the user and encrypt any transaction. http://www.nwfusion.com/news/2000/0119finnphone.html *
"A Secure Internet Can't Have Secrets" PC Week Online (01/19/00); (Coffee, Peter): Internet security requires the use of open source computer code, says PC Week's Peter Coffee. Coffee cites the German Enigma machine of WWII as an example of placing too much confidence in a secret security system. True Internet security requires the collaboration of multiple industry experts. He says. Speaking at the RSA Conference 2000 Tuesday, IBM's Dr. Jeffrey M. Jaffe says the Internet does a good job of establishing markets as places for buyers and sellers to meet as well as conduct their transactions. What the Internet does not yet do well--and needs to--is provide a secure intermediate layer of qualification between the introduction and transaction layers. IBM's Jim Curtin says this qualification layer should be viewed as an escort to customers rather than a bouncer, in order to establish relationships among consumers and e-commerce firms. http://www.zdnet.com/pcweek/stories/columns/0,4351,2423895,00.html *
"Hackers Access Firms' Credit Card Records" Los Angeles Times (01/20/00) P. C7: The credit card database of health product suppler Global Health Trax remained open to hackers for several hours on Monday, according to the company. The company says that the account information that was broken into belonged to some of the distributors to whom it sold health products. However, Global Health Trax says that only a few people accessed the credit card numbers, and that it believes that three former employees were responsible for the cyberattack. This latest case comes only weeks after a hacker broke into the credit card database of CD Universe and displayed the credit card numbers on a clandestine Internet site after the company refused to pay him $100,000. http://www.latimes.com/business/20000120/t000006113.html *
"Retailers Would Bear Brunt of Online Fraud" American Banker (01/11/00) P. 1; (Fickenscher, Lisa; Souccar, Miriam Kreinin): Online businesses are hardest hit by credit card fraud, as they are required to pay the bills when fraudulent transactions occur. In the brick-and-mortar world, banks issuing the credit cards are the ones that end up footing the bill on bogus transactions. Consumers are legally supposed to pay the first $50 of any fraudulent transaction charged to their card, but this is often not enforced. This problem unique to online merchants was highlighted recently when a hacker broke into the computer systems of eUniverse and stole the company's customer credit card information. The hacker then demanded that eUniverse subsidiary CD Universe pay him $100,000 lest he place all of the customers' credit card information on a Web site. When CD Universe refused to pay up, the hacker created a Web site listing over 25,000 customer credit card numbers. Both Visa and MasterCard say that they are in the process of reviewing all of the credit cards involved in the incident so they can alert bank members to watch for suspicious activity in those accounts. Computer security experts say that Internet fraud can be severely curtailed by implementing the SET payment standard created by Visa and Mastercard, which uses digital certificates and does not require account information to be sent over the Web. By 2001, MasterCard will require e-merchants to ask customers for a special three-digit number that will soon be on the back of all MasterCard cards, a number that only the legitimate card owner could be privy to. Other analysts say that the CD Universe incident may speed up the use of smart cards, which require digital signatures and keep customer account and personal information contained on the card and not at the Web host site.*
"Internet Privacy Eroding, Study Says": Each and every one of the top 100 e-commerce sites on the Web fails to live up to all of the "fair information practices" of privacy protection, according to a new study from the Electronic Privacy Information Center (EPIC). The study, known as Surfer... http://www.acm.org/technews/articles/1999-1/1217f.html#item11*
"Take on a New E-dentity": Digital certificates could solve the problems of security and authentication that are making corporations apprehensive about embracing emerging Internet applications. The next-generation ID card is designed to hold the electronic credentials of the user,... http://www.acm.org/technews/articles/1999-1/1217f.html#item18*
"Will Employee Privacy Be the Internet Issue of '00s?": Employee privacy on the Web is an increasingly controversial Internet issue. While businesses are deploying monitoring technologies to track employees' Web use, lawmakers might soon address Internet privacy rights in the workplace. Experts say... http://www.acm.org/technews/articles/1999-1/1229w.html#item8*
"The B2B Tool That Really Is Changing the World" Fortune (03/20/00) Vol. 41, No. 6, P. 132; (Tully, Shawn): Glen Meakem became a General Electric employee in 1994 and on only his second day thought of a brilliant idea: electronic purchasing auctions. Since the Internet at that time was still primitive and unreliable, most GE executives were wary of the project and declined to invest the enormous amount of resources required for its development. Although Meakem was allowed to experiment with online auctions, he left GE two months later when the company denied his request to expand his efforts into a separate business. Meakem subsequently enlisted the help of former colleague Sam Kinney and founded FreeMarkets, a Pittsburgh-based online auction company that now handles billions of dollars in transactions annually. FreeMarkets brings together buyers and suppliers of industrial components in what is essentially a bidding war. A supplier submits a bid on the price of a part and the FreeMarkets site immediately displays it as a black diamond on a graph. The manufacturer needing the part and other suppliers of the part can simultaneously see in real-time who is offering what price, enabling all participants to make informed decisions about how to proceed. United Technologies saved 43 percent in a FreeMarkets auction, paying only $42 million for circuit boards when it had been prepared to spend $74 million. The state of Pennsylvania last year saved 10 percent when it purchased aluminum for license plates through FreeMarkets. The genius of Meakem's creation lies in its transformation of the request for quotation (RFQ) process into a non-secretive, standardized operation. FreeMarkets ensures suppliers compete solely on costs because all other items involved in the RFQ process, such as the delivery date of a product, have been predetermined and are universal across competitors. FreeMarkets also walks first-time clients through the auctioning process and will even research suppliers for manufacturers lacking the time or information to perform the task themselves. A handful of FreeMarkets customers, such as GM, which recently partnered with DaimlerChrysler and Ford to form an online automobile exchange, have branched out to create their own online industrial components auctions. Regardless, FreeMarkets is likely to remain the Internet industrial auction market leader for some time to come. Few existing companies possess the money, patience, or know-how to successfully follow in Glen Meakem's footsteps. http://www.fortune.com/fortune/2000/03/20/the.html *
"Getting Down to Business" San Jose Mercury News Online (03/20/00); (Ackerman, Elise; Heim, Kristi): America Online and Yahoo! are both attempting to enter the profitable B2B e-commerce market and achieve the same widespread brand name recognition among businesses as they have among consumers. AOL unveiled plans to partner with e-marketplace builder PurchasePro.com to create an online exchange that will originally target existing business patrons of AOL and PurchasePro.com but will eventually cater to the needs of organizations of every type and size. Yahoo! has created a directory of 48,000 online businesses and suppliers designed to aid corporate users in researching, pricing, and purchasing products online. Both AOL and Yahoo! face stiff competition in the B2B market from such established e-business companies as Ariba, Commerce One, and ShopNow.com. Prudential Volpe Technology Group analyst Tim Getz claims that the recent activity among consumer e-commerce companies stems from the fact that such sites "are realizing that the business-to-business market is 10 to 12 times larger than the business-to-consumer market." In fact, management consulting firm Boston Consulting Group predicts online B2B transactions will total between $2.8 trillion and $7.3 trillion by 2004. http://www.mercurycenter.com/svtech/news/indepth/docs/b2b032100.htm *
"Panel-B2B Must Not Fight Over Customers" Newsbytes (03/27/00); (Fridman, Sherman): Panelists at Monday's B2B Big Bang Event, representing business-to-business software vendors or B2B exchanges, discussed the issue of who will own the customers in the future. The largest concern among panelists was setting their offerings apart from rival products and services. Two panelists, Mark Pine of OnDisplay and Mansoor Zakaria of 2Bridge, said all B2B companies use the same buzzwords and customers should ask companies to explain what differentiates them from competitors. Companies participating in B2B commerce should justify their offerings, with an emphasis on quality and availability, panelists said. In terms of alliances, panelists said partnering is most successful when a company does not have to worry that the partner will turn into a rival or assume too much control. Companies are often motivated to partner with another firm to gain access to skilled employees, panelists said. Panelists agreed that the B2B market is large enough globally to accommodate competition among multiple marketplaces or exchanges. In the future, a shakeout will occur in the B2B e-commerce market, panelists said. http://www.newsbytes.com/pubNews/00/146411.html *
"Online Exchanges Open Door Wider for Tech Firms" Los Angeles Times (03/20/00) P. C1; (Dunn, Ashley): The B2B e-commerce market is awakening as companies begin to understand the enormous potential online marketplaces have to cut administrative costs, save time, increase employee productivity, and generate huge profits. Forrester Research estimates the B2B market will total $2.7 trillion in 2004, nearly 10 times the value of the consumer retail e-commerce market. Companies that specialize in high-tech applications are well positioned to profit enormously from developing the technology needed to power the different B2B e-commerce operations and providing the services and support to build the online exchanges and ensure they function smoothly. Oracle and Microsoft are the leaders in creating computer databases that store and track information on online exchange products, services, and sales. Ariba and Commerce One create the software programs for online marketplace transactions. WebMethods specializes in creating XML software that enables computer databases to recognize the meaning of entries and know that a certain number is a price and a certain word is a company name. Companies that specialize in protecting the security of online transactions, such as Entrust Technologies, are also key players in the new B2B industry. Although only a few of these companies cashing in on the developing B2B market have gone public, e-commerce analyst Gavin Mlinar says 2000 "is going to be the B2B IPO year." http://www.latimes.com/business/20000320/t000026441.html *
"For RBOCs, B2B Is A-Ok" Telephony (02/28/00) Vol. 238, No. 9, P. 8; (Quinton, Brian): Experts at GartnerGroup are predicting the business-to-business e-commerce market will explode in the next four years, reaching an estimated $7.3 trillion in transactions in 2004, and RBOCs are hurrying to position themselves to ride the rising Internet tide. BellSouth announced it intends to partner with Commerce One to create an "e-market" in which telecommunications companies and suppliers can directly conduct business with one another. U S West will work with Vsource to form a service that will use the Internet to provide small- and medium-sized businesses with office supplies. But the biggest development by far is one involving an offer by SBC Communications to buy e-commerce software and services vendor Sterling Commerce for $3.9 billion. The Sterling acquisition will enable SBC to cut operating costs, increase service efficiency, and gain 50,000 accounts worldwide. SBC says the deal will also make the company more appealing to customers in the home market, fend off competitor CLECs, and increase the value of its stock. Analyst David Rappaport of Diamond Technology Partners says branching into B2B is a logical step for telcos companies because many of them are already in the ISP and Web-hosting business and will soon probably be in the ASP business as well. *
"Data Warehousing ERP Information and B-to-B E-Commerce" Enterprise Systems Journal (02/00) Vol. 15, No. 2, P. 22; (Auditore, Peter J.): The Internet, through business-to-business and business-to-consumer e-commerce, is challenging and changing traditional business and governmental models and the concept of information control as it transforms into a worldwide virtual data warehouse and marketplace. E-commerce pioneer Levi Strauss & Co. recently announced that it would scale back online sales because of a perceived conflict with traditional retail stores. Although there is a definite advantage to being an Internet company from the start, established businesses may find the B2B e-commerce and the Web-enabling of ERP information, which can be the driving force behind the growth of business intelligence and data warehousing, a more suitable fit in the short term. The majority of businesses will turn to independent software vendors and systems integrators for ERP and data warehousing e-commerce technology, but will demand greater levels of scalability, performance, functionality, security, and interoperability, which will radically change the way such systems will be implemented. The relatively new field of enterprise information portals (EIPs) will allow companies to provide business partners with easy, structures and secure access to warehoused information. Many issues remain to be worked out in EIP, but the value of having access to that data will make it an hot area of activity in the near future. http://www.esj.com/fullarticle.asp?ID=22800104904AM *
"The Two Faces of E-Commerce" Manufacturing Systems (02/00) Vol. 18, No. 2, P. 34; (Michel, Roberto): Companies are finding that sell-side and buy-side e-commerce solutions offer broad advantages, including customer self-service capabilities and the ability for manufacturers to focus on strategic sales channel relationships. "Because of the self-service activity on the site, our people are able to be proactive, not simply reactive," says Pete Leonard, operations manager at Life Fitness, which relies on an Internet-based B2B solution provided by Click Commerce. The system provides order management, an online catalog, and the ability to integrate with ERP systems--sell-side core capabilities which yield broad channel management opportunities for Life Fitness. In the future, Life Fitness customers will be able to look up warranty information, and the company will be able to equip field technicians with wireless extranet connections. While some companies, such as Life Fitness, use the Internet for sell-side solutions, others are implementing buy-side e-procurement applications, which use workflow tools and user-defined buying rules to send purchase orders to suppliers or virtual marketplaces on the Web. The technology provides the ability to streamline business processes by gathering strategic sourcing information. Xerox adopted an e-procurement system in May 1998 and now expects it to yield an 80 percent reduction in processing costs. Some best-of-breed vendors have developed consulting services to help companies deploy systems similar to those adopted by Life Fitness and Xerox. Those vendors point out that maximum effectiveness can be reached only when e-commerce applications are linked to collaborative and enterprise applications. "Companies need e-commerce applications, but they also need solutions that improve the performance of the enterprise and the whole supply chain," says Jim Kirkley, chief technology officer at QAD, an ERP vendor. *
"The Higher Stakes of Business-to-Business Trade" New York Times (03/05/00) P. 3-3; (Oppel Jr., Richard A.): There is much debate over whether technology providers such as software companies and dot-coms will play a commanding role in the exploding B2B market, estimated to total $7.3 trillion in transactions by 2004. Analysts are unsure that the revenue these technology providers will earn from helping other companies build and maintain online marketplaces will be enough to justify the large amount of stock market interest and investor capital such technology providers have generated. The stakes are high for many B2B technology providers to succeed in the field. Although the revenue has the potential to be quite large, many analysts feel the probability these providers have for success is rather small. There are simply too many competitors and too many traditional companies who are becoming wise in the ways of e-commerce. Technology providers increasingly encounter situations in which they must be content with smaller shares in a venture than desired or expected. However, it is doubtful that a traditional company will give its technology partner such a small stake in a joint venture that the project no longer becomes meaningful or worthwhile for the technology provider. At the moment, the huge demand for Internet software and technology may be enough to provide B2B technology firms with sufficient leverage to negotiate very lucrative terms for a marketplace partnership. Perhaps technology providers will encounter the least amount of difficulty in fragmented industries in which there are large numbers of both buyers and sellers needing to quickly find a means of cheaply and effectively communicating with one another. *
"U.S. Government Moves to Online Procurement" E-Commerce Times (02/28/00); (Romeo, Jim): The U.S. government is increasing its use of e-business through the Federal Acquisition Streamlining Act (FASA). This measure, which was passed by Congress in 1994, requires that the federal government use e-commerce in its procurement activities. Many different departments in the government are using e-business technology. The U.S. General Services Administration (GSA) has established contracts that allow government agencies such as the CIA, FBI, DOD, and NASA to purchase goods and services via the Internet. In a manner of speaking, GSA has created a portal for government buyers. GSA's Federal Technology Service (FTS) attends to the software, hardware, and wireless technology needs of the government's agencies. In 1999, the FTS spent $4.2 billion on contracts. The government is also using the Internet to arrange conferences more quickly. Under GSA's partnership with AllMeetings.com, secretaries and administrative assistants who attend the agency's conference/meeting planner course in April will learn how to plan low cost, highly effective meetings online. Internet searches on AllMeetings.com are easier and less time consuming because the Web site contains information on thousands of hotels in more than 250 cities. Private businesses are also interested in helping government agencies with their e-commerce needs. FedCenter.com, a privately owned company, has established online catalogs of goods produced by businesses that have contracts with government agencies. Using FedCenter.com, individuals who buy products for the federal government can create RFQs and place purchase orders with contracted companies. http://www.ecommercetimes.com/news/articles2000/000228-3.shtml *
"Retailers to Form Online Market" San Jose Mercury News Online (02/28/00); (Tessler, Joelle): Sears Roebuck on Monday announced that the company plans to partner with French retailer Carrefour to create a joint online marketplace for their products. The business-to-business Internet venture, known as GlobalNetXchange, is designed to eliminate purchasing errors and increase efficiency throughout all stages of the supply chain, thereby generating savings that can be passed on to consumers in the form of reduced prices. GlobalNetXchange will automate some purchasing processes and eliminate the need for Sears and Carrefour to conduct business with suppliers via telephone, fax, or private computer networks. The site will also allow retailers to electronically exchange sales and inventory data with suppliers, and will enable suppliers to expand their retailer base. Oracle will provide software products and services to build and maintain the exchange site. GlobalNetXchange is expected to go public, but no specific time frame has been set. Portions of the site that operate the features of online buying, selling, and bidding are scheduled to be running within the next 30 days. http://www.sjmercury.com/svtech/news/indepth/docs/sears022900.htm*
"Baby Bells Jump Into B2B Marketplace" E-Commerce Times (02/24/00); Greenberg, Paul A. In the wake of the acquisition of B2B software provider Sterling Commerce by telecom company SBC Communications, two other Baby Bells have allied with e-procurement firms, signaling what could be an industry-wide shift from providing merely the means of moving information to providing value-added applications. BellSouth says its deal with Commerce One will cut $1 billion from its annual $16 billion procurement spending in addition to building equity through the sale of minority positions to as many as seven other major telecom firms. "BellSouth truly understands the power and potential of global, electronic trading communities," says Commerce One President Mark Hoffman. "They are doing the right things both internally and externally to legitimately declare leadership status as an e-business enabler." The two companies have previously collaborated on the development of an online trading community for small businesses. U S West has entered a deal with e-procurement startup Vsource, which differentiates itself from such firms as Commerce One with a "pure" Internet-based procurement system as opposed to client/server models requiring an application program. U S West and Vsource will create a "Virtual Source Network" Web page to process requests for information, quotes, proposals, and other procurement documents. http://www.ecommercetimes.com/news/articles2000/000224-6.shtml *
"3 Big Carmakers to Create Net Site for Buying Parts" Washington Post (02/26/00) P. E1; (Brown, Warren; Walker, Leslie): General Motors, Ford Motor, and DaimlerChrysler announced Friday they will create a single online exchange for all of their parts and supplies and invite other automakers from around the globe to join the venture. The formation of the new online buying service, eventually to become a separate company, is expected to reduce the costs of obtaining and shipping parts, increase profits, and avoid an increase in the consumer market price of new vehicles. The venture would be the largest of its kind to date and replaces efforts each of the three companies had already undertaken to develop individual component exchange Web sites. Many auto parts suppliers welcome the launch of this new exchange, saying it will eliminate a lot of the hassle and expense that arises when different automakers use different ordering systems. *
"Study: U.S. Manufacturers Not B2B E-Commerce Ready" E-Commerce Times (02/23/00); (Caswell, Stephen): Although business-to-business e-commerce is gaining in popularity, few manufacturers are participating in it, concluded National Association of Manufacturers (NAM) President Jerry Jasinowski in reference to a NAM survey of 2,500 U.S. manufacturers conducted in January and February. In the survey, 68 percent of respondents said that their employers are not using e-commerce to carry out business transactions. Of the 32 percent of manufacturers that do engage in e-commerce, 52 percent say they intend to use the Internet to create a new sales channel. Manufacturers that procure intermediate materials such as parts or sub-assemblies online number 12 percent, while only 7 percent obtain needed raw materials on the Web. Additionally, 35 percent of respondents say their CEOs or senior management are in charge of all e-commerce initiatives, while a full 10 percent say that no one in their company is in charge of e-commerce. NAM, which represents 14,000 members--including 10,000 small to midsize manufacturing companies--plans to conduct its e-commerce survey every quarter. http://www.ecommercetimes.com/news/articles2000/000223-6.shtml *
"J.C. Penney Sold on New Outlet: Online Auctions" Investor's Business Daily (02/25/00) P. A6; (Phipps, Jennie L.): This April J.C. Penney will launch an online auction site designed to sell overstocked items from its stores and catalog. The move is intended to reverse the company's declining earnings figures from the past two years by attracting repeat business and reducing costs. The company also announced it will close 45 department stores and 289 of its Eckerd drug stores, leading some analysts to believe the brick-and-mortar retailer may be moving toward a more online-based form of business. J.C. Penney already operates a Web site, www.jcpenney.com, that sold more than $100 million in merchandise last year. FairMarket, a company specializing in online hosted auctions, has been hired by J.C. Penney to help organize and launch the Internet auction effort. The retailer will offer its goods both in an automatic markdown format, in which the price of an item drops over the course of several days until the item is either sold or the price reaches a pre-set company minimum, and in a traditional auction format. Other retailers have successfully entered the realm of online auctions, including The Sharper Image, which began auctioning off slow-moving inventory online in March 1999 and is pleased with how much the effort has helped the company with inventory management and expansion of its customer base. http://www.investors.com/stories/IF/2000/Feb/26/45.html *
