Interviewer: Jim Roberts, ABC
Portals offer a "window" into the wide world of the 'net, a window that is personalised and customisable. The information presented to you is specific and relevant. The benefit for the service provider is that you keep coming back (eg. advertising revenue), and the benefit for you is you find all your information in one easy to access place!
At a technical level, the service provider makes agreements with all the information providers (eg. weather bureau, sports associations, stock markets) to access their data live, to ensure that you get the most recent information possible.
In an e-commerce environment, the seller ensures that you can customise your purchasing preferences, so that you will keep coming back and quickly finding the products you like (buying more from them!)
Since all your information will rest on your ISP, and every online business transaction will go through your ISP, it is very important you find an ISP that you can both trust and rely on. Their skill and expertise is critical to the success of your online business.
If you are selling a product (services are somewhat different), your transactions will probably happen something like this:
A multinational ISP is going to find it easier to multi-home your online business (ie. physically locate it in multiple countries for speed and high availability), but this isn't necessarily a requirement for online business, since location independence is one of the fundamental benefits of going online!
If you foresee a large portion of your business being in the US, then you might like to consider hosting your service there, as prices are _much_ more competitive and the speeds are much higher. However, if most of your business will remain Australian, locating in the US can cost you time and money when there are irregularities with international links or in the US.
To start a search engine service, you need a BIG computer (or, more likely, a few big computers!), LOTS of disk space and a FAST network connection.
The big computers then grab a web page from the 'net, check it for keywords and content, add this information to their indexes and then follow any links from that page to other pages. One of my friends draws the analogy of building a phone directory by going from shop to shop, asking if they know the phone numbers of any other shops. In this way search engines roam through all the connected pages on the Internet. Thus, if no-one links to you, you may well not get listed in any search engine! Which leads us to the next question,
The other way of attracting customers is through advertising, either in other media or by banner ads. It is worth mentioning at this point that SPAM (unsolicited commercial email) is very poorly looked on on the 'net, and is likely to get your company blacklisted by many site administrators, as well as gaining you a reputation as an unsavvy (or unsavoury! :-p) e-commerce operator.
The best way to increase your online business is to offer good information about your products combined with fast, friendly service to enquires. People will come back if your information is relevant and the service is good. If your site is hard to use, incomplete or poor quality, or if your service is slow or impersonal, customers will go to the next website where things are better. Your biggest increase in business may well come from reputation and word of mouth, rather than huge advertising campaigns.
Where advertising is considered, public, high exposure media such as billboards, buses, taxis and television are often the most effective. If you can get people interested in your web site on the way to work, or on the way home, then they are quite likely to be curious enough to check it out when they get online. It's important to ensure that when these customers do arrive at your site, they find a quality product -- you only get one chance at this! They are very unlikely to come back for a later look "to see if things have improved" -- if it's bad, they'll move on, and never come back -- or perhaps only when one of their friends persuades them that it has changed.
On the 'word of mouth' front, affiliate programs are currently a popular and effective way of increasing online business -- this is where friends or associates refer people to your business for a cut of the profit -- usually a small credit towards their next purchase.
It is worth noting that not many online businesses actually make a profit at this time. The premier example of an online business success is Amazon.com, who are a very effective provider because they include a huge inventory, they discount the products (as compared to local mall prices) and they reward affiliates. Nonetheless, despite all their success (and their $5 billion+ valuation) they are still not making a profit!
Companies which don't follow the strategy of sites like Amazon.com, by only putting some of their range on its e-commerce site and not making it any cheaper than you could find at your local mall, are unlikely to generate much online business. Why struggle with something new when the old way is easier and better?
In summary, whilst e-commerce offers many new opportunities, and new challenges, it is not so different from every other market -- if you make it easy and attractive for the customer to access and purchase your products, you will receive business. If you make it difficult or uncompetitive, you may spend a lot of money on a white elephant!
23 September 1999 Page-jacking A Portugese cracker and an Australian company stand accused of page-jacking Internet users by copying legitimate web pages and stealing their metatags, invisible index keys for search engines. The scheme redirected users to pornographic sites when they clicked the "back" or "home" buttons. http://www.computerworld.com/home/news.nsf/all/9909234ftc2 http://www.washingtonpost.com/wp-srv/business/daily/sept99/ftc23.htm
It was an interesting and innovative project though!
There are a couple of cheap and easy ways to get in to e-commerce, the simplest is to just get an email address, and answer it regularly! (at least twice a day). Mum and Pop operations may well be happy with just getting a web page, and putting pictures of their product(s) up there, and allow ordering via email. A friend should be able to help them make some simple, attractive web pages.
Commercial operators are going to have to go about it more seriously, however. Small business should talk to your ISP about what e-commerce servers they offer. If they don't offer any direct services, see if they recommend anyone. It may be cheaper to break your e-commerce plans into two parts -- hiring a consultant to write a strategy, and then shopping around for an implementation team/contractor.
Large business will need to talk to some e-commerce experts. Again, you could start with whomever your ISP recommends, but you'll probably want to look at some leading examples of e-commerce in Australia, and find something you like and get that team to help you.
You need to be aware of some of the technologies/concepts that are required to get involved in e-commerce, including:
Information about Ecommerce servers as extracted from DNS records, http://www.apnic.net/ and http://www.netcraft.com/.
Overview -- it is my perception, and the current literature seems to support this, that the most effective e-commerce sites are those selling commodity items, such as CDs and books. People are unlikely to make major purchasing decisions about houses, cars, etc based solely on online information. However, it is very likely that those companies which do make such information readily available will attract in-person custom since the customer knows that the supplier already has the product they are interested in (that house in my suburb, that model car, etc).
It is worth pointing out that two very successful forms of e-commerce haven't really been reviewed in the below, specifically travel and classifieds (eg. The Melbourne Trading Post, netspace/telstra with IIS4). Online jobs sites are certainly popular, but perhaps aren't very commercial yet.