Internet
Commercial Potential of the Internet
Businesses need to place electronic commerce within the context of
broader uses of the Internet than the traditional commercial framework.
As a market, electronic commerce impacts not only marketing but also
production and consumption. Information collected through web stores
is used to customize products, to forecast future demand, and to formulate
business strategies.
Consumers not only order and pay for products online, but also search
for
product information, reveal their preferences, negotiate with sellers,
exchange information about products and firms, and use products online
by filtering, processing, and linking them with other computer programs.
Likewise, supply chain relationships among businesses and competitive
strategies need to aim at increasing the overall market efficiency,
not just transactional efficiency.
The Internet can certainly be used as an alternative marketing channel,
selling existing products online, but the future of electronic commerce
will be guided by innovative digital products and services that will
emerge in the electronic marketplace. But from where are these products
and processes coming? The explosive growth of the Internet gives a partial
answer. The core of digital commerce comes from selling digital products,
but no one is certain how big the digital product market will become.
To get an idea, one only needs to list products that can be digitized:
all paper-based information products such as newspapers, magazines,
books, journals, and databases; computer software, and games; audio
products, including music, and speeches; video and multimedia products,
such as movies and television programs; other information products,
such as weather reports, stock quotes, government information, consumer
information, and even personal information; and digital counterparts
for existing products, such as room keys, digital currency, digital
checks and other financial instruments, airline and concert tickets,
and so on. Many business professionals dismiss the commercial potential
of the Inter-net, pointing out that the most common uses of the Internet
and the web are browsing and entertainment. In turn, the most promising
use of the Internet technology is found in intranets and other within-business
and business-to-business applications.
A survey found that only about one in ten uses the Internet for shopping.
However, shopping here is very narrowly defined. Internet users seeking
information are, in fact, in search of products, and thus, network uses
commonly categorized as informational and entertainment activities need
not be viewed separately from commercial activities. Unlike television
entertainment in which commercial advertising and noncommercial entertainment
are alternatively presented, commercial uses of the Internet encompass
all aspects of user activities. Even e-mail messages can be thought
of as digital products, for instance digitized information, which can
be sold directly as a product or used as a component of business transactions.
All so-called non-commercial activities on the Internet are indeed commercial,
an important realization for digital product sellers.