"B2B Outlook in 2004: A $7 Trillion Market" InternetNews.com (02/18/00): The business-to-business (B2B) e-commerce market will expand rapidly in areas outside of North America in coming years, with the global market expected to exceed $7.29 trillion in 2004, according to Gartner Group research. North America, with over $2.84 trillion in B2B revenue, will represent 39 percent of the market in 2004. By comparison, global B2B e-commerce hit $145 billion in 1999, with North America contributing 63 percent of the market with $91 billion in revenue. Europe will undergo the largest regional B2B growth, with the European market reaching more than $2.34 trillion by 2004, up from $31.8 billion in 1999, Gartner says. Major European firms such as BMW, Swissair, and British Telecom are already heavily moving into B2B e-commerce, says Petra Gartzen of Gartner Group's e-Business Services Europe. In the Asia Pacific region, B2B revenue is projected to rise to $992 billion by 2004 from $9.2 billion in 1999. Over the same time span in Latin America, B2B e-commerce will rise to $124 billion from $1 billion. *
"IT's Value in the Chain" Computerworld (02/14/00) Vol. 34, No. 7, P. 48; Keen, Peter G.W. The Internet has changed business practices and improved many companies' profits in the past 10 years. Online biding, for instance, has lowered the prices many companies pay for products by 3 percent to 5 percent. Prior to online business, even well managed firms accepted that one in five of their invoices would be incorrect. However, once these companies began using e-business, the ratio dropped to 1 in 100. Businesses save money and receive more prompt deliveries by ordering goods online. Still, corporate logistics remain neglected because these activities are usually scattered throughout different departments of a company. In the book, "Dot Com to Dot Profit," Peter G.W. Keen and co-author Nick Earle discuss how attention to logistics can greatly benefit companies and increase their profits. The author believes that corporate IT divisions should develop teams of five to 10 people who work with the Internet and logistics. Keen believes the implementation of their ideas can save companies large amounts of money and increase their business-to-business activities. http://www.computerworld.com/home/print.nsf/all/000214EC0E *
"How to Be Perfect" Economist (02/12/00) Vol. 354, No. 8157, P. 82: Perfect.com, an Internet startup, promises its customers a perfect market--something that economists usually find only in textbooks. A perfect market, according to economists, would allow all buyers and sellers to meet together, with complete supply and demand information. No barriers would exist to entering or leaving, and every buyer would be matched with a supplier that could best meet the buyer's needs. Prices would be at the level required to keep supply and demand in equilibrium, and there would be no transaction costs. The closest that real-world markets come are some of the liquid financial markets, but they frequently have restricted access and other flaws. Competitive auctions have limited usefulness. The Internet promises better efficiency, lower cost, more information and processing power, and huge numbers of buyers and sellers. EHubs have been created to exchange goods and services for business-to-business markets. The University of Chicago's Steven Kaplan and Northwestern University's Mohanbir Sawhney say there are two ways that such eHubs can enhance economic efficiency: aggregation, or bringing together buyers and sellers with a fixed menu of prices; and matching, letting buyers and sellers interact until they find the best match. Stanford University economist Paul Milgrom helped Perfect.com devise its patented technology--an automated "request-for-quote" process that permits competition on many factors, not just price. Perfect.com wants to let buyers describe what they want in a number of respects--within 30 seconds. Suppliers can detail their capabilities in the same amount of time, and then the technology will find the best match. The technology has not yet been proven, and customers may not like the way it operates, but competition is inherently imperfect, and Perfect.com could be very efficient. a href="#fn1">*
"Auction Sites Booming" Computer Reseller News (02/14/00) No. 881, P. 63; (Rogers, Amy): Internet auctions provide growth opportunities for small and midsize businesses. Because smaller businesses have better buying powers on the Internet, they can increase their offline business through online activities. Dave Reinke, vice president of consulting at Braun Consulting, believes that online auctions allow "small businesses [to] compete against the big boys without having to make a [large] investment." To cater to the small business-to-business market, a number of companies are offering services to design business-to-business marketplaces. Recently, Braun entered into a deal with Moai Technologies to develop exchange sites for business-to-business and business-to-consumer transactions. Moai currently uses its LiveExchange as a site for Internet auctions. Meanwhile, InfoMech has partnered with Microsoft to offer Enterchange, an exchange site development service that aims to eventually "produce a site in 30 days or less," says InfoMech CEO Mike Beirne. Integrators that specialize in online marketplace design say that development requires precision and customization. Enterchange combines different Web development programs are to establish one exchange site, according to Beirne. http://www.crn.com/search/display.asp?ArticleID=13777*
"Trading Places" CIO (02/15/00) Vol. 13, No. 9, P. 96; (Kalin, Sari): Online marketplaces are quickly gaining momentum among companies seeking to streamline their supply chains. The business-to-business hubs, which link buyers within a particular industry or across a shared need, are expected to handle as much as $1.25 trillion in nonfinacial goods and services by 2003, according to Dataquest. "Buyers and sellers who aren't participating...will certainly be at a disadvantage," says Dataquest analyst Leah Knight. Online marketplaces are attracting significant attention because they offer benefits to both buyers and sellers. For buyers, a marketplace can significantly ease the process of searching for and comparing providers to fill a certain need, while for sellers, marketplaces provide access to much broader customer bases. Business-to-business marketplaces come in two forms: vertical, which target specific industries, and horizontal, which focus on a specific function required by companies of various industries. Regardless of these distinctions, all marketplaces are striving to discover new ways to generate revenue in the face of increasing competition. Some marketplaces, such as agricultural hub DirectAg.com, are offering additional services such as financing, logistics, systems integration, and procurement management to encourage customer loyalty. Others, such as VerticalNet, are attempting to gain a competitive edge by offering greater services among a variety of industries. VerticalNet, for example, is aggressively working to offer commerce across its 53 vertical business trading communities. http://www.cio.com/archive/021500_trading.html*
"Technology Drives Manufacturing's Growth" Detroit News (02/07/00) P. A7; (Keyes, James H.): Manufacturing grew more than 5 percent a year between 1992 and 1997, as opposed to a little over 3 percent for the economy overall. This boom in the economy, and in manufacturing specifically, can be credited to technological advancement, especially EDI, supply chain automation, and computer-aided manufacturing, writes Johnson Controls CEO James H. Keyes. The improved speed and scale of production, the application of computers, strong commitment to research and development, and a highly skilled labor pool are responsible for productivity in manufacturing increasing 4.7 percent a year since the mid 1990s, Keyes says. Surveyed companies indicated that investing 4 percent of their plant budgets in IT produced a 99 percent productivity increase over 5 years. Manufacturing and other industries involved with developing technologies, such as e-commerce, account for over 40 percent of long-term economic growth. E-commerce is booming, Keyes says, as companies recognize its ability to enhance all aspects of production. Keyes says that at Johnson Controls, factory floor workers get immediate access to information on machine maintenance and other issues through mobile computer terminals, connecting to the company intranet through touch screens. *
"Why the Productivity Revolution Will Spread" Business Week (02/14/00) No. 3668, P. 112; (Reingold, Jennifer; Stepanek, Marcia; Brady, Diane): The Internet was initially perceived as a threat to old-line companies, but now many traditional firms see that they can cut costs and boost efficiency by moving online. For example, Ford is organizing an online trading site called AutoXchange that is expected to increase supplier productivity by up to 10 percent and save the company up to $8 billion in the first several years alone. Although Ford is no Web startup, the auto maker stands to benefit greatly from the Internet with its annual purchasing budget of $83 billion and its 30,000 suppliers. Ford CEO Jacques Nasser compares the Internet's impact on business to the revolution caused by Henry Ford's assembly line. In other industries, companies such as Royal Dutch/Shell Group, Honeywell International, and General Electric are also proving that old-line companies can capitalize on the Internet. GE Power Systems uses Web-based collaboration technology to enable customers and designers to work together to build a power plant, says GE's Jose Lopez. The technology allows blueprints to be exchanged and modified in real time and enables virtual meetings. Customers can watch the construction of a turbine online, requesting changes along the way. GE expects to shorten the time it takes to build a turbine by 20 percent to 30 percent with its new technology. The Internet allows companies to gather customer data, which can be used to provide the best service to the best customers, or to drop unprofitable customers. Although the Internet offers many advantages, companies need to make significant changes to succeed online. Speed and cultural issues, such as the sharing of proprietary information, are among the difficulties companies face as they transition onto the Internet. *
"Speedier Supply Chains" Traffic World (02/07/00) Vol. 261, No. 4, P. 16; (Cottrill, Ken) E-commerce will usher in spontaneous build-to-order supply chains, eclipsing the current just-in-time model of supply-chain management and making warehousing and other support services obsolete, says management consultant Dr. David M. Anderson. This will lead to high demand for express distribution, he predicts. Anderson, working on a book about the issue, says the coming spontaneous build-to-order model is more advanced than the techniques used now by companies such as Dell Computer. The new companies, especially business-to-business e-commerce firms, are abandoning the traditional inventory-based system and making demand forecasting futile. Rather than go with warehouse-based fulfillment services, online firms should find manufacturers that can build on demand in order to meet online consumers' desire for next-day delivery. A genuine spontaneous build-to-order supply chain will make parts and raw materials enter the chain at the same rate that finished products exit the chain. The first companies to reach this model will be "those already vertically integrated enough to do it," Anderson says. The supply chain can get faster with increased standardization of parts and materials, as well as with automatic replenishment of parts and materials when supply drops to a certain level. Manufacturers need to create parts to order for customers rather than getting parts from inventory. Two companies making strides toward the spontaneous build-to-order goal are Hoffman Engineering and the Georgia hydraulic cylinder maker Vickers. *
"Combining E-Commerce and EAI" EAI Journal (01/00) Vol. 2, No. 1,; (Eck, Jeffery R.; Marchetti, Nick): Companies are finding that the best method for achieving the goals of enterprise application integration (EAI), for internal organization, and e-commerce, for external data flow, is a fusion of the two applications. Even in internal applications, integration is difficult, with the average Fortune 500 company using as many as 50 business applications or more, giving rise to hundreds of interfaces between each application. External integration can be hard as well, as firms using EDI or other e-commerce programs must deal with routing obstacles. But new interfaces allow a link between applications and the EAI/EC message broker system, creating one solution for both problems, routing information from application to application. In effect, the EAI/EC message broker is a central system, acting as a hub between applications, both internal and external, as well as between applications in other companies doing business with the firm. A good EAI/EC message broker system allows flexibility to add new ERP systems with legacy applications, as well as new EC/EDI gateway requirements. A Java platform allows for development and evolution of an EAI/EC system as EDI/Internet gateway and EAI systems come closer together. The benefits of such a system, aside from the obvious decrease in network complications, include reduced operating costs and more straightforward training, easing the burden on personnel in addition to relieving confusion to the internal and external systems. *
Business-to-business: the big bonanza
"E-Commerce: Rebuilding Business From the Bottom Up" Silicon Prairie (01/00) Vol. 3, No. 1, P. 12; (Coates, James): E-commerce offers companies a wealth of opportunities. E-commerce has gained a reputation for making consumer sales and business-to-business transactions better, faster, and cheaper. Yet while it is the business-to-consumer side of e-commerce that has gained the attention of the media, the business-to-business side has far greater potential, writes James Coates. Businesses can speed processes by automating them, perhaps by using email to immediately contact a group, or using online databases to track supplier's inventories, says Coates. Using electronic transactions, companies such as Coca Cola can benefit by programming a vending machine to raise the price of a soda when the demand is greatest, such as on a hot day. The list of possibilities provided by business-to-business e-commerce is endless, says Coates. Ultimately, companies that will gain the most success in the Internet age will be those that can design new ways to use e-commerce to their advantage, says John Sviokla, who directs digital strategy at Chicago-based Diamond Technology Partners. These discoveries, dubbed "killer apps," can improve companies of any size and of any industry, says Sviokla. *
E-PURCHASING SAVES BUSINESSES BILLIONS: Business-to-business (B2B) e-commerce is growing rapidly as companies discover that the Internet can reduce procurement costs and raise efficiency. Companies believe the Internet cuts B2B purchasing costs by 10 percent to 20 percent. Major companies such as Kellogg and Bethlehem Steel are joining forces to obtain bulk discounts when buying office supplies online, and small companies are expected to follow suit. Yet2.com today will start matching patents to companies, cutting research and development costs for companies such as Boeing and DuPont, which produce many unused patents and can now profit by selling the patents. Online buying is also being transformed by reverse auctions, in which suppliers compete to win buyers with the lowest price. Suppliers expect to sell $70 billion in products and services through reverse auctions this year, up from $3 billion in 1999, according to Niul Burton, head of A.T. Kearney's Internet auction unit. By 2004, $1 trillion in goods will be sold through reverse auctions, Burton says. (USA Today, 7 Feb 2000) **
"Merger Reinforces Construction E-Commerce" Redherring.com (01/20/00); (Raik-Allen, Georgie): Certain General Electric units are involved in funding for Internet businesses, namely those that are competing for domination of business-to-business communications in the construction industry. EBricks.com and Blueline Online's joint company Cephren received an investment round from GE Equity Investments, GE Power Systems, Goldman Sachs, Grupo Picking Pack, and E.M. Warburg Pincus. GE Capital Real Estate, Internet Capital Group, and Oracle Venture Fund contributed to an investment in Bidcom, while Buzzsaw.com received funding from Crosspoint Venture Partners. Experts believe that the business services covered by all three companies will eventually be dominated by one. Cephren, Bidcom, and Buzzsaw.com earned $41.5 million, $46 million, and $15 million, respectively, from backers. *
"Oracle Plays Catch-Up in Business-to-Business Market" Wall Street Journal (01/27/00) P. B6; (Gomes, Lee): Oracle has recently been emphasizing its business-to-business e-commerce efforts, as such companies as Ariba and Commerce One reach huge market capitalizations. Although Oracle's $156 billion market cap is 67 times its revenue, Ariba and Commerce One have market caps that average 730 times current revenue. Ariba and Commerce One say they will lead business-to-business e-commerce by specializing and not carrying unrelated products. Business-to-business firms can profit by selling the software that runs transaction efforts or by managing the online exchanges. Experts say most business-to-business sales so far have been traditional corporate software sales, although investors are mainly looking at transaction revenue a company might eventually earn. Meanwhile, enterprise software is one of Oracle's major offerings, and if enterprises demand procurement software, the company will start providing it. Oracle is concerned that companies such as Siebel, which has pushed its way into the market for sales force management software, will expand their enterprise software offerings. Oracle and SAP both want to position themselves as one-stop providers of enterprise software. *
"Construction and the Internet: New Wiring" Economist (01/15/00) Vol. 354, No. 8153, P. 68: Internet business-to-business (B2B) companies are offering all levels of the construction industry a way to cut costs and save time. Of the $650 billion spent annually in the U.S. on construction, an estimated $200 billion is spent to correct mistakes and pay for delays. No wonder the construction industry is greeting Internet B2Bs with such enthusiasm. For each of their clients, these firms will develop an individual Web site that allows all involved in the project, from architects to carpenters, to communicate, as well as post or review project information via the site. In addition, all project communication and information is on permanent record. The service greatly reduces communication time and the possibility for errors to occur. B2B services cover residential as well as commercial construction. Instead of setting up sites for individual projects, builder and supplier clients, could establish Internet access with each other, allowing for the speedy and efficient delivery of materials while cutting down on paperwork and, again, human error. *
"E-Commerce Step-by-Step VPNs for B2B?" Computer Currents Online (01/11/00); (Blacharski, Dan): Business-to-business (B2B) e-commerce is burgeoning in part because of virtual private networks (VPNs), which allow small and midsize businesses to enjoy the efficiency and cost reductions once accessible only to the Fortune 500. Big businesses are driving the use of B2B e-commerce, requiring the small companies they do business with to get online. VPNs, which encrypt and authenticate transmissions, afford businesses taking part in B2B e-commerce private and secure Internet links with one another. A conventional installation of VPN involves setting up personal gateway hardware, but VPN installation can also be outsourced through VPN software that can be merged with an existing server. These days, installation is not even necessary in order to make use of VPNs. Services such as Imperito Networks allow companies to sign up to use a VPN on a monthly basis. Although VPN installation can be expensive, once in operation, the service has relatively low upkeep costs and can go a long way in helping a company compete. http://www.currents.net/magazine/national/1801/estp11801.html *
"A New Net Craze Is on the Way" Philadelphia Inquirer (01/18/00) P. C1; (Hill, Miriam): Business-to-business (B2B) e-commerce firms seem poised for huge growth, and investors are eagerly buying stock in these companies. Companies will sell an estimated $1.3 trillion in business products on the Internet by 2003, compared with today's $109 billion, according to Forrester Research. Although B2B firms will only receive a percentage of these total sales, they can earn money in a number of ways. For example, B2B companies can serve as a broker that takes a percentage of each sale, help other businesses establish sales sites, or allow advertisers to access online marketplaces for specific industries. Currently, the B2B market is an estimated three to 10 times larger than the business-to-consumer market. The stock values of B2B companies are rising on investor enthusiasm, and some experts believe investors will be disappointed as a number of B2B firms fail. However, investors believe that stock prices will stay high as successful companies buy up those that fail. Still, B2B stock prices appear to be highly volatile. For example, online industrial products auctioneer FreeMarkets' stock dropped 41 percent this year after General Motors announced that it would use Commerce One rather than FreeMarkets. Another risk to B2B firms is that large companies will decide to deal directly with other businesses, bypassing e-marketplaces. In addition, major software firms such has Oracle and SAP are moving into the B2B market and could shut out B2B players. http://www.phillynews.com/inquirer/2000/Jan/18/business/BTOB18.htm *
"B-to-B Integration Ready to Go" Upside Today (01/19/00); (Ryan, Vincent): WebMethods is viewed by investors as a leading player in one of the next stages of the business-to-business phenomenon--XML-based integration. With $39 million in private funding and Dell Computer, FBR Technology Venture Partners, Goldman Sachs, KPMG, Mayfield Fund, and SAP among its backers, WebMethods is now readying for an initial public offering, which the company filed last November. What sets WebMethods apart from competitors is that "they are the only emerging XML pure-play vendor to have penned agreements with companies like SAP, where real money has changed hands," says Benoit L'Heureux, director of application integration and middleware strategies at Gartner Group. Dell, Hewlett-Packard, Dun & Bradstreet, and Occidental Chemical are among the customers that will be using the WebMethods B-to-B Integration Server, which will help the systems of corporations communicate with one another for e-commerce. XML is the World Web Consortium standard that will help companies share and exchange data and documents such as purchase orders online. Although WebMethods has the early edge, the company could find itself in stiff competition in an application integration market that is expected to surge from $2.2 billion in 1998 to $11.6 billion by 2003, according to International Data; L'Heureux says XML-based B-to-B will grow 10 times faster than the business-to-consumer market. WebMethods will have to compete with the likes of IBM and enterprise application vendors such as TSI and NEON to bring B-to-B traffic using XML to the Web. http://www.upside.com/texis/mvm/opinion/story?id=387e41b20 *
"B2B: The Hottest Net Bet Yet?" Business Week (01/17/00) No. 3664, P. 36; (Cohn, Laura; Brady, Diane; Welch, David): Business-to-business (B2B) e-commerce is growing rapidly, with companies of all kinds moving to the Web and buying the technology to make transactions possible. By the end of next year 91 percent of U.S. firms will use the Internet for procurement, compared with today's 31 percent, according to Deloitte Consulting. This growth will make the B2B market six times as large as the business-to-consumer market by 2003, Deloitte says. B2B e-commerce could enable companies to increase productivity and reduce prices, experts say. Recent studies suggest that B2B e-commerce could raise productivity in manufacturing alone by 9 percent in the next five years, and could lower processing costs in certain industries by over 20 percent. GE Information Services, for example, orders office supplies online using a system called Trading Partner Register. Online transactions cost the company about $1, while ordering offline can cost between $50 and $200 per transaction with the expense of paperwork, says GE CIO Gary Reiner. Investments in B2B companies more than tripled in 1999 over 1998, with venture capitalists investing $3 billion in 200 B2B firms. Fueling these investments is the rapid adoption of B2B technology such as the Internet and Web browsers, which have made digital transactions much simpler and cheaper than the EDI systems of the past. Millions of businesses have moved to the Internet since Web browsers were introduced in 1994, enabling the development of broad B2B marketplaces. *
