1. Management 265
Introduction to E-Commerce
Nicholas A. Davis
Session Two
09/22/2009

2. Auctions
• Fixed pricing – National price
• Trigger pricing – Based on consumer
location
• Personalization pricing – based on how
much a user values a product
• Consumer to Consumer – Auction house is
an intermediary
• Business to Consumer – Auction house
sells items it controls

3. Rise and Fall of Ebay
• Started as a comic book exchange marketplace
• Moved to allow consumers to sell all kinds of
items
• Moved to allow business to sell all kinds of items
• Bulk sellers get more benefit
• Small person being squeezed more
• Threat of Craigslist
• Vonage acquisition and sale

4. Differences
• Auctions
• Portals
• Online Communities

5. Intellectual Property and
Digital Media
• What is intellectual property?
• Does it have the same value as physical
property?
• How do you accurately judge the value of
IP?
• Case Scenario, Nick never buys a CD, but
loves music. Nick gets Napster and
downloads 5000 songs he likes, but would
never buy. What damage has been
caused to the copyright owner?

6. Intellectual Property and
Digital Media
• John regularly buys CDs. John gets
Napster and downloads 5000 songs. What
type of damage has been done?
• Should Nick and John be treated differently
based on the fact that a different amount of
damage has been done to the copyright
holder, based on Nick and John’s shopping
habits?
• Ethically speaking, what are the major
issues here?

7. Online Content Revenue
Models
• Marketing Tide.com
• Free content drives offline revenues
• May work for strong brands, or niche
products, designed to enrich customer
experience

8. Online Content revenue
Models
• Advertising Yahoo
• Free content is paid for by online
advertising
• Depends on growth in online ad volume
and rates, as well as audience size

9. Online Content revenue
Models
• Pay Per View / Pay Per Download
• Charge for premium content is a la carte
• Opportunities for unbundling digital
products, work best with something like an
MP3 player

10. Online Content revenue
Models
• Subscription: Rhapsody
• Monthly charges for unlimited service
• This is the leading model (80%), very
popular with high value products

11. Online Content revenue
Models
• Mixed MSN
• Combination of all models
• Market segmentation opportunities make
this a popular model, charging for some
services, and providing others for free

12. Future trends in E-Commerce
• Anywhere availability of purchased content
• Intelligent outposts (Soda Machines)
• New payment methods (phones)

13. Additional Concerns