"The Rush to XML" InformationWeek (01/03/00) No. 767, P. 71; (Radding, Alan): XML is now the most promising technology available for business-to-business information exchange on the Web, and many companies are beginning to recognize XML's potential. About 45 percent of IT executives plan to launch XML projects in 2000, according to an InformationWeek study. XML allows companies to structure and share data without rewriting systems or adding significant middleware. XML and related standards enable systems to parse documents to find certain content for other systems to process and to change the way content is displayed for different viewers. For example, solutions provider Synergistics uses XML on the portal for its Prevail Knowledge Center product to customize the data each visitor sees. XML seems to be most effective in high-end custom publishing, intra-enterprise application-to-application integration, and business-to-business communication, experts say. In terms of application integration, companies are usually seeking data integration, for example, by sending data from an ERP system to a customer-management system. Beauty product maker NuSkin Enterprises is trying XML as a way to integrate its SAP R/3 ERP system with other applications, and expects to eliminate the need to map record formats to each separate system. Even more than application integration, companies are interested in XML for business-to-business applications. XML uses document type definitions (DTDs) that define specific XML tags, allowing information to be understood by any system that supports XML. Companies can develop their own DTDs or work with other firms to create industry-specific DTDs. Using a standard set of DTDs, business partners can share XML documents rapidly and easily. XML appears ready to carry out the unfulfilled promise of EDI, which proved too expensive and complicated for many businesses. XML tools are inexpensive and widely available--unlike the value-added networks needed for EDI--and XML systems are significantly faster to implement than EDI systems. *
"B2B Explosion Expected in 2000": Business-to-business e-commerce will explode in the next several years, and the Internet will account for a fourth of all business-to-business purchases by 2003, according to a recent study by the Boston Consulting Group (BCG). By 2003 the online... http://www.acm.org/technews/articles/1999-1/1229w.html#item10*
"Standard Pitched for Linking E-Comm Apps, Directories" Network World Online (12/13/99); (Fontana, John): An industry alliance submitted a proposed standard that could ease data exchange among corporate directories and e-business applications. A group consisting of Bowstreet, IBM, Microsoft, and others submitted the Directory Services Markup Language (DSML) 1.0 specification to three standards organizations, including the Organization for the Advancement of Structured Information Standards (OASIS). DSML allows XML documents to read directory information that could be crucial to business-to-business transactions. Although DSML has gained strong industry support, the specification has also attracted some concern because it is largely unproven, much like its parent language, XML. Nevertheless, IBM, Microsoft, Novell, Oracle, and Sun/Netscape have all pledged to support DSML in their upcoming directories. http://www.nwfusion.com/archive/1999/83045_12-13-1999.html
"The Next Waves of Electronic Commerce": The Internet is transforming the marketplace by providing greater communication, according to industry experts. Cisco Systems, for example, already generates 85 percent of its business to customers connected to the Internet. The company also handles... http://www.acm.org/technews/articles/1999-1/1227m.html#item5*
"Greenwich to Be Center of e-Time" Beginning New Year's Day, Greenwich will become home to an international e-commerce clock. British Prime Minister Tony Blair will announce this week the establishment of Greenwich Electronic Time (GeT), which will serve as an Internet version of... http://www.acm.org/technews/articles/1999-1/1229w.html#item9*
CRM Hot for Start-Ups" Computer Reseller News Online (04/13/00); (Howle, Amber): Many dot-coms looking to cash in on business-to-business e-commerce are turning to customer relationship management (CRM). Kovair and trustedanswer.com are among the startups that entered the CRM market this week. On Monday, Kovair released hosted software that provides a single point of interaction for customers and partners to conduct business with a company's sales division. CRM covers a wide range of integration between sales and marketing processes, says Kovair's Eric Sternberg, adding that his company has taken the approach of offering direct interaction between the company and the customer. Kovair is now forming partner programs, and intends to target ASPs and Web integrators. ASPs that aggregate different applications could integrate Kovair's software into their own applications to offer a complete solution, says Sternberg. Meanwhile, systems integrators would back-end integrate Kovair's software into order entry and order status applications, enterprise resource planning software, and e-commerce software, says Sternberg. Another startup called trustedanswer.com debuted on Tuesday, launched by mainframe and storage maker Amdahl. Trustedanswer.com uses a Web-based self-service solution to offer hosted customer service and support. http://www.techweb.com/wire/story/TWB20000413S0015 *
"As IPO's Stumble, Anger and Skepticism Rise" New York Times Online (04/11/00); (Giussani, Bruno): The recent southward trend of European tech companies' stock prices is alienating investors and potential investors alike. The European market's ill fortune began March 14 when Lastminute.com held its IPO. The offering turned out to be a bust as Lastminute.com's stock fell well below its initial price, causing consternation among investors and casting doubt on the brand's potential for future growth. World Online (WOL) followed with its own flop just a few days later. The WOL offering, like the Lastminute.com offering, was greatly oversubscribed, prompting WOL founder Nina Brink to select the top listing price of 43 euros a share. The stock did well briefly before dropping precipitously. Brink's decision to sell two-thirds of her WOL shares three months prior to the offering--an occurrence that was not publicly brought to investors' attention until after the listing--did not help matters. Although she has declined to explain why she sold the shares, Brink has made it known she is sorry about "the commotion in the market." Contrition is not enough for the underwriting banks, which are calling for Brink's resignation, according to sources. The Dutch media reports that investors are preparing to launch lawsuits against the company and that the offering is being analyzed by Dutch banking and regulatory agencies. http://www.nytimes.com/library/tech/00/04/cyber/eurobytes/11eurobytes.html *
"On-line-Only Retailers Likely to Fade" Washington Times (04/13/00) P. A1; (De Marco, Donna): Many online retailers are expected to fail due to competition and financing problems by the end of next year, predicts Forrester Research. Internet-only retailers are in the most precarious position, while catalog companies that have moved to the Web and traditional retailers with Web storefronts are in better shape. The National Retail Federation's Scott Silverman says, "The challenge for Internet-only retailers is to build a brand and a customer base." Although online retailers sold over $7 billion in goods during the 1999 holiday season, few were profitable. Still, Forrester says most online retailers say they do not expect to be profitable until 2002. Forrester says competition will drive consolidation in the industry, particularly for those sites selling software, music, and books. Furniture, apparel, and shoe retailers are in better position since their products are more differentiated. http://www.washingtontimes.com/business/daybook-2000413215759.htm *
"Study Shows 300 Mil Worldwide Web Users" Newsbytes (03/22/00); (Stone, Martin): The number of Internet users worldwide will shoot up from 300 million today to one billion by 2005, according to a $1 million study spanning 34 countries carried out by the Angus Reid Group, which operates out of Toronto. The study finds that U.S. and Canadian citizens lead the world in Internet usage, but European and Japanese users are the most likely to use Web-enabled wireless devices. As many as 150 million people are poised to connect to the Internet this year, the survey finds. However, worldwide growth patterns of Internet usage suggest that only a few countries will experience a real boom in Internet use. Ownership of home computers and interest in the Internet is lowest among Eastern and Southern Europeans, the study finds. "Wireless Web access on cell phones and palmtops and public access to the Web in cafes and kiosks must play a greater role" in bridging the digital divide, Angus Reid says. Per-minute phone charges are driving the use of wireless devices in Europe and Asia. Sweden, the Netherlands, Finland, and Australia approach the U.S. and Canada in terms of being Internet-savvy. A greater percentage of Northern Europeans than Southern Europeans use the Internet. About 59 percent of Americans have Internet access, followed by 56 percent of Canadians, and 53 percent of Swedes. Germany has 18 million Internet users--good for third place in Europe--followed by 14 million in the United Kingdom. http://www.newsbytes.com/pubNews/00/146087.html *
"It's Going to Be E-Commerce or Lost Commerce" Journal of Commerce (03/29/00) P. 7; (Jasinowski, Jerry J.): The health of the United States and the standard of living enjoyed by its citizens will be increasingly linked to the Internet, says Jerry J. Jasinowsky, president of the National Association of Manufacturers. Although government can certainly encourage manufacturers' adoption of Internet technology by enacting legislation to promote digital technologies, protect corporate trade secrets, and widen bandwidth, the chief responsibility of furthering e-business acceptance still falls on the private sector, Jasinowsky says. Unfortunately, says Jasinowsky, the private sector needs to do a better job of promoting e-business. Currently, 68 percent of manufacturers do not use the Internet to conduct business transactions, according to a survey of 2,500 companies conducted by the National Association of Manufacturers. Only 10 percent report having fully automated business process systems and just 5 percent integrate their supply chains via the Internet. Companies slow to adopt the Internet often report Y2K-related delays and fears of investing in technology that will be obsolete almost immediately. On the positive side, 80 percent of respondents have a Web site--although the majority offer only information--and there seems to be industry acceptance of the importance of Internet technology, Jasinowsky says. Furthermore, Forrester Research estimates that business-to-business e-commerce will be 10 times larger than business-to-consumer e-commerce within a few years. *
"Financial Services Industry Missing E-Commerce Boat" E-Commerce Times (01/31/00); (Spiegel, Rob): Most traditional financial services companies have not made aggressive moves to offer services via the Internet because they are concerned about security and the cost of wrong strategic decisions, and they lack sufficient human resources to support Internet initiatives, according to a new Arthur Andersen report. But such caution is the wrong approach, Forrester Research warns. "Firms that dip their toes into the Internet waters are doomed, because the Net crowns winners more quickly than the offline world," said Forrester analyst Jaime Punishill. The person-to-person financial services provided by traditional firms do not generally appeal to younger consumers, who are not wary of technology and prefer to take a more hands-on approach to their investing. The slower traditional financial services companies move, the greater the opportunity for startup Internet companies to capture large portions of the market, the experts say. The Andersen report, entitled "Thriving in the New Economy: Perception vs. Reality," states that fewer than 25 percent of senior management executives in the financial services industry rate e-commerce a high priority. http://www.ecommercetimes.com/news/articles2000/000131-5.shtml *
REPORT: $525M IN E-TAIL SALES NOT COLLECTED IN 1999: Retail sales on the Internet reached about $13 billion in 1999, yet state and local governments were unable to collect $525 million in tax revenues that could have been generated by the sales, according to Forrester Research. Internet retail sales will reach $184 billion in 2004, provoking more contention in the online taxation debate, says Forrester's James McQuivey. The five most populous U.S. states were the biggest losers. California lost $73.8 million in sales tax revenues in 1999, Texas $51.9 million, Illinois $32.6 million, Florida $30.3 million, and New York $26.6 million. The statistics will likely bolster state governors' position on the issue of Internet taxes. Forrester itself has taken a position on the issue, with analyst Steven J. Kafka stating that "Internet, catalog, and brick-and-mortar sales should all be taxed the same--based upon a buyer's physical location." Kafka adds that new technologies will permit companies to collect the taxes with ease and that new taxes will not keep consumers from shopping on the Web. (E-Commerce Times, 25 Feb 2000) *
"The Sky Is...Rising" Forbes ASAP (02/21/00) Vol. 165, No. 4, P. 149; (Jones, Kevin): Business-to-business e-commerce will grow even larger than analysts' most optimistic predictions, because most forecasts neglect three important ways the Internet will shape the economy, writes Kevin Jones. Studying the growth of online markets in vertical niche industries, Jones noticed three ways the markets save money and create new revenue, including inventory squeezers, value creators, and product creators. Inventory squeezers save buyers money by letting them quickly find information on price, availability, and guaranteed arrival dates of items the buyer needs to make products. For example, the e-Steel Internet market lets steel makers reduce the extra inventory they keep to ensure that delivery delays do not prevent them from meeting customer demand. Value creators are companies that would never have existed without the Internet, such as Alibris, a Web portal for used books. Alibris helps buyers and sellers find each other by providing the inventories of used-book dealers to online book vendors such as Amazon.com and Barnesandnoble.com. By making the location of buyers and sellers irrelevant, Alibris helps sell books that might otherwise never be sold. Finally, product creators are Internet markets that enable the existence of products that would otherwise not be developed. For example, the Patent and License Exchange helps universities, businesses, and research groups exchange intellectual property so that an idea that one organization might never turn into a product can be marketed by another. http://www.forbes.com/asap/00/0221/149.htm *
"B2B Apps Are Hot Item on Menu" Interactive Week (04/10/00) Vol. 7, No. 14, P. 82; (Roberts-Witt, Sarah L.): Seeking to capitalize upon the need for Internet startups to become operational as soon as possible, such companies as Ariba, BroadVision, Commerce One, IBM, and Open Market have begun offering business-to-business (B2B) application packages to enable businesses to quickly build e-commerce Web sites. These packages often include such features as search engines, tax calculation, payment processing, security, order processing, auction capabilities, and customer personalization capabilities. The ongoing surge in B2B activity has even altered the focus of many companies' offerings; IBM, for example, has shifted from an emphasis upon e-commerce middleware platforms toward an emphasis upon e-commerce applications. The company recently bolstered its WebSphere Commerce product to include such features as a personalization engine and auction and payment management capabilities, and introduced a service provider version of WebSphere Commerce. Additionally, IBM last month announced a partnership that will allow Ariba to integrate IBM's WebSphere applications with its B2B e-commerce platform. Although B2B packages can be extremely useful, integration with other systems can be difficult and the costs of customizing packages to meet the needs of individual businesses can be quite high. Many analysts, therefore, recommend that companies thoroughly review each package to determine how well its applications, interoperability, and add-on commerce services meet both immediate corporate technological needs and long-term business goals. http://www.zdnet.com/intweek/stories/news/0,4164,2523632,00.html *
"Brick-and-Mortars Take the E-Commerce Plunge" InfoWorld (04/03/00) Vol. 22, No. 14, P. 40; (Schwartz, Ephraim): Although brick-and-mortar companies have taken the time to familiarize themselves with e-commerce and believe they are now ready to move online, there are still several obstacles traditional companies must overcome in order to survive in today's digital economy. Restructuring existing business practices and learning how to act more quickly are perhaps the greatest challenges brick-and-mortar companies face in their e-commerce transformation. "Changing the flow of information changes the business model," says Raj Desai, director of the industrial sector of IBM's Worldwide Automotive Solutions division. Businesses should implement systems that can continuously monitor the status of shipments, taking into account value-added services and factors such as packaging methods, labeling, and shipping company. Also, the relationship between suppliers and distributors is likely to change. B2B companies typically do not carry inventory and instead collaborate with partners at all stages of the manufacturing process, creating products in a piecemeal, immediate fashion. Additionally, time-to-market affects e-business practices. Brick-and-mortar companies cannot afford to take the extra time to get everything right, but instead must use the knowledge of employees to get online as soon as possible. Some traditional companies have chosen to form separate dot-com businesses in order address these e-commerce challenges, while others have formed partnerships with other brick-and-mortar companies and also existing Internet companies. Despite the changes brick-and-mortar firms must implement now, some believe it will ultimately be the dot-coms, and not the traditional companies, that will be forced to significantly alter their practices in order to secure the customer loyalty and build the customer service infrastructure required to survive in the business world. *
"B2B Outlook in 2004: A $7 Trillion Market" InternetNews.com (02/18/00): The business-to-business (B2B) e-commerce market will expand rapidly in areas outside of North America in coming years, with the global market expected to exceed $7.29 trillion in 2004, according to Gartner Group research. North America, with over $2.84 trillion in B2B revenue, will represent 39 percent of the market in 2004. By comparison, global B2B e-commerce hit $145 billion in 1999, with North America contributing 63 percent of the market with $91 billion in revenue. Europe will undergo the largest regional B2B growth, with the European market reaching more than $2.34 trillion by 2004, up from $31.8 billion in 1999, Gartner says. Major European firms such as BMW, Swissair, and British Telecom are already heavily moving into B2B e-commerce, says Petra Gartzen of Gartner Group's e-Business Services Europe. In the Asia Pacific region, B2B revenue is projected to rise to $992 billion by 2004 from $9.2 billion in 1999. Over the same time span in Latin America, B2B e-commerce will rise to $124 billion from $1 billion. *
Beyond the E-Commerce Shakeout" E-Commerce Times (02/18/00); (Dembeck, Chet): Web-based retailers should focus more on profitability, now that it appears that the e-commerce shakeout has begun, writes Chet Dembeck. Beyond.com in January announced its corporate restructuring, 20 percent reduction in work force, and search for a new CEO. At about the same time, Value America saw its stock slide to $5.75 per share from its April high of $74.25. The market appears to no longer be as enthusiastic about the likes of eToys, Theglobe.com, and iVillage, which are some of the more high-profile Web sites. However, when advising Web-based retailers on how to survive the ongoing shakeout, some industry observers do not suggest that e-tailers focus more on profits. For example, Forrester Research says Web-based retailers that cannot keep pace with the estimated 63 percent growth in online shoppers this year should look to establish a niche market or consider being acquired by a larger presence. Forrester says e-tailers can put off profitability for another year if their user base grows by at least 75 percent. Similarly, Forrester says Web-based retailers could focus more on development spending if the number of purchases per customer increases by at least 10 percent, and the amount each customer spends increases by at least 10 percent. Such growth would result in a 21 percent customer revenue increase in a year in which the average Web-shopping household is estimated to spend 17 percent more than it did in 1999. The mindset of Forrester is very similar to that displayed by Amazon.com and other online giants. "My advice to e-tailers that want to become winners instead of a shakeout statistic is to focus on making a profit," writes Dembeck. "Only then will all the other benchmarks really carry much weight." http://www.ecommercetimes.com/news/viewpoint2000/view-000218-1.shtml *
Software Agents and the Future of E-Commerce
It's just the beginning for the Web's e-revolution
"CE Execs Discuss E-Commerce" Discount Store News (01/24/00) Vol. 39, No. 2, P. 4; (Scally, Robert): Now that the Dark Ages of the Internet are behind us, market observers foresee less of an emphasis on the "land grab" stage of development and more of a focus on consolidation for this year, according to Desmond Varady, vice president and co-COO of Internet consulting firm Sapient. The need for Internet-based retailers to finally make some money was a crucial topic during January's Consumer Electronics Show, which featured Varady, among others. A panel of experts at the gathering said that they expect Web-only retailers to falter with profits during the next year and as a result, this could force these companies to partner with others, particularly brick-and-mortar retailers such as department stores that would like to have a better footing in e-commerce. Retailers of consumer electronics are also expected to become more active in e-commerce. BestBuy announced during the event that it would be revamping its e-commerce Web Site, that it is in an alliance with Microsoft, and that it has invested $10 million in the Web-based consumer electronics retailer etown.com. The company is in the process of trying to integrate facets of the in-store-shopping experience with its Web site. Radio Shack is another aggressive consumer electronics retailer. With its RadioShack.com Web site, the retailer has embraced the strategy of having customers use its stores for exchanges, returns, and price adjustments, says Web site executive vice president Henry Chiarelli. *
"CIOs Turning Attention to E-Commerce" E-Commerce Times (02/07/00); (Hillebrand, Mary): E-commerce is the leading technology issue, according to 65 percent of CIOs at U.S.-based companies in a recent survey by CIO Magazine. Furthermore, 62 percent think that President Clinton should appoint someone to look after technology-related national security, and 52 percent support the President's "digital divide" initiative. CIOs are concerned about computer security, but just 18 percent reported problems with external computer crime. But 85 percent support the President's $2 billion plan to fight cyber-terrorism and strengthen the government's computer systems against attack. Less enthusiasm surrounds the digital divide project, which means that few companies are likely to donate money, training and support, or equipment to needy areas, although Microsoft, AT&T, and 3Com have already partnered with urban organizations to help. Many CIOs say their e-commerce plans depend on finding qualified information services personnel, but 77 percent say they are having problems filling open positions. http://www.ecommercetimes.com/news/articles2000/000207-1.shtml *
"Web Retailers Get Energized for E-Holiday Millennium" Executive Technology (01/00) Vol. 2, No. 1, P. 1; (Hickins, Michael): After experiencing record-breaking sales in 1999, successful Internet retailers are already busy planning for the Christmas season of 2000. Holiday shoppers spent $3.3 billion in 1999 between Thanksgiving and Christmas, according to BizRate.com. Online orders were up an estimated 270 percent this holiday season. Traditional catalog merchants such as the Sharper Image tended to perform best under the enormous online demand. "They have the infrastructure, customer service, and logistics in place," says Ben Narasin, CEO of Fashionmall.com, an apparel-mall site. Among those that fell behind were sites that were unprepared to satisfy online orders. "The clear losers were sites that weren't able to control their own fulfillment," says Jupiter Communications analyst Mike May. Throughout the year Internet retailers will be concentrating on building a stronger technological infrastructure, hiring customer service representatives and technical help, and staying abreast of technological developments such as wireless Web applications for cell phones, pagers, and handheld computers. "Wireless applications will have an impact beginning this year," predicts Tom Cunniff, chief creative officer at Web design and consulting firm Fry Multimedia. *
"Report Predicts E-Business Up 86% by 2003" Financial Times (01/28/00) P. 9; (Cane, Alan): The global Internet economy, consisting of e-business and the infrastructure that supports the Internet, will be valued at $2,800 billion and will account for 7 percent of the world's gross domestic product by 2003, according to a study to be released this weekend by Nortel Networks. Communications traffic will grow to such an extent that the global Internet will need to be upgraded by $1,500 billion a year in 2003, the report says. The report finds that e-business will grow fastest in Europe, with an annual growth rate of 118 percent, while e-business worldwide will grow 86 percent and reach $1,300 billion per year in 2003. The study also forecasts that both Europe and the U.S. will experience a shortage of Internet transmission capacity as Internet usage rises. Business-to-consumer e-commerce will not grow as quickly as business-to-business e-commerce, and the latter will show revenues six times as high as the former. *
"IT Managers Push Broadband Service to Advance E-Biz" InternetWeek (01/21/00) No. 797, P. 8; Salamone, Salvatore IT managers looking to promote e-business have made broadband access for their customers a top priority. Internet users with broadband access view an average of 130 percent more Web pages a month and go online 83 percent more often than users with 28.8 or 33.6 Kbps modems, according to a recent A.C. Nielsen/NetRatings study. Considering the relationship between speed and Web use, e-businesses will push broadband to both customers and partners, experts say. One option for IT managers looking to provide broadband to customers, partners, and telecommuters is to sign up for a free DSL service offered by a company such as Broadband Digital Group, which registered 100,000 users in its first week. In addition, national DSL provider Covad Communications says it will start offering installation service on Saturdays, which will allow IT managers to schedule installation more easily. Meanwhile, Northpoint Communications has partnered with Microsoft and Radio Shack to facilitate DSL installation. The AOL-Time Warner deal might further drive broadband growth, as other portals form broadband strategies, experts say. Finally, the FCC recently decided to permit local exchange carriers to provide DSL over installed phone lines, which experts say could further drive the DSL trend. http://www.internetwk.com/story/INW20000121S0006 *
"90 Percent of Holiday E-Shoppers 'Largely Satisfied'" E-Commerce Times (01/14/00); (Spiegel, Rob): A study released by Jupiter Communications reports that 90 percent of online shoppers were "largely satisfied" with their 1999 holiday season Web experiences, despite problems such as site crashes, online traffic jams, and failed deliveries. Consumer satisfaction jumped from 74 percent in 1998 to 90 percent in 1999, with online buyers totaling $7 billion in purchases this holiday season. Jupiter attributes this season's success to large marketing investments and aggressive price promotions among online retailers. Although the 1999 holiday season's $7 billion in sales dwarfed 1998's sales figures, online sales comprised just a fraction of the 1999 estimate of $3 trillion in holiday sales. Yet Jupiter maintains that this holiday season set the precedent for future sales. "The goal of this holiday season was not about generating impressive sales numbers," says Jupiter analyst Ken Casser, "but rather about developing relationships with new customers and securing long-term relationships." Indeed, 35 percent of holiday Web shoppers said their experience has encouraged them to buy more online in 2000. http://www.ecommercetimes.com/news/articles2000/000114-1.shtml *
THE BATTLE FOR INTERNET CONSUMERS: The AOL-Time Warner merger offers a proof of sorts that the Internet economy is working, according to many analysts and members within the industry. "The deal validates the currency and takes our companies to the next level up," says Fabriola Arrendondo, managing director of Yahoo! Europe. Ian Smith, managing director of Oracle UK, says the e-commerce hype has become reality and companies that have not taken to e-commerce by the end of the year could go out of business. Before the merger, AOL's broadband vision had come under fire; the company was also criticized for its response to free Internet access services in Europe and elsewhere. The Internet economy grew 68 percent during the span of the first quarter of 1998 to the first quarter of the following year, according to findings from the Center for Research in Electronic Commerce at the University of Texas's Graduate School of Business. The research also shows that e-commerce was responsible for 34.8 percent of all Internet revenues as of the first quarter of 1999. (Financial Times--Information Technology, 19 Jan 2000)**
"Business E-Commerce Expanding" Baltimore Sun (01/09/00) P. C1; (Patalon, William): Business-to-consumer e-commerce did well over the holidays, as consumers spent some $10 billion online, but now consumer e-commerce is fading somewhat. However, business-to-business e-commerce is picking up. Forrester Research says by 2003 the business-to-business e-commerce market will be worth $1.3 trillion and will affect almost every consumer in some way. Business-to-business e-commerce currently is mostly just trade between businesses that is made easier by computers, but as it evolves, e-commerce will become more sophisticated. Commodities marketplaces are appearing online, and quality of service will become more important than price. Business-to-business e-commerce will combat inflation and reduce costs and wastes, says Grant Thornton manufacturing consultant Paul Engle. He says that moving a supply chain to the Internet can streamline the process by allowing different parts of the chain to see how the others are doing. For instance, if PCs are selling well at the retailer, the manufacturer can start building more computers, and check back along its own chain to be sure there are no shortages. A vendor's system can even be programmed to automatically ship products if the customer's inventory level drops. Inventory measured as a percentage of sales is at a historically low level, and it will drop further--letting companies save money by not having to stock as much. Middleman distributors will disappear in some industries, says economist Pradeep Ganguly. Click Here to View Full Article*
"Cybershops Look to Keep U.S. Online" Associated Press (01/09/00); (Beck, Rachel): This holiday season, online sales reached more than $12 billion, which is 300 percent more than last year. Now cybershops are looking for strategies that will keep their old and new customers coming back to buy from the Web site throughout the year. Most companies are avoiding expensive advertising campaigns, which did not work for companies during the holiday season, in favor of improving customer service, creating personalized services, and offering valuable promotions. Companies such as Toysrus.com and eToys that experienced shipping delays during the holidays are overhauling their Web sites in an attempt to promise their customers on-time delivery of products. Ninety-five percent of 500 people surveyed by Andersen Consulting believe on-time delivery would increase the chances that they would shop at the same Web site again. Companies such as 800.com are taking the "surprise and delight" method to get customers to buy again; 800.com includes something extra with each customer's purchase, like popcorn or other free gifts. Companies such as SmarterKids.com are using their databases of information to create personalized shopping pages; however, many analysts warn companies to be careful with consumers' personal information. http://www.infobeat.com/stories/cgi/story.cgi?id=2563164143-247*
"Online Holiday Shopping Was Hardly Fulfilling": Internet retailers spent about $3 billion on offline advertising this holiday season. But Stu Feldman, director of IBM's E-Commerce Institute, says it is not working. He says research shows that advertising heavily is not enough to encourage consumers to buy from a Web site. "The learning is that having a Web site unavailable is not good and not being able to handle orders efficiently is fatal," he says. Feldman says companies have no choice but to direct more attention and funding toward back-office processes such as customer relationship management and supply chain management. Ernst & Young estimates the holiday online retail market reached $10 billion to $13 billion this year. The lesson to be learned by e-retailers, according to an Ernst & Young survey of 1,200 Internet users, is that consumers want "to get the stuff they ordered on time and in good condition," says analyst Pamela Stuebing. "Fulfillment is the issue." http://www.techweb.com/wire/story/TWB20000105S0003 *
THE INTERNET REVOLUTION TAKES OFF: The Internet has brought with it a speeding Internet economy, which has grown 68 percent from 1998's first quarter to the same quarter in 1999, according to a University of Texas at Austin study. Some $507 billion flowed into the U.S. economy with that growth, compared to $301 billion in 1998, and it provided employment for about 2.3 million Americans. Cisco Systems provided financial backing for the study. The study surveyed 3,400 businesses and found that a third of them did not exist prior to 1996; now they employ 305,000 people, and most of them are small or medium in size. Cisco's Doug Karmin points out that the study shows people that the Internet is not something of the future--it is now. (Telephony 12/06/99)**
REPORT: GROWTH OF NEW WEB USERS SINKS: A new report from Cyber Dialogue finds that Internet retailers may be forced to expand their marketing efforts to attract new Internet users, renew efforts to retain existing customers, and increase their revenues due to the sluggish growth of the U.S. Internet-using population. The growth rate of adult Internet users declined from 58 percent during the first half of 1998 to 13 percent during the first half of this year, the report says. The report predicts that roughly half of all U.S. adults will use the Internet by 2003. Adults with low or moderate levels of income are not making the jump to cyberspace in large enough numbers, a major cause for the slowdown, the report finds. The report also shows that roughly a third of those surveyed say they do not need the Internet. Further, 27 million adults gave up using the Internet this year, according to the report. (USA Today 12/03/99)**
"Online Holiday Sales Beat Expectations" E-Commerce Times (12/20/99); (Spiegel, Rob): Eighty-three percent of e-tailers are increasing revenues over 1998's revenues, according to a study from International Data (IDC). Twenty-six percent of e-tailers have almost doubled their online business, and 23 percent report growth of more than 61 percent, according to the study. Amazon had the most holiday sales, followed by Buy.com, barnesandnoble.com, and eToys, while Toys "R" Us moved up 19 places to number seven on NextCard's list of the top 10 retailers by transaction volume. The IDC study also shows a decrease in the percentage of frustrated online buyers, but shows that the Internet still has customer service problems. Only 25 percent of Internet purchases were abandoned in mid transaction, down from 65 percent abandonment last year, according to the IDC study. Greenfield Online research has concluded that 8 percent more e-buyers in 1999 are not as concerned about using their credit cards online. http://www.ecommercetimes.com/news/articles/991220-5.shtml
"Trends and Predictions for 2000" E-Commerce Times (12/20/99); (Dembeck, Chet): E-Commerce Times columnist Chet Dembeck predicts that 2000 will bring many changes in e-commerce. For example, U.S. users will receive free online access from Microsoft and AOL, while the Linux operating system will become a mainstream alternative to Windows 2000. Americans will embrace portable Internet devices and AOL will acquire several companies in the beginning of 2000 to increase its broadband capacity, he predicts. New technology will make the broadband issue less important, but taxation of e-commerce will be a defining issue of the American presidential elections in 2000. The Microsoft antitrust case will not be resolved in 2000, and many brick-and-mortar companies that did not form strong ties with their online counterparts will fail, Dembeck says. http://www.ecommercetimes.com/news/viewpoint/view-991220-1.shtml
THE INTERNET AT ADOLESCENCE: A TRILLION-DOLLAR PRODIGY: The Internet has changed a great deal about society in a few short years. Six years ago just 90,000 Americans were wired; now 80 million Americans and almost 200 million people in total are online, and the numbers are still going up. Today, online retail sales total approximately $20 billion and business-to-business transactions total $109 billion. Morgan Stanley Dean Witter Internet research team head Mary Meeker talked about the Internet's future last month. Meeker said she believes that IPOs will continue, especially in the areas of broadband, wireless, and general business re-engineering. She says traditional companies are more likely to discard the traditional business model in favor of focusing on the long term and the Internet. Meeker says business-to-business companies will probably attain profitability faster than e-commerce companies and that those currently in business are studying the history of the Internet so as to avoid the mistakes of older companies. (New York Times 12/20/99)**
E-RETAILERS TRY TO MAKE IT EASIER FOR SHOPPERS TO BUY: Anywhere from half to three-quarters of all online shoppers browse for merchandise at Web sites without actually making a purchase, according to analysts. Online retailers Snaz.com and RedCart plan to rid online shoppers of this habit with the introduction of universal shopping carts, allowing visitors to shop several Web sites at a time and pay for purchases in one lump sum, meaning that credit card data need be entered just once. This one-stop shopping and payment system obviates the need for several Web site passwords, says RedCart's Jennifer Razor. However, Jupiter Communications analyst Ken Cassar points out that the carts do nothing to ease the delivery process or lower the costs of deliveries. Amazon.com, eToys, CDnow, and about two dozen other big online retailers participate with either RedCart's or Snaz.com's one-click checkout systems. Some retailers are featuring digital wallets or one-click shopping to lure more customers to their sites. (USA Today 12/22/99)**
GERMAN PUBLISHING GIANTS LEADING THE WAY TO NEW MEDIA: Europe's two leading publishers, Gruner + Jahr, (magazines ); and Axel Springer Verlag (newspapers) have embraced the Web and are building toward a broad platform for new media. G+J established a media services subsidiary and has built its own online editorial system called Cocoon, which interfaces with the commercial systems used by its magazines. With liberal use of third-party components, the modular design of Cocoon allows it to be expanded, modified and improved as needed. Springer's 12-year-old Interactive Media Division is becoming increasingly more involved in the Internet; teletext marketing; and the convergence of the Web, teletext and TV. It hopes to boost the teletext market with an innovation called TeleWeb which uses HTML to improve overall quality. TeleWeb is delivered to homes as part of the broadcast signal picked up by a regular TV antenna, and viewers can use their remote controls to navigate among topics, contents and links. (The Seybold Report on Internet Publishing, Feb 2000) NEWSPAPERS SUFFER BRAIN DRAIN AS WRITERS HEAD TO WEB: As dot-coms dangle stock options, work-at-home flexibility and new challenges in the face of seasoned reporters, newspapers are scrambling to hold onto their talent and replace those who have already followed the lure of the 'Net. Last fall, the San Jose Mercury News lost one fifth of its business news staff to dot-coms. Complicating the situation, growing papers are also poaching each others' brain trusts at an unprecedented rate. Although many papers are raising salaries to boost their appeal, "Money is not going to solve this kind of problem," says one editor. "You have to provide them a great opportunity ... to grow and learn and work in a great environment." (Editor & Publisher 22 Feb 2000)***
http://www.mediainfo.com/ephome/news/newshtm/stories/022200n2.htm ***
PRINT NEWS WILL THRIVE, WITH THE HELP OF THE INTERNET: Print publishers should be in no fear of losing all to the Internet, according to the publication head of content at lastminute.com. In fact, he predicts that print newspapers will experience unprecedented success -- and use the Net to help them do it. Newspapers will learn to get the news to their customers in the format that suits their readers best -- and often, that's on paper. Web sites also are a good format for making the paper available overseas, for selling the invaluable archive and for syndicating content. Other predictions: New formats such as SMS (text messaging to mobile phones), WAP (limited Web access on mobile phones) and Web TV will help newspapers become a brand that customers can access in whatever format they want. Then papers will get more readers. And, if newspapers really get useful, customers will start paying for digital services. Then digital newspapers can ease up on the advertorial barrage, restoring the vital balance between cover price and ad revenue. (The Independent, London 4 Jan 2000) http://www.cnnfn.com***
NEWSPAPERS TO NEED LESS NEWSPRINT IN NEXT DECADE: A recent study by Boston Consulting Group predicts that about 15% of 1997 North American newsprint production capability will be unused by 2003 because of a decline in printed newspapers. "The considerable information content of most newspapers -- combined with high fixed costs and a subsidisation of content by advertising -- makes them particularly vulnerable to both indirect and direct electronic substitution," according to the "Paper and the Electronic Media: Creating Value from Uncertainty" report. The report predicts that by 2003, approximately 15% of the U.S. classified advertising market will shift online, with 10% going electronic in Germany, France, the U.K. and Japan. "Direct substitution also poses a threat to newspapers, as more people turn to online news services. Currently about 200 million pages of The New York Times, the Wall Street Journal and Washington Post are viewed on the Web each month." The study was based on past paper consumption statistics, Internet penetration, and consumer switching probability in the five markets. ("Study: newsprint market in trouble," newspaper techniques Oct 99) http://www.ifra.com/**
COULD WEB CLICKS REPLACE EDITORS' NEWS JUDGMENT?: Gauging reader interest in specific newspaper stories usually involves more instinct and anecdotal evidence than hard facts. But for editors of Web publications, the task is much easier -- every time a surfer clicks on a specific story, the hit can be registered and tabulated. That ability has some concerned that editors may begin letting site traffic, rather than news judgment, drive content decisions. "... We have something to gain by listening a little more closely to what our audience is telling us," says John V. Pavlik, executive director of the Center for New Media at Columbia University. "When it starts becoming a problem is when [editors] stop listening to journalistic standards and instead just start pandering to popular taste." MSNBC.com Editor-in-Chief Merrill Brown insists that most editors are using the information wisely. "What we don't do is make news decisions about what the most important stories of the day are based on traffic," he says. "This data is not a replacement for journalistic news judgment." (USC Annenberg Online Journalism Review, 10 Nov 99) http://ojr.usc.edu/content/story.cfm?request=276**
THE AGE OF THE ELECTRONIC JOURNALIST: The online publishing revolution has had three major effects on how newspapers organize journalists, according to George Brock, managing editor of The Times of London. First is speeding up of the news cycle. Second is enhancement of the journalist's ability to manage huge amounts of information. And third is the changing expectations and habits of readers. As newspapers rebalance their output between traditional print and newer digital formats, Brock identified five key tasks that will help shape the writers and editors of the next generation. Journalists should be well-versed in the traditional values of newspaper publishing, including editorial standards and the separation between editorial and advertising interests. At the same time, the editorial process should be opened up to technological experimentation and innovation. Editors must learn to foster a "rolling journalism" culture rather than the "batch publishing" that has been dominant to date: "...Newspaper journalists accustomed to a fixed daily cycle have to revise their thinking, to advance some stories, hold back others, run trailers for some, run some stories only online and some only offline." Editors must realize that newspapers' relationships with readers are changing, and that readers are getting less national and international "top stories" news from newspapers, but are looking for non-breaking-news information, such as analysis, context, opinion, background, features, lifestyle, health, etc. Finally, Brock called on systems vendors to develop software that would make journalists' lives easier -- by producing "an easy-to-use, reliable publishing system that ... puts together wysiwyg page assembly, Web publishing and a knowledge management for writers which allows them to easily manipulate large quantities of electronic data from many different sources." (George Brock, "The Age of the Electronic Journalist" Newsroom for a Digital Age, Ifra conference 7-8 Dec 99)**
MODERN JOURNALISTS MUST GRASP THE NETWORKED SOCIETY: In an era when anyone with a PC and an opinion can disseminate information online, making it instantly available to millions of eyeballs, the role of journalists in society must be questioned. Rather than existing as the primary source for news of all kinds, journalists in today's network society must offer readers something more. "On the one hand journalists are faced with the challenge to offer more refined and deeper journalism from various specialised areas, and, even more, contextualised and interpretative information from all areas," argues Ari Heinonen of the University of Tampere's Journalism Research and Development Centre in Finland. "On the other hand, journalists are expected to be professional communicators who can offer attaching and attracting journalism, i.e. journalism that is appreciated and felt necessary by the audience, journalism that is meaningful for citizens in their everyday life. These are no minor tasks for journalism training." The solution, Heinonen suggests, is to provide journalists with both the professional skills they need to master new technology, but also with the intellectual understanding to grasp the nature of network society, and their role in that society. As journalists, their value will lie in their ability to add context and depth to news reporting, relieving the burden on an audience overloaded with raw data. (Ari Heinonen, "Challenges And Trends In Journalism," Newsroom for a Digital Age, Ifra conference 7-8 Dec 99)**
"On the Global, Faceless Web, Trust Counts for Even More" New York Times--E-Commerce (03/29/00) P. E28; Slade, Margot Increasing numbers of B2B entrepreneurs are discovering that contrary to popular Internet sentiment, replacing human contact with digital contact is not necessarily good for business. The complexity and enormous amount of factors involved in B2B transactions means many corporate buyers often only completely trust those sellers with whom they have a personal relationship. Therefore, simply offering a low price does not guarantee an Internet business will be successful. "In this universe, you often need more than textual information," claims Anna Copeland Wheatley, editor in chief of business magazine AlleyCat News. She says purchase negotiations that take place solely through terse emails or frenzied online auctions are frequently hurried and result in poor decisions, prompting certain buyers to avoid certain sellers. Also, information shared electronically is much more likely to be presented in a manner that may be misleading or deceitful, resulting in transactions that benefit one party significantly more than another. The Internet should instead be used in conjunction with telephone calls and face-to-face meetings, thereby enabling buyers and sellers to both communicate inexpensively and efficiently and develop positive relationships that foster mutual trust and understanding. http://www.nytimes.com/library/tech/00/03/biztech/technology/29slad.html *
"E-Business Analysis Tools Are Key for Dot-Coms" PC Week Online (03/12/00); (Hammond, Mark): Analytic intelligence, which provides precise and profitable information about customers, is becoming a mission-critical element of e-commerce, because it produces personalized content that can be used to attract business. Dot-coms are employing new tools enabling them to access, analyze, and share e-commerce data to build loyalty among customers and suppliers and build profit. "The focus has been on getting the operational systems up," said Douglas Hackney, analyst and president of the Enterprise Group. "What they haven't had is the why." Among the challenges of analytic intelligence is parsing the large amounts of data into a manageable volume, maintaining customer privacy, and, for traditional companies moving online, blending analyzed Web data with back- and front-office data to create a comprehensive view. "There are difficulties in doing this and no magic bullet to solve it," said Joe Whitehurst, analyst and president of Whitehurst Associates. "It takes a lot of hard work and a lot of attention to detail. Demand for it is large, especially for Internet-based e-commerce companies--startups in particular." Well-implemented solutions can be very valuable, as Outpost.com realized after 25 percent of customers identified as inactive through analysis responded to a direct marketing effort by returning to the Web site and making purchases. "I'm very pleased with the ROI," said Brett Lauter, Outpost's director of CRM. "It's ultraimportant to do this, to build a trusted and valued relationship with your customer." Many companies are making a name for themselves in the growing business intelligence and data warehousing industry through offerings and partnerships, including Oracle, SAS, IBM, Microsoft, Hyperion Solutions, and such startups as Accrue Software and WebTrends. http://www.zdnet.com/pcweek/stories/news/0,4153,2459218,00.html *
"Dr. E-Mail Will See You Now" Technology Review (02/00) Vol. 103, No. 1, P. 42; Shapley, Deborah Email is an important way for e-commerce companies to manage customer relationships, and several businesses are now offering products that automatically respond to customer inquiries or send the messages to the appropriate department. For example, General Interactive offers EchoMail, which uses algorithms to categorize basic properties of email. EchoMail sorts email according to five fundamental properties--issue, request, products, customer type, and attitude. Based on these categories, EchoMail can either automatically respond with a prewritten message or direct the email to a specific department for human attention. JCPenney, which uses EchoMail, always has a person reply to messages that are grouped in the negative attitude category to ensure that irate customers get appropriate responses. JCPenney has worked to make its Web site interactive and responsive to customers. The best way to draw customers to a Web site and promote customer loyalty is email, according to Forrester Research. JCPenney says email helps it establish a type of dialogue with customers and turn them into repeat buyers, noting that email promotions receive two to three times the response rate of online ads. General Interactive CEO V.A. Shiva says EchoMail saves users about $3 per message on the average $4.23 it costs for humans to read and respond to a single email. Although General Interactive now holds about 22 percent of the automated email response market, rivals Brightware and Kana Communications also look promising. However, major phone companies such as Nortel and Lucent might ultimately have the most success as email managers, with their ability to integrate email with call centers as well as paper mail. http://www.techreview.com/articles/jan00/shapley.htm *
Ad agencies adjust to a target audience of one
"Web Retailers Get Energized for E-Holiday Millennium" Executive Technology (01/00) Vol. 2, No. 1, P. 1; (Hickins, Michael): After experiencing record-breaking sales in 1999, successful Internet retailers are already busy planning for the Christmas season of 2000. Holiday shoppers spent $3.3 billion in 1999 between Thanksgiving and Christmas, according to BizRate.com. Online orders were up an estimated 270 percent this holiday season. Traditional catalog merchants such as the Sharper Image tended to perform best under the enormous online demand. "They have the infrastructure, customer service, and logistics in place," says Ben Narasin, CEO of Fashionmall.com, an apparel-mall site. Among those that fell behind were sites that were unprepared to satisfy online orders. "The clear losers were sites that weren't able to control their own fulfillment," says Jupiter Communications analyst Mike May. Throughout the year Internet retailers will be concentrating on building a stronger technological infrastructure, hiring customer service representatives and technical help, and staying abreast of technological developments such as wireless Web applications for cell phones, pagers, and handheld computers. "Wireless applications will have an impact beginning this year," predicts Tom Cunniff, chief creative officer at Web design and consulting firm Fry Multimedia. *
"Obsessed With Customer Service and Experience" Financial Times--Information Technology (02/02/00) P. 15; (Price, Christopher): Amazon.com CEO Jeff Bezos says the company's long-term goal is to be the entry point for all online shopping. Although some argue Amazon is trying to be all things to all people, Bezos counters that Amazon is trying to be only one thing--"Earth's most customer-centric company." A truly customer-centric company, he says, listens to the demands of its customers and meets them, constantly innovates on behalf of its customers, and strives to provide the most individually personalized online shopping experience possible. Customers care only about four things, according to Bezos--selection, ease of use, price, and service. An effective brand will be created only if a company addresses all four customer concerns. Founded five years ago, Amazon shipped over 20 million books, CDs, and other items during the fourth quarter of 1999, en route to sales of $650 million, more than all of 1998. Bezos says the book division will be profitable in 1999 while analysts project overall profitability by 2001. *
"Scramble to Cope With the Demands of E-Commerce" Financial Times--Information Technology (02/02/00) P. 27; (Manchester, Philip): Customer relationship management (CRM) software and services, including necessary front- and back-office integration services, promise to be of crucial importance over the next few years. Sales of CRM products will reach $16.8 billion worldwide by 2003, up from $3.7 billion in 1999, according to AMR Research. E-commerce will be the chief driving force behind CRM's growth; successful e-commerce operations require extensive integration of enterprise systems and a consistent, personalized online presentation to the customer. CRM efforts often deliver a significant return on investment as well, according to a recent survey of the CRM Market by Granville Equity Research. The study cites Novell's CRM deployment, which sparked an increase in quarterly revenues by $20 million to a total of $30 million. The CRM market is particularly strong in Europe, where International Data projects CRM spending will grow 47 percent every year through 2003. *
E-RECEIPTS NEXT ON RETAIL FRONT: The Digital Receipt Alliance, which includes Visa, Office Depot, and a number of major tech firms, last week announced a standard for digital receipts that can be sent over e-mail or viewed on the Internet. Technology companies participating in the effort include Microsoft, AOL, and Hewlett-Packard's Verifone unit. The digital receipts would be based on XML and would include transaction data, links to vendors' and manufacturers' sites, and possibly promotional offerings. Supporters say the receipts would eliminate the need for consumers to retain paper receipts, and would help brick-and-mortar stores access online consumers. In addition, advocates say the digital receipts would encourage traditional shoppers to use the Internet to view receipts and discounts. Indiana University business school professor Raymond Burke says digital receipt databases will offer businesses a more complete picture of consumers, because the databases will include online and offline purchases. (Computerworld, 24 Jan 2000) **
"E-Retailers Balance IT, Marketing" InternetWeek (01/10/00) No. 795, P. 1; (Karpinski, Richard): Online retailers are beginning to learn that a successful e-business requires a steady balance between marketing and order fulfillment. Although most e-commerce ventures strongly emphasized sales and marketing for the holiday season, many failed to adequately prepare their infrastructures to handle the traffic. "I had worried that sites would overspend on sales and marketing, and underspend on building out their back ends. And that's exactly what happened," says Jupiter Communications analyst Ken Cassar. Online retailers that thrived in the holiday season cite early planning and IT spending as the keys to their success. Electronics retailer Hifi.com, for example, bolstered its infrastructure after experiencing inventory shortages and understaffed customer service centers during the 1998 holiday season. After adding a new e-commerce and inventory management system and quadrupling its call center capacity, Hifi.com yielded strong sales figures and a 99 percent fulfillment rate this holiday season. Inventory fulfillment systems are particularly important to an e-business' success, says Toysmart.com CEO David Lord, whose company runs a $1 million inventory fulfillment system from Yantra. Although the cost of such a system is high, it yields an equally high value in terms of customer service, says Yantra's Rachel Lev. Too many sites "allow somebody to purchase something when they don't really know if it's available," says Lev. "A faux pas like that can do serious damage to a brand." http://www.internetwk.com/lead/lead010600.htm *
"E-Business Redefines Infrastructure Needs" InfoWorld (01/10/00) Vol. 22, No. 2, P. 22; (Fisher, Susan E.): E-commerce has created a need for around-the-clock systems, creating challenges for IT workers who are trying to eliminate downtime in complicated and often unstable networks. Since online shoppers can switch so easily to a rival company, e-commerce vendors must ensure that their site is always available. Online businesses cannot afford for systems to go down while they make upgrades or changes, says Calvin Braunstein of consultancy Robert Francis Group. Downtime cost large Internet companies $8,000 an hour in 1999, Forrester Research estimates. Online firms also have difficulty predicting traffic volumes. "The fact is that the world at large has on-demand access to your systems, and you no longer can fully control the impact they will have on you," says Corbis systems engineer Ian Cote. Availability is now a key emphasis in designing e-commerce systems. Drugstore.com, for example, uses software that caches a buyer's credit card information so that if the store's connection to the credit card authorization system fails, the information will be resubmitted before the customer even knows of the problem. http://www.infoworld.com/articles/hn/xml/00/01/10/000110hnetrend.xml *
"The Importance of Assurance for Electronic Shoppers": Customer service is even more important at e-commerce sites than at brick-and-mortar stores, yet many online retailers seem to be neglecting this aspect of their business. In a recent Ernst & Young survey, half of the email inquiries sent to retail sites... http://www.acm.org/technews/articles/1999-1/1220m.html#item6*
"The Leaders of E-Business" InformationWeek recently compiled a list of the 100 most innovative e-business companies. The E-Business 100 range from established firms to startups less than a year old, and cover a variety of industries. The companies are all using the Internet... http://www.acm.org/technews/articles/1999-1/1220m.html#item8*
"Report: Supply Chain Not Net-Ready in Europe, Says IDC" IDG News Service (04/06/00); (Sayer, Peter): The market for Internet-based supply chain management services in Europe is still in the early stages of development, according to a new International Data (IDC) study. The report, called "Internet Impact on Supply Chain Management Services," said that European companies have largely resisted Web-enabled supply chains because of concerns regarding security. "Security issues dominate the underlying lack of enthusiasm," said IDC European services expertise center manager Mirko Lukacs. Lukacs said that although European service providers are eager to develop online SCM systems, lack of interest from corporate customers has limited their offerings. He said that smaller companies often prefer private EDI systems to Web-based supply chain systems, which in turn makes their larger partners reluctant to implement Web-based processes. Yet European companies will see a greater need for some measure of Web-enablement to cater to the increasingly customer-centric business atmosphere, warned Lukacs. He said that consumers are quickly becoming the most significant link in the supply chain by expecting greater product variety and availability and strong reliability of order fulfillment. *
"European Online Sales Set to Soar" Newsbytes (03/30/00); (Gold, Steve): Europe will be in the same e-commerce league as the U.S. by 2005 suggests a new report by Forrester Research. Entitled "Retail's Pan-European Future," the study estimates that online retail sales in Europe will reach $170 million over the next five years, at an annual growth rate of 98 percent. If so, online sales would account for 7 percent of total retail sales across Europe. A gap would no longer exist between the U.S. and parts of northern Europe like Germany, Sweden, and the United Kingdom. In fact, Germany is expected to surpass the U.S. in travel-related e-commerce and the United Kingdom is projected to overtake the U.S. in the groceries category. Germany will account for 26 percent of all online sales in Europe, while 9.3 percent of Sweden's total retail sales will be made online. Although e-commerce is not expected to take off at such a pace in southern Europe, France is expected to represent 14 percent of all online sales in Europe. Companies seeking to become leaders in the European e-commerce market in the next few years will have to develop cross-border strategies that will attract pan-European sales, says Forrester senior analyst Matthew Nordan. A large number of Internet pure plays are expected to succumb to a wave of consolidation, which could leave as much as 75 percent of online sales to traditional retailers. And the future is not promising for multi-country online retailers because cross-border strategies must balance local requirements with a pan-European scale. Service providers will offer many of the cross-border solutions involving logistics, payments, and customer service needs. Traditional retailers have the potential to become e-commerce leaders if they move quickly, says Nordan. *
"Intel Plans Five E-Business Laboratories" Financial Times (04/07/00) P. 18; (Grande, Carlos): Intel plans to invest millions of dollars in the development of five e-business testing centers in Europe, in a move aimed at boosting the company's role as an Internet infrastructure provider. As part of the plan, Intel has teamed with 10 Web consultancies to help e-businesses test technology in France, Germany, the Netherlands, Sweden, and the United Kingdom. Intel's partners in the venture include Swedish Internet incubator Icon Medialab and French incubator Integra. The announcement follows similar moves by other hardware makers, such as Dell, into the services arena. Companies will need to implement Intel products, particularly Internet equipment, in order to use the new testing facilities. "These centers are designed to give companies the benefit of our technology, testing an e-business in 30 to 60 days," says Intel's Rob Ecklemann. Intel's new focus on Internet infrastructure positions the firm as a rival to Cisco, a major supplier of Internet networking gear, and Sun, a provider of e-commerce servers. *
"For U.S. Internet Portals, the Next Big Battleground Is Overseas" Wall Street Journal (03/23/00) P. B1; (Auerbach, Jon G.; Wysocki, Bernard Jr.; Boudette, Neal E.): Larger U.S. Internet companies such as AOL, Yahoo!, and Lycos are expanding their brands to Europe, Asia, and Latin America in hopes of establishing themselves before the local competition becomes entrenched. The European portal space is heating up. Lycos Europe just held its IPO in Germany this week, and other companies are expected to follow suit. Yahoo! and Lycos each have a roster of about two dozen foreign portals, AOL about half that many, and Excite nine. Internet growth is expected to be slower in the U.S. than the rest of the world over the coming years, due in part to slashed access rates in other countries, including free monthly access and low phone-fee services. International Data predicts the U.S. will have only 42 percent of the world's Internet users by 2002, down from 56 percent in 1997. Local competition is giving U.S. companies a run for their money in many markets, including Germany and France, where T-Online and Wanadoo, respectively, hold the lead. AOL Chairman Steve Case says the free Internet access model in the United Kingdom will prove unsustainable in the future as full-service providers begin to supplement Web access with other services, including TV and phone. AOL's German Web site has captured 29.5 percent of the country's Internet users, while AOL's U.K. site has captured 24.7 percent, and the AOL France site has seized 26.6 percent. *
"EU 'Dot.com' Summit" BBC Online (03/23/00): E-commerce will be one of the foremost issues addressed during the special Euro summit in Portugal. U.K. Prime Minister Tony Blair, who arrived in Lisbon Wednesday, says European countries should move in the direction of making Internet access more widely available and more affordable. One in five people are online in the United Kingdom, compared to one in two in the U.S. Although it costs 50 pounds to surf the Internet 30 hours a month in the United Kingdom, in the U.S. it would cost 30 pounds. Blair will also address the issues that hinder e-commerce. Most ministers believe the summit could result in economic reform for Europe. They are hoping that the same frenzy of businesses started and jobs created in the U.S. will happen in Europe. To encourage this transformation, the ministers are targeting education, employment training, and support for new online businesses. A recent report from the European Commission found that EU countries have not been quick to promote innovation, cut red tape, or change their social security systems to encourage work. Ultimately, European leaders have a chance to agree on ways to improve productivity and complete the single market, and the summit represents a huge opportunity to catch up to international commercial standards. http://news.bbc.co.uk/hi/english/world/europe/newsid_687000/687573.stm *
"European E-Commerce Poised for Boom" E-Commerce Times (03/28/00); Conlin, Robert Online business-to-consumer sales in Europe will reach an incredible $170 billion by 2005, up from just $2.8 billion in 1999, says Forrester Research. On average the growth would reach 98 percent annually. Although greater use of the Internet is expected to be a major contributor to the projected growth, the single currency in 2002 and the emergence of both interactive digital television and wireless e-commerce will be just as significant. Forrester expects European retailers that have the necessary logistics infrastructure, supplier relationships, and merchandising experience to succeed across the continent to lead the charge into Internet commerce. Senior analyst Matthew M. Nordan sees a trend toward industry consolidation in the next few years with companies that are not able to develop cross-border strategies seeking to bow out. Pure-plays will be particularly hard-pressed to compete with traditional retailers that would already be at a significant advantage in a borderless Europe. In fact, Nordan expects traditional retailers to carve out 75 percent of online sales in Europe within three years. Germany is expected to lead with 26 percent of online sales, followed by France at 14 percent. However, Sweden is expected to have the highest proportion of retail sales at 9.3 percent. Europeans will be buying so much apparel and groceries and so many autos by 2005 that online sales related to media, electronics, and leisure travel will shrink to 40 percent from more than 80 percent in 1999. Still, e-commerce will represent just 7 percent of total retail sales in Europe. "European E-Commerce Poised for Boom" *
E-Commerce Times (03/28/00); (Conlin, Robert): Online business-to-consumer sales in Europe will reach an incredible $170 billion by 2005, up from just $2.8 billion in 1999, says Forrester Research. On average the growth would reach 98 percent annually. Although greater use of the Internet is expected to be a major contributor to the projected growth, the single currency in 2002 and the emergence of both interactive digital television and wireless e-commerce will be just as significant. Forrester expects European retailers that have the necessary logistics infrastructure, supplier relationships, and merchandising experience to succeed across the continent to lead the charge into Internet commerce. Senior analyst Matthew M. Nordan sees a trend toward industry consolidation in the next few years with companies that are not able to develop cross-border strategies seeking to bow out. Pure-plays will be particularly hard-pressed to compete with traditional retailers that would already be at a significant advantage in a borderless Europe. In fact, Nordan expects traditional retailers to carve out 75 percent of online sales in Europe within three years. Germany is expected to lead with 26 percent of online sales, followed by France at 14 percent. However, Sweden is expected to have the highest proportion of retail sales at 9.3 percent. Europeans will be buying so much apparel and groceries and so many autos by 2005 that online sales related to media, electronics, and leisure travel will shrink to 40 percent from more than 80 percent in 1999. Still, e-commerce will represent just 7 percent of total retail sales in Europe. http://www.ecommercetimes.com/news/articles2000/000328-7.shtml *
"Central Europe, Too, Is Embracing the Net" Wall Street Journal Europe (03/10/00); (Chapman, Carolyn): A small but enthusiastic group of companies in Hungary, and in the rest of Central Europe, are pushing e-business development in the region. The companies, often traditional businesses using the Internet as an additional source of revenue, find that much work must be done before e-commerce is widely accepted in Hungary. Currently, most electronic transactions in Hungary are conducted on electronic data interchange (EDI) systems, which allow businesses to exchange orders, invoices, and inventory information. Although business-to-business e-commerce is growing with the proliferation of EDI systems, business-to-consumer e-commerce is virtually nonexistent. An Andersen Consulting study in August on Hungarian e-commerce reported that about 60 online retailers exist in the nation, generating just 0.02 percent of total retail sales revenue. Hungarian e-commerce is limited by many factors: a small economy, high telephone rates and Internet connection fees, consumer wariness toward credit cards, and, perhaps most importantly, a lack of interest among banks. Despite these hurdles, some remain optimistic about the growth of the Internet. "My prediction for e-commerce in the world, and in Hungary, is that it will make life something that you and I could have never anticipated," says Ference Bati, director of IBM Central/Eastern Europe and Russia. "We don't know how it's going to be because we've only just started." *
"Is Russian E-Commerce Ready to Explode?" E-Commerce Times (03/06/00); Dembeck, Chet Judging by a variety of factors, Russia appears to many analysts to be well poised to enter the information age. The Russian Internet Technologies Center recently reported Russian e-commerce sales totaled $160 million in 1998. Russia has the highest Internet usage figure, nearly 7.8 million adults, for any country in Central and Eastern Europe. The Russian workforce is well educated and contains a large number of engineers and technical experts. Some American companies, including Cisco Systems, Intel, Compaq Computer, Lucent Technologies, and IBM have offered advice to the Russian government on ways to encourage the rapid growth of e-commerce. Of course, not everybody is convinced. Some Russian officials fear online expansion will dramatically increase the country's already high tax-evasion rate and inhibit the growth of new brisk-and-mortar businesses in the country. Others, including American experts, predict a large portion of Russia's tech force will head West toward Europe and America, creating a serious deficit of technical know-how that could prove devastating to the development of the Russian Internet. Also, Russia's reputation for being unable to make timely loan repayments may discourage the influx of the Western venture capital required to expand the Russian Internet infrastructure. http://www.ecommercetimes.com/news/viewpoint2000/view-000306-1.shtml *
"UN Could Set E-Com Standard" Journal of Commerce (03/08/00) P. 12; (Zuckerman, Amy): The United Nations Standard Product and Services Classification Code (UN/SPSC) is quickly becoming a worldwide standard by enabling businesses and individuals from any language background to conduct e-business with complete understanding among trading partners of what exactly is being traded. Using the specification, every product and service available on the worldwide market will be assigned a code number that will be embedded in the enterprise computing systems of every company engaging in e-business, enabling fail-safe understanding of the goods and services being traded. For example, Title 39 covers Lighting and Electrical Accessories and Supplies and includes the sub-category of light bulbs and lamp components. The code provides for further specificity with regard to lamps and continues to label specific types of lamps, such as halogen, medical, fluorescent, and more. UN/SPSC is the first system to classify both products and services for worldwide use, according to author Amy Zuckerman. *
"Europe's Top IT Official Expounds on E-Europe Plan" Newsbytes (03/07/00); (McGuire, David): During a luncheon address given today, European Commissioner for Enterprise and Information Society Erkki Liikanen discussed strategies Europe should adopt to help close the Internet commerce gap between itself and the United States. Liikanen said most important is the need to reshape the European business culture to encourage greater venture-capital investment and spur entrepreneurial startups. Other issues Europe needs to address before it becomes a major player in the new economy include the management of e-commerce disputes, how to apply the value-added tax to Internet purchases, the liberalization of the European telecommunications system, and the establishment of regulations that protect European citizens without hindering growth of the e-commerce industry. *
PUBLISHING WITHOUT PERISHING: The Internet has become a haven for political and social activists seeking broader audiences for their controversial views. Yet some, living in oppressive environments such as China, Singapore, and the Middle East have come to fear reprimand from extremist religious groups or from local governments, which often filter Internet content to ensure social order. To enable these activists to distribute their writings safely, an Internet startup has formed to allow authors to publish sensitive information under the cloak of anonymity. The online bookstore, Booklocker.com, offers official page forms to preserve an author's anonymity, and site creator Angela Adair-Hoy says she will release the authors names only under court order. One Booklocker.com user, who goes by the pen name Savasan Yurtserver, fears terrorist action or political exile in response to his book, "The Bible or The Koran," which compares flaws in the two holy texts. "In the East, you can't question the scriptures," says Yurtserver. "There are many terrorist organizations in both my country and in the neighboring countries who take note of the authors that have radical views about religion only to kill them later." (Wired News, 25 Feb 2000)**
CHINA CLAMPS DOWN ON WEB NEWS SITES: In another step in China's strategy to control the Internet, the Chinese government is requiring the more than 700 news-related Web sites that operate within the country to register with the State Council, and new sites must also comply with the new rule: "From now on, new commercial Web sites undertaking news and broadcasting activities must first get an approval from the press office (of the State Council)," says Wang Qingcun, assistant head of the Council's information office. Reporters for the Web sites must also get proper accreditation from the government. (Dow Jones 18 Feb 2000) http://dowjones.wsj.com/i/media/ON-CO-20000218-000257-d-industry-c1-media.ht ml ***
"Europe Angered by Claims of U.S. Spying" Los Angeles Times (02/24/00) P. A1; (Dahlburg, John-Thor; Drogin, Bob): Some Europeans are accusing the National Security Agency (NSA) of intercepting communications sent by private citizens and using economic espionage to the advantage of U.S. corporations. A committee of the 15-nation European Parliament recently heard testimony from Duncan Campbell, a physicist and journalist, who insists that the NSA's legendary "Echelon" computer network not only spies on private citizens but also helped U.S. companies Boeing and Raytheon beat European rivals for contracts in foreign markets. NSA, which has never publicly acknowledged the existence of Echelon, has adamantly denied the accusations, saying that it is illegal for the agency to give intelligence to private companies for their economic benefit. Echelon is allegedly operated in conjunction with Britain, Australia, New Zealand, and Canada, which some analysts say makes the European's charges more suspect. And many European intelligence experts admit that France, Germany, and Russia consistently spy on other countries to gain commercial trade secrets for the benefit of domestic corporations. However, many Europeans insist that the NSA is spying on private citizens, and blame the agency in part for Europe's high unemployment rates because of the advantage that NSA's alleged industrial spying has given to American firms. Campbell suggests that Europeans start using encryption to protect the integrity of their communications. http://www.latimes.com/news/nation/updates/lat_snoop000224.htm *
EU POLICE PUSH FOR CROSS-BORDER E-EAVESDROPPING: The European Union is trying to create some guidelines on electronic surveillance among its member countries. As crime becomes more high-tech and global, many police in European countries have decried the lack of clear guidelines on the interception of e-mails, faxes, and cell phone calls from criminals operating across various borders. However, a bill that is pending in the EU legislature would allow a police department in one EU state to conduct surveillance of electronic communications in another member state. However, some privacy and civil rights organizations worry about what kind of limits will be placed on the surveillance operations. EU authorities are also currently trying to get law-enforcement agencies to work with Internet service providers to help fight such cybercrimes as money-laundering and pornography distribution. (Wall Street Journal, 25 Feb 2000) **
US AND BRUSSELS IN BREAKTHROUGH ON DATA PRIVACY: The U.S. and European Union have reached a tentative consensus on their long-standing disagreement over the EU's data privacy directive. The finer details of the agreement remain to be ironed out, but the EU has agreed to go along with the U.S. "safe harbor" proposal and has found a policy of enforcement that it is comfortable with. "We've had a breakthrough on enforcement issues with regard to data on EU subjects," said John Mogg, the EU's internal market director-general. The two sides have agreed on standards that will be used to determine if a U.S. company is eligible to be included on the safe harbor list, as well as on the penalties for companies that fail to follow the privacy rules. U.S. companies could be prosecuted under criminal law for not following the agreed-to privacy guidelines, said David Aaron, U.S. undersecretary for electronic commerce. (Financial Times, 23 Feb 2000)**
"Europe's Internet Bash" Business Week (02/07/00) No. 3667, P. EB40; (Baker, Stephen; Echikson, William): Europe is looking more like it is on the verge of having an Internet boom, while more American companies with online plans head across the Atlantic in search of new markets. Although electronic business totaled just $15 billion in Europe last year, according to International Data, that number is expected to rise to $178 billion by 2002. Entrepreneurs are now packing First Tuesday gatherings, startups are finding more than one round of venture capital, Web-based business and technology companies are launching IPOs, and consumers are starting to go online to shop for items. In the midst of this Internet frenzy, American companies that have made their way to Europe are opening offices on the continent, commissioning studies, and buying billboards in hopes of being prepared when the market is ripe--just 13 percent of Europeans now go online from their homes. Viewed as the next logical step for U.S. companies, Europe is a market that has an economy that is as large as America's, but has the potential to have 100 million more consumers. However, U.S. companies can expect some very stiff competition from their European counterparts. In fact, some already have. American Online has had to contend with Europe's telephone giants, who view themselves as being the Yahoo! and the AOL of the Internet, being able to subsidize their own ISPs. And in just months AOL saw Dixons soar past it in Britain as the number one Internet service thanks to Freeserve. Like AOL, U.S. e-commerce efforts will find European portals, ISPs, auction sites, investment sites, and the like ready to do serious battle with them. Some European industries, such as automobile makers, are already ahead of their U.S. counterparts in that they have been using sophisticated electronic links before the emergence of the Internet. A greater challenge to American companies could be the direction that the European phone companies want to take e-commerce. The phone companies want to bring mobile Internet to cell phones, and if they are able take the lead in this technology, European companies could also catch and surpass American companies in e-commerce. *
CHINA VOWS TO SHUT WEB FIRMS LEAKING 'STATE SECRETS': The Chinese government has vowed to crack down on information exchanged on the Internet, in what analysts see as an extension of the country's severe censorship and protection of "state secrets" to the Web. According to the new rules, any information conveyed via the Internet must first be viewed and approved by security forces. Those running online chat rooms must face security checks as well. The government has also demanded that corporations and individuals report the specifics about the encryption devices they possess, which most analysts see as a sign that the government intends to monitor even the most proprietary information held by private companies. Also included in the recent regulations is a ban on the hiring of "cyber-reporters" by Web sites to write exclusive stories. News stories that were not initially written and published by official news services must gain government approval before they can be transmitted on the Internet. (Wall Street Journal, 27 Jan 2000)**
"Reports Say Europeans Are Lagging in Making Purchases Over the Internet" Journal of Commerce (01/26/00) P. 19; (Atkinson, Helen): Reports from Ernst & Young and United Parcel Service both forecast healthy e-commerce gains in Europe. However, the Ernst & Young report said a top hurdle for online purchasing is shipping costs, with 54 percent of U.S. consumers complaining and 45 percent of those in Britain. Another 45 percent of British respondents cited the need to make sure items fit properly before buying. Credit card security was a big concern only in Australia, where half of those polled were deterred by security issues. Among online retailers, Ernst & Young found that 53 percent have in-house distribution centers, a quarter use third-party distribution, and 11 percent ship directly from suppliers. In the next year online spending will increase threefold in Britain, Canada, Australia, and France. The number of U.S. online consumers increased to 39 million in 1999 from 17 million in 1998, while European online consumers increased to 8.3 million from 5.2 million in the same period. According to the UPS report, technological progress is not far along, with number of daily emails in the single digits for more than half of Germans, Italians, and Spaniards. Business leaders in Britain topped Europe for daily emails, averaging 29 messages a day. Nine out of 10 have a Web site, but 35 percent have e-commerce on their sites and a mere 30 percent think the sites are useful for marketing and advertising.*
"Japanese E-Commerce Set to Explode" E-Commerce Times (01/21/00); Greenberg, Paul A. Japanese e-commerce will skyrocket in the next few years, according to a new report from Andersen Consulting and Japan's Ministry of International Trade and Industry (MITI). Already, business-to-business e-commerce in Japan has risen 420 percent since 1998, and MITI and Andersen Consulting expect this explosive rate of expansion to continue until the market reaches $651 billion in 2003. Meanwhile, Japanese business-to-consumer e-commerce is steadily expanding. Andersen predicts that the market will reach $42 billion in 2003, with automobiles, travel, and real estate each accounting for over $9.5 billion of that total. Despite the rapid expansion of online business in Japan, e-commerce services represent just 2 percent of household spending, the report says. The report names factors such as high telecommunications costs and the lack of Japanese-language Internet applications as contributors to the nation's delayed e-commerce adoption. Business-to-business e-commerce may also be hampered by Japan's distribution system of middlemen, who could lose their jobs as online systems are deployed. Firms such as Nippon Telegraph & Telephone and Sony are working to make e-commerce more affordable by introducing low-cost Internet access plans, while Vertical Net has partnered with Softbank to create a service that will launch business-to-business trading networks in English and Japanese. http://www.ecommercetimes.com/news/articles2000/000121-5.shtml *
"Slow Start in the Online Race" Financial Times (01/24/00) P. 12; (Taylor, Paul): European businessmen and lawmakers are coming to the realization that excessive telecommunications costs are stunting the growth of e-commerce in Europe. Yahoo! is the most popular Web site in the United Kingdom, followed by Freeserve, according to research from MMXI. The only other U.K. Web site in the top 10 is the BBC's site, which ranks at No. 10. All the others are American. U.S. companies are expected to spend $348 billion on e-commerce infrastructure by 2003, more than double last year's total of $153 billion, according to Internet Research Group and SRI Consulting. Still, Europe is doing some things right. Wireless mobile telephony use in Europe is higher than in the U.S. And free ISPs such as Freeserve have become extremely popular with European Internet users and have done a great deal for the e-commerce industry by getting more people online. IDC Internet analyst Stefan Elmer says the number of Europeans going online is increasing to the point that the European consumer e-commerce market will be ready to explode in one or two years. The U.S. is only slightly ahead of Europe in the use of the Internet as a basic communications and promotions tool for businesses, according to a report released this month by Mori. Europe as a whole is expected to generate 12 percent of its sales electronically by 2002. *
"Global Limits" Traffic World (01/10/00) Vol. 261, No. 4837; (Cottrill, Ken): Although many companies aspire to serve international markets through e-commerce, most are stifled by the difficulties of global distribution. In a recent Forrester Research survey, 85 percent of U.S. retailers surveyed were unable to deliver products internationally. Furthermore, the companies that do serve international markets are mostly relying on a domestic warehouse to do so, says Forrester analyst Stacy McCullough. About 40 percent of respondents listed international distribution as their largest e-commerce challenge. Although the companies reported a large number of hits on their sites from foreign buyers, the companies said they had not determined a way to deliver to these customers, says McCullough. The challenges of serving foreign markets include handling sales cycles in different countries and making timely deliveries, according to experts. Companies should measure the cost of delivering to foreign customers against the profit these customers will bring, and provide service accordingly, experts say. http://www.trafficworld.com/reg/news/logistics/l011000.html*
"E-Business Digital Divide Is European Not Transatlantic, Say Pollsters": A Mori survey of high-ranking officials at U.S. and European businesses indicates that the difference in attitudes about the Internet between the two regions is not as large as previously thought, but that northern and southern Europe are exhibiting a... http://www.acm.org/technews/articles/1999-1/1220m.html#item13*
"Not a Global Village After All?" People in different countries use the Web and make online purchases in sometimes vastly different ways, according to a nonscientific International Data (IDC) survey on e-commerce. IDC's John Gantz says, "Some of the results we had will challenge... http://www.acm.org/technews/articles/1999-1/1210f.html#item12*
NEW DOMAIN MAY UNITE EUROPE: The European Union has proposed that dot-eu be added to the list of domain names available to European companies, which are typically relegated to country-specific domains. The European Commission says it will support the creation of such a domain to foster the growth of cross-border e-commerce in the EU. The dot-com domain has become an American top-level domain, rather than a global one, says EuroISPA President Jim Dixon. The U.S. domain, dot-us, is unpopular with American companies because the address must also include a state and sometimes even a city code. Dot-eu is a perfect match for those companies that focus on Europe as a whole, rather than one European country, Dixon says. The International Organization for Standardization, which must approve the eu country code in order for it to be recognized, is reluctant to do so because the EU is not a country, but a group of countries. The Internet Corporation for Assigned Names and Numbers must also give approval to the eu code before it can become available. (Wired News 12/20/99)**
AMAZON REVERSES ON HITLER BOOK: German consumers no longer will be able to purchase Adolf Hitler's Mein Kampf from Amazon.com, under terms of a new policy announced yesterday by the company. The announcement is a departure from the company's previous policy of selling English translations of the book to German buyers; German language versions of the title are banned in Germany. Sales of the English version helped push Mein Kampf onto Amazon's top-10 list for German buyers. "It is not legally definitely clear to us what the status of the English version is," and therefore the company has decided not to ship Mein Kampf to Germany, says Amazon.com's Bill Curry. Amazon.com's decision was greeted warmly by the hate-group monitoring organization, the Wiesenthal Center. Barnesandnoble.com will, for now, continue to sell the book in Germany. (Washington Post 11/18/99)**
Bond Market Appears Wary of Amazon
NET FIRMS OFFERING FREEBIES ARE PAYING DEARLY: CONSUMERS EXPECT EVEN MORE: Many online firms are offering products for free or at significantly reduced prices in order to establish themselves in e-commerce, but experts say this business model might not be effective. For example, IWon.com, which is supported by CBS, awards $1 million each month to one of its visitors. The giveaways often require that consumers provide personal information; FamilyWonder.com last year gave a $20 check to visitors for filling out a survey and purchasing at least $20 worth of goods. However, the business model of giving away products is proving unsustainable in some instances, and some online firms have now been losing money for four or five years. Online companies typically bring in money by selling products or services, advertising, or transaction fees from sales advertisers make as a result of the site. While online companies try to compete by offering freebies and discounts, most giveaways are not successful and simply encourage consumers to seek bigger bargains, according to a Jupiter Communications study. (Los Angeles Times, 7 Feb 2000)**
Which E-Tailers Will Survive the Holiday Test?": Online companies with something unique to offer consumers have a greater likelihood of longevity, while companies that offer mundane products may not survive after the holiday e-commerce boom. To survive, e-businesses could begin positioning... http://www.acm.org/technews/articles/1999-1/1217f.html#item7*
"The Fast Track to Becoming an E-Business" E-business became a top business priority in 1999, and companies are choosing between two main approaches to e-business. The first model, called immersion, involves the gradual implementation of e-business initiatives and applications... http://www.acm.org/technews/articles/1999-1/1217f.html#item19*
"Disney Plans to Narrow Portal's Focus" Wall Street Journal (01/28/00) P. A3; (Orwall, Bruce): With Walt Disney's Go.com portal lagging far behind rivals such as Yahoo! and AOL, the company has decided that a change in strategy for Go.com is warranted. The new strategy places an emphasis on entertainment, recreation, and leisure--traditional strongholds in the Disney empire. Disney supported the launch of its Go.com site last January with a massive advertising blitz, but traffic at the site has been stagnant. Disney's strategy change was greeted enthusiastically by both investors and analysts. Areas of the Go.com site such as small business and careers could be eliminated. The recast site will provide a greater degree of information and links on topics such as music, movies, and travel, said Steve Bornstein, head of the Go.com unit. The changes to the site will be gradual and will be initiated in the spring. In related news, Go.com announced an advertising deal with Pets.com. *
"Doors Open for One-Stop Surfers" Financial Times (01/18/00) P. 10; (Nairn, Geoff): Many companies are trying to spark employee use of corporate intranets with workgroup-tailored Web pages called portals. Designed to resemble consumer portal sites such as Yahoo!, corporate portals are becoming a fast growing sector of the Internet software. Market analysts predict its worth could reach $15 billion by 2002. Many companies have thrown their weight behind intranet portal development. "In the past, Web sites were used for external communications," says NetObjects CEO Samir Arora, "but now we are beginning to see Web technology transform the enterprise from within." NetObjects' Authoring Server Suite fosters collaboration through a team-based design approach to creating a company's intranet portal. Also, Lotus and Microsoft jointly unveiled what is known as a knowledge management (KM) portal, designed to provide customized information links to corporate intranets. *
"SAP Seen Creating at Least 10 Portals for Big Companies" Wall Street Journal (12/13/99) P. B11; (Boudette, Neal E.): SAP by the end of the year expects to announce deals to build at least 10 portals for business-to-business e-commerce. The portals will manage communications and transactions between large companies and their suppliers, says SAP co-CEO Hasso Plattner. One portal will serve as a marketplace for such German chemical companies such as Bayer, BASF, and Hoechst to purchase non-production supplies. SAP will manage the portals and collect part of the revenue transacted. In five years the marketplace business could account for 10 percent to 20 percent of SAP's revenue, Plattner says. Although Plattner did not provide specific details since not all of the agreements are final, he said the deals involve major firms from Europe and the U.S. Although SAP leads the market for software that runs internal processes, the company is lagging in helping clients move to the Internet. SAP was forgotten in October when Ford chose Oracle and General Motors chose Commerce One to build portals connecting the manufacturers to their suppliers. However, Hewlett-Packard last week signed a $36 million agreement to use mySAP.com for buying transactions. "Portals May Come Unstuck in 2000, Says IBM Guru": A newfound maturity in the e-business market could cause poorly planned sites to fall behind, said IBM vice president of Internet technology John Patrick at a recent press briefing in Hong Kong. Patrick predicted that Internet startups with unstable business... http://www.acm.org/technews/articles/1999-1/1210f.html#item8*
"Lessons Learned From ERP: E-Commerce Will Feel Frictionless": The issues many companies faced in implementing ERP strategies 10 years ago can help businesses better understand today's task of moving into e-commerce, writes Bill Lipsin. ERP implementations... http://www.acm.org/technews/articles/1999-1/1210f.html#item9*
Inside IBM: Internet Business Machines": The dot-com companies may get all the glory in the Internet marketplace, but IBM has quietly become the leader in helping businesses set up shop online, executives refocus their companies' corporate strategies, and much more. About one-fourth... http://www.acm.org/technews/articles/1999-1/1210f.html#item10*
"Behind the Scenes": A wealth of new technologies aim to make e-commerce more convenient. Among these innovations is the digital wallet, which is designed to automatically fill out the online forms required upon purchase by each online site. Jupiter Communications... http://www.acm.org/technews/articles/1999-1/1210f.html#item15*
"Integrators Pursue Promising Online Tax Projects" Washington Technology (01/24/00) Vol. 14, No. 20, P. 1; (LeSueur, Steve): Internet tax filing solutions are starting to emerge all across the country. Anderson Consulting in Chicago has implemented its EasyTax solution, which company officials say could generate tens of millions of dollars in revenue. Meanwhile, American Management Systems kicks off its pilot program in February, which will be geared towards businesses. Unisys is working to create an online filing system for paying income taxes in Pittsburgh. And before making the jump to the Internet, Kansas and Hawaii are conducting e-filing over the telephone. Dataquest expect state and local governments to spend $972 million on tax and revenues systems in 2004, up from $552 million in 1999. Electronic tax filing is considered to be a major tool because it offers the immediate payment of taxes, quick refunds, a reduction in paperwork, and improved accuracy. However, the issue of people paying taxes online without having to pay credit card companies must be addressed before online tax really takes off. Experts say many people will not want to file their taxes online if they have to use their credit cards--they carry a transaction fee of about 2 percent--to do so. Unisys' Faye Farrington says credit card fees are a major stumbling block to electronic tax filing. The government's role in e-filing is another problem, the tax preparation industry would add. Tax preparation companies do not want the government to have a part in performing tax preparation services for taxpayers. Their opposition led to last year's legal squabble of H&R Block and Intuit with the California Franchise Tax Board. The companies convinced a judge to block the installation of California's e-filing service because it represented a conflict of interest for the state. Such concerns have governments moving more slowly with their e-filing plans as a result. "The changes [that e-filing could bring about] are so large and pervasive that you've got to talk to all the stakeholders," says AMS' Ross Kory. http://www.washingtontechnology.com/vol14_no20/cover/1011-1.html *
CONGRESS GETS BILL TO CONTINUE BAN ON NEW STATE TAXES ON INTERNET COMMERCE: As expected, Sen. Ron Wyden (D-Ore.) and Rep. Christopher Cox (R-Calif.) yesterday introduced their bipartisan bill to extend the current ban on new state and local Internet taxes. Meanwhile, Michigan Gov. John Engler told the Senate Budget Committee this week that he would like to see a ban on new Internet surcharges or access fees. Also, a group of congressmen are backing legislation that would permanently prohibit states from imposing e-commerce sales taxes. Sen. Pete V. Domenici (R-N.M.) criticized the anti-tax efforts, noting that potential revenue shortfalls produced by the ban on Internet sales taxes could force state and local governments to levy other forms of taxes, reduce services, or seek the federal government's help in increasing tax revenues. (New York Times, 4 Feb 2000)**
CLINTON UNVEILS $2 BILLION PROPOSAL FOR ONLINE ACCESS President Clinton yesterday revealed the details of his multibillion-dollar proposal to ensure that all Americans have equal access to the Internet. Clinton's plan to bridge the digital divide offers $2 billion in tax breaks to tech companies in exchange for their participation in the effort, $150 million in technology-training funding for teachers, $100 million for the creation of 1,000 tech centers in low-income areas, $50 million to help low-income families purchase computers, and $45 million to fund the creation of tech projects in low-income areas. In addition, Clinton's plan asks for $25 million to help the industry provide broadband service to rural and other areas, and $10 million to help train Native Americans for careers in technology. Clinton says he hopes the plan will make Internet access as common as telephone access in America. (Investor's Business Daily, 3 Feb 2000)**
TAXATION PETITION: The message below is from a prominent economist who specializes in tax policy issues. So far, he has 80 signatures, many from well known academic and government types.
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MARYLAND TO GET INTERNET PROPOSALS: The state of Maryland today will release a 23-page report detailing a massive e-commerce legislation initiative designed to put Maryland at the forefront of the e-commerce movement. The initiative will put Maryland on the map as the "e-commerce state," says Major F. Riddick Jr., chairman of the state's Internet Technology Board. The report is a tie-in to several technology bills that will be introduced during the next legislative session, says Riddick. The report calls for all state residents to receive an e-mail address at birth, privacy protections, the timely approval of the Uniform Electronic Transactions Act, and the transferal of 80 percent of state agency services online by 2004. The report also notes that the Internet Technology Board believes that e-commerce taxes "should be based on fairness and tax neutrality" and that any e-commerce taxes passed into law should be simple for online companies to handle. (Washington Post 12/09/99)**
"Will Euro Taxes Hinder Net Growth?": The U.S. Advisory Commission on Electronic Commerce, a 19-person panel studying the impact of domestic and foreign taxes on the Internet for Congress, heard debates from the Organization for Economic Co-operation and Development (OECD) and the European... http://www.acm.org/technews/articles/1999-1/1217f.html#item9*
AMAZON.COM IS GRANTED AN INJUNCTION IN BARNESANDNOBLE.COM PATENT DISPUTE: Barnesandnoble.com has been ordered by U.S. District Judge Marsha J. Pechman to halt the use of its Express Lane one-click shopping system, a potentially crippling blow, considering that the online holiday shopping season is in full swing. Barnesandnoble.com said it will shut down the system, but also announced that it will meet the demands of the all-important holiday shopping season by launching a new service within coming days. Details about the new service, Express Checkout, were not released. The judge's ruling stems from a lawsuit filed by Amazon.com in October, charging that barnesandnoble.com's Express Lane system infringed on a patent for Amazon.com's one-click system. Barnesandnoble.com plans to appeal the ruling. (Wall Street Journal 12/03/99)**
"A Big Bet on the Holidays": Internet retailers have bombarded television viewers with a slew of advertisements in the hope of making huge holiday sales. The potential for big money already is evident: over Thanksgiving weekend Amazon.com sold two and a half times as much as in the... http://www.acm.org/technews/articles/1999-1/1210f.html#item17*
"Does E-Commerce Have Anything to Offer Small Business?": E-commerce for small to midsize businesses has not developed as much as it has for large companies, but more efforts are now being made to draw smaller firms online. Small business Web sites for the most part are just static pages that contain... http://www.acm.org/technews/articles/1999-1/1210f.html#item7*
Try Our New Search Engine: Our new search engine searches both the TechNet Web site and the entire Knowledge Base. http://search.microsoft.com/us/itresources/SearchMS.asp Browse Online Support Options Support options, from free self-help to paid support, are detailed here: http://www.microsoft.com/technet/support/default.htm Customize Your View of the TechNet Home Page Personalize your home page to see articles on your favorite topics. http://www.microsoft.com/technet/announce/personlz.htm
EXECUTIVES IN TOP-DOWN DRIVE FOR WEB LITERACY: Companies are beginning to encourage their top executives to learn Web skills and to form closer ties to customers in order to prepare for an increasingly Internet-based economy. For example, British Airways recently had its directors pair up with young IT workers for two hours to create a personalized Web site and purchase items over the Internet. Still, 73 percent of British executives do not view technology as a strategic driver, according to a recent Microsoft/Cranfield School of Management study. In addition, the report shows that directors devote only 8 percent of their time to customers, despite the warning by e-commerce vendors that the Internet is giving customers more power. Microsoft's Neil Holloway advises companies to "spend time with customers every day, get a 30-year-old on your board and be a customer of your own company if you want to cannibalize your own business before someone else does." (Financial Times 11/26/99)**
FINES FOR UNSOLICITED JUNK E-MAIL STILL FACE VOTE: Legislation that would make it illegal in Maryland to send unsolicited commercial e-mail without identifying the sender will have to pass a state House committee and a floor vote before the General Assembly adjourns this week if it is to become law. The state Senate passed its version of the legislation outlawing unsolicited junk e-mail on a 44-0 vote in March. However, SB 177, which has Senate President Thomas V. Mike Miller Jr. (D) as its lead sponsor, may be held up in the House. For example, State Del. and House Judiciary Committee Chairman Joseph F. Vallario Jr. (D) has expressed some concern about the bill's penalties. The bill would allow an injured party to seek actual damages for each unsolicited commercial e-mail message or $25,000 per day that a violation occurred. Miller's legislative director Stephen Ports says the damages are no different from what other states have on their books. Moreover, SB 177 would make violations misdemeanors that are punishable with fines up to $500 and imprisonment up to one year. Eleven states already have such laws regulating unsolicited e-mail. (Daily Record, 5 April 2000) **
SENS. GREGG, KOHL TAKE AIM AT INTERNET TAXES: A pair of senators will weigh in on the issue of e-commerce taxes today by introducing a bill that would prevent state and local governments from collecting remote sales taxes from out-of-state retailers, including e-commerce companies. The bill from Sens. Judd Gregg (R-N.H.) and Herb Kohl (D-Wis.) would appear to align the senators with anti-Internet tax forces led by Virginia Gov. James Gilmore. Gilmore, head of the Advisory Commission on Electronic Commerce, will present Congress with a report tomorrow suggesting that the moratorium on Internet taxes be extended through 2006. The Gregg-Kohl bill aims to disrupt state and local governments' efforts to make their existing tax structures more conducive to collecting remote e-commerce taxes. (Newsbytes, 10 April 2000)**
FORD, TEXAS BATTLE OVER WEB SITE Ford Motor is engaging the state of Texas in a legal battle to determine the definition of an online sale. Texas argued during a court hearing Wednesday that its laws are quite clear that automobiles may not be directly sold in the state without a state franchise license, prompting Ford to argue that its cars are not truly being sold on the Internet. The matter stems from actions by state motor vehicle officials to stop Ford from advertising the sale of used cars on a Web site. Ford officials contend that Texas is hampering the growth of e-commerce. (Associated Press, 13 April 2000) **
"German Court: AOL Liable for Music Piracy" USA Today Online (04/12/00): A German court has ruled that AOL Germany is liable for the illegal trading of digital music files on its servers, a decision that could bolster the music industry's defense against piracy on the Internet. AOL Germany says it will appeal the decision, which stems from a lawsuit filed against the ISP by Hit Box, a German company that sells digital music files. "Total control of all pages on our servers is technically almost impossible," said AOL Germany's Alexander Adler, adding that such monitoring would also amount to censorship. The court's ruling underscores the need for ISP-introduced copyright-protection technologies, said Gema, Germany's top music licensing group. http://www.usatoday.com/life/cyber/tech/review/crh053.htm *
"ACLU Appeals One Ruling, Lauds Another" Newsbytes (04/05/00); (Kelsey, Dick): The ACLU and the Electronic Privacy Information Center are appealing last month's court ruling that found in favor of Cyber Patrol and precluded Internet users from publishing the "cphack" code-cracking program on the Web. The ACLU is carrying out the appeal on behalf of three Web sites that published duplicate copies of the program, which enables Internet users to access a list of Web sites that are blocked by Cyber Patrol Internet filters. ACLU Attorney Chris Hansen contends that Cyber Patrol's filtering software inadvertently blocks sites that have no business being blacklisted. Cyber Patrol does not disclose the identities of the approximately 50,000 blocked Web sites on its list, but Hansen says Internet users are entitled to know the identity of the sites. The ACLU is attempting to win a stay of the order while the appeals process is underway, and will go to a federal appeals court if necessary. The ACLU had a much more favorable opinion of another recent court decision, this one involving an Ohio court's ruling that computer-programming languages are protected by the First Amendment. Ohio ACLU Legal Director Raymond Vasvari says the ruling gives programming languages the same protections as music, scientific articles, and other varieties of "technical expression." http://www.newsbytes.com/pubNews/00/146969.html *
"E-Commerce and the Law" Maclean's Online (04/10/00); (Wood, Chris): The Mattel legal dispute with hackers involving the popular software filter Cyber Patrol underscores how difficult it will be for governments to resolve conflicts involving the Internet. In this case, Mattel filed one suit against a hacker in British Columbia, another suit against a hacker in Sweden, and then sued them both in Massachusetts. The company sued Matthew Skala of Canada and Eddy Jansson of Sweden because they posted a program on the Internet that showed the list of Web sites protected by Cyber Patrol and the registered secret passwords of adult users. In this incident, as in several others, the Internet has shown that lawmakers have some new legal issues to address. The Canadian government has tried to do just that with its new federal Personal Information Protection and Electronic Documents Act, which is likely to go into effect in January. Essentially a privacy law, the legislation would bring Canada up to par with the European Union on issues related to personal information of customers and employees. The legislation seeks to treat digital documents and electronic signatures like paper documents and signatures in ink. Companies doing business on the Internet would be required to have a formal policy for handling personal information and to name an official who would be held accountable. In addition, companies would have to disclose what they collect and why, and give Web surfers the choice not to provide personal information without having to lose the opportunity to buy goods and services. Fines would be as costly as $100,000 for failing to cooperate with investigations. Opposed by e-commerce and privacy advocates, the bill is even more controversial because it would set a precedent by allowing provinces to enact laws that mirror the federal requirement. Some provinces are working on matching legislation but none have been presented as of yet. Nevertheless, the issues addressed in the Canadian legislation may not fully apply to a case like Mattel's. http://www.macleans.ca/pub-doc/2000/04/10/Technology/32979.shtml *
"House OKs Cyber Rules" Baltimore Sun (03/29/00) P. 1D; (Wheeler, Timothy B.): The Maryland House of Delegates, led by Del. Kumar P. Barve (D-Montgomery County), recently voted 83-50 to approve the Uniform Computer Information Transaction Act, a controversial bill that establishes rules for software purchases, including those made over the Internet. Barve said lawmakers had tweaked the bill to give Maryland consumers more rights regarding software purchases than any other U.S. state. However, critics of the bill noted that most lawmakers did not have even 24 hours to examine the bill, and they contend that the bill lacks sufficient consumer protections. Del. Elizabeth Bobo (D-Howard County) warned that the bill could make Maryland "the laughingstock of e-commerce society across the nation." Maryland lawmakers see the law as a key to fostering the growth of the state's technology industry. The state's House Economic Matters Committee marked up the bill to give consumers greater protections, including software refunds. The terms of the bill also bar software companies from electronically repossessing software from consumers. But the bill does give software companies an advantage by enabling them to request that consumer lawsuits be held in the states they operate from. "The bill doesn't guarantee that Maryland consumers will be protected by Maryland law," said Steven Sakamoto-Wengel, an assistant Maryland attorney general. State librarians are worried that the bill would interfere with library patrons' ability to copy and exchange electronic data. *
"Software Law Could Be a Hard Sell" USA Today (03/29/00) P. 3D; (Zuckerman, M.J.): Although several states are moving to follow Virginia's lead in passing the Uniform Computer Information Transaction Act (UCITA), the bill is surrounded in controversy. Even as Virginia's legislators passed UCITA, they decided to postpone the measure from becoming law until 2001 while they study and revise the bill. High-tech firms such as Microsoft and AOL pushed aggressively for UCITA, and Virginia Gov. Jim Gilmore (R) approved the bill on March 14, in a move many people view as an effort to pass the bill before Maryland. Consumer groups are concerned that companies might be able to choose the laws of any state to govern their software licenses, so all software companies could apply the Virginia law to their contracts. Critics of UCITA say the bill provides manufacturers with too much power, essentially giving software makers permission to make poor-quality software. Meanwhile, opponents say UCITA offers little recourse for consumers. The bill would allow manufacturers to enforce licensing terms that appear on the screen while users are installing software, and which few people read, consumer groups say. The terms of these licenses could be used by manufacturers to remotely disable a user's software, critics say. Meanwhile supporters say the bill would give consumers a better understanding of their rights. http://www.usatoday.com/usatonline/20000329/2083211s.htm *
"Congress Moves Forward on E-Signatures" Newsbytes (03/29/00); MacMillan, Robert The path to reconciliation of competing House and Senate digital signature bills has been cleared of obstacles by the Senate's appointment of members to a conference session on digital signatures. The Senate version of the bill is considered more conservative than the House version, the Electronic Signatures in Global and National Commerce Act. A compromise bill will be voted on before being sent to the White House. Conference appointees consist of 10 Republicans, including Sens. John McCain (R-Ariz.) and Orrin Hatch (R-Utah), and seven Democrats, including Sens. Fritz Hollings (D-S.C.) and Patrick Leahy (D-Vt.). The inclusion of Leahy is considered key; Democrats had been upset that Republicans had been excluding Leahy and others from discussions on the issue of digital signatures. http://www.newsbytes.com/pubNews/00/146562.html *
ROLLING THE DICE: During the coming weeks, Congress will consider the Internet Gambling Prohibition Act, a proposal making it illegal to use the Internet for gambling transactions. Passage of the bill would force more than 700 online casinos in operation worldwide to close down and eliminate a $1.2 billion virtual gaming industry. However, the proposed legislation does not ban state-regulated online gambling operations, such as lotteries, horse and dog racing, and jai alai. Some supporters of the act, including state attorneys general, and various racing and jai alai organizations, say such exemptions are included out of deference to existing state sovereignty in gambling-related matters. Meanwhile, other backers, including the NCAA, which thinks online gambling threatens the integrity of its games and the financial habits of college students, are willing to accept provisional legislation rather than no legislation at all. An assortment of family values organizations refuse to accept such provisions and have withdrawn their support for the bill. Opponents of the bill believe the "sweetheart carve-outs" are the result of political maneuvering and will do more harm than good. (Legal Times Online, 14 March 2000)**
"Spam Strikes Back" E-Commerce Times (03/16/00); (Enos, Lori): Internet and legal experts are questioning a judge's dismissal of a case brought by the Attorney General of Washington against an Oregon man who was accused of spamming. Among them is Alan Schwartz, who co-authored the book "Stopping Spam." In an interview with E-Commerce Times, Schwartz addressed the interpretation of King County Superior Court Judge Palmer Robinson, who ruled that the Washington anti-spam law violates the interstate commerce clause of the U.S. Constitution. Schwartz suggests that Robinson should not have equated sending spam with interstate commerce because spamming does not involve a commercial transaction. Meanwhile, Ian Oxman, president of ChooseYourMail.com, took issue with Robinson's interpretation that Washington's law was "unduly restrictive and burdensome" to Jason Heckel, the man accused of spamming Washington residents. Oxman argues that if that burden is not placed on the spammer, then it will be placed on consumers and ISPs. Spam is not the same as traditional junk mail, anti-spam advocates note, because the financial burden is placed on the consumers and ISPs that receive the spam. Although Schwartz says legislation should remain at the state level, Oxman says Robinson's ruling shows that there is a need for federal legislation with the varying and conflicting anti-spamming laws that states have enacted. Four federal laws have been proposed thus far. However, Jerry Cerasale, senior vice president of the Direct Marketing Association, believes it would be best if technology companies policed themselves. Even with Robinson's ruling, computer users will not be inundated with spam because ISPs across the country make spamming illegal for their customers. http://www.ecommercetimes.com/news/articles2000/000317-2.shtml *
"Furor Over Virginia E-Biz Law" Wired News (03/15/00); (McCullagh, Declan): Virginia Governor James Gilmore signed the Uniform Computer Information Transaction Act (UCITA) into law on March 14--though it will not take effect until mid 2001--and consumer activists, computer scientists, and librarians are protesting the new legislation. UCITA, which regulates e-commerce and "shrink wrap" software licenses, was drafted by software and hardware companies that have been lobbying states to adopt it. Virginia is the first state to accept UCITA; Gilmore says its increase in electronic transactions will perpetuate the Internet revolution and promote e-commerce, as well as strengthening the growth of the state's technology and manufacturing economies. So far, those opposed to UCITA are fragmented, but their protests seem to be gaining momentum--the Consumer Project on Technology has condemned the act for allegedly giving businesses more rights at consumers' expense, and the Linux community is afraid that UCITA will increase open-source software developers' legal liability. GNU Project founder Richard Stallman says the commercial software companies that make proprietary software will avoid liability through shrink-wrap licenses, while self-employed contractors and amateurs will be hit hard. UCITA has been introduced in a number of states and is supported by Microsoft and the Business Software Alliance, among others. http://www.wired.com/news/politics/0,1283,34947,00.html*
CURRENT LAW FIGHTS CYBER-THEFT BEST: Business Software Alliance President Robert W. Holleyman II is urging Congress to forgo the introduction of additional online piracy legislation and instead rely on existing laws such as the No Electronic Theft Act to fight the theft of intellectual property in cyberspace. The piracy of software over the Internet "threatens to dwarf all other forms of piracy," said Holleyman. Holleyman also called on the United States to adopt the World Intellectual Property Organization's copyright treaties. Piracy losses across the globe amount to $11 billion per year and cost the nation nearly $900 billion in lost taxes. (Newsbytes, 9 March 2000)**
"Would-Be Cyber-Champions in Web Frenzy" Hill (03/08/00) Vol. 7, No. 10, P. 18; (Porteus, Liza): Members of Congress are becoming more responsive to a growing public clamor for federal regulation of the Internet, partnering with one another to determine how best to ensure the security of Web transactions without dampening the entrepreneurial spirit of the Internet. Republican congressional politicians have formed the House Republican Cyber-Security Team to work with the House Subcommittee on Crime and the House Republican Conference's Subcommittee on Government Management, Information and Technology to educate communities on Internet security issues and guarantee that any federal laws passed include sufficient punishments for Web hackers. Also, the House passed a measure to give the government a larger role in technology-related research projects. Congressional senators have held hearings to discuss the security of the federal government's information systems; introduced the Government Information Security Act, designed to place more responsibility for Internet regulation in the hands of the Office of Management and Budget; and lobbied for greater FY2000 budget funds for programs to protect federal computers. Rep. Jim Moran (D-Va.) of the Defense Appropriations subcommittee said that although most hacker activity to date has been relatively harmless, cyber attacks "could be the greatest threat we face." *
"The Bots That Bind: Digital Age Contract Law" Upside Today (03/07/00); (Jolish, Barak D.; Reyna, Jeffrey W.): The Uniform Computer Information Transactions Act (UCITA), aimed at changing contract law by defining standards that apply to transactions in "computer information," is a controversial proposal that has been enacted by Virginia and is being considered by other states. UCITA includes many provisions that critics say give the software industry too much control over their products. The law could have a broad impact even if all 50 states do not approve the measure, because "choice of law" clauses would allow software firms to pick any state's laws to govern their contracts. UCITA would make mass market licenses (MMLs), also known as shrink-wrap licenses, enforceable. In the past, no law formally validated shrink-wrap licenses, although some courts found that the licenses were enforceable. Consumer advocates and other critics say UCITA's shrink-wrap laws give software firms too much freedom, allowing them to disclaim responsibility for known glitches. Meanwhile, UCITA advocates say the law benefits consumers by forcing vendors to prominently display such disclaimers. Another controversial aspect of UCITA is a provision that would let vendors remotely shut off software if the user is in "material breach" of contract. Opponents say this provision would allow vendors to abuse their power over customers by threatening to disable their software, while proponents note that vendors must follow a strict set of rules before shutting off access. Another concern about UCITA is that it would let vendors write contracts that would prohibit reverse engineering of their products, making it difficult for developers to build compatible products. http://www.upside.com/texis/mvm/upside_counsel?id=38c41cee0 *
"Virginia Law Standardizes Internet Contracts" EE Times Online (03/01/00); (Leopold, George): The Virginia General Assembly last month passed the Uniform Computer Information Transactions Act, a measure that intends to standardize commercial provisions for Internet contracts, including software licenses. The measure, the first of its kind to receive state approval, awaits only Gov. James Gilmore's signature before it becomes law. Gilmore is not expected to sign the measure until assessments on the bill's impact are completed. The passage of the measure is expected to prompt a raft of similar legislation from other states. The states of Maryland, Hawaii, Oklahoma, and Illinois are already working on measures that address standardized Internet contracts. The Virginia bill has set off a contentious debate among its supporters, including the software industry, and its detractors, composed of engineering groups, consumer groups, and a number of state attorneys general. Consumer groups argue that provisions in the bill will force consumers to adhere to hidden licensing agreements, but Jane Johansen, software-law expert at the Drinkard Biddle law firm, says warranties in the bill could also increase the likelihood that consumers will receive refunds on software returns. Mark Pullen, vice president of technology policy at the IEEE-USA, claims the legislation would prohibit software engineers from engaging in reverse engineering. http://www.techweb.com/wire/story/TWB20000301S0013 *
"CIOs Join Fight to Kill UCITA" Computerworld (03/06/00) Vol. 34, No. 10, P. 1; (Thibodeau, Patrick): CIOs in Virginia are working to fight the adoption of the Uniform Computer Information Transactions Act (UCITA), a law that critics believe favors software vendors at the expense of consumers. Virginia's governor is expected to soon approve UCITA, making the state the first to pass the law in an effort to become a high-tech leader. UCITA outlines buyer and seller rights on issues such as shrink-wrapped licenses and vendor liability for faulty software. Critics such as Reynolds Metal CIO John Rudin, who mobilized Virginia's CIOs against UCITA, say the law provides vendors with too much control over contracts. Rudin's efforts succeeded in postponing the law's implementation until July 2001, after a group of users and vendors examines the law. One way UCITA favors vendors is with a "self-help" provision that permits vendors to turn off software remotely, essentially allowing vendors to hold users hostage with the threat of shutting down programs, Rudin says. UCITA supporters note that UCITA is merely a set of default rules that companies in special circumstances are free to change. However, Principal Financial Group director of corporate purchasing Randy Roth says he is already restricted in his ability to negotiate with large vendors once the vendor knows that its product is mission-critical. Meanwhile, UCITA supporters say the law provides uniformity to software licenses and gives early adopters a high-tech edge since vendors will need to establish a physical presence in the state to apply UCITA's provisions. However, UCITA opponent and lawyer Cem Kaner says the way the laws will be applied is unclear and likely subject to judicial interpretation. http://www.computerworld.com/home/print.nsf/all/000306F3AE *
"The Great Amazon Patent Debate" Newsweek (03/13/00) Vol. 135, No. 11, P. 74; (Levy, Steven): Amazon.com founder Jeff Bezos and his company are finding themselves the targets of criticism due to Amazon's patent on its "1-Click" technology and the patent infringement lawsuit it filed against barnesandnoble.com. Amazon is following the model of traditional businesses in patenting its concept, but many Internet observers believe that, in the open-system tradition of the Internet, Amazon should share its innovations. Internet expert Tim O'Reilly, along with others, thinks that the government gives unwarranted protection to unoriginal ideas, and he believes that companies should share conceptual innovations instead of patenting questionable breakthroughs. Bezos counters this idea with the fear that other big companies will get an edge and crush the online bookseller. O'Reilly insists that giving 1-Click away would gain Amazon public approval; as it is, thousands of people agree with O'Reilly as expressed on various Web sites, and some have decided to boycott Amazon. Bezos insists that 1-Click was not obvious when it was patented, and points out that there are other companies that are much more possessive of innovations. *
"When the Internet Moves Faster Than the Courts" New York Times Online (02/25/00); (Kaplan, Carl S.): Internet-related law cases pose a problem to higher courts because the facts as determined by a trial court are often rendered obsolete by the time a case can be reviewed by higher judges, according to an article by Stuart M. Benjamin, associate professor at the University of San Diego Law School. In his article, "Stepping Into the Same River Twice; Rapidly Changing Facts and the Appellate Process," which appeared in the December issue of the Texas Law Review, Benjamin cites the Reno v. ACLU dispute as a case in point. In that case, which concerned the regulation of indecent content on the Internet, roughly a year passed between an initial ruling from a district court and the Supreme Court's decision on the matter. In challenging the law, the ACLU had argued that it was not economically viable for some Web sites to use age verification systems to keep children from viewing inappropriate content. By the time the case went to the Supreme Court, technological advances in age verification systems invalidated that argument. If appealed, the Microsoft antitrust case could also be affected by this lag time, Benjamin says. The Supreme Court would not be able to review the Microsoft case until 2002, during which time the level of integration between operating systems and browsers is likely to change enough that they are no longer separate products, as the presiding judge contends in his findings, Benjamin says. The speed of the Internet gives appellate courts little choice but to update their facts with additional briefs, exhibits, and hearings, according to Benjamin. http://www.nytimes.com/library/tech/00/02/cyber/cyberlaw/25law.html *
MAJOR COPYRIGHT HOLDERS TEAM UP TO LOBBY CONGRESS ON PIRACY: An alliance of some 30 groups and associations have announced plans to fight piracy on the Internet by creating the Copyright Assembly, a lobbying group that will "preserve, protect, and defend the sanctity and concept of copyright from all intruders." Members of the alliance include the Motion Picture Association of America (MPAA), the American Association of Advertising Executives, NASCAR, the National College Athletic Association, the Recording Industry of America, and the Newspaper Association of America. The group announced its intentions in a letter to Congress, without recommending legislation on the matter of online copyright protection. Addressing the issue of Internet TV broadcasts last week, MPAA President Jack Valenti cautioned against the hasty implementation of legislation. (New York Times Online, 22 Feb 2000)**
"States Review Commerce Law" Interactive Week (02/14/00) Vol. 7, No. 6, P. 10; (Brown, Doug): Supporters of the Uniform Computer Information Transactions Act (UCITA) say it will bring order to the legal environment around electronic information, especially intellectual property, copyright, and contract law. These supporters include software companies, who say the law would release the full potential of e-commerce. However, opponents of the act say it will allow software developers to write their own laws on intellectual property and would put more strength in the fine-print contracts already in place. American Library Association legislative counsel Miriam Nisbet points out that the enforceability of the contracts is already questionable as well as often at odds with copyright law. Nisbet says libraries worry that the UCITA will give software companies the legal basis to forbid the lending of software to borrowers, among other things. The UCITA was to be part of the Uniform Commercial Code but was not endorsed, so the National Conference of Commissioners on Uniform State Laws passed it separately. Then 24 state attorneys general joined the FTC in expressing concern about the language of the act. Software companies are pushing hard for the adoption of the UCITA in state legislatures. Business Software Alliance vice president Becca Gould says consumers and software companies can litigate legal issues and gradually build a body of case law, or write the law first. But Association of Computing Machinery President Barbara Simons points out that the UCITA removes liability from software engineers for their products. *
"Virginia Legislature is 1st to Approve Model Net Law" Recorder/Cal Law (02/17/00); (Sandburg, Brenda): The Virginia legislature has become the first in the nation to adopt the Uniform Computer Information Act, a controversial bill that aims to give uniformity to software contracts. Both the House of Delegates and the Senate approved the Internet industry-friendly legislation on Tuesday. The act is also under consideration in Maryland, Hawaii, Illinois, and Oklahoma. The Motion Picture Association of America, which has stated its opposition to the act, says it favors the version of the bill produced by the Virginia legislature, according to John McCabe, the legislative director of the National Conference of Commissioners on Uniform State Laws. The Virginia bill does not cover transactions among companies in the industry, McCabe says. *
Michigan Moves Against DoubleClick (http://www.nytimes.com/library/tech/00/02/cyber/articles/18doubleclick.html) By JERI CLAUSING: Already under investigation by the federal government and the State of New York, the online advertising giant DoubleClick was accused of violating Michigan's consumer protection laws. In CyberTimes
Can Cookies Act as Stalkers? (http://www.nytimes.com/library/tech/00/02/cyber/cyberlaw/18law.html) By CARL S. KAPLAN: Under Texas law, a person who follows another person around repeatedly in a way that is calculated to cause the victim to fear for his safety is guilty of the crime of stalking. In the Internet age, can the law be applied to a Web site?
ONLINE GAMBLING PROVOKES INTERNET TEST CASE: The future of the online gambling industry could be at stake in a case pitting the U.S. against an Antigua-based online casino that has been charged with violating a U.S. law prohibiting telephone-placed bets across state or federal borders. Jury selection for the case begins today. Countries all over the world will be following the case because it holds ramifications on the issue of national jurisdiction, says Internet lawyer Jim Halpert of Piper Marbury Rudnick & Wolfe. Documents for the case state that the U.S. is legally within its rights to reach beyond its borders in criminal cases that harm U.S. citizens and involve an "interstate wire communication facility." "Where a bet is 'placed' physically, conceptually, or otherwise simply does not matter for purposes of prosecution," the documents state. However, Internet legal analysts contend that the matter of jurisdiction is not so cut-and-dried. (FT.com, 13 Feb 2000)**
CANADIAN WEB SITE CARRYING U.S. SHOWS IS CLOSED AS JUDGE AWAITS ARGUMENTS: Judge Donald Ziegler of the U.S. District Court in Pittsburgh granted a temporary restraining order shutting down Canadian Web site iCraveTV.com, which had been accused in two lawsuits of stealing programming from American TV networks and offering it as content on its site. One lawsuit that was filed by the Motion Picture Association of America, CBS, ABC, and Fox claimed that iCraveTV engaged in one of the largest intellectual property thefts in U.S. history. The other lawsuit was filed by the National Basketball Association and the National Football League. ICraveTV cannot continue operating until it shows that it is capable of preventing U.S. Internet users from accessing the site, according to the terms of Judge Ziegler's order. ICraveTV's CEO said the company would look at all its options, including the possibility of using a stronger security system to keep U.S. Internet users from accessing the site. (Wall Street Journal, 31 Jan 2000)**
BRITISH ISPS CRACK DOWN ON HATE: The Internet Watch Foundation (IWF), a self-regulating agency funded by British ISPs, has announced that it will begin rooting out illegal hate speech on the Internet. The IWF was initially created in 1996 as part of a deal between the Internet industry and the government to battle child pornography online. The new focus on hate speech expands the agency's watchdog role, and although companies are not legally required to acquiesce to its requests, those that do will be immune from governmental prosecution. The IWF has set up a hotline, and will investigate all complaints it receives to gauge whether the offending speech is actually illegal under British law. The agency's expanded role is seen by many as part of the British government's attempt to make the country more attractive for e-commerce. However, civil liberties groups say the IWF is essentially a censorship organization enforcing politically correct speech in an area where the law is extremely fuzzy. Even the IWF admits that there is a lot of gray area and confusion surrounding British hate speech law, and it plans to lobby the government to create clear, concise regulations governing such speech. (Wired News, 25 Jan 2000)**
AMAZON REVERSES ON HITLER BOOK: German consumers no longer will be able to purchase Adolf Hitler's Mein Kampf from Amazon.com, under terms of a new policy announced yesterday by the company. The announcement is a departure from the company's previous policy of selling English translations of the book to German buyers; German language versions of the title are banned in Germany. Sales of the English version helped push Mein Kampf onto Amazon's top-10 list for German buyers. "It is not legally definitely clear to us what the status of the English version is," and therefore the company has decided not to ship Mein Kampf to Germany, says Amazon.com's Bill Curry. Amazon.com's decision was greeted warmly by the hate-group monitoring organization, the Wiesenthal Center. Barnesandnoble.com will, for now, continue to sell the book in Germany. (Washington Post 11/18/99)**
WEB SITE RESTRICTED FROM POSTING NEWSPAPER ARTICLES: A preliminary ruling by a U.S. district court judge rejected an argument from conservative Web site Freerepublic.com that its posting of newspaper articles copied without permission was covered under the U.S. "fair use" doctrine. "Fair use" allows copyrighted works to be duplicated in certain cases, such as when the works are the subject of review or commentary. The Los Angeles Times and the Washington Post had filed a copyright infringement lawsuit last year against the site, alleging that Free Republic's activities had damaged the newspapers' own Web sites, which charge $1.50 to view archived articles that Free Republic was posting for free. The newspapers pointed out that Free Republic could have just provided a link to the articles, which would not be an infringement of copyright, but Free Republic argued that would impose a significant inconvenience on users. The case is scheduled to go to trial next June. Ifra analysts note that the newspapers' lawsuit seems to be part of a trend of increased efforts by publishers to defend editorial assets in the emerging information economy. (Los Angeles Times 9 Nov 99) http://www.latimes.com/**
CHILDREN CHOOSE WEB SURFING OVER CHANNEL SURFING: A joint AOL and Roper Starch study of 500 children between the ages of 9 and 17 found that 63 percent of the youth surveyed would rather surf the Web than watch television, while 55 percent prefer being on the Web to being on the telephone. The study also polled 1,000 adults, 42 percent of whom say they buy merchandise on the Web, up from 31 percent in last year's survey. Internet rookies are averaging 6.6 hours a week online, while those with three years of Internet experience stay online an average of 10.5 hours per week, the study found. Both children and adults say they use the Internet to compose letters, chat in real time, play games, and download music. Children between 9 and 11 years old go online an average of three days per week, while those between 15 and 17 years old go online an average of five days per week. Two thirds of adults and children surveyed said they would prefer a computer with access to the Internet rather than a television or phone, if stranded on a desert island. (C|Net 11/11/99)**
E-PUBLISHING CHALLENGES THE GATEKEEPER MODEL: Emerging Web publishers are finding many benefits to online publishing as digital-rights technology matures, and even some traditional publishers are now moving toward the Web. Online publishers such as Fatbrain.com and Ebookstand.com are selling copyrighted digital works, giving writers more control in the process. Using digital-rights technologies, writers can generate portable, customizable works with royalty protection. In addition, writers can reduce time, overhead costs, and distribution restrictions by publishing online. In an effort to keep up with new publishing models, traditional firms such as Bertelsmann, Houghton Mifflin, Macmillan USA, and others are teaming with technology firms such as Xerox, Hewlett-Packard, Reciprocal, and Fatbrain. By publishing online, companies can almost eliminate publishing and distribution costs aside from marketing expenses. Web publishing offers higher sales volumes, wider market exposure, a larger selection of titles, lower warehouse expenses, and increased cash flow, says Xerox's Peter Perine. Furthermore, publishers are able to offer out-of-print titles, reprints, and short works at a low cost by using books-on-demand printers. (InfoWorld 11/08/99)**
GLOBAL E-CONSUMER RULES PROPOSED: The Organization of Economic Cooperation and Development (OECD), which represents 29 countries including the U.S., has almost finished creating consumer protection guidelines for e-commerce. The group has been working on the guidelines for the past two years, and a final version of the rules might be adopted by the end of the year. Federal officials say the guidelines will boost e-commerce by encouraging consumer confidence, while industry officials say the rules are possibly too specific and do not address emerging technologies or services such as online auctions. The guidelines aim to form common e-commerce standards in different countries and call for an organization similar to the Better Business Bureau to resolve conflicts. Although the guidelines are voluntary, OECD member nations often convert the group's recommendations into law. (Computerworld 10/25/99)**
SIGNATURES ON CYBERSPACE'S DOTTED LINE: Congress is in the process of deciding how different e-commerce practices will affect consumers. Generally agreed upon is the benefit of legally recognizing signatures sent over the Internet by digital technologies including encryption, fingerprint readers, and stylus pads. However, at issue is whether Congress will amend certain notification rules that businesses such as banks and insurance companies are now required to follow. Currently, if an insurance company wants to cancel a client's policy or change the premium it must first notify the policy holder by mail. Yet a bill proposed by Sen. Spencer Abraham (R-Mich.) aims to allow companies to notify clients via e-mail or by posting notification on a company bulletin board. Some consumer advocates feel that the proposed type of notification is insufficient and advocate continued notification via traditional mail. Proponents of the bill say electronic notifications would lower the cost of businesses, which consumers would see in the form of reduced prices. (New York Times 11/01/99)**
U.S. E-COMMERCE SOARS BY 127 PERCENT: Electronic commerce for the first quarter of this year leaped 68 percent higher than the same period last year, according to a study conducted by University of Texas researchers and paid for by Cisco Systems that was released on Oct. 27. The researchers concluded that as sectors of the Internet economy--such as prescription drugs and groceries--grow, they inevitably will steal market share from traditional storefronts, which will cause fundamental changes to affected industries. The study also showed that e-commerce companies created 400,000 new jobs during the one-year period. Despite the obvious differences between the traditional economy and the Internet economy, the researchers discovered that small business drives growth in both areas; during the year in question, the top 10 Internet companies only controlled 27 percent of the $507 billion in total revenues for Internet-related companies. (E-Commerce Times 10/27/99)**
ACTIVISTS DECRY BILLS ON 'DIGITAL SIGNATURE' Consumer groups are up in arms over two bills in Congress, the Millennium Digital Commerce Act and the Electronic Signatures in Global and National Commerce Act, that would give digital signatures equal legal footing with traditional signatures. The bills, one in the House and one in the Senate, undermine the effectiveness of state consumer-protection laws and do not provide the same consumer protections as those given to traditional paper records. The Senate bill leaves out key state and federal consumer protections and interferes "with a state's rights to protect its own consumers, without imposing any protections against misuse, mistake, or fraud," says a letter from the National Consumer Law Center. The White House has soured on the Senate bill due to the effect it will have on consumer protections and regulations, while Commerce Department General Counsel Andrew J. Pincus says both the House and Senate versions would have a devastating effect on state and federal consumer protections. "Unscrupulous people" will be able to use the bills to their advantage by preying on online consumers, leading to a loss of consumer confidence in the Internet, predicts Pincus. (Washington Post 10/29/99)**
IN EUROPE, SURFING A WEB OF RED TAPE: Europe's e-commerce economy is being held back by rules of the traditional economy, including tax laws and regulations. Roughly 16 percent of Europeans are using the Internet, a jump of 10 percent over figures from just two years ago. Still, European Union rules are restricting the growth of auto sales on the Web, as are German laws that severely restrict retailers ability to offer price discounts. So far, European politicians have been good at giving lip service about bringing down the barriers to a European-wide e-commerce economy but have produced little in the way of action. German, French, and Dutch price-fixing schemes are holding up online book sales. The outdated cartel system has the support of Bertelsmann's BOL.com subsidiary. Reverse auctions, such as the model established by Priceline.com, are outlawed in Germany. One side effect of Europe's tangled e-commerce restrictions is that Europeans are doing their online shopping at U.S.-based Web sites. (Wall Street Journal (10/29/99)**
MICROSOFT JOINS TELMEX TO BUILD INTERNET PORTAL FOR HISPANICS: Microsoft and Telefonos de Mexico (Telmex) yesterday announced a joint venture to build the hemisphere's largest Spanish-speaking Internet portal. Carlos Slim, Telmex's largest shareholder, also holds stakes in computer retailer CompUSA, online music retailer CDNow, and the majority share of Prodigy Communications. The venture, which will begin Dec. 1, will team Telmex's Internet access expertise with Microsoft's portal technology to compete with a fast-growing number of Internet providers for a share of the forecasted 10 million Net users in Central and South America. Microsoft and Telmex are also targeting the 8 million to 10 million Spanish-speakers in the U.S. and Canada. "Telmex will try to expand its access business in Latin America, which we estimate will be an additional 30 million Internet users in the next three to four years," says Microsoft's Mauricio Santillan. (Wall Street Journal 10/19/99)**
HEAVY TRAFFIC CRASHES BRITANNICA'S WEB SITE: Encyclopedia Britannica's Web site crashed Tuesday when more than 10 times the expected number of people tried to visit the site after the company announced that it was providing a free online version of its encyclopedia. The site, www.britannica.com, features the company's entire 32-volume encyclopedia set as well as articles from 75 magazines. It was developed as an attempt to regain prominence in the encyclopedia business after IT companies such as Microsoft, which offers digital encyclopedias, caused sales to erode from Britannica's high of $650 million in 1989. Many analysts insist Britannica was too slow to adapt to the online world and say that the company may have lost its opportunity to compete. Britannica provides the site to the public free of charge and aims to earn money by selling ads on the site's many pages. (Los Angeles Times 10/20/99)**
BUSINESS-TO-BUSINESS SALES SET TO SOAR: Business-to-business e-commerce will grow tremendously in the next several years, bringing significant change to most industries, experts say. By 2000, business-to-business e-commerce in the U.S. will reach $251 billion, jumping to $1.4 trillion by 2003, compared with $19 billion in 1997, according to Forrester Research. Consumer e-commerce, by contrast, will reach only $41 billion by 2002, Jupiter Communications says. The main factor driving e-commerce among businesses is the emergence of more advanced software that has encouraged more companies to move online. Increasing competition and globalization are also fueling e-commerce growth. Financial opportunities have led many businesses online, as e-business facilitates procurement, auctioning, advertising, and e-commerce. The computing and electronics industries are likely to change the most as a result of e-commerce by 2003, according to Merrill Lynch. Other industries that will be significantly affected by e-commerce include utilities, shipping and warehousing, petrochemicals, and motor vehicles. (Financial Times--Electronic Business 10/20/99)**
INTERNET STRATEGY BECOMES A MUST AT THE TOP: Executives looking to become CEO of their respective companies need to be proficient in the Internet, much like current CEOs were expected to be knowledgeable of PCs and mainframes when they took office. General Electric is an example of this scenario: company chairman and CEO John F. Welch was appointed head of GE in 1981, long before the existence of the World Wide Web. When Welch retires at the end of next year, his replacement will be expected to know the Internet, especially since the company has made e-commerce a company-wide goal. American Standard, a manufacturer of bathroom fixtures and air conditioning equipment, recently began selling its products to distributors via the Internet and revealed that Allied Signal President Frederic Poses will replace Emmanuel A. Kampouris, CEO of American Standard, when he retires next year. Before American Standard decided to select Poses for the position of CEO, it told all the contenders that investment in the Internet was essential, even if it reduced quarterly earnings. Allied Signal's involvement in the Internet was one of the reasons Poses was selected from the group of candidates. (New York Times 10/20/99)**
AN EXPANDING EDUCATION "PORTAL" SITE CUTS A DEAL WITH YAHOO!: Hungary Minds, an Internet portal site, last month inked deals with the University of Maryland, UCLA Extension, Monster.com, and iVillage, and has now arranged to have an exclusive button on Yahoo!'s education site. Hungary Minds is designed to be an education site where one evening a person can research for a Ph.D. and the next night learn how to fly fish, says CEO Stuart Skorman. He says, "Any individual person can make a course and offer it through our site." Hungary Minds reserves the right to reject courses it deems unsuitable such as courses on how to construct a nuclear weapon or those with high sexual content. Robert E. Myers, the senior vice-president for policy planning and administration at the University of Maryland, says the school and Hungary Minds have entered into a "reciprocal revenue" agreement whereby Hungary Minds will pay the university whenever a visitor is sent to the Hungary Minds site from the University of Maryland site and visa versa. (Chronicle of Higher Education Online 10/19/99)**
ENTER THE ELECTRONIC EMPLOYEE: Although e-business is often more efficient than conducting manual processes, companies must be careful to consider costs related to technology maintenance and labor. Online technology cut $15.2 billion from corporate cost structures in the U.S. in 1998, while annual savings will reach $600 billion in 2002, according to Giga Information Group. Yet the cost of maintaining and supporting an extensive e-business site could top several million dollars annually, eating for the first year or two into the savings companies otherwise enjoy, says IBM's John Swainson. A smooth transition to new technology and a comprehensive strategy for unionized workers are necessary to gain from cost savings. A switch to automated processes can often result in a labor reduction, which can be costly for companies with unionized workers. While a variety of methods can be used to reduce the impact of labor reduction, a common option is to retrain existing employees to perform jobs in different areas. (CFO 10/99)**
INCREASINGLY SLOW INTERNET WILL HURT E-COMMERCE: E-commerce will be hampered by the slowness of the Internet, which will most likely keep getting slower in coming years, according to a recent study by Northeast Consulting Resources. Another report by Zona Research shows evidence that long Web page download times are costing companies billions of dollars. After waiting eight seconds for downloading a Web page, Zona found that over 33 percent of Internet consumers stop trying the download and give up. Consulting firm Keynote measured the performance of 40 top e-commerce Web sites, starting in 1996. The results showed that faster Web sites use content distribution services, which increase the speed of downloading Web pages. These services deliver Web pages from the nearest server to a consumer's location, bypassing router hops. (E-Commerce Times 10/14/99)**
INFORMATIONWEEK 500: IT EXCELLENCE: As 1999 draws to a close, businesses are completing Y2K efforts and turning their attention to new IT projects, especially e-business initiatives. InformationWeek notes this trend in the 500 companies the magazine selected as the most innovative technology users based on a survey of IT usage conducted in May and June. Of the IT managers responding to the survey, 97 percent listed e-business as their top business, organizational, and technology priority for the next 12 months. In terms of strategic technology priorities, electronic commerce and intranet or enterprise portals topped the InformationWeek 500's list. Intranets and corporate portals are being more widely used for a larger range of applications, such as human resources, training, customer service, management, decision support, marketing and sales-force automation, workflow, and ERP. The chosen firms reported that they now obtain an average of 21 percent of total revenue from e-business. In addition, more companies are now offering online customer service and are working to better serve customers through Web efforts, data warehouses, and CRM systems. Customer satisfaction is now one of the key measures of the value of an IT investment, cited by 81 percent of IT managers. (InformationWeek 09/27/99)**
SURVEY: 65 PERCENT OF COMPANIES DON'T HAVE E-COMM STRATEGY: The recent E-Business & Technology Survey conducted by the Cutter Consortium indicates that 65 percent of businesses lack an overall e-commerce strategy, and almost a fourth of companies do not have a basic business and implementation plan for e-commerce. Almost a third of the survey respondents do not know when they will have a basic plan. The survey reinforces Cutter's belief that few firms have aligned their business and IT strategies, says Cutter Analyst Sheila Green. Currently, many firms do not include IT in planning high-level strategies. Among survey respondents, only about half of the firms' CIOs had any involvement in the corporate strategic plan. Despite these statistics which might suggest otherwise, the survey respondents are participating in e-commerce. More than a quarter said they participate in e-commerce, while almost half said they advertise on the Internet. In addition, about 38 percent said they deliver goods over the Internet. (InternetWeek 09/06/99)**
E-Commerce Outgrows U.S.:North American Buying Dominance to Give Way Worldwide growth in e-commerce will be led by North America over the next five years - but the rest of the world is catching up fast. (ABCNEWS.com) F R A M I N G H A M, Mass., Aug. 25 - Non-U.S. Internet spending is expected to account for almost half of the world’s online commerce growth by 2003, according to a report issued today by market research firm International Data Corp. IDC said that by the end of this year 60 percent of the world’s Web population would reside outside of the United States and 46 percent of online spending would take place beyond U.S. borders by 2003. Both the Western European and Asian-Pacific regions, including Japan, represent hotbeds of e-commerce activity, with e-commerce spending in Western Europe expected to increase to $430 billion in 2003 from $5.6 billion in 1998. From Technophiles to Tool of Masses: “In Western Europe, the Internet is quickly moving from a technophile phenomenon to a tool for the entire population,” said Anna Giraldo, a senior analyst with IDC’s Internet and eCommerce Strategies research program. She added that the adoption of the euro would further drive online sales. The number of Internet users in Asia-Pacific was expected to quadruple to more than 81 million by 2003 from 21 million in 1998, IDC said. In the same period, online spending in that region was expected to surge to $72 billion from $2.7 billion. The total number of worldwide Internet users was expected to top 130.6 million this year, according to a study released in July by New York-based research firm eMarketer. Three-Digit User Increase: The study, which aggregated research from hundreds of different sources, including Forrester Research, Intelliquest, Jupiter Communications, IDC and a number of international research firms, predicted that the number of active Internet users would jump to 350 million by 2003, a 267 percent increase from the 95.4 million people using the Internet at the end of 1998. “Companies that sell on the Web will face technical, logistical and organizational challenges as they try to develop a global Internet strategy that incorporates multilingual e-commerce sites,” Giraldo said. “It might sound contradictory, but a successful global strategy will involve thinking locally in each of the individual markets,” she said, pointing out that online shoppers would be more likely to trust a Web site developed in their own country than an international one. Copyright 1999 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Literature on the Resource-Based View of Strategy and the "Digital Economy" and Electronic Commerce
IRELAND AIMS FOR E-COMMERCE FUTURE: Irish Prime Minister Bertie Ahern is intent on making Ireland a hub of electronic commerce, and has signed an $80 million agreement with Global Crossings to supply his country with an Internet “superhighway” by mid-2000. “This project will enable us to provide up to 15 times the current international capacity out of Ireland at one tenth of the existing unit cost levels,” says Ahern. The government also has signed contracts with nine companies to provide broadband infrastructure linking more than 120 centers throughout the country, and has established a $2.5-million fund to assist small and medium-sized companies in establishing e-commerce enterprises. (Reuters/TechWeb 6 Jul 99) http://www.techweb.com/wire/story/reuters/REU19990706S0001*
NET DELUSIONS:
University of South Florida researchers have published a study showing that fears of the Internet are replacing the CIA and radio waves as a frequent delusion in psychiatric patients. In every case of Internet delusion documented by the researchers, the patient actually had little experience with computers. “That’s not really surprising,” says author Dr. Glenn Catalano. “Things can seem especially threatening when you don’t know much about them.” One patient believed someone had created a link between his Web page and his extremities-when certain keys were struck, he said, his extremities would jump. He also believed that a friend had placed Internet bugs in his ears that could read his mind and control his thoughts. Catalano predicts an increase in Internet-related delusions. “We’re going to have to start asking different kinds of questions to determine the source of patients’ paranoia. You can’t just ask if someone is following you.” (AP 5 Jul 99)
http://tampabayonline.net/news/flor100x.htm
*As abstracted in ACM Tech News.
**As abstracted in EduPage.
***As abstracted in NEWS-ON-NEWS/The Ifra Trend Report.
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